SCHEDULE 14a Information
Proxy Statement Pursuant to Section 14(a) of the Securities and
Exchange Act of 1934 (Amendment No. __________)
Filed by the Registrant /x/
Filed by a part other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
AMERICAN OIFIELD DIVERS, INC.
-----------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------
(Name of Person(s) Filing Proxy Statment, if
other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(e)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
-------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
-------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
-------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------
<PAGE>
AMERICAN OILFIELD DIVERS, INC.
900 TOWN & COUNTRY LANE, SUITE 400
HOUSTON, TEXAS 77024
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1998
To the stockholders of American Oilfield Divers, Inc.:
NOTICE IS HEREBY GIVEN that the 1998 annual meeting of stockholders of
American Oilfield Divers, Inc. (the "Company" ) will be held Friday, May 15,
1998 at 9:00 a.m. local time in the Radisson Suite Hotel Houston West, 10655
Katy Freeway, Houston, Texas 77024, for the following purposes, more fully
described in the accompanying proxy statement:
1. To elect two Class II directors.
2. To approve an amendment to the Amended and Restated Articles of
Incorporation to change the Company name to "Ceanic Corporation."
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 April 3,
1998 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
Houston, Texas
April 8, 1998
AMERICAN OILFIELD DIVERS, INC.
900 TOWN & COUNTRY LANE, SUITE 400
HOUSTON, TEXAS 77024
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1998
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
shareholders to be held May 15, 1998 at the time and place for the purposes
set forth in the accompanying Notice of Meeting, and at any adjournment
thereof (the "Meeting"). This Proxy Statement is being mailed to
shareholders together with the proxy materials on or about April 8, 1998.
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 April 3, 1998 to vote on all matters to come
before the Meeting. On that date the Company had outstanding 10,640,760
shares of Common Stock, each of which is entitled to one vote. If you
specify your choice on the proxy with respect to a matter being voted upon,
the shares represented by your proxy will be voted in accordance with your
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 and for the proposal to amend the Company's Amended and Restated
Articles of Incorporation to change its name to "Ceanic Corporation."
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.
You may revoke your proxy by (i) giving written notice of revocation at
any time before its exercise to Quinn J. Hebert, Secretary, American
Oilfield Divers, Inc., 900 Town & Country Lane, Suite 400, Houston, Texas
77024, (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 DIRECTORS
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 II directors
will expire at the Meeting, and the persons listed as the Class II nominees
in the table below will be nominated for the election to the Board of
Directors for a term expiring in 2001. The term of office of the Class III
directors will expire at the 1999 meeting. The term of office of the Class
I director will expire at the 2000 meeting. Proxies cannot be voted for
more than two nominees, and not more than two directors 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 nominees listed below. In the unanticipated
event that either Mr. O'Malley or Mr. Peterson 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, 1998
concerning the nominees for director, each director and each executive
officer of the Company named, 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., 900 Town & Country Lane, Suite 400, Houston, Texas
77024. All executive officers of the Company, including Messrs. Stanley,
Peterson, Suggs, Hebert, Cowe and Ms. Green serve at the pleasure of the
Board of Directors. The Board of Directors recommends a vote FOR the
nomineess named below:
<TABLE>
<CAPTION>
Principal First Shares
Occupation or Elected Beneficially
Name Age Employment Director Owned Percent
----- --- ------------- -------- ------------ -------
Nominees for Class II Directors (For Term expiring in 2001)
<S> <C> <C> <C> <C> <C>
Kevin C. Peterson 41 Executive Vice President 1997 2,100 *
and Chief Operating
Officer<F1>
William C. O'Malley 61 Chairman of the Board of 1993 20,150<F3> *
Directors, President
and Chief Executive
Officer of Tidewater,
Inc. (marine services)<F2>
Continuing Class III Directors (Term expires in 1999)
George C. Yax 56 Chairman of the Board<F4> 1981 941,731 8.85%
Stephen A. Lasher 50 President of The Gulf 1993 22,500<F3> *
Star Group, Inc.
(financial advisory
services)<F5>
Continuing Class I Director (Term expires in 2000)
Rodney W. Stanley 53 President and Chief 1996 113,800<F3> *
Executive Officer<F6>
Executive Officers not serving as Directors
Robert B. Suggs 50 Senior Vice President - --- 96,000 *
Americas Region<F7>
Gordon J. Cowe 43 Vice President - --- --- *
Corporate Engineering<F8>
Quinn J. Hebert 34 Corporate Counsel and --- * *
Secretary<F9>
Cathy M. Green 32 Vice President - Finance --- 2,500<F3> *
and Chief Financial
Officer<F10>
---------
All nominees, directors and executive officers as a
group (nine persons) 1,198,781 11.27%
- ----------
* Less than one percent.
<FN>
<F1> Mr. Peterson has been Chief Operating Officer since October 13, 1997. He joined the
Company as a Director and Executive Vice President and President - Technology Group on May 15,
1997. Until joining the Company in May, 1997, Mr. Peterson served as President and Chief
Executive Officer of Coflexip Stena Offshore, Inc., a subsea contractor. From 1990 until May
1997 Mr. Peterson was President and Chief Operating Officer of Perry Tritech, Inc.
manufacturer of remotely operated vehicles ("ROV").
<F2> 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 provider of offshore marine services, since September, 1994.
Prior to that time, he had been Chairman of the Board of Directors of Sonat Offshore Drilling,
Inc. ("Sonat Offshore"), an oil and gas contract drilling company, since April, 1987 and Chief
Executive Officer of Sonat Offshore since May, 1990. 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 bank holding company.
<F3> Shares beneficially owned by Mr. O'Malley include options to purchase 7,500 shares.
Shares beneficially owned by Mr. Lasher include options to purchase 7,500 shares. Shares
beneficially owned by Mr. Stanley includes options to purchase 60,000 shares and 16,000 shares
held in a trust in which Stanley's is trustee. Shares beneficially owned by Ms. Green consist
of options to purchase 2,000 shares.
<F4> Mr. Yax served as President and Chief Executive Officer of the Company from its inception
until December 1996.
<F5> 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 Weingarten Realty Investors, a
publicly-held real estate investment trust, and Weingarten Properties, a public real estate
investment trust. Since 1990, Mr. Lasher has been President of The Gulf Star Group, Inc., a
provider of financial advisory services.
<F6> 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.
<F7> Robert B. Suggs joined the Company in 1985 as the Company's Vice President-Operations.
He became Vice President/General Manager-Offshore Division in 1990 and in 1997, became
Senior Vice President-Americas Region. From 1981 to 1985, Mr. Suggs served as
Vice President-Diving Services for Sea Con, Inc. In 1975, Mr. Suggs co-founded Sea Dive,
Inc. which was sold to Sea Con, Inc. in 1981. He served in the United States Navy
aboard a nuclear submarine from 1966 to 1970.
<F8> Gordon J. Cowe joined the Company in 1997 as Vice President - Corporation Engineering.
From 1996 until May 1997 he was a Senior Vice President of Sonsub International Inc., a
provider of subsea and engineering services From 1994 to 1996, Mr. Cowe served as Engineering
Manager/Deputy Alliance Manager for Transfield Worley Joint Venture. Prior to that time, he
served in various engineering management positions.
<F9> Mr. Hebert joined the Company in 1993. Until 1993 he was an associate with the law firm
of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., New Orleans, Louisiana.
<F10> Cathy M. Green joined the Company in 1994 as Corporate Controller. She became Vice
President - Finance and Chief Financial Officer in January 1996. From 1992 to 1994, she was a
manager with Price Waterhouse LLP, an independent public accounting firm.
</FN>
</TABLE>
_______________________
During 1997, the Board of Directors held eight meetings.
During the period that he served as a director in 1997, 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 Board committee
that the director attends and (iii) reimbursement of all
ordinary and necessary expenses incurred in attending any
meeting of the Board or any Board committee.
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 shareholders at an exercise price
equal to the fair market value of the Common Stock on the
grant date, 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
grant date. A maximum of 50,000 shares may be issued pursuant
to options granted under the Director Plan. As of December
31, 1997, options for 15,000 shares have been granted under
the Director Plan.
The Audit Committee, which met once in 1997, meets
periodically with representatives of the Company's
independent public accountants to assess 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 1997,
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 Amended and Restated 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. Stanley, the Company's
President and Chief Executive Officer, failed to file timely
in 1997 a Form 4 reporting one transaction. Each of Mr.
O'Malley and Mr. Lasher, directors of the Company, failed to
file timely in 1995 and 1996 a Form 5 reporting one
transaction. Each of Mr. Hebert and Ms. Green, executive
officers of the Company, failed to file timely in 1997 a Form
4 reporting one transaction. Mr. Suggs, executive officer of
the Company failed to file timely in 1996 two Form 4
reporting six transactions and in 1997 a Form 4 reporting two
transactions.
PROPOSAL TO AMEND
THE ARTICLES OF INCORPORATION
The Board of Directors has unanimously approved a
recommendation that the shareholders adopt an amendment to
the Company's Amended and Restated Articles of Incorporation
(the "Articles"). The effect of the amendment would be to
change the name of the Company from "American Oilfield
Divers, Inc." to "Ceanic Corporation". When the Company
began in 1981, American Oilfield Divers, Inc. was a diving
and vessel services company for the United States oil and gas
industry, focusing primarily in the Gulf of Mexico. Since
1981, the Company has grown and diversified into an
international subsea service company providing underwater
services and products to the oil and gas industry as well as
industrial and governmental customers, both domestically and
internationally. Currently, the Company not only provides
traditional oilfield diving and vessel services but also has
expanded into general contracting services, deepwater ROV
services and field development services. The Company adopted
"Ceanic" as its tradename in February 1998. The Board of
Directors believes that the new name "Ceanic Corporation"
reflects its continued focus to market and operate worldwide
under one name.
The change of name will not affect the validity or
transferability of stock certificates currently outstanding,
and the Company's shareholders will not be required to
surrender or exchange any certificates now held by them. The
change will not affect the capital structure of the Company
or the listing of any of its securities on any national
securities exchange. The Company does not intend to change
its stock ticker symbol "DIVE" at this time.
The adoption of the proposal to approve the amendment
to the Articles to change the Company's name requires an
affirmative vote of the holders of two-thirds of the shares
present, in person or by proxy, at the meeting. The text of
the proposed amendment is as follows:
ARTICLE I
Name
The name of the corporation is Ceanic Corporation.
If the amendment is adopted by the shareholders, it
will become effective upon its filing with the
Louisiana Secretary of State, which is expected to be
accomplished immediately after the annual meeting of
shareholders.
The Board of Directors recommends that the shareholders
vote FOR the proposal to amend the Articles to change
the Company name to "Ceanic Corporation."
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, 1997, 1996 and
1995 of (i) the chief executive officer and (ii) the
four most highly compensated executive officers of the
Company during 1997 other than the chief executive
officer (collectively, the "Named Executive
Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- ------------
Securities
Underlying
Name and Principal Position Year Salary Bonus Options(#)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rodney W. Stanley, 1997 $275,000 $ 0 300,000
President and 1996 90,185<F1> 0
Chief Executive Officer
Kevin C. Peterson 1997 $119,166<F2> $ 0 200,000
Executive Vice President
and Chief Operating Officer
Robert B. Suggs 1997 $136,666 $45,000 10,000
Senior Vice 1996 109,992 $30,000
President-Americas Region
Quinn J. Hebert 1997 $125,000 $ 0 50,000
Corporate Counsel and 1996 90,000 30,000
Secretary
Cathy M. Green 1997 $125,000 $ 0 20,000
Chief Financial 1996 82,083 30,000
Officer and
Vice President-Finance
_____
<FN>
<F1> Mr. Stanley commenced employment on August 1, 1996,
thus the amount stated as his 1996 salary reflects a
partial year employment. For information with respect to
his stock options, see "Stanley Employment Agreement"
below.
<F2> Mr. Peterson commenced employment on May 15, 1997; thus
the amount stated as his 1997 salary reflects a partial
year of employment. Mr. Peterson's annual salary as
Executive Vice President and Chief Operating Officer is
$230,000. For information with respect to his stock
options see "Peterson Employment Agreement" below.
</FN>
</TABLE>
Stock Options
The following table sets forth information with respect
to all stock options granted in 1997 by the Company to each
of the Named Executive Officers. No stock appreciation
rights have been granted by the Company to any of the Named
Executive Officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Grant
Individual Grants Date Value
- -------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
Number of % of Total
Securities Options Exercise Grant
Underlying Granted to or Base Date
Options Employees Price Expiration Present
Name Granted(#)(F1> in Fiscal ($/Sh) Date Value ($)<F3>
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rodney W. Stanley 300,000<F2> 26% $ 9.00 4/29/07 $1,896,000
Kevin C. Peterson 200,000 18% $ 9.00 5/15/07 $1,710,000
Robert B. Suggs 10,000 * $15.56 9/9/07 $ 107,200
Quinn J. Hebert 50,000 4% $ 9.00 4/29/07 $ 316,000
Cathy M. Green 20,000 1.7% $15.56 9/9/07 $ 214,400
* Less than 1%.
<FN>
<F1> Each of the stock options granted in
1997 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. 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.
<F2> Mr. Stanley's option granted to
purchase 375,000 options at $8.875 subject
to performance criteria was cancelled in
1997. In an effort to bring Mr. Stanley's
long-term compensation in line with the
incentives of the Company's peer group and
the Company's other executive officers, in
April 1997, Mr. Stanley was granted an
option to purchase 300,000 shares at $9.00
per share, vesting over a five-year term
without being subject to performance
criteria.
<F3> The Black-Scholes option pricing model
was used to determine the grant date
present value of the stock options granted
in 1997 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 $6.32, $8.55 and $10.72 on April 29,
1997, May 15, 1997 and September 9, 1997,
respectively. The following facts and
assumptions were used in making such
calculation: (a) an unadjusted exercise
price of $9.00 on April 29, 1997 and May
15, 1997, and $15.56 on September 9, 1997
for each such stock option granted; (ii) a
fair market value of $9.00 for one share of
Company common stock granted on April 29,
1997, $11.50 on May 15, 1997 and $15.56 on
September 9, 1997; (iii) no dividend yield;
(iv) a stock option term of 10 years; (v) a
stock volatility of 48.98% with respect to
grants made on April 29, 1997 49.25% for
grants made on May 15, 1997 and 48.53% for
grants made on September 9, 1997, 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 6.88%, 6.65% and 6.33% for
grants made on April 29, 1997, May 15,
1997, and September 9, 1997, respectively,
which is equivalent to the yield on a ten-
year treasury note on the such dates. 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 $6.32, $8.55
and $10.72 for each grant date of April 29,
1997, May 14, 1997 and September 9, 1997,
respectively, was multiplied by the total
number of stock options granted to each of
the Named Executive Officers on such date
to determine the total grant date present
value of such stock options granted to each
Named Executive Officer, respectively.
</FN>
</TABLE>
The following table sets forth
information with respect to any exercises
of Company stock options in 1997 by each of
the Named Executive Officers and all
outstanding Company stock options held by
each of the Named Executive Officers as of
December 31, 1997. No stock appreciation
rights have been granted by the Company to
any of the Named Executive Officers.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised In-the
Unexercised Money Options at
Options at FY-End($)
FY-End (#) -----------------
-----------
Shares Acquired Exercisable/ Exercisable/
Name on Exercise(#) Value Realized Unexercisable* Unexercisable*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rodney W. Stanley 0 0 60,000 $ 225,000
240,000* $ 900,000*
Kevin C. Peterson 0 0 0 $ 0
200,000* $ 750,000*
Robert B. Suggs 3,053 $26,644 0 $ 0
10,000* $ 0
Quinn J. Hebert 8,000 44,161 0 $ 0
50,000* $ 187,500*
Cathy M. Green 4,000 39,376 2,000 $ 10,500
20,000* $ 0
</TABLE>
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 in
December, 1996. 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 was
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.
After a review of the terms of the grant of
options under Mr. Stanley's employment
agreement, the Compensation Committee voted to
eliminate the performance criteria under the
Agreement and issue Mr. Stanley a reduced
number of shares consistent with issuance to
those of the Company's other executive officers
and the Company's peer group. The 375,000
options previously issued to Mr. Stanley were
cancelled and a total of 300,000 options were
granted to Mr. Stanley on April 29, 1997 at an
exercise price of $9.00 per share, vesting over
a five-year period.
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.
Peterson Employment Agreement
The Company and Mr. Peterson entered into
a five-year employment agreement (the
"Agreement") effective May 15, 1997. Pursuant
to the provisions of the Agreement, Mr.
Peterson's initial annual salary was $220,000
as Executive Vice President and was increased
to $230,000 upon Mr. Peterson's election as
Chief Operating Officer. Mr. Peterson's salary
is subject to review by the Board of Directors
annually. Mr. Peterson 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.
Peterson (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. Peterson no further amounts under the
Agreement. If, however, Mr. Peterson 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.
Peterson 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. Mr. Peterson was
granted options to purchase 200,000 shares of
Common Stock on May 15, 1997 at an option
exercise price of $9.00 per share vesting over
a five year period.
At the end of Mr. Peterson'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. Peterson 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. Peterson under the Agreement
will be $200,000 per year.
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 1997 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 for the Company's executive
officers, reviews and provides general guidance
for the compensation of the Company's regional
and other senior 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 has adopted
an executive compensation philosophy that seeks
to (i) provide a competitive total compensation
package that enables the Company to attract,
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.
The Company seeks to attain these objectives
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
reviewing and establishing the Company's
executive compensation program include the
Company's financial performance, industry
practices, the Company's culture and
organizational structure, the responsibilities
undertaken by a given executive and his or her
success in doing so.
In order to link a portion of executive
compensation to Company performance, the
Committee determined to continue during 1997 an
annual bonus plan under which each executive
officer and the Company's regional and other
senior 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 regions
and business units. The exact amount of the
bonus paid to the executive officers, however,
was determined by the Compensation Committee.
In 1997, Mr. Stanley received total cash
compensation (in the form of salary) of
$275,000 from the Company. Mr. Stanley's
annual salary is fixed in his employment
agreement, which is discussed above, although
it may be increased upon annual review by the
Board of Directors. Although the Company's
1997 revenues increased by approximately 25%
from $105.8 million for 1996 compared to $132.7
million for 1997, the Company's net income
level for fiscal 1997 of $2.2 million
($.22/share) was well below the Company's
expectations and objective performance goals.
Based primarily on the Company's 1997 financial
performance, and notwithstanding the
significant revenue growth in 1997, the
Compensation Committee elected not recommended
to the Board of Directors an increase in Mr.
Stanley's salary or to pay a bonus to Mr.
Stanley, as the Chief Executive Officer.
Moreover, due to the same factors discussed
above, the Company did not pay a cash bonus to
members of the Company's Executive Committee in
1997 which includes Mr. Peterson, Mr. Hebert,
and Ms. Green in addition to Mr. Stanley.
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
shareholders and 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 1997, the Company granted options
to purchase shares of common stock in the
amount of 300,000 to Mr. Stanley, 200,000 to
Mr. Peterson, 10,000 to Mr. Suggs, 50,000 to
Mr. Hebert, 20,000 to Mr. Cowe and 20,000 to
Ms. Green.
Under Section 162(m) ("Section 162(m)") of
the Internal Revenue Code of 1986, as amended,
generally no deduction is allowed by a publicly
held corporation 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. 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'Malley Stephen 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) the peer
group previously selected by the Company (the
"Old 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., (iii) and a revised peer group (the "New
Peer Group") recently selected by the Company
that, except for the substitution of Cal Dive
International, Inc. for Seacor Holdings, Inc.
consist of the membership from the Old Peer
Group. The Company elected to replace SEACOR
with Cal Dive International, Inc. as Cal Dive
recently became a public corporation in 1997
and is a provider of diving, vessel and related
services in the Gulf of Mexico and hence better
reflects peer group members who provide similar
services and products as the Company. The
Company's initial public offering was completed
in July, 1993 and, accordingly, return
information for earlier periods is not
presented. The graph reflects the assumption
that $100 was invested on July 21, 1993 in
Company Common Stock and in the three indices
presented. The returns of each member of the
Old Peer Group and the New Peer Group have 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, 30.8%; all U.S. stocks quoted on
the Nasdaq Stock Market, 132.0%; the Old Peer
Group, 154.5%; and the New Peer Group, 161.7%.
[Insert Graph Here]
CERTAIN TRANSACTIONS
In 1997, the Company purchased the M/V
American Defender, a 220 foot class dynamically
positioned vessel, from Tidewater, Inc. for the
aggregate purchase price of $2.25 million. Mr.
O'Malley, a director of the Company, is
Chairman of the Board, President and Chief
Executive Officer of Tidewater. Also, in 1997,
the Company sold its environmental service
subsidiary, American Pollution Control, Inc.
for $275,000 cash to a company owned by Mr.
Yax, the Company's Chairman of the Board. The
Company believes that the prices involved in
these transactions, which were negotiated at
arm's length, are favorable to the Company.
The price received by the Company on the sale
of American Pollution Control, Inc. exceeded
the value determined in an opinion from an
independent investment banking firm.
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. Shareholders voting, or abstaining
from voting, by proxy on any issue will be
counted as present for purposes of constituting
a quorum. If a quorum is present, (i) the
election of the directors to be elected at the
Meeting will be determined by plurality vote
(that is, the nominees receiving the two
largest number of votes will be elected) and
(ii) the affirmative vote of the holders of
two-thirds of the shares present in person or
by proxy at the Meeting will be required to
approve the proposal to amend Article I of the
Company's Articles to change the name of the
Company to "Ceanic Corporation" and (iii) a
majority of votes actually cast will decide any
other matter properly brought before the
Meeting for a vote of shareholders. Shares for
which proxy authority to vote for any nominee
for election as a director is withheld by the
shareholders 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 amend
the Articles, shares abstained from voting will
be considered present at the Meeting for
purposes of determining whether or not two-
thirds of the shares present at the Meeting
were voted for such proposal, but shares not
voted as a result of broker non-votes will not
be so considered. With respect to all other
matters, shares not voted as a result of
abstentions and broker non-votes will not be
considered as voted for purposes of determining
whether or not a majority of votes were cast
for such matters.
PRINCIPAL STOCKHOLDERS
The following table sets forth information
as to the only persons known by the Company to
have beneficial ownership, as of March 1, 1998,
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, 1998, the Company had 10,640,760
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.
Name and Address Shares Beneficially Owned Percent of Class
---------------- ------------------------- ----------------
David L. Babson and Company 754,800 7.1%
One Memorial Drive
Cambridge, Massachusetts 02142
Wellington Management Group 587,500<F1> 5.5%
75 State Street
Boston, Massachusetts
- ----------
<F1> Of the 587,500 shares, Wellington
Management Company has shared voting power over
307,500 shares and shared dispositive power
over all 587,500 shares.
RELATIONSHIP WITH INDEPENDENT PUBLIC
ACCOUNTANTS
The Company's financial statements for 1997
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 shareholders who desire to present
a proposal qualified for inclusion in the proxy
materials relating to the Company's 1999 annual
meeting must forward their 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,
1998.
By Order of the Board of Directors
/s/ Quinn J. Hebert
Quinn J. Hebert
Secretary
Houston, Texas
April 8, 1998
<PAGE>
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 April 3, 1998
at the annual meeting of the shareholders of the Company to be held on
May 15, 1998 (the "Annual Meeting"), and at any and all adjournments
thereof.
The Board of Directors recommends a vote FOR the nominees listed below
1. Election of Directors.
FOR / / The nominee listed below WITHHOLD AUTHORITY / / to vote for
(except as marked to the the nominee
contrary below) listed below)
INSTRUCTIONS: To withhold authority to vote for any nominee, strike
a line through the nominee's name below:
Kevin C. Peterson William C. O'Malley
The Board of Directors recommends a vote FOR the proposal to amend
the Articles of Incorporation and to change the Company name to
"Ceanic Corporation."
2. Approval of the amendment to the Articles of Incorporation to change
the Company name to "Ceanic Corporation."
/ / 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 nominees listed on the
reverse side and FOR the proposal to amend the Articles of
Incorporation to change the Company name to "Ceanic Corporation."
The individuals designated above will vote in their discretion on any
other matter that may properly come before the meeting.
Date: , 1998
------------------------
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.
