SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
AMERICAN OILFIELD DIVERS, INC.
(Name of Registrant as Specified In Its Charter)
BOARD OF DIRECTORS
AMERICAN OILFIELD DIVERS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check 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-
11:1 (Set forth amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
[ ] 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 of Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed
AMERICAN OILFIELD DIVERS, INC.
130 EAST KALISTE SALOOM ROAD
LAFAYETTE, LOUISIANA 70508
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 1997
To the stockholders of American Oilfield Divers, Inc.:
NOTICE IS HEREBY GIVEN that the 1997 annual meeting of stockholders
of American Oilfield Divers, Inc. (the "Company" ) will be held Friday,
May 16, 1997 at 9:00 a.m. local time in the Lafayette Petroleum Club,
111 Heymann Boulevard, Lafayette, Louisiana, 70503, for the following
purposes, more fully described in the accompanying proxy statement:
1. To elect one Class I director.
2. To approve the Amended and Restated Incentive Compensation Plan.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only common stockholders of record at the close of business on March
14, 1997 are entitled to notice of and to vote at the annual meeting and
all adjournments thereof.
Your vote is important regardless of the number of shares you own.
Whether or not you plan to attend the annual meeting, please mark, date
and sign the enclosed proxy card and return it promptly in the enclosed
stamped envelope. Furnishing the enclosed proxy will not prevent you
from voting in person at the meeting should you wish to do so.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Quinn J. Hebert
Quinn J. Hebert
Secretary
Lafayette, Louisiana
April 7, 1997
<PAGE>
AMERICAN OILFIELD DIVERS, INC.
130 EAST KALISTE SALOOM ROAD
LAFAYETTE, LOUISIANA 70508
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1997
GENERAL
This Proxy Statement is being furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of American
Oilfield Divers, Inc. (the "Company") for use at its annual meeting of
stockholders to be held May 16, 1997 at the time and place for the
purposes set forth in the accompanying Notice of Meeting, and at any
adjournment thereof (the "Meeting"). The date of this Proxy Statement
is April 7, 1997.
The costs of soliciting proxies in the enclosed form will be borne by
the Company. In addition to soliciting proxies by mail, directors,
officers, and employees of the Company and its subsidiaries, without
receiving additional compensation therefor, may solicit proxies by
telephone and in person. Arrangements will also be made with banks,
brokerage firms and other custodians, nominees and fiduciaries to
forward solicitation materials to the beneficial owners of shares of the
common stock of the Company ("Common Stock"), and the Company will
reimburse such persons for reasonable out-of-pocket expenses incurred in
connection therewith.
The proxies that accompany this Proxy Statement permit each holder of
record of Common Stock on March 14, 1997 to vote on all matters to come
before the Meeting. On that date the Company had outstanding 10,468,581
shares of Common Stock, each of which is entitled to one vote. Where a
stockholder specifies his choice on the proxy with respect to a matter
being voted upon, the shares represented by the proxy will be voted in
accordance with such specification. If no specification is made, the
shares will be voted in favor of both of the proposed nominees to the
Board of Directors listed herein.
The Board of Directors of the Company is not aware of any business to
be acted upon at the Meeting other than those matters set forth in the
accompanying Notice of Meeting. If, however, other proper matters are
brought before the Meeting, or any adjournment thereof, the persons
appointed as proxies will have discretion to vote or abstain from voting
thereon according to their best judgment.
A proxy may be revoked by (i) giving written notice of revocation at
any time before its exercise to Quinn J. Hebert, Secretary, American
Oilfield Divers, Inc., 130 East Kaliste Saloom Road, Lafayette,
Louisiana 70508, (ii) executing and delivering to Mr. Hebert at any time
before its exercise a later dated proxy or (iii) attending the Meeting
and voting in person.
ELECTION OF DIRECTOR
The Company's Amended and Restated Articles of Incorporation provide
for a Board of Directors consisting of three classes, with the number of
directors to be set forth in the By-laws. The By-laws provide for a
Board of Directors of five persons. The term of office of the Class I
director will expire at the Meeting, and the person listed as the Class
I nominee in the table below will be nominated for the election to the
Board of Directors for a term expiring in 2000. The term of office of
the Class II directors will expire at the 1998 annual meeting. The term
of office of the Class III directors will expire at the 1999 meeting.
Proxies cannot be voted for more than one nominee and not more than one
director can be elected.
In the absence of contrary instructions, it is the intention of the
persons named in the accompanying proxy to vote the shares represented
thereby for the election of the nominee listed below. In the
unanticipated event that Mr. Stanley is unavailable as a candidate for
director, the Board of Directors will nominate a replacement candidate
and the person named in the accompanying proxy will vote for such
candidate.
The following table sets forth certain information as of April 1,
1997 concerning the nominee for director, each director and each
executive officer of the Company named in the summary compensation table
below, including the number and percentage of shares of Common Stock
beneficially owned by him, determined in accordance with Rule 13d-3 of
the Securities and Exchange Commission. The date shown under the
caption "First Elected Director" for each nominee and director refers to
the year in which he was first elected to the Board of Directors.
Unless otherwise indicated, each person has been engaged in the
principal occupation shown for the past five years or longer and shares
indicated as beneficially owned are held directly with sole voting and
investment power. In the case of directors who are also officers of the
Company, unless otherwise indicated, such persons have been employed as
an officer in one or more capacities by the Company or a subsidiary for
the past five years or longer. The address of each director and
executive officer is c/o American Oilfield Divers, Inc., 130 East
Kaliste Saloom Road, Lafayette, Louisiana 70508. All executive
officers of the Company, including Messrs. Stanley, Freeman, Suggs, Yax,
and Hebert, serve at the pleasure of the Board of Directors. The Board
of Directors recommends a vote FOR the nominees named below:
<TABLE>
<CAPTION>
Principal First Shares
Occupation or Elected Beneficially
Name Age Employment Director Owned Percent
_____ ___ _____________ _________ ___________ ________
Nominee for Election as Class I Director (For term expiring in 2000)
<S> <C> <C> <C> <C> <C>
Rodney W. Stanley 52 President and Chief 1996 37,800 *
Executive Officer(1)
Continuing Class II Directors (Term expires in 1998)
Prentiss A. Freeman 47 Executive Vice President 1986 265,665(2) 2.5
and Chief Operating
Officer
William C. O'Malley 60 Chairman of the Board of 1993 17,6502 *
Directors, President
and Chief Executive
Officer of Tidewater,
Inc. (marine and gas
compression services)(3)
Continuing Class III Directors (Term expires in 1999)
George C. Yax 55 Chairman of the Board(4) 1981 1,061,073 10.1
Stephen A. Lasher 49 President of The Gulf Star 1993 19,500(2) *
Group, Inc. (financial
advisory services)(5)
Named Executive Officers not serving as Directors
Robert B. Suggs 49 Vice President/General --- 93,720(2) *
Manager - Gulf Services
Division
Quinn J. Hebert 33 Corporate Counsel and --- 2,667(2) *
Secretary(6)
All nominees, directors and executive officers as a 1,464,7752 14.0
group (eight persons)
___________________
* Less than one percent.
(1) Mr. Stanley has been a Director and President and Chief Executive
Officer of the Company since December 1996. He joined the Company as a
Director and Senior Vice President - International Operations on August
1, 1996. From 1995 to May 1996, he served as President and Chief
Executive Officer of Hard Suits Inc., which was acquired by the Company
in 1996. From 1986 to 1995 Mr. Stanley was President and Chief
Executive Officer of Sonsub, Inc., a provider of subsea engineering and
other services.
(2) Shares beneficially owned by Mr. Freeman include exercisable options
to purchase 16,665 shares granted pursuant to the Amended and Restated
Incentive Compensation Plan. Shares beneficially owned by Mr. O'Malley
include exercisable options to purchase 6,000 shares granted pursuant to
the Non-Employee Director Stock Option Plan. Shares beneficially owned
by Mr. Lasher include exercisable options to purchase 6,000 shares
granted pursuant to the Non-Employee Director Stock Option Plan. Shares
beneficially owned by Mr. Suggs include exercisable options to purchase
2,720 shares granted pursuant to the Amended and Restated Incentive
Compensation Plan. Shares beneficially owned by Mr. Hebert consist of
exercisable options to purchase 2,667 shares granted pursuant to the
Amended and Restated Incentive Compensation Plan. Shares beneficially
owned by all nominees, directors and executive officers as a group
include exercisable options to purchase 4,000 shares granted to another
executive officer pursuant to the Amended and Restated Incentive
Compensation Plan.
(3) Mr. O'Malley is a member of the Compensation Committee and is
Chairman and a member of the Audit Committee. Mr. O'Malley has been
Chairman of the Board, President and Chief Executive Officer of
Tidewater, Inc., a publicly-held provider of offshore marine and gas
compression services, since September, 1994. Prior to that time, he had
been Chairman of the Board of Directors of Sonat Offshore Drilling,
Inc., ("Sonat Offshore"), a publicly-held offshore oil and gas contract
drilling company, since April, 1987 and Chief Executive Officer of Sonat
Offshore since May, 1990. From 1987 until May, 1993, Mr. O'Malley
served as a director and Executive Vice President of Sonat, Inc., a
holding company of various energy-related subsidiaries and principal
stockholder of Sonat Offshore. Mr. O'Malley is also a director of
Hibernia Corporation, a publicly-held, Louisiana-based bank holding
company.
(4) Mr. Yax also served as President and Chief Executive Officer of the
Company from its inception until December 1996.
(5) Mr. Lasher is a member of the Audit Committee and is Chairman and a
member of the Compensation Committee. Mr. Lasher is also director of
(i) Weingarten Realty Investors, a publicly-held real estate investment
trust, since 1984, and a member of its compensation committee and (ii)
Weingarten Properties, a public real estate investment trust, since
1984. Since 1990, Mr. Lasher has been President of The Gulf Star Group,
Inc., a provider of financial advisory services. Prior to 1990, Mr.
Lasher served in various capacities with Rotan, Mosle Financial
Corporation, an investment banking firm, serving as executive vice
president, head of corporate finance, until 1990.
(6) Mr. Hebert joined the Company in 1993. From 1988 to 1993, he was
an associate with the law firm of Jones, Walker, Waechter, Poitevent,
Carrere & Denegre, L.L.P., New Orleans, Louisiana.
</TABLE
_______________________
During the fiscal year ended December 31, 1996, the Board of
Directors held eight meetings. During the period that he served as a
director in 1996, each director of the Company attended 75% or more of
the aggregate number of meetings of the Board of Directors and
committees of which he is a member.
Each director of the Company who is not an officer of the Company
receives (i) an annual fee of $15,000, (ii) $500 for each meeting of the
Board of Directors or any committee thereof at which such director is
present in person or by means of telephone conference call and (iii)
reimbursement of all ordinary and necessary expenses incurred in
attending any meeting of the Board or any committee thereof.
Pursuant to the Company's Non-Employee Director Stock Option Plan
(the "Director Plan"), each non-employee director will automatically
receive options to purchase 1,500 shares of the Common Stock of the
Company upon first becoming a director and annually thereafter on the
day following the Company's annual meeting of stockholders at an
exercise price equal to the fair market value of the Common Stock on the
date of grant, which, so long as the Company's Common Stock is quoted on
the Nasdaq Stock Market, will be the final closing sales price per share
for the trading day next preceding the date of grant. A maximum of
50,000 shares may be issued pursuant to options granted under the
Director Plan. As of December 31, 1996, options for 12,000 shares have
been granted under the Director Plan.
The Audit Committee, which met once in the fiscal year ended
December 31, 1996, meets periodically with representatives of the
Company's independent public accountants to obtain an assessment of the
financial position and results of operations of the Company and reports
to the Board of Directors with respect thereto. The Compensation
Committee, which met three times in the fiscal year ended December 31,
1996, reviews, analyzes and recommends compensation programs to the
Board, establishes executive compensation, evaluates the performance of
certain executive officers and is responsible for the administration of
and the grant of awards under the Company's 1993 Incentive Compensation
Plan. The Board of Directors does not have a standing nominating
committee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and beneficial owners of more
than 10% of the Common Stock to file certain beneficial ownership
reports with the Securities and Exchange Commission. Mr. Yax, the
Company's Chairman of the Board, failed to file timely in 1994 a Form 4
reporting one transaction.
PROPOSAL TO APPROVE
THE AMENDED AND RESTATED INCENTIVE COMPENSATION PLAN
The Board of Directors unanimously proposes that the stockholders
approve the Company's Amended and Restated Incentive Compensation Plan
(the "Plan").
Reasons for the Proposal
The Company's Amended and Restated Incentive Compensation Plan was
originally approved as the 1993 Incentive Compensation Plan by the
stockholders of the Company prior to the effective date of the Company's
initial public offering in 1993. As originally approved, the 1993
Incentive Compensation Plan authorized the issuance of a total of
500,000 shares of common stock of the Company pursuant to incentives
granted thereunder and contained various restrictions so that it would
comply with the applicable conditions of Rule 16b-3 ("Rule 16b-3")
promulgated by the Securities and Exchange Commission (the "SEC") under
Section 16 ("Section 16") of the Securities Exchange Act of 1934 and
thereby ensure that transactions under the Plan by certain officers of
the Company would not result in Section 16 liability to them.
Subsequent to the adoption of the 1993 Incentive Compensation Plan, the
SEC amended Rule 16b-3 to remove many of the benefit plan restrictions
contained therein. In addition, Section 162(m) ("Section 162(m)") of
the Internal Revenue Code of 1986 was amended by the United States
Congress to limit tax deductions for executive compensation under
certain circumstances unless the restrictions imposed by Section 162(m)
are met. Finally, in 1996, the Company and Rodney W. Stanley, the
President and Chief Executive Officer of the Company, entered into an
employment agreement pursuant to the terms of which Mr. Stanley was
granted under the 1993 Incentive Compensation Plan options to purchase
375,000 shares of Common Stock at an option exercise price of $8.875 for
each share. The portion of such grant covering 225,000 shares was made
subject to approval by the Company stockholders at their 1997 annual
meeting because it exceeded the remaining amount available under the
share limit of the 1993 Incentive Compensation Plan.
In response to these developments, the Board of Directors recently
amended the 1993 Incentive Compensation Plan to remove restrictions no
longer required by Rule 16b-3, to qualify certain incentives granted
thereunder as tax-deductible, performance-based compensation under
Section 162(m), and to increase the number of shares of Company common
stock that may be issued under it for purposes of covering Mr. Stanley's
grant and for ensuring that the Company may be in the position to
continue its ability to furnish under the Plan a variety of economic
incentives designed to attract, retain, and motivate key employees and
officers and to strengthen the mutuality of interests between such
employees and the stockholders.
The amendments were made by the Board of Directors subject to
stockholder approval of the Plan as so amended. In summary, the changes
effected by these amendments include the following:
(i) the provisions on administration were modified to eliminate
the requirement that the members of the Compensation Committee of the
Board of Directors of the Company be "disinterested directors" under the
previous version of Rule 16b-3 but to require that they be "non-employee
directors" under revised Rule 16b-3 and "outside directors" under
Section 162(m);
(ii) the number of shares of Company common stock that may be
issued under such Plan was increased from 500,000 to 1,200,000;
(iii) certain limitations on calculating the number of shares of
Company common stock subject to such Plan, which pertained to re-issuing
forfeited or repurchased shares, were eliminated;
(iv) a limitation that no individual may receive in any one year
under such Plan incentives that relate to more than 400,000 shares of
Company common stock was added;
(v) the minimum exercise price of a stock option granted under
the Plan was increased from 85% of "fair market value" of a share of
Company common stock on the date of grant to 100% of "fair market value"
of a share of Company common stock on the date of grant;
(vi) the requirement that no stock option granted to a person
subject to Section 16 may be exercisable within the six-month period
immediately following the date of grant was eliminated;
(vii) special restrictions on elections made by person subject to
Section 16 to withhold shares of Company common stock from payments made
under such Plan to satisfy withholding taxes were eliminated;
(viii)the provision authorizing adjustments under such Plan upon
the reorganization or recapitalization of the Company was modified to
prohibit any such adjustments to the extent that they would be
inconsistent with the requirements for full deductibility under Section
162(m);
(ix) the provisions requiring shareholder approval of amendments
were modified to eliminate any such necessity to the extent required by
Rule 16b-3 but to mandate such approval if needed to qualify incentives
granted under such Plan as performance-based compensation under Section
162(m);
(x) the provisions on transferability of incentives,
particularly stock options, were relaxed to permit transfers of
incentives to certain family members or entities owned by family
members;
(xi) numerous provisions throughout such Plan were modified to
reflect that, as a result of such modification of the transferability
provisions, the grantee of an incentive may not be the holder of an
incentive at the time of its exercise, adjustment, amendment, or
repurchase or at the time of the issuance of shares of Company Common
Stock under such incentive;
(xii) the provision permitting the Compensation Committee of the
Board of Directors to cancel a stock option to make a participant
eligible for the grant of a stock option at a lower exercise price or
the grant of another Incentive was eliminated;
(xiii)the provisions on restricted stock were modified to require
a restricted period of at least three years, or, if vesting is subject
to the attainment of performance goals, a restricted period of at least
one year;
(xiv) the name of such Plan was changed from the "1993 Incentive
Compensation Plan" to the "Amended and Restated Incentive Compensation
Plan"; and
(xv) miscellaneous conforming changes were made.
In accordance with the requirements of Section 162(m), the Board
of Directors proposes that the stockholders approve the Amended and
Restated Incentive Compensation Plan in its entirety. If such
stockholder approval is not obtained, compensation payable under a grant
made under the Plan on or after the 1997 annual meeting of stockholders
would not meet the exception for performance-based compensation and
therefore may not be tax-deductible under Section 162(m). In addition,
if such stockholder approval is not obtained, the Company would be
required under Mr. Stanley's employment agreement to provide Mr. Stanley
with the economic equivalent of 225,000 of his options. Finally, if
such stockholder approval is not obtained, certain rules of the National
Association of Securities Dealers, Inc. would forbid the issuance of the
additional 700,000 shares of Company common stock under the Plan.
Summary of the Plan
The following is a summary of the Plan as recently amended by the
Board of Directors of the Company. The summary is qualified in its
entirety by reference to the complete text of the Plan as so amended,
which is attached hereto as Exhibit A.
General
The Board of Directors believes that the Plan increases
shareholder value and advances the interests of the Company by
furnishing a variety of economic incentives designed to attract, retain,
and motivate key employees and officers and to strengthen the mutuality
of interests between such employees and the stockholders.
Shares Issuable under the Plan
Under the Plan, key employees of the Company, including officers
and directors who are full-time employees of the Company, may be granted
stock options, stock awards, restricted stock, performance share awards
or cash awards (the "Incentives") by the Compensation Committee of the
Company's Board of Directors (the "Committee"). There are presently 27
persons participating in the Plan, and approximately 873 other
persons are eligible to participate in the Plan. A maximum of 1,200,000
shares of Common Stock are issuable under the Plan, except that this
number, and the price, if any, at which such shares are issuable, would
be adjusted in the event of any recapitalization, stock dividend, stock
split, combination of shares or other change in Common Stock. As of
April 1, 1997, the fair market value of a share of Common Stock was
$11.50. There were outstanding under the Plan as of that date
non-qualified stock options to purchase 488,914 shares of Common Stock
with various exercise prices, exercisability schedules, and expiration
dates. Such outstanding stock options include non-qualified
stock options to purchase 375,000 shares of Common Stock at an exercise
price of $8.875 granted, subject to stockholder approval of the Plan as
so recently amended by the Board of Directors of the Company, on August
1, 1996 to Rodney W. Stanley, the President and Chief Executive Officer
of the Company, pursuant to the terms of his employment agreement with
the Company dated as of July 16, 1996. No individual may receive in any
year Incentives, whether payable in cash or shares of Common Stock, that
relate to more than 400,000 shares of Common Stock.
In the event that stock options to purchase shares expire or are
terminated or canceled or in the event that shares of restricted stock
issued under the Plan are forfeited or reacquired by the Company, such
shares would again become issuable pursuant to Incentives issued under
the Plan. In the event of a merger, consolidation or reorganization of
the Company, there will be substituted for each share of Common Stock
then subject to the Plan (including shares subject to restrictions,
options or achievement of performance share objectives) the number and
kind of securities to which the holders of Common Stock are entitled
pursuant to the transaction.
Administration of the Plan
The Committee administers the Plan and has authority to award
Incentives under the Plan, to interpret the Plan, to establish any rules
or regulations relating to the Plan that it determines to be
appropriate, to authorize agreements with participants relating to
Incentives ("Incentive Agreements"), to amend those agreements in
certain respects, to make any other determination that it believes
necessary or advisable for the proper administration of the Plan and to
delegate its authority as appropriate. If a participant ceases to be an
employee of the Company for any reason, including death, disability or
retirement at normal retirement age, any Incentives may be exercised or
shall expire at such time as may be determined by the Committee in the
Incentive Agreement. Any stock option or unexercised portion thereof
that was otherwise exercisable on the date of termination of employment
will expire at the time or times established by the Committee.
Amendments to the Plan
The Board may amend or discontinue the Plan at any time, except to
the extent that any amendment may require shareholder approval to comply
with any tax or regulatory requirement. No amendments or discontinuance
may change or impair, without the consent of the recipient thereof, an
Incentive previously granted, except that the Company retains the right
to convert any outstanding incentive stock option to a non-qualified
stock option or to require the forfeiture of an Incentive if the
recipient's employment is terminated for cause.
Types of Incentives
A summary of the types of Incentives that may be granted under the
Plan is set forth below.
Stock Options. The Committee may grant non-qualified stock
options ("NQSOs") or incentive stock options ("ISOs") to purchase shares
of Common Stock. The Committee will determine the number and purchase
price of the shares subject to stock options, the term of the stock
options and the time or times that the stock options become exercisable,
provided the purchase price for stock options may not be less than the
fair market value of the Common Stock on the date of grant and provided
that the term of ISOs may not exceed 10 years. No ISO may be granted to
any participant who, at the time of the grant, would own stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company. The Committee may accelerate the
exercisability of any stock option. Upon approval of the Committee, the
Company may repurchase a previously granted stock option from any
optionee by mutual agreement before such stock option has been
exercised, by payment to the optionee of the amount per share by which
the fair market value of the shares subject to the stock option on the
date of repurchase exceeds the exercise price. The Committee shall
determine at what time or times during its term a stock option shall be
exercisable. The exercise price may be paid in cash, check, in shares
of Common Stock that have been held for at least six months, or through
a broker-assisted exercise arrangement. If a participant exercises a
stock option and pays the exercise price with shares of Common Stock
held by such participant, the Committee may grant each participant an
additional option to purchase the number of shares of Common Stock equal
to the number of shares of Common Stock surrendered at an exercise price
equal to the fair market value of a share of Common Stock on the date of
such surrender.
Stock Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock,
without other payment therefor, as additional compensation for services
previously provided to the Company. Restricted stock consists of shares
of Common Stock that are transferred to a participant for past services
or that are sold by the Company to a participant at a specified price,
but subject to restrictions regarding their sale, pledge or other
transfer by the participant for a specified period (the "Restricted
Period"). The Committee has power to determine the number of shares to
be transferred to a participant as a stock award or as restricted stock
and to determine the price, if any, at which shares of restricted stock
shall be sold to a participant. All shares of restricted stock will be
subject to such restrictions as the Committee may designate in the
Incentive Agreement with the participant, including, among other things,
that the shares of Common Stock are required to be forfeited or resold
to the Company in the event of termination of employment or in the event
specified performance goals or targets are not met. A Restricted Period
of at least three years is required, except that if vesting is subject
to the attainment of performance goals, a minimum Restricted Period of
one year is required. Subject to the restrictions provided in the
Incentive Agreement, each participant receiving restricted stock will
have the rights of a shareholder with respect thereto, including voting
rights and rights to receive dividends.
Performance Shares. Performance shares consist of an award paid
in shares of Common Stock of the Company without any payment by the
participant. Each performance share will be subject to such terms and
conditions as the Committee deems appropriate, including performance
objectives for the Company or one or more of its operating divisions to
be achieved by the end of a specified period. The award of performance
shares does not create rights in the participant as a shareholder of the
Company until the payment of shares of Common Stock with respect to the
award, except to the extent that the Committee has granted dividend
equivalent payment rights in connection with such award.
Cash Awards. A cash award may be made by the Company to an
eligible employee as additional compensation for his services to the
Company. Payment may depend on the achievement of specified performance
objectives by the Company or the individual or may relate to the amount
of the tax obligation imposed on a participant in connection with a
stock Incentive granted to a participant. The amount of a cash award
will be determined by the Committee.
Acceleration of Incentives Upon Occurrence of Certain Events
If so determined by the Committee at any time in its sole
discretion, or if (a) a person or group of persons, other than any
employee benefit plan of the Company or related trust, becomes the
beneficial owner of securities representing 30% or more of the total
voting power of the Company; (b) a majority of the members of the Board
of Directors of the Company is replaced within any period of less than
two years by directors not nominated and approved by the Board of
Directors; or (c) the shareholders of the Company approve a
reorganization, merger or consolidation, in each case, with respect to
which the individuals and entities who were the respective beneficial
owners of the Common Stock and other voting securities of the Company
immediately prior to such reorganization, merger or consolidation do
not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 80% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors of the corporation
resulting from such reorganization, merger or consolidation; or (d) the
shareholders of the Company approve a complete liquidation or
dissolution of the Company or the disposition of all or substantially
all of the Company's assets, the following will occur: the restrictions
on all shares of restricted stock awarded shall lapse immediately, all
outstanding stock options shall become exercisable immediately, and all
performance objectives will be deemed to be met and payment made
immediately, unless otherwise determined by the Board of Directors and a
majority of the continuing directors, as defined in the Plan, or unless
the Committee is otherwise directed by the participant in writing.
Transferability of Incentives
No stock option or performance share may be transferred, pledged,
assigned, or otherwise encumbered by the holder thereof except by will;
by the laws of descent and distribution; pursuant to a domestic
relations order, if permitted by the Committee; or to immediate family
members or entities controlled or for the benefit of immediate family
members, if permitted by the Committee.
Payment of Withholding Taxes in Stock
A participant may, but is not required to, satisfy such
participant's withholding tax obligation by electing that the Company
withhold, from the shares of Common Stock that such participant would
otherwise receive upon the issuance of Common Stock in connection with
an Incentive, the lapse of restrictions on Common Stock in connection
with an Incentive, or the exercise of a stock option, shares of Common
Stock having a value equal to the amount required to be withheld. This
election must be made prior to the date on which the amount of tax to be
withheld is determined and is subject to the Committee's right of
disapproval.
Federal Income Tax Consequences
Under existing federal income tax provisions, a participant who
receives stock options or performance shares or who purchases or
receives shares of restricted stock that are subject to restrictions
that create a "substantial risk of forfeiture" (within the meaning of
Section 83 of the Internal Revenue Code of 1986, as amended (the
"Code")) will not normally realize any income, nor will the Company
normally receive any deduction for federal income tax purposes, in the
year such Incentive is granted.
When an NQSO granted pursuant to the Plan is exercised, the
employee will realize ordinary income measured by the difference between
the aggregate fair market value of the shares of Common Stock on the
exercise date and the aggregate purchase price of the shares of Common
Stock as to which the option is exercised, and, subject to Section
162(m) of the Code, the Company will be entitled to a deduction in the
year the option is exercised equal to the amount the employee is
required to treat as ordinary income.
An employee generally will not recognize any income upon the
exercise of any ISO, but the excess of the fair market value of the
shares at the time of exercise over the option price will be an item of
adjustment, which may, depending on particular factors relating to the
employee, subject the employee to the alternative minimum tax imposed by
Section 55 of the Code. An employee will recognize capital gain or loss
in the amount of the difference between the exercise price and the sale
price on the sale or exchange of stock acquired pursuant to the exercise
of an ISO, provided the employee does not dispose of such stock within
either two years from the date of grant or one year from the date of
exercise of the incentive stock option (the "required holding period").
An employee disposing of such shares before the expiration of the
required holding period will recognize ordinary income generally equal
to the difference between the option price and the fair market value of
the stock on the date of exercise. The remaining gain, if any, will be
capital gain. The Company will not be entitled to a federal income tax
deduction in connection with the exercise of an ISO, except where the
employee disposes of the Common Stock received upon exercise before the
expiration of the required holding period.
If the exercise price of an NQSO is paid by the surrender of
previously owned shares, the basis and the holding period of the
previously owned shares carries over to the same number of shares
received in exchange therefor. The compensation income recognized on
exercise of such NQSO is added to the basis of the remaining shares
received. If the exercised option is an ISO and the shares surrendered
were acquired through the exercise of an ISO and have not been held for
the applicable holding period, the optionee will recognize income on
such exchange and the basis of the shares received will be equal to the
fair market value of the shares surrendered. If the applicable holding
period has been met on the date of exercise, there will be no income
recognition and the basis and the holding period of the previously owned
shares carries over to the same number of shares received in exchange
therefor and the remaining shares begin a new holding period and will
have a zero basis.
An employee who receives restricted stock or performance shares
will normally recognize taxable income on the date the shares become
transferable or no longer subject to substantial risk of forfeiture or
on the date of their earlier disposition. The amount of such taxable
income will be equal to the amount by which the fair market value of the
shares of Common Stock on the date such restrictions lapse (or any
earlier date on which the shares are disposed of) exceeds their purchase
price, if any. An employee may elect, however, to include in income in
the year of purchase or grant the excess of the fair market value of the
shares of Common Stock (without regard to any restrictions) on the date
of purchase or grant over its purchase price. Subject to the
limitations imposed by Section 162(m) of the Code, the Company will be
entitled to a deduction for compensation paid in the same year and in
the same amount as income is realized by the employee. Dividends
currently paid to the participant will be taxable compensation income to
the participant and deductible by the Company.
A participant who receives a stock award under the Plan consisting
of shares of Common Stock will realize ordinary income in the year of
the award equal to the fair market value of the shares of Common Stock
covered by the award on the date it is made and, subject to Section
162(m) of the Code, the Company will be entitled to a deduction equal to
the amount the employee is required to treat as ordinary income. An
employee who receives a cash award will realize ordinary income in the
year the award is paid equal to the amount thereof and the amount of the
cash award will be deductible by the Company, subject to Section 162(m)
of the Code.
When the exercisability or vesting of an Incentive granted under
the Plan is accelerated upon a change of control, any excess on the date
of the change in control of the fair market value of the shares or cash
issued under Incentives over the purchase price of such shares may be
characterized as "parachute payments" (within the meaning of Section
280G of the Code) if the sum of such amounts and any other such
contingent payments received by the employee exceeds an amount equal to
three times the "base amount" for such employee. The "base amount"
generally is the average of the annual compensation of such employee for
the five years preceding such change in ownership or control. An
"excess parachute payment" with respect to any employee, is the excess
of the present value of the parachute payments to such person, in the
aggregate, over and above such person's base amount. If the amounts
received by an employee upon a change in control are characterized as
parachute payments, such employee will be subject to a 20% excise tax on
the excess parachute payments pursuant to Section 4999 of the Code, and
the Company will be denied any deduction with respect to such excess
parachute payments.
This summary of federal income tax consequences of NQSOs, ISOs,
restricted stock, performance shares, stock awards, and cash awards does
not purport to be complete. Reference should be made to the applicable
provisions of the Code. There also may be state and local income tax
consequences applicable to transactions involving Incentives.
Grants During the Last Fiscal Year
The following table sets forth information with respect to the
Incentives that were awarded in 1996 to each of the executive officers
named above, all current executive officers as a group, and all
employees, including all current officers who are not executive
officers, as a group, under the Plan. No (i) director or nominee for
election as a director who is not a named executive officer nor any (ii)
associate of any director, nominee for director, or executive officer
participates or is anticipated to be eligible to participate in the
Plan. All outstanding Incentives are NQSOs. The amounts and types of
Incentives that will be granted under the Plan in 1997 have not yet been
determined by the Compensation Committee of the Board of Directors.
NEW PLAN BENEFITS
-----------------
Amended and Restated Incentive
Compensation Plan
Number
of Securities
Name and Position Underlying NQSOs
- ------------------ ---------------------------------
George C. Yax, 0
Chairman of the Board
Rodney W. Stanley, 375,000
President and Chief Executive Officer
Prentiss A. Freeman, 0
Executive Vice President and
Chief Operating Officer
Robert B. Suggs, 0
Vice President/General Manager- Gulf
Services Division
Quinn J. Hebert, 0
Corporate Counsel and Secretary
Executive Group 375,000
Non-Executive Officer 204,000
Employee Group
________________
Vote Required for Approval of the Plan
The affirmative vote of the holders of a majority of the vote
actually cast will be required for approval of the Plan.
The Board of Directors unanimously recommends that shareholders
vote FOR the approval of the Amended and Restated Incentive Compensation
Plan.
EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS
Summary of Executive Compensation
The following table provides a summary of the compensation for the
fiscal year ended December 31, 1996 and each of the two years ended
October 31, 1994 and 1995 of (i) the chief executive officer and (ii)
the four most highly compensated executive officers of the Company
during 1996 other than the chief executive officer (collectively, the
"Named Executive Officers").
Summary Compensation Table
</TABLE>
<TABLE>
<CAPTION> Long-Term
Annual Compensation Compensation
___________________ ______________
Securities Underlying All Other
Name and Principal Position Year Salary Bonus Options (#) Compensation
___________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
George C. Yax 1996 $266,667(1) $ 0 0 $ 0
Chairman of the Board(1) 1995 300,000 0 0 0
1994 300,000 0 0 924(2)
Rodney W. Stanley, 1996 $ 86,333(3) $ 0 375,000(3) $ 0
President and
Chief Executive Officer(1)(3)
Prentiss A. Freeman 1996 $203,862 $ 0 0 $ 0
Executive Vice 1995 203,111 0 0 0
President and Chief 1994 201,296 0 0 924(2)
Operating Officer
Robert B. Suggs 1996 $109,992 $30,000 0 $ 0
Vice President/General
Manager - Gulf
Services Division
Quinn J. Hebert 1996 $90,000 $30,000 0 $
Corporate Counsel and
Secretary
______________________________
(1) From the Company's formation in 1981 through December 1996, Mr. Yax
served as the Company's Chairman of the Board, President and Chief
Executive Officer. As part of the Company's succession plan, Mr. Yax
resigned as President and Chief Executive Officer and Rodney W. Stanley
became the Company's President and Chief Executive Officer in December
1996. Mr. Yax retains the role of Chairman of the Board at an annual
salary of $75,000.
(2) Consists of $924 in matching contributions by the Company through
the Company's Profit Sharing Plan.
(3) Mr. Stanley commenced employment with the Company on August 1, 1996;
thus the amount stated as his salary reflects a partial year of
employment. Mr. Stanley's annual salary as President and Chief
Executive Officer is $275,000. For information with respect to his
stock options, see "Stanley Employment Agreement" below.
</TABLE>
Stock Options
The following table sets forth information with respect to all
stock options granted in 1996 by the Company to each of the Named
Executive Officers. No stock appreciation rights have been granted by
the Company to any of the Named Executive Officers.
Option Grants in Last Fiscal Year
Grant
Individual Grants Date
Value
________________________________________________________________________
(a) (b) (c) (d) (e) (f)
Number of % of Total
Securities Options Exercise Grant
Underlying Granted to or Base Date
Options Employees Price Expiration Present
Name Granted (#) in Fiscal Year ($/Sh) Date Value ($)
_________________________________________________________________________
George C. Yax 0 0 -- -- --
Rodney W. Stanley 375,000 65% $8.875 8/1/06 $2,070,000
Prentiss A. Freeman 0 0 -- -- --
Robert B. Suggs 0 0 -- -- --
Quinn J. Hebert 0 0 -- -- --
(1) Each of the stock options granted in 1996 by the Company to the
Named Executive Officers is not immediately exercisable. One-fifth of
the number of stock options covered by each such grant will become
exercisable on the first through fifth anniversaries of the respective
date of grant thereof provided certain Company-wide performance goals
are attained. Such stock options will, however, become immediately
exercisable in their entirety at such time as determined by the
Compensation Committee of the Board of Directors in its sole discretion
or upon the occurrence of certain events specified in the Amended and
Restated Incentive Compensation Plan.
(2) The Black-Scholes option pricing model was used to determine the
grant date present value of the stock options granted in 1996 by the
Company to the Named Executive Officers. Under the Black-Scholes option
pricing model, the grant date present value of each stock option
referred to in the table was calculated to be $5.52. The following
facts and assumptions were used in making such calculation: (a) an
unadjusted exercise price of $8.875 for each such stock option; (ii) a
fair market value of $8.875 for one share of Company common stock on the
date of grant; (iii) no dividend yield; (iv) a stock option term of 10
years; (v) a stock volatility of 36.42%, based on an analysis of weekly
closing stock prices of shares of Company common stock during the three-
year period prior to the date of grant; and (vi) an assumed risk-free
interest rate of 6.79%, which is equivalent to the yield on a ten-year
treasury note on the date of grant. No other discounts or restrictions
related to vesting or the likelihood of vesting of stock options were
applied. The resulting grant date present value of $5.52 was multiplied
by the total number of stock options granted to each of the Named
Executive Officers to determine the total grant date present value of
such stock options granted to each Named Executive Officer,
respectively.
The following table sets forth information with respect to any
exercises of Company stock options in 1996 by each of the Named
Executive Officers and all outstanding Company stock options held by
each of the Named Executive Officers as of December 31, 1996. No stock
appreciation rights have been granted by the Company to any of the Named
Executive Officers.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
(a) (b) (c) (d) (e)
_______________________________________________________________________
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares FY-End (#) FY-End($)
Acquired on ___________ ____________
Name Exercise (#) Value Exercisable/ Exercisable/
Acquired on Realized ($) Unexercisable*Unexercisable*
________________________________________________________________________
George C. Yax 0 -- 0 $ 0
0* 0*
Rodney W. Stanley 0 -- 0 $ 0
375,000* 1,125,000*
Prentiss A. Freeman 0 -- 16,665 $ 72,909
8,345* 36,509*
Robert B. Suggs 5,280 $25,080 0 $ 0
2,720* 11,900*
Quinn J. Hebert 0 -- 5,333 $ 23,332
2,667* 11,668*
Stanley Employment Agreement
The Company and Mr. Stanley entered into a five-year employment
agreement (the "Agreement") effective August 1, 1996. Pursuant to the
provisions of the Agreement, Mr. Stanley's initial annual salary was
$200,000 as Senior Vice President - International Operations and was
increased to $275,000 upon Mr. Stanley's election as President and Chief
Executive Officer. Mr. Stanley's salary is subject to review by the
Board of Directors annually. Mr. Stanley is also entitled to
participate in all pension, incentive, bonus and other employee benefit
plans made available to the Company's executive officers. If Mr.
Stanley (i) dies or becomes disabled, (ii) is terminated for "Cause", as
defined in the Agreement, or (iii) leaves the employ of the Company for
a reason other than "Good Reason", as defined in the Agreement, the
Company owes Mr. Stanley no further amounts under the Agreement. If,
however, Mr. Stanley is (i) terminated for a reason other than "Cause"
or (ii) leaves the employ of the Company for "Good Reason", the Company
is required to pay Mr. Stanley an amount equal to his then full current
annual salary plus the full incentive bonus paid or payable for the year
immediately preceding such termination.
Under the Agreement, Mr. Stanley will be eligible for an annual
bonus upon the attainment of certain Company-wide performance goals, the
amount of which is to be determined by the Company's Compensation
Committee. Pursuant to the terms of the Agreement, Mr. Stanley was
granted options to purchase 375,000 shares of Common Stock on August 1,
1996 at an option exercise price of $8.875 per share. The grant of the
option to purchase 225,000 of these shares is subject to approval by the
Company stockholders at the 1997 annual meeting. Such options will
become exercisable in installments of 75,000 shares each year, provided
certain Company-wide performance goals are attained. If such
shareholder approval is not obtained, the Company is obligated to
provide Mr. Stanley with the economic equivalent of those options not
approved.
At the end of Mr. Stanley's employment with the Company, the
Company may, in its sole discretion under the Agreement, elect to
trigger a non-competition covenant pursuant to which Mr. Stanley will be
prohibited from competing with the Company in various geographic areas
for a period of up to two years. The amount of the noncompetition
payment to Mr. Stanley under the Agreement will be either $100,000 per
year or $200,000 per year, depending upon the reason for Mr. Stanley's
employment termination.
Compensation Committee Interlocks and Insider Participation
Messrs. Lasher and O'Malley serve on the Company's Compensation
Committee, with Mr. Lasher acting as its Chairman. No executive officer
of the Company during the fiscal year ended December 31, 1996 served as
a director, or member of the compensation committee, of another entity
one of whose executive officers served as a director, or on the
Compensation Committee, of the Company.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors reviews,
analyzes and establishes compensation packages for the Company's
executive officers, reviews and provides general guidance for the
compensation packages for the Company's profit center managers,
evaluates the performance of the Chief Executive Officer and Chief
Operating Officer and administers the grant of stock-based awards under
the Company's Amended and Restated Incentive Compensation Plan. Messrs.
O'Malley and Lasher, who comprise the Compensation Committee, are both
independent, non-employee directors of the Company.
In consultation with an employee benefits consultant retained by the
Company to assess the Company's executive compensation in comparison to
that of fourteen other publicly-held oilfield service companies (the
"Comparison Group"), the Committee adopted an executive compensation
philosophy that seeks to (i) provide a competitive total compensation
package that enables the Company to hire, develop, reward and retain key
executives, (ii) tie executive compensation to the Company's annual
business objectives and strategies, and (iii) provide variable total
reward opportunities that are directly tied to increases in stockholder
value. The Company's compensation philosophy is also intended to reward
individual initiative and achievement, and to assure that the amount and
nature of executive compensation is reasonably commensurate with the
Company's financial condition, results of operations and Common Stock
performance.
These objectives are generally sought to be met with base salaries
that are generally competitive with those of the Comparison Group,
annual incentive bonuses keyed primarily to the attainment of
performance targets tied to the Company's budget and the award of stock
options or other stock-based awards that focus on increases in stock
value over a longer term. Factors considered from time to time in
establishing and reviewing the Company's executive compensation program
include the Company's financial performance, management's business
philosophy, industry practices and the Company's culture and
organizational structure.
In 1996, Mr. Yax received total cash compensation (in the form of
salary) of $266,667 from the Company. The determination of Mr. Yax's
compensation was based upon the factors described above with respect to
all executive officers, and, in addition, upon Mr. Yax's extensive
experience, leadership and reputation within the oilfield service
industry and his leadership role in the Company's development. Mr.
Yax's salary remained unchanged from 1995. In December, 1996, as part
of the Company's succession plan, Mr. Yax stepped down as President and
Chief Executive Officer, but remains the Company's Chairman of the
Board.
In order to link a portion of executive compensation to Company
performance, the Committee determined to continue during 1996 an annual
bonus plan under which each executive officer and the Company's eight
profit center managers could earn an annual bonus of between
approximately 15% to 60% of salary based on the quality of the
individual's performance and the attainment of pre-established revenue
and profit goals by the Company as a whole and by individual profit
centers. The exact amount of the bonus paid to the executive officers,
however, was determined by the Compensation Committee.
Five of the Company's eight profit centers surpassed the 1996
objective performance milestones and the Company paid bonuses to the
executives responsible for those profit centers of up to 30% of the
executive's salary, totaling approximately $135,000 for the group.
Although the Company's 1996 revenues increased by approximately 20% from
$88.7 million for 1995 compared to $105.8 million for 1996 and the
Company recorded $5.0 million (or $.74/share) of net income for 1996
compared to a net loss of $329,000 (or $.05/share) for 1995, the
Company, on a consolidated basis, did not achieve the Company-wide
performance milestones for 1996. Based on the Company's failure to
achieve the Company-wide 1996 performance milestones and notwithstanding
the significant net income generated in 1996, the Compensation Committee
elected not to pay a bonus to Mr. Yax, as Chief Executive Officer.
Another element of the Committee's performance-based compensation
philosophy is the Amended and Restated Incentive Compensation Plan. The
purpose of the Plan is to link the interests of management to the
interests of stockholders, focus on intermediate and long-term results.
Stock options grants are typically made at 100% of the market value of
the stock on the date of the award, are not exercisable during the first
year after the award and are exercisable thereafter under a vesting
schedule selected by the Committee that specifies the number of the
options becoming exercisable each year throughout the schedule. The
size of option grants is determined subjectively, generally in
approximate proportion to the officer's level of responsibility and
experience. For those purposes, in 1996, the Company granted options to
Mr. Stanley, who had just been hired by the Company, to purchase 375,000
shares of Common Stock. No other executive officers received option
grants in 1996.
Under Section 162(m) ("Section 162(m)") of the Internal Revenue Code
of 1986, as amended, no deduction by a publicly held corporation is
allowed for compensation paid by the corporation to its most highly
compensated executive officers to the extent that the amount of such
compensation for the taxable year for any such individual exceeds $1
million. Section 162(m) provides for the exclusion of compensation that
qualifies as performance-based from the compensation that is subject to
such deduction limitation. The Company is now seeking stockholder
approval of the Amended and Restated Incentive Compensation Plan at the
1997 annual meeting of stockholders to ensure that stock options granted
through such Plan will continue to be fully deductible. Other types of
incentive compensation granted through such Plan may also qualify as
performance-based compensation if additional requirements are met. The
Company anticipates that the components of individual annual
compensation for each highly compensated executive officer that do not
qualify for any exclusion from the deduction limitation of Section
162(m) will not exceed $1 million and will therefore qualify for
deductibility.
Submitted by the Compensation Committee of the Board of Directors
William C. O'MalleyStephen A. Lasher
Performance Graph
The following graph presents the cumulative total shareholder return
on the Company's Common Stock for the period since the Company's initial
public offering in July, 1993 compared to the cumulative total
shareholder return, assuming reinvestment of dividends, for (i) all U.S.
stocks quoted on the Nasdaq Stock Market as measured by the CSRP Total
Return Index for the Nasdaq Stock Market (U.S.), (ii) all U.S. stocks
quoted on the Nasdaq Stock Market that have the same Standard Industrial
Classification ("SIC") code as the Company (oilfield services) ("Nasdaq
Oilfield Services Group") and (iii) a peer group selected by the Company
("Peer Group") consisting of the following issuers, each of which is in
the offshore construction business or the offshore oil and gas support
services business, or both businesses: Coflexip Stena Offshore, Inc.,
Global Industries, Inc., J. Ray McDermott, S.ALtd., Oceaneering
International, Inc., SEACOR Holdings, Inc., and Stolt Comex Seaway S.A.
The Company believes that the members of the Peer Group provide services
and products more comparable to those of the Company than those provided
by the Nasdaq Oilfield Services Group. For this reason the Company has
included the Peer Group in the following performance graph and intends
to use it in future performance graphs in place of the Nasdaq Oilfield
Services Group. The Company's initial public offering was completed in
July, 1993 and, accordingly, return information for earlier periods is
not presented. These indices have been prepared for the Company by the
Center for Research in Securities Prices (CSRP) at the University of
Chicago. The graph assumes $100 was invested on July 21, 1993 in
Company Common Stock and in the three indices presented. The returns of
each member of the Peer Group has been weighted according to that
issuer's stock market capitalization. The Company paid no dividends
during the period presented. The cumulative total percentage returns
for the period presented were as follows: Company Common Stock, 21.8%;
all U.S. stocks quoted on the Nasdaq Stock Market, 89.0%; the Nasdaq
Oilfield Services Group, 181.4%; and the Peer Group, 50.5%.
[INSERT PERFORMANCE GRAPH HERE]
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a
quorum. Stockholders voting, or abstaining from voting, by proxy on any
issue will be counted as present for purposes of constituting a quorum.
If a quorum is present, (i) the election of the director to be elected
at the Meeting will be determined by plurality vote (that is, the
nominee receiving the largest number of votes will be elected) and (ii)
a majority of votes actually cast will be required to approve the
Company's Amended and Restated Incentive Compensation Plan and will
decide any other matter properly brought before the Meeting for a vote
of stockholders. Shares for which proxy authority to vote for any
nominee for election as a director is withheld by the stockholders and
shares that have not been voted by brokers who may hold shares on behalf
of the beneficial owners ("broker non-votes") will not be counted as
voted for the affected nominee. With respect to the proposal to approve
the Amended and Restated Incentive Compensation Plan and with respect to
any other matter coming before the Meeting, shares that are not voted as
a result of abstentions and broker non-votes will not be considered as
cast in determining whether or not a majority of votes has been cast.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as to the only person
known by the Company to have beneficial ownership, as of March 1, 1997,
of more than 5% of the outstanding shares of Company Common Stock, other
than George C. Yax, whose beneficial ownership and address is disclosed
under "Election of Directors." As of March 1, 1997, the Company had
10,463,248 shares outstanding. To the Company's knowledge, all shares
shown as beneficially owned are held with sole voting power and sole
dispositive power unless otherwise indicated. The information set forth
below has been determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934 on the basis of the most recent
information furnished to the Company by the person listed.
Shares
Name and Address Beneficially Owned Percent of Class
- ---------------- ------------------ ----------------
Heartland Advisors, Inc. 592,5001 5.7%
790 N. Milwaukee Street
Milwaukee, Wisconsin 53202
(1) Of the 592,500 shares, Heartland Advisors, Inc. has sole voting
power as to 567,500 of such shares and sole dispositive power as to all
592,500 shares.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's financial statements for the year ended December 31,
1996 were audited by the firm of Price Waterhouse LLP. Representatives
of Price Waterhouse LLP are not expected to be present at the Meeting,
but will be available to respond to appropriate questions in writing.
STOCKHOLDER PROPOSALS
Eligible stockholders who desire to present a proposal qualified for
inclusion in the proxy materials relating to the Company's 1998 annual
meeting must forward such proposal to the Secretary of the Company at
the address set forth on the Notice of the Meeting in time to arrive at
the Company prior to December 18, 1997.
By Order of the Board of Directors
/s/ Quinn J. Hebert
Quinn J. Hebert
Secretary
Lafayette, Louisiana
April 7, 1997
<PAGE>
EXHIBIT A
AMERICAN OILFIELD DIVERS, INC.
AMENDED AND RESTATED INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of the Amended and Restated Incentive
Compensation Plan (the "Plan") of American Oilfield Divers, Inc. ("AOD")
is to increase shareholder value and to advance the interests of AOD and
its subsidiaries (collectively, the "Company") by furnishing a variety
of economic incentives (the "Incentives") designed to attract, retain
and motivate key employees and officers and to strengthen the mutuality
of interests between such employees and AOD's shareholders. Incentives
may consist of opportunities to purchase or receive shares of common
stock, no par value per share, of AOD (the "Common Stock"), monetary
payments or both, on terms determined under the Plan. As used in the
Plan, the term "subsidiary" means any corporation of which AOD owns
(directly or indirectly) within the meaning of Section 425(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), 50% or more of
the total combined voting power of all classes of stock.
2. Administration.
2.1. Composition. Prior to the registration of the Common
Stock under the Securities Exchange Act of 1934 (the "1934 Act"),
the Plan shall be administered by the Board of Directors of AOD.
After registration of the Common Stock under the 1934 Act, the
Plan shall be administered by the compensation committee (the
"Committee") of the Board of Directors of AOD, consisting of two
or more members of the Board of Directors, each of whom, to the
extent necessary to comply with Rule 16b-3 ("Rule 16b-3")
promulgated by the Securities and Exchange Commission (the "SEC")
under the 1934 Act or any successor rule or regulation thereto as
in effect from time to time, is a "non-employee director" within
the meaning of Rule 16b-3 and, to the extent necessary to comply
with Section 162(m) ("Section 162(m)") of the Code and all
regulations promulgated thereunder as in effect from time to time,
is an "outside director" under Section 162(m). References herein
to the "Committee" shall refer to the Board prior to the
registration of the Common Stock under the 1934 Act.
2.2. Authority. The Committee shall have plenary authority
to award Incentives under the Plan, to interpret the Plan, to
establish any rules or regulations relating to the Plan that it
determines to be appropriate, to enter into agreements with
participants as to the terms of the Incentives (the "Incentive
Agreements") and to make any other determination that it believes
necessary or advisable for the proper administration of the Plan.
Its decisions in matters relating to the Plan shall be final and
conclusive on the Company and participants. The Committee may
delegate its authority hereunder to the extent provided elsewhere
herein.
3. Eligible Employees. Key employees of the Company (including
officers and directors who are full-time employees of the Company) shall
become eligible to receive Incentives under the Plan when designated by
the Committee. Employees may be designated individually or by groups or
categories, as the Committee deems appropriate. With respect to
participants not subject to Section 16 of the 1934 Act, the Committee
may delegate its authority to designate participants, to determine the
size and type of Incentive to be received by those participants and to
determine or modify performance objectives for those participants.
4. Types of Incentives. Incentives may be granted under the
Plan in any of the following forms, either individually or in
combination, (a) incentive stock options and non-qualified stock
options; (b) stock awards; (c) restricted stock; (d) performance shares
and (e) cash awards.
5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as provided
in Section 10.5, a total of 1,200,000 shares of Common Stock are
authorized to be issued under the Plan. In the event that a stock
option granted hereunder expires or is terminated or cancelled
prior to exercise, any shares of Common Stock that were issuable
under such options may again be issued under the Plan. In the
event that shares of Common Stock are issued as restricted stock
or pursuant to a stock award and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired shares may again
be issued under the Plan.
5.2. Type of Common Stock. Common Stock issued under the
Plan may be authorized and unissued shares or issued shares held
as treasury shares.
5.3. Individual Limit. Any provision of the Plan to the
contrary notwithstanding, no individual may receive in any year
Incentives under the Plan, whether payable in cash or shares of
Common Stock, that relate to more than 400,000 shares of Common
Stock.
6. Stock Options. A stock option is a right to purchase shares
of Common Stock from AOD. Stock options granted under this Plan may be
incentive stock options or non-qualified stock options. Any option that
is designated as a non-qualified stock option shall not be treated as an
incentive stock option. Each stock option granted by the Committee
under this Plan shall be subject to the following terms and conditions:
6.1. Price. The exercise price per share shall be
determined by the Committee, subject to adjustment under Section
10.5; provided that in no event shall the option price be less
than 100% of the Fair Market Value of a share of Common Stock on
the date of grant.
6.2. Number. The number of shares of Common Stock subject
to the option shall be determined by the Committee, subject to
adjustment as provided in Section 10.5.
6.3. Duration and Time for Exercise. The term of each
stock option shall be determined by the Committee. Each stock
option shall become exercisable at such time or times during its
term as shall be determined by the Committee at the time of grant.
The Committee may accelerate the exercisability of any stock
option.
6.4. Repurchase. Upon approval of the Committee, the
Company may repurchase a previously granted stock option from the
holder thereof by mutual agreement before such option has been
exercised by payment to such holder of the amount per share by
which: (i) the Fair Market Value (as defined in Section 10.12) of
the Common Stock subject to the option on the date of purchase
exceeds (ii) the exercise price.
6.5. Manner of Exercise. A stock option may be exercised,
in whole or in part, by giving written notice to the Company,
specifying the number of shares of Common Stock to be purchased.
The exercise notice shall be accompanied by the full purchase
price for such shares. The option price shall be payable in
United States dollars and may be paid by cash; check; by delivery
of shares of Common Stock held by the holder of such stock option
for at least six months, which shares shall be valued for this
purpose at the Fair Market Value on the date such option is
exercised, or in such other manner as may be authorized from time
to time by the Committee. The Committee may also permit holders
of such stock options, either on a selective or aggregate basis,
simultaneously to exercise options and sell the shares of Common
Stock acquired pursuant to a brokerage or similar arrangement,
approved in advance by the Committee, and use the proceeds from
such sale as payment of the exercise price. In the case of
delivery of an uncertified check upon exercise of a stock option,
no shares shall be issued until the check has been paid in full.
Prior to the issuance of shares of Common Stock upon the exercise
of a stock option, a holder of a stock option shall have no rights
as a shareholder.
6.6. Incentive Stock Options. Notwithstanding anything in
the Plan to the contrary, the following additional provisions
shall apply to the grant of stock options that are intended to
qualify as Incentive Stock Options (as such term is defined in
Section 422A of the Code):
(a) Any Incentive Stock Option agreement authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events be
consistent with and contain or be deemed to contain all
provisions required in order to qualify the options as
Incentive Stock Options.
(b) All Incentive Stock Options must be granted
within ten years from the date on which this Plan is adopted
by the Board of Directors.
(c) Unless sooner exercised, all Incentive Stock
Options shall expire no later than ten years after the date
of grant.
(d) The option price for Incentive Stock Options
shall be not less than the Fair Market Value of the Common
Stock subject to the option on the date of grant.
(e) No Incentive Stock Options shall be granted to
any participant who, at the time such option is granted,
would own (within the meaning of Section 422A of the Code)
stock possessing more than 10% of the total combined voting
power of all classes of stock of the employer corporation or
of its parent or subsidiary corporation.
(f) The aggregate Fair Market Value (determined with
respect to each Incentive Stock Option as of the time such
Incentive Stock Option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for
the first time by a participant during any calendar year
(under the Plan or any other plan of AOD or any of its
subsidiaries) shall not exceed $100,000.
6.7. Equity Maintenance. If a participant exercises an
option during the term of his employment with the Company, and
subject to Committee approval pays the exercise price (or any
portion thereof) through the surrender of shares of outstanding
Common Stock previously held in the participant's name, the
Committee may, in its discretion, grant to such participant an
additional option to purchase the number of shares of Common Stock
equal to the shares of Common Stock so surrendered by such
participant. Any such additional options granted by the Committee
shall be exercisable at the Fair Market Value of the Common Stock
determined as of the respective dates such additional options may
be granted. As stated above, such additional options may be
granted only in connection with the exercise of options by the
participant during the term of his active employment with the
Company. The grant of such additional options under this Section
6.7 shall be made upon such other terms and conditions as the
Committee may from time to time determine.
7. Stock Awards and Restricted Stock. A stock award consists
of the transfer by the Company to a participant of shares of Common
Stock, without other payment therefor, as additional compensation for
services previously provided to the Company. Restricted stock consists
of shares of Common Stock that are transferred to a participant by the
Company for services previously provided to the Company or sold by the
Company to a participant for the price provided in Section 7.2 below,
but subject to restrictions on sale or other transfer by the
participant. The transfer of Common Stock pursuant to stock awards and
the transfer and sale of restricted stock shall be subject to the terms
and conditions provided below.
7.1. Number of Shares. The number of shares to be
transferred by the Company to a participant pursuant to a stock
award or as restricted stock shall be determined by the Committee.
7.2. Sale Price. The Committee shall determine the price,
if any, at which shares of restricted stock shall be sold to a
participant, which may vary from time to time and among
participants.
7.3. The Restricted Period. At the time an award of
restricted stock is made, the Committee shall establish a period
of time during which the transfer of the shares of restricted
stock shall be restricted (the "Restricted Period"). Each award
of restricted stock may have a different Restricted Period. A
Restricted Period of at least three years is required, except that
if vesting of the shares is subject to the attainment of specified
performance goals, a Restricted Period of one year or more is
permitted. Unless otherwise provided in the Incentive Agreement,
the Committee may in its discretion declare the Restricted Period
terminated and permit the sale or transfer of the restricted
stock. The expiration of the Restricted Period shall also occur
as provided under Section 10.3.
7.4. Escrow. In order to enforce the restrictions imposed
by the Committee pursuant to Section 7.3, the participant
receiving restricted stock shall enter into an agreement with the
Company setting forth the conditions of the grant. Shares of
restricted stock shall be registered in the name of the
participant and the certificates representing such shares shall be
deposited, together with a stock power endorsed in blank, with the
Company. Each such certificate shall bear a legend in
substantially the following form:
The transferability of this certificate
and the shares of Common Stock represented
by it are subject to the terms and
conditions (including conditions of
forfeiture) contained in the American
Oilfield Divers, Inc. Amended and Restated
Incentive Compensation Plan, and an
agreement entered into between the
registered owner and American Oilfield
Divers, Inc. A copy of the Plan and
agreement is on file in the office of the
secretary of American Oilfield Divers,
Inc.
7.5. End of Restricted Period. Subject to Section 10.4, at
the end of the Restricted Period for shares of restricted stock,
the certificates representing such shares will be delivered free
of restrictions imposed under Section 7.3 to the participant or to
the participant's legal representative, beneficiary or heir.
7.6. Shareholder. Subject to the terms and conditions of
the Plan and the Incentive Agreement, each participant receiving
restricted stock shall have all the rights of a shareholder with
respect to shares of stock during the Restricted Period for such
shares, including without limitation, the right to vote such
shares. Unless otherwise provided in the Incentive Agreement,
dividends paid in cash or property other than Common Stock with
respect to shares of restricted stock shall be paid to the
participant currently.
8. Performance Shares. A performance share consists of an
award that shall be paid in shares of Common Stock, as described below,
without any payment by the participant. The award of performance shares
shall be subject to such terms and conditions as the Committee deems
appropriate, including the following:
8.1. Performance Objectives. Each performance share will
be subject to performance objectives for the Company or one of its
operating divisions to be achieved by the end of a specified
period. The number of performance shares awarded shall be
determined by the Committee and may be subject to such terms and
conditions, as the Committee shall determine. If the performance
objectives are achieved, each participant will be paid in shares
of Common Stock equal to the number of performance shares
initially granted to that participant. If such objectives are not
met, each award of performance shares may provide for lesser
payments in accordance with formulae established in the award.
8.2. Not a Shareholder. The award of performance shares to
a participant shall not create any rights in such participant as a
shareholder of the Company, until the payment of shares of Common
Stock with respect to an award.
8.3. Dividend Equivalent Payments. Unless a performance
share award is granted by the Committee in conjunction with
dividend equivalent payment rights or other such rights, no
adjustment shall be made in performance shares awarded on account
of cash dividends that may be paid or other rights that may be
issued to the holders of Common Stock prior to the end of any
period for which performance objectives were established.
9. Cash Awards. A cash award consists of a monetary payment
made by the Company to a participant as additional compensation for his
services to the Company. Payment of a cash award may depend on
achievement of performance objectives by the Company or by individuals
or may relate to the amount of the tax obligation imposed on the
participant in connection with a stock Incentive granted to the
participant. The amount of any monetary payment constituting a cash
award shall be determined by the Committee in its sole discretion. Cash
awards may be subject to other terms and conditions, which may vary from
time to time and among participants, as the Committee determines to be
appropriate.
10. General.
10.1. Duration. The Plan shall remain in effect until all
Incentives granted under the Plan have either been satisfied by
the issuance of shares of Common Stock or the payment of cash or
been terminated under the terms of the Plan and all restrictions
imposed on shares of Common Stock in connection with their
issuance under the Plan have lapsed.
10.2. Transferability. No stock option or performance
share may be transferred, pledged, assigned or otherwise
encumbered by a participant except:
(i) by will;
(ii) by the laws of descent and distribution;
(iii) pursuant to a domestic relations order, as
defined in the Code, if permitted by the Committee and so provided
in the Incentive Agreement or an amendment thereto; or
(iv) as to stock options only, if permitted by the
Committee and so provided in the Incentive Agreement or an
amendment thereto, (a) to Immediate Family Members, (b) to a
partnership in which Immediate Family Members, or entities in
which Immediate Family Members are the sole owners, members or
beneficiaries, as appropriate, are the only partners, (c) to a
limited liability company in which Immediate Family Members, or
entities in which Immediate Family Members are the sole owners,
members or beneficiaries, as appropriate, are the only members, or
(d) to a trust for the sole benefit of Immediate Family Members.
"Immediate Family Members" shall be defined as the spouse and
natural or adopted children or grandchildren of the participant
and their spouses. To the extent that an Incentive Stock Option
is permitted to be transferred during the lifetime of the
participant, it shall be treated thereafter as a non-qualified
stock option. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of stock options or performance
shares, or levy of attachment or similar process upon stock
options of performance shares not specifically permitted herein,
shall be null and void and without effect.
10.3. Effect of Termination of Employment or Death. In the
event that a participant ceases to be an employee of the Company
for any reason, including death, any Incentives may be exercised
or shall expire at such times as may be determined by the
Committee in the Incentive Agreement.
10.4. Additional Condition. Anything in this Plan to the
contrary notwithstanding: (a) the Company may, if it shall
determine it necessary or desirable for any reason, at the time of
award of any Incentive or the issuance of any shares of Common
Stock pursuant to any Incentive, require the recipient or holder
of the Incentive, as a condition to the receipt thereof or to the
receipt of shares of Common Stock issued pursuant thereto, to
deliver to the Company a written representation of present
intention to acquire the Incentive or the shares of Common Stock
issued pursuant thereto for his own account for investment and not
for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration
or qualification (or any updating of any such document) of any
Incentive or the shares of Common Stock issuable pursuant thereto
is necessary on any securities exchange or under any federal or
state securities or blue sky law, or that the consent or approval
of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with the award of any Incentive,
the issuance of shares of Common Stock pursuant thereto, or the
removal of any restrictions imposed on such shares, such Incentive
shall not be awarded or such shares of Common Stock shall not be
issued or such restrictions shall not be removed, as the case may
be, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.
10.5. Adjustment. In the event of any merger, consoli-
dation or reorganization of the Company with any other corporation
or corporations, there shall be substituted for each of the shares
of Common Stock then subject to the Plan, including shares subject
to restrictions, options, or achievement of performance share
objectives, the number and kind of shares of stock or other
securities to which the holders of the shares of Common Stock will
be entitled pursuant to the transaction. In the event of any
recapitalization, stock dividend, stock split, combination of
shares or other change in the Common Stock, the number of shares
of Common Stock then subject to the Plan, including shares subject
to restrictions, options or achievement of performance share
objectives, shall be adjusted in proportion to the change in
outstanding shares of Common Stock. In the event of any such
adjustments, the purchase price of any option, the performance
objectives of any Incentive, and the shares of Common Stock
issuable pursuant to any Incentive shall be adjusted as and to the
extent appropriate, in the reasonable discretion of the Committee,
to provide the holders thereof with the same relative rights
before and after such adjustment. No such adjustments required by
this Section 10.5 shall be authorized to the extent that such
authority would be inconsistent with the requirements for full
deductibility under Section 162(m).
10.6. Incentive Agreements. Except in the case of stock
awards or cash awards, the terms of each Incentive shall be stated
in an agreement approved by the Committee. The Committee may also
determine to enter into agreements with holders of options to
reclassify or convert certain outstanding options, within the
terms of the Plan, as Incentive Stock Options or as non-qualified
stock options.
10.7. Withholding.
(a) The Company shall have the right to withhold from
any payments made under the Plan or to collect as a
condition of payment, any taxes required by law to be
withheld. At any time that a participant is required to pay
to the Company an amount required to be withheld under
applicable income tax laws in connection with the issuance
of Common Stock, the lapse of restrictions on Common Stock
or the exercise of an option, the participant may, subject
to the approval of the Committee, satisfy this obligation in
whole or in part by electing (the "Election") to have the
Company withhold shares of Common Stock having a value equal
to the amount required to be withheld. The value of the
shares to be withheld shall be based on the Fair Market
Value of the Common Stock on the date that the amount of
tax to be withheld shall be determined ("Tax Date").
(b) Each Election must be made prior to the Tax Date.
The Committee may disapprove of any Election, may suspend or
terminate the right to make Elections, or may provide with
respect to any Incentive that the right to make Elections
shall not apply to such Incentive. If a participant makes
an election under Section 83(b) of the Code with respect to
shares of restricted stock, an Election is not permitted to
be made.
10.8. No Continued Employment. No participant under the
Plan shall have any right, because of his or her participation, to
continue in the employ of the Company for any period of time or to
any right to continue his or her present or any other rate of
compensation.
10.9. Deferral Permitted. Payment of cash or distribution
of any shares of Common Stock to which a participant is entitled
under any Incentive shall be made as provided in the Incentive
Agreement. Payment may be deferred at the option of the
participant if provided in the Incentive Agreement.
10.10. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time; provided, however, that no
amendment shall be made without shareholder approval if such
approval is necessary to comply with any tax or regulatory
requirement, including for these purposes any approval necessary
to qualify Incentives as "performance based" compensation under
Section 162(m) if such qualification is deemed necessary or
advisable by the Committee; and provided further, that no
amendment or discontinuance shall, subject to adjustments
permitted under Section 10.5, change or impair, without the
consent of the holder thereof, an Incentive previously granted,
except that the Company retains the right to (a) convert any
outstanding Incentive Stock Option to a non-qualified stock
option, or (b) require the forfeiture of an Incentive if a
participant's employment is terminated for cause.
10.11. Acceleration of Incentives. Notwithstanding any
provision in this Plan or in any Incentive Agreement to the
contrary, the restrictions on all shares of restricted stock
awarded shall lapse immediately, all outstanding options shall
become exercisable immediately, and all performance objectives
shall be deemed to be met and payment made immediately, (a) if so
determined by the Committee at any time in its sole discretion, or
(b) if any of the following events occur, unless otherwise
determined by the Board of Directors and a majority of the
Continuing Directors (as defined below):
(i) any person or group of persons, other than any
employee benefit plan of the Company, or related trust,
initially becomes the beneficial owner of securities
representing 30% or more of the total voting power of AOD;
(ii) a majority of the members of the Board of
Directors of AOD is replaced within any period of less than
two years by directors not nominated and approved by the
Board of Directors; or
(iii) the shareholders of AOD approve a
reorganization, merger or consolidation, in each case, with
respect to which the individuals and entities who were the
respective beneficial owners of the Common Stock and other
voting securities of AOD immediately prior to such
reorganization, merger, or consolidation do not, following
such reorganization, merger or consolidation, beneficially
own, directly or indirectly, more than 80% of, respectively,
the then outstanding shares 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
reorganization, merger or consolidation, or a complete
liquidation or dissolution of AOD or the sale or other
disposition of all or substantially all of the assets of
AOD;
provided that, if a participant directs the Committee in
writing prior to the occurrence of any such event (an
"Acceleration Notice") then the acceleration shall occur
only to the extent specified in the Acceleration Notice.
For the purposes of this Section 10.11, beneficial ownership
by a person or group of persons shall be determined in accordance
with Regulation 13D (or any similar successor regulation)
promulgated by the SEC under the 1934 Act. Beneficial ownership
of securities representing more than 30% of the total voting power
may be established by any reasonable method, but shall be presumed
conclusively as to any person who files a Schedule 13D report with
the SEC reporting such ownership. If the restrictions and non-
exercisability periods are eliminated by reason of provision (i),
the limitations of this Plan shall not become applicable again
should the person or group cease to own securities representing
30% or more of the voting power of AOD.
For purposes of this Section 10.11, "Continuing Directors"
are directors (A) who were in office prior to the time any of
provisions (i), (ii) or (iii) occurred or any person publicly
announced an intention to acquire securities representing 20% or
more of the voting power of AOD, (B) directors in office for a
period of more than two years, and (C) directors nominated and
approved by the Continuing Directors.
10.12. Definition of Fair Market Value. Whenever "Fair
Market Value" of Common Stock shall be determined for purposes of
this Plan, it shall be determined as follows: (a) if the Common
Stock is listed on an established stock exchange or any automated
quotation system that provides sale quotations, the closing sale
price for a share of the Common Stock on such exchange or
quotation system on the applicable date, or if no sale of the
Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of the Common Stock; (b)
if the Common Stock is not listed on any exchange or quotation
system, but bid and asked prices are quoted and published, the
mean between the quoted bid and asked prices on the applicable
date, and if bid and asked prices are not available on such day,
on the next preceding day on which such prices were available; and
(c) if the Common Stock is not regularly quoted, the fair market
value of a share of Common Stock on the applicable date as
established by the Committee in good faith.
10.13. Compliance with Section 16. With respect to persons
subject to Section 16 of the 1934 Act, transactions under the Plan
are intended to comply with all applicable conditions of Rule 16b-
3. To the extent any provision of the Plan or action by the
Committee is deemed not to comply with an applicable condition of
Rule 16b-3, it shall be deemed null and void to the extent
permitted by law and deemed advisable by the Committee.
PROXY
This Proxy is Solicited on Behalf of the Board of Directors of
AMERICAN OILFIELD DIVERS, INC.
The undersigned hereby constitutes and appoints Quinn J. Hebert and Cathy
M. Green, or either of them, proxies for the undersigned, with full power
of substitution, to represent the undersigned and to vote, as designated
below, all of the shares of Common Stock of American Oilfield Divers, Inc.
(the "Company") that the undersigned is entitled to vote and held of
record by the undersigned on March 14, 1997 at the annual meeting of
shareholders of the Company to be held on May 16, 1997 (the "Annual Meeting"),
and at any and all adjournments thereof.
The Board of Directors recommends a vote FOR the nominee listed below.
1. Election of Director.
FOR [ ] The nominee listed below (except as marked to
the contrary below)
WITHHOLD AUTHORITY [ ] to vote for the
nominee listed
below.
INSTRUCTIONS: To withhold authority to vote for any nominee, strike a
line through the nominee's name below:
Rodney W. Stanley
The Board of Directors recommends a vote FOR the approval of the Amended
and Restated Incentive Compensation Plan.
2. Approval of the Amended and Restated Incentive Compensation Plan.
[ ] FOR [ ] AGAINST
3. In their discretion to vote upon such other business as may properly
come before the Annual Meeting or any adjournment thereof.
(Please See Reverse Side)
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR the nominee listed on the reverse side and FOR the approval
of the Amended and Restated Incentive Compensation Plan. The individuals
designated above will vote in their discretion on any other matter that
may properly come before the meeting.
Date: , 1997
Signature of Shareholder
Signature if held jointly
Please sign exactly as name
appears on the certificate
or certificates representing
shares to be voted by this
proxy, as shown on the label
to the left. When signing as
executor, administrator,
attorney, trustee, or guardian
please give full title as
such. If a corporation,
please sign full corporation
name by president or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
persons.
Please mark, sign, date and return this proxy promptly using the enclosed
envelope.
