pre14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
þ |
|
Preliminary Proxy Statement |
|
o |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
o |
|
Definitive Proxy Statement |
|
o |
|
Definitive Additional Materials |
|
o |
|
Soliciting Material Pursuant to §240.14a-12 |
OCEANEERING INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|
|
|
|
|
þ |
|
No fee required. |
|
|
|
|
|
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
|
|
|
|
o |
|
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: |
|
|
|
|
|
|
|
|
OCEANEERING INTERNATIONAL, INC.
11911 FM 529, Houston, Texas 77041-3000
April , 2008
Dear Shareholder:
You are cordially invited to attend the 2008 Annual Meeting of Shareholders of Oceaneering
International, Inc. The meeting will be held on Friday, May 16, 2008, at 8:30 a.m., local time, at
our regional office located at
5004 Railroad Avenue, Morgan City, Louisiana 70380.
On the following pages, you will find the Notice of Annual Meeting of Shareholders and Proxy
Statement giving information concerning the matters to be acted on at the meeting. Our Annual
Report to Shareholders describing Oceaneerings operations during the year ended December 31, 2007
is enclosed.
We hope you will be able to attend the meeting in person. Whether or not you plan to attend,
please take the time to vote. In addition to using the enclosed paper proxy card to vote, which
you may sign, date and return in the enclosed postage-paid envelope, you may vote your shares via
the Internet or by telephone by following the instructions included in this package.
Thank you for your interest in Oceaneering.
|
|
|
|
|
|
John R. Huff
|
|
T. Jay Collins |
Chairman of the Board
|
|
President and Chief Executive Officer |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Shareholders to Be Held on May 16, 2008.
The proxy statement and annual report are available on the Internet at
www.oceaneering.com/InvestorRelations.asp at Annual Reports and Proxies.
The following information applicable to the Annual Meeting may be found in the proxy statement and
accompanying proxy card:
|
|
|
the date, time and location of the meeting; |
|
|
|
|
a list of the matters intended to be acted on and our recommendations regarding those
matters; |
|
|
|
|
any control/identification numbers that you need to access your proxy card; and |
|
|
|
|
information about attending the meeting and voting in person. |
OCEANEERING INTERNATIONAL, INC.
11911 FM 529, Houston, Texas 77041-3000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 16, 2008
To the Shareholders of Oceaneering International, Inc.:
The Annual Meeting of Shareholders of Oceaneering International, Inc., a Delaware corporation
(Oceaneering), will be held on Friday, May 16, 2008, at 8:30 a.m., local time, at our regional
office located at
5004 Railroad Avenue, Morgan City, Louisiana 70380, to consider and take action on the following:
|
|
|
election of two Class I directors as members of the Board of Directors of
Oceaneering to serve until the 2011 Annual Meeting of Shareholders or until a successor
has been duly elected and qualified (Proposal 1); |
|
|
|
|
approval of an amendment of the Restated Certificate of Incorporation of Oceaneering
to increase the number of authorized shares of common stock (Proposal 2); |
|
|
|
|
ratification of the appointment of Ernst & Young LLP as independent auditors of
Oceaneering for the year ending December 31, 2008 (Proposal 3); and |
|
|
|
|
transaction of such other business as may properly come before the Annual Meeting of
Shareholders or any adjournment or postponement thereof. |
The Board of Directors recommends a vote in favor of Proposal 1, Proposal 2 and Proposal 3.
The close of business on March 24, 2008 is the record date for the determination of
shareholders entitled to notice of, and to vote at, the meeting or any adjournment thereof.
Our Board welcomes your personal attendance at the meeting. Whether or not you expect to
attend the meeting, please submit a proxy as soon as possible so that your shares can be voted at
the meeting. You may submit your proxy by filling in, dating and signing the enclosed proxy card
and returning it in the enclosed postage-paid envelope. Please refer to page 1 of the Proxy
Statement and the proxy card for instructions for proxy voting by telephone or over the Internet.
|
|
|
|
|
By Order of the Board of Directors, |
|
|
|
|
|
|
|
|
George R. Haubenreich, Jr. |
|
|
Senior Vice President, General Counsel |
April , 2008
|
|
and Secretary |
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND MAIL YOUR
PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE, OR VOTE BY TELEPHONE OR
OVER THE INTERNET IN ACCORDANCE WITH INSTRUCTIONS IN THIS PROXY STATEMENT AND
ON YOUR PROXY CARD.
OCEANEERING INTERNATIONAL, INC.
PROXY STATEMENT
PROXIES AND VOTING AT THE MEETING
Only shareholders of record at the close of business on March 24, 2008 will be entitled to
notice of, and to vote at, the meeting. As of that date, 55,118,588 shares of our Common Stock,
$.25 par value per share (Common Stock), were outstanding. Each of those outstanding shares is
entitled to one vote at the meeting. We are initially sending this Proxy Statement and the
accompanying proxy to our shareholders on or about April ___, 2008. The requirement for a quorum at
the meeting is the presence in person or by proxy of holders of a majority of the outstanding
shares of Common Stock. There is no provision for cumulative voting.
Solicitation of Proxies
The accompanying proxy is solicited on behalf of our Board of Directors for use at our annual
meeting of shareholders to be held at the time and place set forth in the accompanying notice. We
will pay all costs of soliciting proxies. We will solicit proxies primarily by mail. In addition
to solicitation by mail, our officers, directors and employees may solicit proxies in person or by
telephone, facsimile and electronic transmissions, for which such persons will receive no
additional compensation. We have retained Georgeson Shareholder Communications, Inc. to solicit
proxies at a fee estimated at $7,500, plus out-of-pocket expenses. We will reimburse brokerage
firms, banks and other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding proxy material to beneficial owners of our Common Stock.
The persons named as proxies were designated by our Board and are officers of Oceaneering.
All properly executed proxies will be voted (except to the extent that authority to vote has been
withheld), and where a choice has been specified by the shareholder as provided in the proxy, the
proxy will be voted in accordance with the specification so made. Proxies submitted without
specified choices will be voted FOR Proposal 1 to elect the director nominees proposed by our
Board, FOR Proposal 2 to approve an amendment of the Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock and FOR Proposal 3 to ratify the
appointment of Ernst & Young LLP as independent auditors of Oceaneering for the year ending
December 31, 2008.
Methods of Voting
Voting by Mail You may sign, date and return your proxy card in the pre-addressed,
postage-paid envelope provided. If you return your proxy card without indicating how you want to
vote, the designated proxies will vote as recommended by our Board.
Voting by Telephone or the Internet If you have stock certificates issued in your
own name, you may vote by proxy by using the toll-free number or at the Internet address listed on
the proxy card.
The telephone and Internet voting procedures are designed to verify your vote through the use
of a voter control number that is provided on each proxy card. The procedures also allow you to
vote your shares and to confirm that your instructions have been properly recorded. Please see
your proxy card for specific instructions.
If you hold shares through a brokerage firm, bank or other custodian, you may vote by
telephone or the Internet only if the custodian offers that option.
1
Revocability of Proxies
If you have one or more stock certificates issued in your own name, and you vote by proxy,
mail, the Internet or telephone, you may later revoke your proxy instructions by:
|
|
|
sending a written statement to that effect to our Corporate Secretary at 11911 FM
529, Houston, Texas 77041-3000, the mailing address for the executive offices of
Oceaneering; |
|
|
|
|
submitting a proxy card with a later date signed as your name appears on the stock
certificate(s); |
|
|
|
|
voting at a later time by telephone or the Internet; or |
|
|
|
|
voting in person at the Annual Meeting. |
If you have shares held through a brokerage firm, bank or other custodian, and you vote by
proxy, you may later revoke your proxy instructions only by informing the custodian in accordance
with any procedures it sets forth.
PROPOSAL 1
Election of Directors
Our Certificate of Incorporation divides our Board into three classes, each consisting as
nearly as possible of one-third of the members of the whole Board. There are currently two members
of each class. The members of each class serve for three years following their election, with one
class being elected each year.
Two Class I directors are to be elected at the 2008 Annual Meeting. In accordance with our
bylaws, directors are elected by a plurality of the votes cast. Accordingly, abstentions and
broker non-votes marked on proxy cards will not be counted in the election. The Class I
directors will serve until the 2011 Annual Meeting of Shareholders or until a successor has been
duly elected and qualified. The directors of Classes II and III will continue to serve their terms
of office, which will expire at the Annual Meetings of Shareholders to be held in 2009 and 2010,
respectively.
The persons named in the accompanying proxy intend to vote all proxies received in favor of
the election of the nominees named below, except in any case where authority to vote for the
directors is withheld. Although we have no reason to believe that the nominees will be unable to
serve as directors, if either nominee withdraws or otherwise becomes unavailable to serve, the
persons named as proxies will vote for any substitute nominee our Board designates.
Set forth below is information (ages are as of May 16, 2008) with respect to the nominees for
election as directors of Oceaneering.
Nominees
2008 Class I Directors
T. Jay Collins
Mr. Collins, 61, has been Chief Executive Officer of Oceaneering since May 2006 and President of
Oceaneering since 1998. He previously served as Chief Operating Officer of Oceaneering from 1998
until 2006. He also served as Executive Vice President Oilfield Marine Services of Oceaneering
from 1995 to 1998 and as Senior Vice President and Chief Financial Officer of Oceaneering from 1993
until 1995. Mr. Collins has been a director of Oceaneering since 2002.
D. Michael Hughes
Mr. Hughes, 69, has been owner of The Broken Arrow Ranch and affiliated businesses, which harvest,
process and market wild game meats, since 1983. He has been associated with Oceaneering since its
incorporation, serving as Chairman of the Board from 1970 to 1980 and from 1984 to 1990. He is
Chairman of the Nominating and Corporate Governance Committee of Oceaneerings Board and a member
of the Audit Committee of Oceaneerings Board. Mr. Hughes has been a director of Oceaneering since
1970.
2
Continuing Directors
Information below (ages are as of May 16, 2008) is for those directors whose terms will expire in
2009 and 2010.
2009 Class II Directors
Jerold J. DesRoche
Mr. DesRoche, 71, has been a partner and a director of National Power Company, a privately owned
company that owns and operates power generation facilities using waste fuels and renewable energy,
since 1991. He served as President and Chief Executive Officer of ABB Combustion Engineering
Canada, Inc. from 1988 to 1991. He is a member of the Compensation Committee and the Nominating
and Corporate Governance Committee of Oceaneerings Board. Mr. DesRoche has been a director of
Oceaneering since 2003.
John R. Huff
Mr. Huff, 62, has been Chairman of Oceaneerings Board of Directors since August 1990. He served
as Chief Executive Officer of Oceaneering from 1986 to May 2006. Mr. Huff also serves as a
director of BJ Services Company, Rowan Companies, Inc., KBR, Inc. and Suncor Energy, Inc. Mr. Huff
has been a director of Oceaneering since 1986.
2010 Class III Directors
David S. Hooker
Mr. Hooker, 64, has been Chairman of Avoco Secure Ltd., a software development and distribution
company which principally focuses on applications providing document content security and
authentication, since November 2006, and Chairman of Ocean Hover Limited, an oilfield hovercraft
marketing organization, since January 2004. Previously, he served as Chairman of Goshawk Insurance
Holdings PLC, an insurance company, from January 1996 to October 2003. He is also a director of
Aminex plc, an oil and gas exploration and production company, and a director of Eleuthera Capital
Ltd., a helium exploration company. He is Chairman of the Audit Committee of Oceaneerings Board
and a member of the Nominating and Corporate Governance Committee of Oceaneerings Board. Mr.
Hooker has been a director of Oceaneering since 1973.
Harris J. Pappas
Mr. Pappas, 62, has been President of Pappas Restaurants, Inc., a privately owned multistate
restaurant group, since 1983 and Chief Operating Officer and director of Lubys, Inc., a publicly
owned restaurant company, since March 2001. He also serves on the Advisory Boards of Frost
National Bank in Houston and the Boys & Girls Clubs of Greater Houston. He is Chairman of the
Compensation Committee of Oceaneerings Board and a member of the Audit Committee of Oceaneerings
Board. Mr. Pappas has been a director of Oceaneering since 1996.
3
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth the number of shares of Common Stock beneficially owned as of
March 24, 2008 by each director and nominee for director, each of the executive officers named in
the Summary Compensation Table in this Proxy Statement and all directors and executive officers as
a group. Except as otherwise indicated, each individual named has sole voting and dispositive
power with respect to the shares shown.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Underlying |
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
Name |
|
|
Number of Shares (1) |
|
|
|
Units (2) |
|
|
|
Total |
T. Jay Collins |
|
|
|
36,000 |
|
|
|
|
147,500 |
|
|
|
|
183,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerold J. DesRoche |
|
|
|
16,000 |
|
|
|
|
|
|
|
|
|
16,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip D. Gardner |
|
|
|
40,200 |
|
|
|
|
34,500 |
|
|
|
|
74,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
George R. Haubenreich, Jr. |
|
|
|
18,420 |
|
|
|
|
60,800 |
|
|
|
|
79,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
David S. Hooker |
|
|
|
64,000 |
|
|
|
|
|
|
|
|
|
64,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Huff |
|
|
|
123,100 |
|
|
|
|
171,500 |
|
|
|
|
294,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Michael Hughes |
|
|
|
24,600 |
|
|
|
|
|
|
|
|
|
24,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Kevin McEvoy |
|
|
|
27,786 |
|
|
|
|
68,000 |
|
|
|
|
95,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin J. Migura |
|
|
|
18,000 |
|
|
|
|
62,200 |
|
|
|
|
80,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Harris J. Pappas |
|
|
|
112,390 |
|
|
|
|
|
|
|
|
|
112,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (11 persons) |
|
|
|
480,630 |
|
|
|
|
551,500 |
|
|
|
|
1,032,130 |
|
|
|
|
(1) |
|
Includes the following shares subject to stock options exercisable as of March 24, 2008: Mr.
Gardner 27,500; Mr. Hooker 40,000; Mr. Pappas 60,000; and all directors and executive
officers as a group 127,500. There are no other outstanding stock options for directors and
executive officers. Also includes the following shares granted pursuant to restricted stock
award agreements, as to which the recipient has sole voting power and no dispositive power:
Mr. DesRoche 8,000; Mr. Hooker 8,000; Mr. Hughes 8,000; Mr. Pappas 8,000 and all
directors and executive officers as a group 32,000. Also includes the following share
equivalents, which are fully vested but are held in trust pursuant to the Oceaneering
Retirement Investment Plan (the 401(k) Plan), as to which the individual has the right to
direct the plan trustee on how to vote: Mr. McEvoy 9,786; and all directors and executive
officers as a group 9,920. At withdrawal, the share equivalents are settled in shares of
Common Stock. Each executive officer and director owns less than 1% of the outstanding Common
Stock; all directors and executive officers as a group own (1) less than 1% of the outstanding
Common Stock and (2) approximately 1.9% of the total of the outstanding shares of Common Stock
and the shares underlying restricted stock units owned by directors and executive officers. |
|
(2) |
|
Includes shares of Common Stock that are represented by restricted stock units of Oceaneering
that are credited to the accounts of certain individuals and are subject to vesting. The
individuals have no voting or investment power over these restricted stock units. |
4
Listed below is the only person who, to our knowledge, may be deemed to be a beneficial owner
as of March 24, 2008 of more than 5% of the outstanding shares of Common Stock. This
information is based on statements filed with the Securities and Exchange Commission (the SEC).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of |
|
|
Percent |
Name and Address of Beneficial Owner |
|
|
Beneficial Ownership |
|
|
of Class (1) |
FMR LLC
82 Devonshire Street
Boston, MA 02109
|
|
|
|
6,183,082 |
(2) |
|
|
|
11.2 |
|
|
|
|
(1) |
|
The percentage is based on the total number of issued and outstanding shares of Common Stock
as of March 24, 2008. |
|
(2) |
|
The amount beneficially owned of 6,183,082 shares as shown, is as reported by FMR LLC
(FMR) in a Schedule 13G filed with the SEC on February 15, 2008. Includes 4,367,437
shares beneficially owned by Fidelity Management & Research Company (Fidelity), a wholly
owned subsidiary of FMR, as a result of its acting as an investment advisor to various
investment companies (the Funds). FMR and Edward C. Johnson III, Chairman of FMR,
through FMRs control of Fidelity and the Funds, each has sole power to dispose of the
4,367,437 shares owned by the Funds. Neither FMR nor Edward C. Johnson III has the sole
power to vote or direct the voting of the shares owned directly by the Funds, which power
resides with the Funds Boards of Trustees. Fidelity carries out the voting of the shares
under written guidelines established by the Funds Boards of Trustees. Strategic Advisors,
Inc., 82 Devonshire, Boston MA 02109, a wholly owned subsidiary of FMR and an investment
advisor beneficially owns 100 shares. Pyramis Global Advisors, LLC (PGALLC), 53 State
Street, Boston, MA 02109, an indirect wholly owned subsidiary of FMR, is the beneficial
owner of 2,900 shares. Edward C. Johnson III and FMR, through its control of PGALLC, each
has sole dispositive power over 2,900 shares and sole power to vote or to direct the voting
of 2,900 shares owned by the institutional accounts or funds advised by PGALLC. Pyramis
Global Advisors Trust Company (PGATC), 53 State Street, Boston, MA 02109, an indirect
wholly owned subsidiary of FMR and a bank as defined in Section 3(a)(6) of the Securities
and Exchange Act of 1934, is the beneficial owner of 447,600 shares as a result of its
serving as an investment manager of institutional accounts owning such shares. Edward C.
Johnson III and FMR, through FMRs control of PGATC, each has sole dispositive power over
447,600 shares and sole power to vote or to direct the voting of 392,100 shares owned by
the institutional accounts managed by PGATC. Fidelity International Limited (FIL),
Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda, and various foreign-based subsidiaries
provide investment advisory and management services to a number of non-U.S. investment
companies and certain institutional investors. FIL is the beneficial owner of 1,365,045
shares. |
5
Corporate Governance
During
2007, our Board of Directors held six meetings of the full Board and 23 meetings of the
committees of the Board. Each director attended at least 75% of the aggregate number of meetings
of the Board and meetings of the committees of the Board on which he served. In addition, we have
a policy that directors are encouraged to attend the annual meeting. Last year, all of our
directors attended our annual meeting. In 2007, the nonemployee directors met in regularly
scheduled executive sessions without management present, and similar sessions are scheduled for
2008. The chairmen of the Audit Committee, Compensation Committee and Nominating and Corporate
Governance Committee chair these executive sessions on a rotating basis. Interested parties may
communicate directly with the nonemployee directors by sending a letter to the Board of Directors
(independent members), c/o Corporate Secretary, Oceaneering International, Inc., 11911 FM 529,
Houston, Texas 77041-3000.
Under rules adopted by the New York Stock Exchange, our Board of Directors must have a
majority of independent directors. A director qualifies as independent only if the Board
affirmatively determines that the director has no material relationship with us. In evaluating
each directors independence, the Board considered relationships and transactions between each
director, his family members and any business, charity or other entity in which the director has an
interest, on the one hand, and us and our senior management, on the other hand. As a result of
this review, the Board affirmatively determined that all our directors are independent, except for
Mr. Huff, who had served as our Chief Executive Officer until May 2006, and Mr. Collins, who is our
President and Chief Executive Officer.
We have three standing committees of our Board of Directors: the Audit Committee; the
Compensation Committee; and the Nominating and Corporate Governance Committee. Our Board of
Directors has determined that each member of these committees is independent in accordance with the
requirements of the New York Stock Exchange. Our Board has also determined that each member of the
Audit Committee meets the independence requirements for service on an audit committee that the SEC
has established.
The Audit Committee
The Audit Committee, which is comprised of Messrs. Hooker (Chairman), Hughes and Pappas, held
13 meetings during 2007. Our Board of Directors determined that all members of the Audit Committee
are audit committee financial experts as defined in the applicable rules of the SEC. For
information relating to the background of each member of the Audit Committee, see the biographical
information under Proposal 1 Election of Directors and Continuing Directors. The Audit
Committee is appointed by our Board of Directors, on the recommendation of the Nominating and
Corporate Governance Committee, to assist the Board in its oversight of:
|
|
|
the integrity of our financial statements; |
|
|
|
|
our compliance with legal and regulatory requirements; |
|
|
|
|
the independence, qualifications and performance of our independent auditors; |
|
|
|
|
the performance of our internal audit functions; and |
|
|
|
|
the adequacy of our internal control over financial reporting. |
Our management is responsible for our internal controls and preparation of our consolidated
financial statements. Our independent auditors are responsible for performing an independent audit
of the consolidated financial statements and issuing a report thereon. The Audit Committee is
responsible for overseeing the conduct of these activities and, subject to shareholder
ratification, appointing our independent auditors. As stated above and in the Audit Committee
Charter, the Audit Committees responsibility is one of oversight. The Audit Committee is not
providing any expert or special assurance as to Oceaneerings financial statements or any
professional certification as to the independent auditors work.
6
In discharging its duties, the Audit Committee reviews and approves the scope of the annual
audit, non-audit services to be performed by the independent auditors and the independent auditors
audit and non-audit fees; reviews and discusses with management (including the senior internal
auditor) and the independent auditors the annual audit of our internal control over financial
reporting; recommends to our Board of Directors that the audited financial statements be included
in the Annual Report on Form 10-K for filing with the SEC; meets independently with our internal
auditors, independent auditors and management; reviews the general scope of our accounting,
financial reporting, annual audit and internal audit programs and matters relating to internal
control systems, as well as the results of the annual audit and interim financial statements,
auditor independence issues and the adequacy of the Audit Committee charter; and reviews with
management and the independent auditors any correspondence with regulators or governmental agencies
and any published reports that raise material issues regarding our financial statements or
accounting policies. A copy of the Audit Committee charter is attached to this Proxy Statement as
Appendix A and available on the Corporate Governance page of our Web site (www.oceaneering.com).
Any shareholder who so requests may obtain a written copy of the charter from us. The report of
the Audit Committee is included in this Proxy Statement under the heading Report of the Audit
Committee.
The Compensation Committee
The Compensation Committee, which is comprised of Messrs. Pappas (Chairman) and DesRoche, held
six meetings during 2007. The Compensation Committee is appointed by our Board of Directors to:
|
|
|
assist the Board in discharging its responsibilities relating to (1) compensation of
our executives, other key employees and nonemployee directors and (2) employee benefit
plans and practices; and |
|
|
|
|
produce or assist management with the preparation of any reports that may be
required from time to time by the rules of the NYSE or the SEC to be included in our
proxy statements for our annual meetings of shareholders or annual reports on Form
10-K. |
Specific duties and responsibilities of the Compensation Committee include: general oversight
of our executive and key employee compensation plans and benefit programs; reviewing and approving
objectives relevant to the compensation of executives and key employees, including administration
of annual bonus plans, long-term incentive plans, supplemental executive retirement plan and
severance, termination and change-of-control arrangements; approving employment agreements for key
executives; reviewing and making recommendations to the Board regarding the director and officers
indemnification and insurance matters; evaluating the performance of executives and key employees,
including our Chief Executive Officer; recommending to the Board the compensation for the Board and
committees of the Board; and annually evaluating its performance and its charter.
Since 2004, the Compensation Committee has engaged Mercer, formerly known as Mercer Human
Resource Consulting (Mercer), to assist the Compensation Committee in its administration of
compensation for our executives and other key employees. Mercer assisted the Compensation
Committee in the design and particulars of our 2007 long-term incentive program. Mercer performed
a market analysis of total direct compensation (the sum of salary, annual incentive bonus, and
long-term incentive compensation) and retirement plan value for our executives and other key
employees and compensation for nonemployee directors among peer group companies and other survey
data, see Compensation Discussion and Analysis The Role of the Compensation Consultant in this
Proxy Statement. The Compensation Committee approved the form and amounts of our 2007 long-term
incentive program and compensation for our executive officers and other key employees, and
recommended to the Board the forms and amounts of compensation for nonemployee directors.
A copy of the Compensation Committee charter is available on the Corporate Governance page of
our Web site (www.oceaneering.com). Any shareholder who so requests may obtain a written copy of
the charter from us. The report of the Compensation Committee is included in this Proxy Statement
under the heading Report of the Compensation Committee.
7
The Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee, which is comprised of Messrs. Hughes
(Chairman), DesRoche and Hooker, held four meetings during 2007. The Nominating and Corporate
Governance Committee is appointed by our Board of Directors to:
|
|
|
identify individuals qualified to become directors of Oceaneering; |
|
|
|
|
recommend to our Board candidates to fill vacancies on our Board or to stand for
election to the Board by our shareholders; |
|
|
|
|
recommend to our Board a director to serve as Chairman of the Board; |
|
|
|
|
recommend to our Board committee assignments for directors; |
|
|
|
|
periodically assess the performance of our Board and its committees; |
|
|
|
|
evaluate related-person transactions in accordance with our policy regarding such
transactions; and |
|
|
|
|
periodically review and assess the adequacy of our corporate governance policies and
procedures. |
The Nominating and Corporate Governance Committee operates under a written charter adopted by
our Board of Directors. A copy of this charter and a copy of our Corporate Governance Guidelines
are available on the Corporate Governance page of our Web site (www.oceaneering.com). Any
shareholder who so requests may obtain a written copy of each of these documents from us.
The Nominating and Corporate Governance Committee solicits ideas for potential Board
candidates from a number of sources, including members of our Board of Directors and our executive
officers. The Committee also has authority to select and compensate a third-party search firm to
help identify candidates, if it deems it advisable to do so.
The Nominating and Corporate Governance Committee will also consider nominees recommended by
shareholders in accordance with our bylaws. In assessing the qualifications of all prospective
nominees to the Board, the Nominating and Corporate Governance Committee will consider, in addition
to criteria set forth in our bylaws, each nominees personal and professional integrity,
experience, skills, ability and willingness to devote the time and effort necessary to be an
effective board member, and commitment to acting in the best interests of Oceaneering and its
shareholders. Consideration also will be given to the Boards having an appropriate mix of
backgrounds and skills. A shareholder who wishes to recommend a nominee for director should comply
with the procedures specified in our bylaws, as well as applicable securities laws and regulations
of the New York Stock Exchange. The Nominating and Corporate Governance Committee will consider
all candidates identified through the processes described above, whether identified by the
Committee or by a shareholder, and will evaluate each of them on the same basis.
As to each person a shareholder proposes to nominate for election as a director, our bylaws
provide that the nomination notice must:
|
|
|
include the name, age, business address and principal occupation or employment of
that person, the number of shares of Common Stock beneficially owned or owned of record
by that person and any other information relating to that person that is required to be
disclosed under Section 14 of the Securities Exchange Act of 1934, as amended (the
Exchange Act), and the related SEC rules and regulations; and |
|
|
|
|
be accompanied by the written consent of the person to be named in the proxy
statement as a nominee and to serve as a director if elected. |
8
The nomination notice must also include, as to that shareholder and the beneficial owner, if
any, of Common Stock on whose behalf the nomination or nominations are being made:
|
|
|
the name and address of that shareholder, as they appear on our stock records and
the name and address of that beneficial owner; |
|
|
|
|
the number of shares of Common Stock which that shareholder and that beneficial
owner own beneficially or of record; |
|
|
|
|
a description of all arrangements and understandings between that shareholder or
that beneficial owner and each proposed nominee of that shareholder and any other
person or persons (including their names) pursuant to which the nomination(s) are to be
made by that shareholder; |
|
|
|
|
a representation by that shareholder that he or she intends to appear in person or
by proxy at that meeting to nominate the person(s) named in that nomination notice; |
|
|
|
|
a representation as to whether that shareholder or that beneficial owner, if any,
intends, or is part of a group, as Rule 13d-5(b) under the Exchange Act uses that term,
which intends (1) to deliver a proxy statement and/or form of proxy to the holders of
shares of Common Stock having at least the percentage of the total votes of the holders
of all outstanding shares of Common Stock entitled to vote in the election of each
proposed nominee of that shareholder which is required to elect that proposed nominee
and/or (2) otherwise to solicit proxies in support of the nomination; and |
|
|
|
|
any other information relating to that shareholder and that beneficial owner that is
required to be disclosed under Section 14 of the Exchange Act and the related SEC rules
and regulations. |
To be timely for consideration at our 2009 Annual Meeting, a shareholders nomination notice
must be received at our principal executive offices, 11911 FM 529, Houston, Texas 77041-3000,
addressed to our Corporate Secretary, no earlier than November 17, 2008 and no later than the close
of business on January 16, 2009.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee has served as one of our officers or employees at any
time. None of our executive officers serve as a member of the compensation committee of any other
company that has an executive officer serving as a member of our Board. None of our executive
officers serve as a member of the board of directors of any other company that has an executive
officer serving as a member of our Compensation Committee.
Code of Ethics
Our Board of Directors adopted a code of ethics that applies to our Chief Executive Officer,
Chief Financial Officer, Chief Accounting Officer and Treasurer, and a code of business conduct and
ethics that applies to our officers, directors and employees. Each is available on the Corporate
Governance page of our Web site (www.oceaneering.com). Any shareholder who so requests may obtain
a printed copy of these codes from us. Any change in or waiver of these codes of ethics will be
disclosed on our Web site.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who
own more than 10% of our Common Stock to file with the SEC and the New York Stock Exchange initial
reports of ownership and reports of changes in ownership of Common Stock. Based solely on a review
of the copies of such reports furnished to us and representations that no other reports were
required, we believe that all our directors and executive officers complied on a timely basis with
all applicable filing requirements under Section 16(a) of the Exchange Act during 2007.
9
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of Oceaneering International, Inc.s Board of Directors is comprised of
the three directors named below. Each member of the Audit Committee is an independent director as
defined by applicable Securities and Exchange Commission rules and New York Stock Exchange listing
standards. The Committee met 13 times during the year ended December 31, 2007. The Committee
reviewed with management and Ernst & Young LLP, Oceaneerings independent registered public
accounting firm, the interim financial information included in Oceaneerings quarterly reports on
Form 10-Q for the periods ended March 31, 2007, June 30, 2007 and September 30, 2007, prior to
their being filed with the Securities and Exchange Commission. In addition, the Committee reviewed
all of Oceaneerings earnings releases in 2007 with management and Ernst & Young prior to the
public release of those earnings releases.
The Committee reviewed and discussed with management and Ernst & Young Oceaneerings
consolidated financial statements for the year ended December 31, 2007. Members of management
represented to the Committee that Oceaneerings consolidated financial statements were prepared in
accordance with generally accepted accounting principles. The Committee discussed with Ernst &
Young matters required to be discussed by Statement on Auditing Standards No. 61, Communication
with Audit Committees, as amended. The Committee also reviewed and discussed with management and
Ernst & Young managements report and Ernst & Youngs report on internal control over financial
reporting in accordance with Section 404 of the Sarbanes-Oxley Act.
Ernst & Young provided to the Committee the written disclosures required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees, as amended, and the
Committee discussed with Ernst & Young their independence. The Committee concluded that Ernst &
Youngs provision of non-audit services to Oceaneering and its affiliates is compatible with Ernst
& Youngs independence.
Based on the Committees discussion with management and the independent auditors and the
Committees review of the representations of management and the report of the independent auditors,
the Committee recommended to Oceaneerings Board of Directors that Oceaneerings audited
consolidated financial statements as of and for the year ended December 31, 2007 be included in the
Form 10-K for the year ended December 31, 2007 filed with the SEC.
Audit Committee
David S. Hooker, Chairman
D. Michael Hughes
Harris J. Pappas
10
COMPENSATION DISCUSSION AND ANALYSIS
The following discussion and analysis contains statements regarding future individual and company
performance goals and measures. These goals and measures are disclosed in the limited context of
Oceaneerings compensation programs and should not be understood to be statements of managements
expectations or estimates of results or other guidance. Oceaneering specifically cautions
investors not to apply these statements to other contexts.
The following Compensation Discussion and Analysis, or CD&A, provides information regarding
the compensation programs in place for our Chief Executive Officer, Chief Financial Officer and
three other most highly compensated executive officers during 2007. We refer to these five
individuals in this CD&A as the Named Executive Officers. This CD&A includes information
regarding, among other things, the objectives of our compensation program, the achievements that
the compensation program is designed to reward, the elements of the compensation program (including
the reasons why we employ each element and how we determine amounts paid) and how each element fits
into our overall compensation objectives.
Compensation Philosophy and Objectives
Our executive compensation program is designed to attract and retain key executives, motivate
them to achieve our short-term and long-term objectives, and reward them for superior performance.
We use several different compensation elements in the executive compensation program which are
geared to both our short-term and long-term performance. The following principles influence the
design and administration of our executive compensation program.
Compensation Should Be Related to Performance
The Compensation Committee of our Board of Directors (the Committee), and our Board of
Directors believe that a significant portion of a Named Executive Officers direct compensation
should be tied to overall company performance, measured against financial goals and objectives.
Under the performance-based portions of our compensation arrangements, our basic philosophy is
that, in years when performance is better than the objectives established for the relevant
performance period, Named Executive Officers should be paid more than the target awards and, when
our performance does not meet planned objectives, incentive award payments should be less than such
targets, in the absence of unusual circumstances.
Compensation Programs Should Motivate Executives to Remain With Us
We believe that there is significant value to our shareholders for Named Executive Officers to
remain with our company over time. Our business is built significantly by executives who can
develop and maintain customer relationships over time. Also, value is built by executives who
understand the unique business and technical aspects of our industry. For these reasons, a
significant element of our historical executive compensation arrangements has been long-term
incentive compensation arrangements, with awards that have provided for vesting over several years.
In addition, we provide several of our executive officers with some financial security in the
event of a change of control, to promote long-term retention. We also provide for long-term
benefits through retirement plans (see Post-Employment Compensation Programs below).
Incentive Compensation Should Represent a Significant Part of an Executives Total Direct
Compensation
We believe that the portion of a Named Executive Officers total compensation that varies with
our overall performance objectives should increase as the scope and level of the individuals
business responsibilities and role in the organization increase. We believe that more than
one-half of the total direct compensation (the sum of salary, annual incentive bonus, and long-term
incentive compensation) of the Named Executive Officers should be at risk against short- and
long-term performance goals and the Chief Executive Officer should be subject to a greater amount
of such risk than other Named Executive Officers.
11
Incentive Compensation Should Balance Short-Term and Long-Term Performance
We strive to maintain an executive compensation program that balances short-term, or annual,
results and long-term success. To reinforce the importance of this balancing we regularly provide
the Named Executive Officers both annual and long-term incentives. The value for participants in
our long-term incentive plans generally increases at higher levels of responsibility, as executives
in these leadership roles have the greatest influence on our strategic direction and results over
time.
Beginning in 2006, the Committee adopted our current approach to long-term incentives, in
which awards of service-based restricted stock units and performance units are made to our
executive officers and other key employees. Assuming restricted stock value based on grant date
value established by the Financial Accounting Standards Boards Statement of Financial Accounting
Standards No. 123 (revised 2004), Share-Based Payment (SFAS 123R), and performance units
notionally valued at $100 per unit for achievement of performance goals at target level, the
Committee believes that the performance units should account for more than one-half of the total
annual long-term incentive compensation of the Named Executive Officers and the service-based
restricted stock units should account for the balance. The Committee believes that this approach
promotes our philosophy of rewarding executives for growing shareholder value over time. Upon
vesting, settlement of the restricted stock units will be made in shares of our common stock. Upon
vesting, the value of the performance units will be paid in cash.
Compensation Levels Should Be Competitive
The Committee reviews competitive compensation information as part of its process in
establishing total direct compensation and retirement plan values that are competitive. In making
compensation decisions, the Committee considers all elements of compensation when setting each
element of compensation. The Committee assesses each element of base salary, annual incentive
bonus, long-term incentive compensation and retirement plan values against a combination of
available information from the most recent proxy statements of a peer-group of publicly traded
companies and survey data from the energy and general industries.
The Role of the Compensation Committee
The Committee has the primary authority to establish compensation for the Named Executive
Officers and other key employees and administers all our executive compensation plans and
agreements. The Committee annually reviews corporate goals and objectives and sets the
compensation levels for Named Executive Officers based on the Committees evaluation. Our Chief
Executive Officer assists the Committee by providing annual recommendations regarding the
compensation of the Named Executive Officers and other key employees, excluding himself. The
Committee can exercise its discretion in modifying or accepting these recommendations. The Chief
Executive Officer attends Committee meetings. However, the Committee also meets in executive
session without the Chief Executive Officer (or other members of management) present when
discussing the Chief Executive Officers compensation.
The Committee reviews comparative compensation information compiled by a compensation
consultant as described in Role of the Compensation Consultant below; however, the Committee does
not base its decisions on targeting compensation to specific benchmarks. Comparative compensation
is one factor used by the Committee in making its compensation decisions. Overall, however, our
compensation program for Named Executive Officers is intended to create a total compensation
opportunity that, on average, is equal to approximately the 50th percentile in the
aggregate of appropriate competitive comparative compensation for a Named Executive Officer. For
additional information regarding the role and responsibility of the Committee, see Proposal 1
Election of Directors The Compensation Committee above.
The Role of the Compensation Consultant
In 2007, the Committee retained Mercer (the Compensation Consultant) to: (1) conduct a
review of our total direct compensation (the sum of base salary, annual incentives bonus and
long-term incentive compensation) and retirement plan programs for the Named Executive Officers and
other key employees; (2) identify and evaluate a peer group of companies and survey data for
compensation comparison purposes; (3) conduct a pay-for-performance analysis to assess the
correlation of executive pay and company performance for Oceaneering and the peer group of
companies identified; and (4) assist in our assessment of whether payments made pursuant to change
of control agreements could result in excise taxes pursuant to Section 4995 of the Internal Revenue
Code, assuming a change of control occurred on December 31, 2007 (see Post-Employment
Compensation Programs Change of Control Agreements and Potential Payments on Termination or
Change of Control below). The Compensation Consultants only work for
12
Oceaneering in 2007 was at the direction of the Committee, except for some accounting-related
assistance and non-executive compensation advice provided in 2007, for which the Compensation
Consultant was paid approximately $3,200.
The Compensation Consultant assessed the continuing validity of the peer group of companies
used for comparison purposes in the review it conducted for the Committee in 2006 and recommended a
list of 23 publicly traded companies as the peer group for comparison purposes (collectively the
Compensation Peer Group). The Compensation Peer Group is comprised of the same companies
identified as the peer group in 2006, except that one company that was acquired by another was
deleted and the successor by merger of a company in the peer group was substituted.
The companies included in the Compensation Peer Group were approved for inclusion by the
Committee, primarily due to their operational focus broadly within the oilfield service industry
and the belief that we compete with these companies for talent and for stockholder investment. The
Committee reviews the companies comprising the Compensation Peer Group at least every two years.
The companies comprising the Compensation Peer Group used for 2007 comparison purposes were:
|
|
|
|
|
|
|
|
|
BJ Services Company
|
|
GlobalSantaFe Corporation
|
|
Pride International, Inc. |
|
|
Bristow Group Inc.
|
|
Grant Prideco, Inc.
|
|
Rowan Companies, Inc. |
|
|
Cameron International Corporation
|
|
Helix Energy Solutions Group, Inc.
|
|
Smith International Inc. |
|
|
Diamond Offshore Drilling, Inc.
|
|
Key Energy Services, Inc.
|
|
Superior Energy Services, Inc. |
|
|
ENSCO International Incorporated
|
|
McDermott International, Inc.
|
|
Tidewater Inc. |
|
|
Exterran Holdings, Inc.
|
|
National Oilwell Varco, Inc.
|
|
Transocean Inc. |
|
|
FMC Technologies, Inc.
|
|
Noble Corporation
|
|
Weatherford International Ltd. |
|
|
Global Industries, Ltd.
|
|
Oil States International, Inc. |
|
|
The sources of the survey data used by the Compensation Consultant were (1) the 2007 U.S.
Energy Compensation Survey and 2007 U.S. Americas-Executive Remuneration Database, which combines
all of the Compensation Consultants survey data as well as client data submissions for
approximately 570 executive-level positions in which approximately 2,200 organizations participated
and which were prepared by the Compensation Consultant, and (2) a 2007 Survey Report on Top
Management Compensation prepared by Watson Wyatt Data Services, which features data across multiple
industries and geographies in which approximately 2,300 organizations participate (collectively,
the Compensation Surveys).
The Compensation Consultant identified the 25th, 50th and
75th percentile for base salary, annual bonus incentive, long-term incentive
compensation and retirement plan value, individually and in the aggregate for the comparable
position of each of our Named Executive Officers from a blend of compensation information
identified for the Compensation Peer Group from the most recent proxy statements filed with the SEC
by the companies comprising the Compensation Peer Group (weighted at 50%) and from the Compensation
Surveys (weighted at 50% with each component weighted equally), except that the Compensation Peer
Group information was used exclusively for evaluating retirement plan value, as retirement plan
value information was not available in the Compensation Surveys.
2007 Executive Compensation Components
For 2007, the primary components of our compensation program for Named Executive Officers
were:
|
|
|
base salary; |
|
|
|
|
annual incentive award paid in cash; |
|
|
|
|
long-term incentive programs comprised of restricted stock units and performance
units; and |
|
|
|
|
retirement plan. |
13
Base Salary
The Committee considers salary levels annually in November, for changes to be effective the
first day of the following year, as well as upon a promotion or significant change in job
responsibility. Each year, our Chief Executive Officer recommends base salaries for the other
Named Executive Officers based on historical levels of base salaries, with adjustments he
subjectively deems appropriate based on the overall performance of the Named Executive Officer,
including a review of contributions and performance, over the past year. In reviewing the Chief
Executive Officers recommendations and in deciding base salaries for all Named Executive Officers,
the Committee considers each officers level of responsibility, experience, tenure, performance and
the comparative compensation information provided by the Compensation Consultant. The Committees
evaluation of each Named Executive Officer also takes into account an evaluation of Oceaneerings
overall performance. In November 2006, the Committee approved a salary increase of 10% for Mr.
Collins and, as recommended by Mr. Collins, salary increases ranging from 7% to 12% for the other
Named Executive Officers.
Annual Incentive Awards Paid in Cash
In March of each year, the Committee approves a performance-based annual cash bonus award
program under a shareholder approved Incentive Plan for the persons listed as named executive
officers in the summary compensation table of our proxy statement for that year. These cash bonus
award opportunities have been based on a comparison of our net income for the year to target net
income for that year. For each other participating employee in the program, the cash bonuses are
based upon the level of achievement of a combination of our net income, financial and non-financial
goals of our applicable profit center for that employee and individual goals. For each
participant, the maximum award achievable is a percentage of the participants annual salary as of
March 1st of the year of the program. In March of each year, the Committee also approves the final
bonus amounts under the cash bonus award program for the previous year.
In March 2007, the Committee approved a cash bonus award program for 2007. For the Named
Executive Officers, bonuses were determined by a comparison of our net income in calendar year 2007
to target net income for that year. The maximum cash pay-out under the program for each Named
Executive Officer is a specified percentage of that executives base salary as of March 1, 2007.
As recommended by our Chief Executive Officer and approved by the Committee (1) the target amount
for our net income in 2007 was $155 million, an amount 25% higher than the net income we achieved
in 2006 (which was almost twice the amount of net income achieved in 2005) and equated to the
mid-point of our then-published earnings per share guidance range for 2007 and (2) the net income
amount in 2007 necessary to achieve the maximum bonuses under the program was 110% of the target
amount or $170.5 million. Under the program, attainment of the target amount would have resulted
in a payout of 90% of the maximum amount payable to the Named Executive Officer. For any award in
the program to be payable, more than 70% of the target net income for 2007 had to be achieved. The
Named Executive Officers in the program for 2007 and their respective maximum payouts as a
percentage of base salary were: Mr. Collins 150%; Messrs. McEvoy, Migura and Haubenreich 100%;
and Mr. Gardner 80%, which reflects no change in the maximum percentage of base salary from 2006.
14
The following table notes the percentage of maximum payout to a Named Executive Officer under
the program for the percentage of target net income achieved. The Committee has the discretion to
award an amount less than that calculated.
In March 2008, the Committee approved the final bonuses under the 2007 Cash Bonus Award
Program. Due to our achieving a record level of net income in 2007, which was in excess of 110% of
the performance goal for 2007, the Committee awarded maximum bonuses payable to Messrs. Collins,
McEvoy, Migura and Haubenreich under the program. The Committee also approved additional merit
bonuses to those Named Executive Officers based on Oceaneerings performance (the fourth
consecutive year of record net income, a 45% increase in the amount of net income achieved in 2006)
and the outstanding contributions to Oceaneerings performance by these officers. The Committee
exercised its discretion to award an amount to Mr. Gardner less than the maximum award payable
under the program, as a result of the failure of the Oceaneering Multiflex division of Subsea
Products to achieve planned financial results in 2007.
Awards made to the Named Executive Officers for performance in 2007 are reflected in the
Bonus and Non-Equity Incentive Plan Compensation columns of the Summary Compensation Table
below.
Long-Term Incentive Compensation
Historically, we granted stock options annually and restricted stock or stock unit awards
every three years to our executive officers and other key employees. However, the Committee
decided that, in light of the expense recognition requirements established by SFAS 123R and
effective beginning in 2006, to refrain from using stock options as an employee compensation
element for our executive officers and other employees for the foreseeable future and to instead
use annual grants of service-based restricted stock unit awards and performance unit awards.
Accordingly, no stock options were awarded in 2007.
15
In deciding upon a methodology for determining changes to our long-term incentive program, we
established the following objectives:
|
|
|
deliver competitive economic value; |
|
|
|
|
reduce annual share utilization; |
|
|
|
|
preserve the alignment of the executives financial and shareholding interest with
those of our shareholders, generally; |
|
|
|
|
attract and retain executives and other key employees; |
|
|
|
|
focus management attention on specific performance measures that have a strong
correlation with the creation of shareholder value; and |
|
|
|
|
provide that a majority of an executives total direct compensation is
performance-based. |
In order to achieve these objectives, the Committee decided upon a long-term incentive program
to deliver value would be through two vehicles, restricted stock unit awards and performance unit
awards. The Committee expects to consider these long-term incentive awards in late February of
each year. Such awards to new employees or in connection with other events such as promotions will
be considered at the next scheduled Committee meeting after the hire date or after the event
occasioning the consideration of the award.
In February 2007, performance units and service-based restricted stock unit awards, each
comprising an estimated 55% and 45%, respectively, of the estimated grant date total long-term
incentive value were awarded to the Named Executive Officers. These restricted stock units are
scheduled to vest in full on the third anniversary of the award date, subject to earlier vesting if
the employee meets certain age or age and years of service requirements; the termination or
constructive termination of an employees employment in connection with a change of control of
Oceaneering or due to death or disability. No part of the awards to Named Executive Officers
vested during 2007 by reason of any of the early vesting provisions. Each restricted stock unit
represents the equivalent of one share of our common stock. Upon vesting, settlement of the
restricted stock units will be made in shares of our common stock. The grant date value of
restricted stock units awarded to Named Executive Officers is reflected in the Grant Date Fair
Value of Stock and Stock Option Awards column of the Grants of Plan-Based Awards table below.
The performance units awarded in February 2007 are scheduled to vest in full on the third
anniversary of the award date, subject to similar early vesting terms as are applicable to the
restricted stock units. The Committee approved specific financial goals and measures based on
cumulative cash flow from operations and a comparison of return on invested capital and cost of
capital for the three-year period January 1, 2007 through December 31, 2009 to be used as the basis
for the final value of the performance units. The measures were selected because of our belief
that they have a strong correlation with the creation of shareholder value. The amount of
cumulative cash flow from operations during this three-year performance period necessary to achieve
the target level goal for this measure is $1 billion. This amount was selected because it is three
times the annual cash flow from operations expected to be achieved in 2007, which exceeded the
record amount achieved in 2006. The amounts to be achieved by Oceaneering to reach the threshold
and maximum are $100 million less and more, respectively, than the target level amount.
Oceaneerings return on invested capital must exceed its cost of capital over this three-year
performance period by 50% for the target level goal to be achieved for this performance measure.
For the threshold level to be achieved, the return on invested capital must be 30% in excess of the
cost of capital and for the maximum level to be achieved it must be 70% in excess of the cost of
capital. The final value of each performance unit may range from $0 to $125 with the threshold,
target and maximum levels of achievement of goals valued at $75, $100 and $125, respectively. If
the calculated unit value exceeds $100, the Committee retains discretion to reduce such value to
any amount above or equal to $100. Upon vesting, the value of the performance units will be
payable in cash.
16
The determination of the final value of each performance unit is based on the application of
the following grid (with interpolation between the specified levels):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Cash Flow |
|
Unit Values |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum |
|
$ |
62.50 |
|
|
$ |
100.00 |
|
|
$ |
112.50 |
|
|
$ |
125.00 |
|
Target |
|
$ |
50.00 |
|
|
$ |
87.50 |
|
|
$ |
100.00 |
|
|
$ |
112.50 |
|
Threshold |
|
$ |
37.50 |
|
|
$ |
75.00 |
|
|
$ |
87.50 |
|
|
$ |
100.00 |
|
Below
Threshold |
|
$ |
0.00 |
|
|
$ |
37.50 |
|
|
$ |
50.00 |
|
|
$ |
62.50 |
|
|
|
Below |
|
Threshold |
|
Target |
|
Maximum |
|
|
Threshold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Invested Capital/Cost of Capital
|
The estimated future payout of the performance unit awards to Named Executive Officers if each
of the performance measures is achieved at the threshold, target or maximum level is reflected in
the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column of the Grants of
Plan-Based Awards table below.
For 2007, approximately 57% of the total direct compensation of Mr. Collins, our Chief
Executive Officer, was at risk against short- and long-term performance goals and approximately
51-53% was at risk for each of the other Named Executive Officers.
Post-Employment Compensation Programs
Retirement Plans
We maintain a 401(k) plan and a Supplemental Executive Retirement Plan (SERP). All of our
employees who meet the eligibility requirements may participate in our 401(k) plan. The Named
Executive Officers have elected not to participate in our 401(k) plan. Participation in our SERP
includes Named Executive Officers and other key employees selected for participation by the
Committee. Our SERP was established to provide a benefit to our executives and other key employees
in excess of Internal Revenue Code limits for our 401(k) plan, in order to attract and motivate
participants to remain with us and provide retirement plan values that are competitive with those
provided by companies within the Compensation Peer Group. Under our SERP, we credit a
participants notional account with a percentage determined by the Committee of each of the
participants base salary, subject to vesting. A participant may elect to defer a portion of base
salary and annual bonus for accrual pursuant to our SERP. Amounts accrued under our SERP are
adjusted for earnings and losses as if they were invested in one or more investment vehicles
selected by the participant from those designated as alternatives by the Committee. A
participants interest in the plan is generally distributable upon termination. The percentage of
base salary credited for Named Executive Officers in 2007 was: Mr. Collins 50%; Mr. McEvoy 50%;
Messrs. Migura and Haubenreich 40% each; and Mr. Gardner 20%. Please see the Non-Qualified
Deferred Compensation table and accompanying narrative for further information about our SERP and
contributions to the Named Executive Officers accounts.
Change of Control Agreements
In November 2001, we entered into Change of Control Agreements (each, a Change of Control
Agreement) with Messrs. Collins, McEvoy, Migura and Haubenreich, each of whom are Named Executive
Officers, replacing each of their respective prior senior executive severance agreements. The
payment and benefits under our Change of Control Agreements did not influence and were not
influenced by the other elements of compensation, as the change of control payments and benefits
serve different objectives and due to the fact that a change of control or other triggering event
may never occur. We limit eligibility for change of control agreement participation to those Named
Executive Officers whose full support and sustained contribution would be important to the
successful completion of a change of control. We believe the benefits provided by the Change of
Control Agreements help promote long-term retention by providing some financial security to these
Named Executive Officers against the risk of loss of employment which could result following
17
a change of control of our company. The Change of Control Agreements entitle the individual to
receive a severance package, described below, in the event of the occurrence of both a change of
control and a termination of the executives employment by us without cause (as defined below) or
by the executive for good reason (as defined below) during a period of time beginning a year prior
to the occurrence or, in some cases, the contemplation by the Board of a change in control (the
Effective Date) and ending two years following the Effective Date. For purposes of the Change of
Control Agreements, a change of control is defined as occurring if:
|
|
|
any person is or becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of our securities representing 20% or more of
the combined voting power of our outstanding voting securities, other than through the
purchase of voting securities directly from a private placement by us; |
|
|
|
|
the current members of our Board, or subsequent members approved by at least
two-thirds of the current members, no longer comprise a majority of our Board; |
|
|
|
|
our company is merged or consolidated with another corporation or entity, and our
shareholders own less than 60% of the outstanding voting securities of the surviving or
resulting corporation or entity; |
|
|
|
|
a tender offer or exchange offer is made and consummated by a person other than us
for the ownership of 20% or more of our voting securities; or |
|
|
|
|
there has been a disposition of all or substantially all of our assets. |
As defined in each Change of Control Agreement, cause for termination by Oceaneering means
conviction by a court of competent jurisdiction, from which conviction no further appeal can be
taken, of a felony-grade crime involving moral turpitude related to service with us.
As defined in each Change of Control Agreement, good reason to terminate includes:
|
|
|
any adverse change in status, title, duties or responsibilities; |
|
|
|
|
any reduction in annual base salary, SERP contribution level by us, annual bonus
opportunity or aggregate long-term compensation, all as may be increased subsequent to
date of the Change of Control Agreements; |
|
|
|
|
any relocation; |
|
|
|
|
the failure of a successor to assume the Change of Control Agreement; |
|
|
|
|
any prohibition by us against the individual engaging in outside activities
permitted by the Change of Control Agreement; |
|
|
|
|
any purported termination by us that does not comply with the terms of the Change of
Control Agreement; or |
|
|
|
|
any default by us in the performance of our obligations under the Change of Control
Agreement. |
The severance package provided for in each such executives Change of Control Agreement
consists of an amount equal to three times the sum of:
|
|
|
the executives highest annual rate of base salary during the then-current year or
any of the three years preceding the year of termination; |
|
|
|
|
an amount equal to the maximum award the executive is eligible to receive under the
then-current fiscal year bonus plan; and |
|
|
|
|
an amount equal to the maximum percentage of the executives annual base salary
contributed by us for him in our SERP for the then-current year multiplied by the
executives highest annual rate of base salary. |
18
A minimum aggregate amount payable for these items is stated in each such executives
agreement, which amount was calculated using the year-end December 31, 2001 amounts for each
component.
The severance provisions also provide that, for each applicable individual:
|
|
|
any outstanding stock options would vest immediately and become exercisable or the
individual may elect to be paid an amount equal to the spread between the exercise
price and the higher market value for the shares of our common stock underlying those
options; |
|
|
|
|
the benefits under all compensation plans, including restricted stock agreements and
restricted stock unit agreements, would be paid as if all contingencies for payment and
maximum levels of performance had been met; and |
|
|
|
|
the applicable individual would receive benefits under all other plans he then
participates in for three years. |
The Change of Control Agreements provide that, if any payments made thereunder would cause the
recipient to be liable for an excise tax because the payment is a parachute payment (as defined
in the Internal Revenue Code), then we will pay the individual an additional amount to make the
individual whole for that tax liability.
Perquisites
We provide our Named Executive Officers with perquisites and other benefits that we believe
are reasonable and consistent with our overall compensation program to enable us to attract and
retain employees for key positions. The Committee periodically reviews the levels of perquisites
and other personal benefits provided to our executive officers. The perquisites provided to the
Named Executive Officers in 2007 and our incremental cost to provide those perquisites are set
forth in the All Other Compensation column of the Summary Compensation Table below and the
related footnotes to that table.
Stock Ownership Guidelines
To align the interests of our directors, executive officers and shareholders, we believe our
directors and executive officers should have a significant financial stake in Oceaneering. To
further that goal, our Board adopted stock ownership guidelines on November 30, 2007, requiring
that our nonemployee directors, chief executive officer, executive vice president and senior vice
presidents maintain minimum ownership interests in Oceaneering. Our nonemployee directors are
generally expected to own not less than a fixed number of shares equal to five times the annual
cash retainer generally paid to nonemployee directors divided by the closing price of our stock on
November 30, 2007, the date of adoption of the policy.
Our chief executive officer, executive vice president and senior vice presidents are generally
expected to own not less than a fixed number of shares equal to a multiple of their annual base
salary divided by the closing price of our stock on the date of adoption of the policy. The
multiple of annual base salary used to determine the fixed number of shares is as provided in the
following table.
|
|
|
Level |
|
Base Salary Multiple |
Chief Executive Officer |
|
5 |
Executive Vice President |
|
3 |
Corporate Senior Vice Presidents |
|
3 |
Other Senior Vice Presidents |
|
2 |
The following forms of ownership are recognized in determining the number of shares of our
stock owned by a nonemployee director or executive officer for purposes of satisfying the stock
ownership guidelines:
|
|
|
direct ownership of shares; |
|
|
|
|
indirect ownership of shares, including stock or stock equivalents held in our
retirement plan; and |
|
|
|
|
vested and unvested shares of restricted stock or stock units held under our
long-term incentive programs. |
19
A nonemployee director or executive has three years from the date of adoption of the policy or
the initial date of election or appointment to comply with stock ownership guidelines. The time
period for satisfying such ownership requirement may be extended at the discretion of our chief
executive officer for an additional period of up to two years. In the event that a nonemployee
director or executive does not meet the stock ownership level within the specified time period, he
or she will be prohibited from selling any stock acquired through vesting of restricted stock or
restricted stock units or upon exercise of stock options, except to pay for applicable taxes or the
exercise price, until he or she satisfies the requirements. Each of our current nonemployee
directors and Named Executive Officers is covered by this policy and currently satisfies the stock
ownership guidelines applicable to him.
Tax Deductibility of Pay
Section 162(m) of the Internal Revenue Code generally disallows a deduction to public
companies to the extent of excess annual compensation over $1 million paid to certain executive
officers, except for qualified performance-based compensation. Our 2007 annual cash bonus program
and 2007 performance unit program are intended to qualify as performance-based compensation under
Section 162(m). Our general policy, where consistent with business objectives, is to preserve the
deductibility of compensation to executive officers. We may authorize forms of compensation that
might not be deductible if we believe they are in the best interests of Oceaneering and its
shareholders. Our 2007 service-based restricted stock unit awards are not considered
performance-based under Section 162(m) and, accordingly, are subject to the $1 million limit on
deductibility. All or a portion of the value, when vested, of these restricted stock unit awards
may not be deductible. We had no nondeductible compensation paid to executive officers in 2007 and
do not anticipate any in 2008.
Compliance With Internal Revenue Code Section 409A
Section 409A of the Internal Revenue Code, which was enacted in 2004 and generally became
effective in 2005, can impose significant additional taxes on the recipient of nonqualified
deferred compensation arrangements that do not meet specified requirements regarding both form and
operation. Some of the arrangements between Oceaneering and its executive officers and other
employees provide, or might be considered to provide, nonqualified deferred compensation. The
Committee believes that changes to some of these arrangements will be appropriate, so that our
employees will not be subject to the additional Section 409A taxes. The Committee has already
adjusted some of our compensation arrangements to comply with Section 409A and anticipates that it
will take further action in 2008, in accordance with guidance recently issued by the Internal
Revenue Service, to amend arrangements to comply with Section 409A. These adjustments may include
changing the timing and form of payments to be made under nonqualified deferred compensation
arrangements. The arrangements that are likely to be changed include outstanding restricted stock,
restricted stock unit and performance unit awards, the SERP and Change of Control Agreements.
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
included in this Proxy Statement with the management of Oceaneering International, Inc., and, based
on such review and discussions, the Compensation Committee recommended to the Board of Directors of
Oceaneering that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation Committee
Harris J. Pappas, Chairman
Jerold J. DesRoche
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes compensation of our Chief Executive Officer, our Chief
Financial Officer, and our three most highly compensated executive officers other than our Chief
Executive Officer and Chief Financial Officer for the years ended December 31, 2007 and 2006.
20
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
Nonqualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
Incentive Plan |
|
|
Deferred |
|
|
All Other |
|
|
|
Name and Principal |
|
|
|
|
|
|
|
Salary |
|
|
Bonus |
|
|
Awards |
|
|
Awards |
|
|
Compensation |
|
|
Compensation |
|
|
Compensation |
|
|
|
Position |
|
|
Year |
|
|
($) |
|
|
($)(1) |
|
|
($)(2) |
|
|
($) |
|
|
($)(3) |
|
|
Earnings ($) |
|
|
($)(4)(5) |
|
|
Total ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
2007 |
|
|
|
|
550,000 |
|
|
|
|
175,000 |
|
|
|
|
2,085,307 |
|
|
|
|
|
|
|
|
|
825,000 |
|
|
|
|
|
|
|
|
|
1,437,080 |
|
|
|
|
5,072,387 |
|
President & Chief |
|
|
|
2006 |
|
|
|
|
457,000 |
|
|
|
|
281,000 |
|
|
|
|
1,434,336 |
|
|
|
|
|
|
|
|
|
469,000 |
|
|
|
|
|
|
|
|
|
1,440,295 |
|
|
|
|
4,081,631 |
|
Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Kevin McEvoy |
|
|
|
2007 |
|
|
|
|
350,000 |
|
|
|
|
100,000 |
|
|
|
|
932,277 |
|
|
|
|
|
|
|
|
|
350,000 |
|
|
|
|
|
|
|
|
|
754,748 |
|
|
|
|
2,487,025 |
|
Executive Vice President |
|
|
|
2006 |
|
|
|
|
310,000 |
|
|
|
|
60,000 |
|
|
|
|
700,395 |
|
|
|
|
|
|
|
|
|
290,000 |
|
|
|
|
|
|
|
|
|
744,238 |
|
|
|
|
2,104,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin J. Migura |
|
|
|
2007 |
|
|
|
|
315,000 |
|
|
|
|
85,000 |
|
|
|
|
861,655 |
|
|
|
|
|
|
|
|
|
315,000 |
|
|
|
|
|
|
|
|
|
662,915 |
|
|
|
|
2,239,570 |
|
Senior Vice President & |
|
|
|
2006 |
|
|
|
|
281,000 |
|
|
|
|
44,000 |
|
|
|
|
648,708 |
|
|
|
|
|
|
|
|
|
281,000 |
|
|
|
|
|
|
|
|
|
691,389 |
|
|
|
|
1,946,097 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George R. Haubenreich, Jr. |
|
|
|
2007 |
|
|
|
|
295,000 |
|
|
|
|
55,000 |
|
|
|
|
904,550 |
|
|
|
|
|
|
|
|
|
295,000 |
|
|
|
|
|
|
|
|
|
656,481 |
|
|
|
|
2,206,031 |
|
Senior Vice President, |
|
|
|
2006 |
|
|
|
|
275,000 |
|
|
|
|
35,000 |
|
|
|
|
648,708 |
|
|
|
|
|
|
|
|
|
275,000 |
|
|
|
|
|
|
|
|
|
686,671 |
|
|
|
|
1,920,379 |
|
General Counsel &
Secretary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip D. Gardner |
|
|
|
2007 |
|
|
|
|
230,000 |
|
|
|
|
|
|
|
|
|
403,031 |
|
|
|
|
|
|
|
|
|
150,000 |
|
|
|
|
|
|
|
|
|
248,833 |
|
|
|
|
1,031,864 |
|
Senior Vice President |
|
|
|
2006 |
|
|
|
|
215,000 |
|
|
|
|
|
|
|
|
|
284,697 |
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
203,081 |
|
|
|
|
802,778 |
|
Subsea Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts represent merit bonuses awarded to the indicated Named Executive Officers,
apart from the bonuses awarded under the 2007 Cash Bonus Award Program which are reflected
in the Non-Equity Incentive Plan Compensation column of this table. For further
information, see Compensation Discussion and Analysis Annual Incentive Awards Paid in
Cash above. |
(2) |
|
The amounts represent the compensation cost recognized by us in 2007 and 2006 related
to stock options, restricted stock and restricted stock unit awards made prior to 2006 and
restricted stock unit awards made in 2007 and 2006 in accordance with SFAS 123R. The
compensation cost for 2007 is comprised of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards Prior to 2007 |
Awards in 2007 |
|
|
|
|
|
|
|
|
|
Restricted
Stock Units |
|
Restricted Stock Units |
|
|
|
Name |
|
Stock Options ($) |
($) |
($) |
|
Total ($) |
T. Jay Collins |
|
|
|
|
|
|
|
|
1,574,214 |
|
|
|
|
511,093 |
|
|
|
|
2,085,307 |
|
M. Kevin McEvoy |
|
|
|
|
|
|
|
|
767,997 |
|
|
|
|
164,280 |
|
|
|
|
932,277 |
|
Marvin J. Migura |
|
|
|
|
|
|
|
|
711,065 |
|
|
|
|
150,590 |
|
|
|
|
861,655 |
|
George R. Haubenreich, Jr. |
|
|
|
|
|
|
|
|
711,065 |
|
|
|
|
193,485 |
|
|
|
|
904,550 |
|
Philip D. Gardner |
|
|
|
3,653 |
|
|
|
|
303,548 |
|
|
|
|
95,830 |
|
|
|
|
403,031 |
|
|
|
For a discussion of valuation assumptions see Note 8 to our consolidated financial
statements included in our Annual Report on Form 10-K for the years ended December 31,
2007 and 2006, respectively. Excluded from the 2007 and 2006 amounts are the costs we
recognized in 2007 and 2006, respectively for tax-assistance payments made in 2007 and
2006 to Named Executive Officers associated with restricted stock and restricted stock
units awarded prior to 2006, because the actual tax-assistance payments made in 2007 and
2006 for such awards are reported in the All Other Compensation column of this table. |
21
(3) |
|
The amounts reflect cash awards to the Named Executive Officers pursuant to our 2007
Cash Bonus Award Program, see Compensation Discussion and Analysis Annual Incentive
Awards Paid in Cash above. |
(4) |
|
The amounts shown for each attributable perquisite or benefit does not exceed the
greater of $25,000 or 10% of the total amount of perquisites received by any Named
Executive Officer except as quantified for a Named Executive Officer in the footnotes
below. |
(5) |
|
The amounts shown in All Other Compensation column for 2007 and 2006 are attributable
to the following: |
|
|
|
Mr. Collins: $275,000 and $229,167 for our 2007 and 2006 contribution to his
notional SERP account, respectively; $1,132,973 and $1,186,039 for tax gross-up
payments associated with vestings of restricted stock and stock units in 2007 and
2006, respectively; perquisites and other personal benefits in 2007 and 2006
totaling $29,107 and $25,089, respectively, comprised of in each year: provision
of excess liability insurance; tax advice and tax return preparation; club
membership; sporting event tickets; medical premium and cost reimbursements for
supplemental medical insurance plan; and personal use of company-provided
automobile. |
|
|
|
|
Mr. McEvoy: $175,000 and $142,667 for our 2007 and 2006 contribution to his
notional SERP account, respectively; $566,486 and $593,020 for tax gross-up
payments associated with vestings of restricted stock and stock units in 2007 and
2006, respectively; perquisites and other personal benefits in 2007 and 2006
totaling $13,262 and $8,551, respectively, comprised of in each year: provision of
excess liability insurance; tax advice and tax return preparation; club membership;
sporting event tickets; medical premium and cost reimbursements for supplemental
medical insurance plan; and personal use of company-provided automobile. |
|
|
|
|
Mr. Migura: $126,000 and $112,320 for our 2007 and 2006 contribution to his
notional SERP account, respectively; $528,721 and $563,369 for tax gross-up
payments associated with vestings of restricted stock and stock units in 2007 and
2006 respectively; perquisites and other personal benefits in 2007 and 2006
totaling $8,194 and $15,700, respectively, comprised of in each year: provision of
excess liability insurance; tax advice and tax return preparation; club membership;
sporting event tickets; and medical premium and cost reimbursements for
supplemental medical insurance plan. |
|
|
|
|
Mr. Haubenreich: $118,000 and $110,000 for our 2007 and 2006 contribution to his
notional SERP account; respectively; $528,721 and $563,369 in tax gross-up payments
associated with vestings of restricted stock and stock units in 2007 and 2006,
respectively; perquisites and other personal benefits totaling $9,760 and $13,302,
respectively, comprised of in each year: excess liability insurance; tax advice
and tax return preparation; club membership; sporting event tickets; and medical
premium and cost reimbursements for supplemental medical insurance plan. |
|
|
|
|
Mr. Gardner: $46,000 and $43,000 for our 2007 and 2006 contribution to his
notional SERP account, respectively; $201,417 and $158,139 in tax gross-up payments
associated with vestings of restricted stock and stock units in 2007 and 2006,
respectively; perquisites and other personal benefits in 2007 and 2006 totaling
$1,416 and $1,942, respectively, comprised of in each year excess liability
insurance. |
22
The following table provides information about the equity and non-equity awards to the Named
Executive Officers under our 2005 Incentive Plan during the year ended December 31, 2007.
Grants of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
|
All Other |
|
|
|
|
|
|
|
Grant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
Exercise |
|
|
Date Fair |
|
|
|
|
|
|
|
|
Estimated Future Payouts Under |
|
|
Estimated Future Payouts |
|
|
Awards: |
|
|
Awards: |
|
|
or Base |
|
|
Value of |
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan |
|
|
Under Equity Incentive Plan |
|
|
Number of |
|
|
Number of |
|
|
Price of |
|
|
Stock and |
|
|
|
|
|
|
|
|
Awards(1) |
|
|
Awards |
|
|
Shares of |
|
|
Securities |
|
|
Option |
|
|
Option |
|
|
|
Grant |
|
|
Threshold |
|
Target |
|
Maximum |
|
|
Threshold |
|
Target |
|
Maximum |
|
|
Stock or |
|
|
Underlying |
|
|
Awards |
|
|
Awards |
Name |
|
|
Date |
|
|
($) |
|
($) |
|
($) |
|
|
(#) |
|
(#) |
|
(#) |
|
|
Units (#)(2) |
|
|
Options (#) |
|
|
($/Sh) |
|
|
($)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
2/23/07 |
|
|
|
|
1,050,000 |
|
|
|
1,400,000 |
|
|
|
1,750,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,149,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Kevin McEvoy |
|
|
|
2/23/07 |
|
|
|
|
450,000 |
|
|
|
600,000 |
|
|
|
750,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
492,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin J. Migura |
|
|
|
2/23/07 |
|
|
|
|
412,500 |
|
|
|
550,000 |
|
|
|
687,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
451,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George R.
Haubenreich, Jr. |
|
|
|
2/23/07 |
|
|
|
|
397,500 |
|
|
|
530,000 |
|
|
|
662,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
435,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip D. Gardner |
|
|
|
2/23/07 |
|
|
|
|
262,500 |
|
|
|
350,000 |
|
|
|
437,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
287,490 |
|
|
|
|
(1) |
|
These columns show the potential value of the payout for each Named Executive Officer
under the performance units awarded in 2007 if the threshold, target or maximum goals are
satisfied for each of the performance measures. The potential payouts are
performance-driven and therefore completely at risk. For a description of the awards,
including business measurements for the three-year performance period and the performance
goals for determining the payout see Compensation Discussion and Analysis Long-Term
Incentive Compensation above. |
|
(2) |
|
The amounts reflect the number of restricted stock units awarded to the Named Executive
Officers in 2007. For a description of the awards see Compensation Discussion and
Analysis Long-Term Incentive Compensation above. |
|
(3) |
|
The amounts reflect the full grant date value of restricted stock units under SFAS 123R
awarded to the Named Executive Officers in 2007. For a discussion of valuation
assumptions, see Note 8 to our consolidated financial statements included in our annual
report on Form 10-K for the year ended December 31, 2007. For a description of the awards,
see Compensation Discussion and Analysis Long-Term Incentive Compensation above. |
23
The following table provides information on the current holdings of stock options and unvested
restricted stock units for each of the Named Executive Officers as of December 31, 2007.
Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
|
Incentive Plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market |
|
|
Awards: |
|
|
Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
Number |
|
|
Value of |
|
|
Number of |
|
|
Market or |
|
|
|
Number of |
|
|
Number of |
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
|
|
of Shares or |
|
|
Shares or |
|
|
Unearned |
|
|
Payout Value of |
|
|
|
Securities |
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
|
Units of |
|
|
Shares, Units |
|
|
Unearned |
|
|
|
Underlying |
|
|
Underlying |
|
|
Underlying |
|
|
|
|
|
|
|
|
|
|
|
|
of Stock |
|
|
Stock That |
|
|
or Other |
|
|
Shares, Units or |
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Unexercised |
|
|
Option |
|
|
Option |
|
|
That Have |
|
|
Have Not |
|
|
Rights That |
|
|
Other Rights |
|
|
|
Options (#) |
|
|
Options(#) |
|
|
Unearned |
|
|
Exercise |
|
|
Expiration |
|
|
Not Vested |
|
|
Vested |
|
|
Have Not |
|
|
That Have Not |
Name |
|
|
Exercisable |
|
|
Unexercisable |
|
|
Options (#) |
|
|
Price ($) |
|
|
Date |
|
|
(#) (1) |
|
|
($)(2) |
|
|
Vested (#) |
|
|
Vested ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,000 |
|
|
|
|
8,620,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Kevin McEvoy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000 |
|
|
|
|
4,041,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin J. Migura |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,200 |
|
|
|
|
3,717,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George R. Haubenreich, Jr. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,800 |
|
|
|
|
3,690,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip D. Gardner |
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.58 |
|
|
|
|
3/25/09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18.64 |
|
|
|
|
12/26/09 |
|
|
|
|
30,000 |
|
|
|
|
2,020,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Reflects unvested restricted stock units pursuant to the 2002, 2006 and 2007 Restricted
Stock Unit Agreements for the Named Executive Officers. The vesting schedule for these
restricted stock units is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002 |
|
|
2006 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agreement |
|
|
Agreement |
|
|
Agreement |
|
|
|
|
|
|
2002 Agreement (# of Units) |
|
|
Total |
|
|
(# of Units) |
|
|
(# of Units) |
|
|
Total |
Name |
|
|
7/4/08 |
|
7/3/09 |
|
7/2/10 |
|
|
(# of Units) |
|
|
2/2/09 |
|
|
2/23/10 |
|
|
(# of Units) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
36,000 |
|
|
|
24,000 |
|
|
|
12,000 |
|
|
|
|
72,000 |
|
|
|
|
28,000 |
|
|
|
|
28,000 |
|
|
|
|
128,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Kevin McEvoy |
|
|
|
18,000 |
|
|
|
12,000 |
|
|
|
6,000 |
|
|
|
|
36,000 |
|
|
|
|
12,000 |
|
|
|
|
12,000 |
|
|
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin J. Migura |
|
|
|
16,800 |
|
|
|
11,200 |
|
|
|
5,600 |
|
|
|
|
33,600 |
|
|
|
|
10,600 |
|
|
|
|
11,000 |
|
|
|
|
55,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George R. Haubenreich, Jr. |
|
|
|
16,800 |
|
|
|
11,200 |
|
|
|
5,600 |
|
|
|
|
33,600 |
|
|
|
|
10,600 |
|
|
|
|
10,600 |
|
|
|
|
54,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip D. Gardner |
|
|
|
6,400 |
|
|
|
6,400 |
|
|
|
3,200 |
|
|
|
|
16,000 |
|
|
|
|
7,000 |
|
|
|
|
7,000 |
|
|
|
|
30,000 |
|
|
|
|
(2) |
|
Market value of unvested restricted stock units assumes a price of $67.35 per share of
our Common Stock as of December 31, 2007. The estimated value of the
tax-assistance payment that would be provided pursuant to the 2002 Restricted Stock Unit
Agreement for the market value of these restricted stock units is as follows: |
|
|
|
|
|
- Mr. Collins |
|
$ |
2,781,501 |
|
- Mr. McEvoy |
|
$ |
1,390,751 |
|
- Mr. Migura |
|
$ |
1,298,034 |
|
- Mr. Haubenreich |
|
$ |
1,298,034 |
|
- Mr. Gardner |
|
$ |
618,111 |
|
24
The following table provides information for the Named Executive Officers on (1) stock option
exercises during 2007, including the number of shares acquired upon exercise and the value
realized, and (2) the number of shares acquired upon vesting of stock awards in the form of
restricted stock and restricted stock unit awards and the value realized.
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
Number of Shares |
|
Value Realized |
|
|
Number of Shares |
|
Value Realized on |
Name |
|
|
Acquired on Exercise (#) |
|
on Exercise ($) |
|
|
Acquired on Vesting (#) |
|
Vesting ($)(1) |
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
|
|
|
|
|
|
|
|
|
36,000 |
|
|
|
1,975,320 |
|
M. Kevin McEvoy |
|
|
|
|
|
|
|
|
|
|
|
|
18,000 |
|
|
|
987,660 |
|
Marvin J. Migura |
|
|
|
|
|
|
|
|
|
|
|
|
16,800 |
|
|
|
921,816 |
|
George R. Haubenreich, Jr. |
|
|
|
|
|
|
|
|
|
|
|
|
16,800 |
|
|
|
921,816 |
|
Philip D. Gardner |
|
|
|
|
|
|
|
|
|
|
|
|
6,400 |
|
|
|
351,168 |
|
|
|
|
(1) |
|
The amount reflects the value realized for restricted stock vested pursuant to our 2002
Restricted Stock Unit Program. Pursuant to these programs, a tax-assistance payment was
provided in the following amounts: Mr. Collins $1,132,973; Mr. McEvoy $566,486; Mr.
Migura $528,721; Mr. Haubenreich $528,721; and Mr. Gardner $201,417. The amount of
these tax-assistance payments is included for each Named Executive Officer in the amount
shown in the All Other Compensation column of the Summary Compensation Table above. |
We do not provide a Pension Benefits Table because we have no qualified pension plan or other
plan that would be reportable under the SECs rules applicable to Pension Benefits Tables.
Nonqualified Deferred Compensation
Our SERP is an unfunded, defined contribution plan for selected executives and key employees
of Oceaneering, including the Named Executive Officers. Pursuant to our SERP, U.S. participants,
including the Named Executive Officers, may defer up to 85% of their base salaries and 90% of their
annual cash bonus amounts. We credit a participants notional account with a determined percentage
of the participants base salary, subject to vesting. Benefits under our SERP are based on the
participants vested portion of his or her notional account balance at the time of termination of
employment. A participant vests in our credited amounts at the rate of 33% each year, subject to
accelerated vesting upon the soonest to occur of (1) the date the participant has completed ten
years of participation, (2) the date that the sum of the participants age and years of
participation equals 65, (3) the date of termination of employment by reason of death or
disability, and (4) within two years following a change of control. Messrs. Collins, McEvoy,
Migura and Haubenreich are fully vested in their SERP accounts. All participants are fully vested
in deferred base salary and bonus.
25
The table below shows the investment options available to all participants and the annual rate
of return for each investment for the year ended December 31, 2007, as reported by the
administrator of our SERP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rate of |
|
|
|
|
|
Rate of |
|
|
|
Return |
|
|
|
|
|
Return |
Name of Fund |
|
|
(%) |
|
|
Name of Fund |
|
|
(%) |
|
|
|
|
|
|
|
|
|
|
Alger Small-Cap Growth |
|
|
|
15.10 |
|
|
|
AllianceBernstein International Value |
|
|
|
6.24 |
|
American Funds Growth |
|
|
|
11.93 |
|
|
|
American Funds Growth-Income |
|
|
|
4.66 |
|
Batterymarch
International Small-Cap |
|
|
|
4.73 |
|
|
|
BlackRock Equity Index |
|
|
|
5.23 |
|
BlackRock Small-Cap Index |
|
|
|
(2.02 |
) |
|
|
Capital Guardian Diversified Research |
|
|
|
1.19 |
|
Capital Guardian Equity |
|
|
|
6.27 |
|
|
|
Clearbridge Large-Cap Value |
|
|
|
3.54 |
|
Columbia Technology |
|
|
|
23.03 |
|
|
|
Goldman Sachs Short Duration Bond |
|
|
|
4.47 |
|
Highland Capital-Floating Rate Loan |
|
|
|
(1.86 |
) |
|
|
Janus Growth LT |
|
|
|
15.63 |
|
JP Morgan Diversified Bond |
|
|
|
1.32 |
|
|
|
Lazard Mid-Cap Value |
|
|
|
(2.15 |
) |
Loomis, Sayles Large-Cap Growth |
|
|
|
21.63 |
|
|
|
MFS International Large Cap |
|
|
|
9.26 |
|
NFJ Small Cap Value |
|
|
|
3.14 |
|
|
|
Oppenheimer Emerging Market |
|
|
|
33.09 |
|
Oppenheimer Main Street Core |
|
|
|
4.40 |
|
|
|
Oppenheimer Multi-Strategy |
|
|
|
4.34 |
|
Pacific Life High Yield Bond |
|
|
|
2.44 |
|
|
|
Pacific Life Money Market |
|
|
|
4.99 |
|
PIMCO Inflation Managed |
|
|
|
10.14 |
|
|
|
PIMCO Managed Bond |
|
|
|
8.53 |
|
Van Kampen Comstock |
|
|
|
(3.01 |
) |
|
|
Van Kampen Mid-Cap Growth |
|
|
|
22.92 |
|
Van Kampen Real Estate |
|
|
|
(16.16 |
) |
|
|
Vaughan Nelson Small Cap Equity |
|
|
|
6.04 |
|
The following table provides information on our non-qualified deferred compensation plan.
Amounts shown are entirely attributable to our SERP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
Registrant |
|
|
|
|
|
|
|
Aggregate |
|
|
|
|
|
|
Contributions |
|
|
Contributions in |
|
|
Aggregate Earnings |
|
|
Withdrawals/ |
|
|
Aggregate Balance |
Name |
|
|
in 2007 ($) |
|
|
2007 ($)(1) |
|
|
in 2007 ($)(2) |
|
|
Distributions ($) |
|
|
at 12/31/07 ($)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
24,000 |
|
|
|
|
275,000 |
|
|
|
|
70,012 |
|
|
|
|
|
|
|
|
|
2,736,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M. Kevin McEvoy |
|
|
|
|
|
|
|
|
175,000 |
|
|
|
|
61,272 |
|
|
|
|
|
|
|
|
|
1,341,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin J. Migura |
|
|
|
225,000 |
|
|
|
|
126,000 |
|
|
|
|
71,116 |
|
|
|
|
|
|
|
|
|
2,608,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George. R.
Haubenreich, Jr. |
|
|
|
|
|
|
|
|
118,000 |
|
|
|
|
(73,019 |
) |
|
|
|
|
|
|
|
|
1,763,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip D. Gardner |
|
|
|
50,000 |
|
|
|
|
50,000 |
|
|
|
|
11,735 |
|
|
|
|
|
|
|
|
|
317,212 |
|
|
|
|
(1) |
|
Amounts reflect the credited contributions we made to the account of the Named
Executive Officer in 2007. All of the contributions shown are included in the All Other
Compensation column of the Summary Compensation Table above. |
|
(2) |
|
Amounts shown reflect hypothetical accrued gains (or losses) in 2007 on the aggregate
of contributions by the Named Executive Officer and us on notional investments designed to
track the performance of the funds selected by the Named Executive Officers as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Earnings in 2007 |
|
|
|
|
|
|
Executive |
|
Company |
|
|
|
Name |
|
|
Contributions ($) |
|
Contributions ($) |
|
|
Total ($) |
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
16,359 |
|
|
|
53,653 |
|
|
|
|
70,012 |
|
M. Kevin McEvoy |
|
|
|
2,714 |
|
|
|
58,558 |
|
|
|
|
61,272 |
|
Marvin J. Migura |
|
|
|
35,652 |
|
|
|
35,464 |
|
|
|
|
71,116 |
|
George R. Haubenreich, Jr. |
|
|
|
(7,960 |
) |
|
|
(65,059 |
) |
|
|
|
(73,019 |
) |
Philip D. Gardner |
|
|
|
4,576 |
|
|
|
7,159 |
|
|
|
|
11,735 |
|
26
|
|
|
(3) |
|
Amounts reflect the accumulated account values (including gains and losses) of
contributions by the Named Executive Officers and us as of December 31, 2007 as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Balance at 12/31/07 |
|
|
|
|
|
|
Executive |
|
Company |
|
|
|
Name |
|
|
Contributions ($) |
|
Contributions ($) |
|
|
Total ($) |
|
|
|
|
|
|
|
T. Jay Collins |
|
|
|
561,673 |
|
|
|
2,175,065 |
|
|
|
|
2,736,738 |
|
M. Kevin McEvoy |
|
|
|
51,225 |
|
|
|
1,290,023 |
|
|
|
|
1,341,248 |
|
Marvin J. Migura |
|
|
|
1,325,641 |
|
|
|
1,282,466 |
|
|
|
|
2,608,107 |
|
George R. Haubenreich, Jr. |
|
|
|
533,091 |
|
|
|
1,230,269 |
|
|
|
|
1,763,360 |
|
Philip D. Gardner |
|
|
|
118,133 |
|
|
|
199,079 |
|
|
|
|
317,212 |
|
Potential Payments on Termination or Change of Control
As described in the Compensation Discussion and Analysis above, Messrs. Collins, McEvoy,
Migura and Haubenreich have Change of Control Agreements. Upon a change of control of Oceaneering,
each of them may be subject to certain excise taxes pursuant to Section 4999 of the Internal
Revenue Code. We have agreed to reimburse those Named Executive Officers for all such excise taxes
that may be imposed and any income taxes and excise taxes that may become payable as a result of
the reimbursement. Based on the amounts shown in the Change of Control column in the following
tables, none of the Named Executive Officers would be subject to an excise tax liability. However,
whether an excise tax liability will arise in the future will depend on the facts and circumstances
in existence at the time a change of control payment becomes payable. All of the outstanding
long-term incentive agreements of the Named Executive Officers have provisions for settlement in
the event of death, disability or a change of control, except the 2002 restricted stock unit
agreements of Messrs. Collins, McEvoy, Migura and Haubenreich have no provision for settlement in
the event of a change of control.
Assuming a December 31, 2007 termination date and, where applicable, using the closing price
of our Common Stock of $67.35 as reported by the New York Stock Exchange, the tables below show
potential payments to each of the Named Executive Officers in the existing contracts, agreements,
plans or arrangements, whether written or unwritten in the event of a termination of such
executives employment, including amounts payable pursuant to benefits or awards in which the Named
Executive Officers are vested. As used in the agreements referenced in the table below, the term
Change of Control has the same meaning as the Change of Control agreements define that term. For
a summary of that definition, see Compensation Discussion and Analysis Change of Control
Agreements above.
T. Jay Collins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary or |
|
|
|
|
|
|
|
|
|
involuntary |
|
|
|
|
|
|
Payments upon termination |
|
|
termination |
|
|
Death and Disability |
|
|
Change in Control |
|
|
|
|
|
|
|
|
|
|
Severance Payments |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
4,950,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit Plan Participation |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
83,657 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units
(unvested & accelerated) |
|
|
$ |
0 |
|
|
|
$ |
11,402,301 |
(3) |
|
|
$ |
3,771,600 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Units (unvested
& accelerated) |
|
|
$ |
0 |
|
|
|
$ |
0 |
(5) |
|
|
$ |
2,800,000 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation/Base Salary |
|
|
$ |
84,615 |
|
|
|
$ |
84,615 |
|
|
|
$ |
84,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP (vested) |
|
|
$ |
2,736,738 |
(7) |
|
|
$ |
2,736,738 |
(7) |
|
|
$ |
2,736,738 |
(7) |
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
|
$ |
2,821,353 |
|
|
|
$ |
14,223,654 |
|
|
|
$ |
14,426,610 |
|
|
|
|
|
|
|
|
|
|
|
27
M. Kevin McEvoy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary or |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
involuntary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments upon termination |
|
|
termination |
|
|
Death and Disability |
|
|
Change in Control |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
2,625,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit Plan Participation |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
77,301 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units
(unvested & accelerated) |
|
|
$ |
0 |
|
|
|
$ |
5,431,751 |
(3) |
|
|
$ |
1,616,400 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Units (unvested
& accelerated) |
|
|
$ |
0 |
|
|
|
$ |
0 |
(5) |
|
|
$ |
1,200,000 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation/Base Salary |
|
|
$ |
17,759 |
|
|
|
$ |
17,759 |
|
|
|
$ |
17,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP (vested) |
|
|
$ |
1,341,248 |
(7) |
|
|
$ |
1,341,248 |
(7) |
|
|
$ |
1,341,248 |
(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
|
$ |
1,359,007 |
|
|
|
$ |
6,790,758 |
|
|
|
$ |
6,877,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin J. Migura
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary or |
|
|
|
|
|
|
|
|
|
involuntary |
|
|
|
|
|
|
Payments upon termination |
|
|
termination |
|
|
Death and Disability |
|
|
Change in Control |
|
|
|
|
|
|
|
|
|
|
Severance Payments |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
2,268,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit Plan Participation |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
63,242 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units
(unvested & accelerated) |
|
|
$ |
0 |
|
|
|
$ |
5,015,754 |
(3) |
|
|
$ |
1,454,760 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Units (unvested
& accelerated) |
|
|
$ |
0 |
|
|
|
$ |
0 |
(5) |
|
|
$ |
1,080,000 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation/Base Salary |
|
|
$ |
48,462 |
|
|
|
$ |
48,462 |
|
|
|
$ |
48,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP (vested) |
|
|
$ |
2,608,107 |
(7) |
|
|
$ |
2,608,107 |
(7) |
|
|
$ |
2,608,107 |
(7) |
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
|
$ |
2,656,569 |
|
|
|
$ |
7,672,323 |
|
|
|
$ |
7,522,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George R. Haubenreich, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary or |
|
|
|
|
|
|
|
|
|
involuntary |
|
|
|
|
|
|
Payments upon termination |
|
|
termination |
|
|
Death and Disability |
|
|
Change in Control |
|
|
|
|
|
|
|
|
|
|
Severance Payments |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
2,124,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit Plan Participation |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
58,327 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units
(unvested & accelerated) |
|
|
$ |
0 |
|
|
|
$ |
4,988,814 |
(3) |
|
|
$ |
1,427,820 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Units (unvested
& accelerated) |
|
|
$ |
0 |
|
|
|
$ |
0 |
(5) |
|
|
$ |
1,060,000 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation/Base Salary |
|
|
$ |
45,385 |
|
|
|
$ |
45,385 |
|
|
|
$ |
45,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP (vested) |
|
|
$ |
1,763,360 |
(7) |
|
|
$ |
1,763,360 |
(7) |
|
|
$ |
1,763,360 |
(7) |
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
|
$ |
1,808,745 |
|
|
|
$ |
6,797,559 |
|
|
|
$ |
6,478,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
Philip D. Gardner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary or |
|
|
|
|
|
|
|
|
|
involuntary |
|
|
|
|
|
|
Payments upon termination |
|
|
termination |
|
|
Death and Disability |
|
|
Change in Control |
|
|
|
|
|
|
|
|
|
|
Severance Payments |
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units
(unvested & accelerated) |
|
|
$ |
0 |
|
|
|
$ |
2,638,611 |
(8) |
|
|
$ |
2,638,611 |
(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Units (unvested
& accelerated) |
|
|
$ |
0 |
|
|
|
$ |
0 |
(5) |
|
|
$ |
700,000 |
(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP (unvested & accelerated) |
|
|
$ |
0 |
|
|
|
$ |
71,942 |
(10) |
|
|
$ |
71,942 |
(10) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Vacation/Base Salary |
|
|
$ |
19,019 |
|
|
|
$ |
19,019 |
|
|
|
$ |
19,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP (vested) |
|
|
$ |
317,212 |
(7) |
|
|
$ |
317,212 |
(7) |
|
|
$ |
317,212 |
(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options (vested) |
|
|
$ |
1,420,725 |
(11) |
|
|
$ |
1,420,725 |
(11) |
|
|
$ |
1,420,725 |
(11) |
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
|
$ |
1,756,956 |
|
|
|
$ |
4,467,509 |
|
|
|
$ |
5,167,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amount reflects an amount equaling three times the sum of: a) his highest annual rate
of base salary for the prior three years; b) the maximum award he is eligible to receive
under the annual cash bonus program for the current year; and c) maximum percentage of base
salary contribution level by us for him in our SERP for the current year multiplied by his
highest annual rate of base salary in effect during the current year or any of the prior
three years that is payable pursuant to the executives Change of Control Agreement. |
|
(2) |
|
Amount reflects the estimated value of the benefit to the executive to receive the same
level of medical, life insurance, and disability benefits for a period of three years after
termination that is payable pursuant to the executives Change of Control Agreement. |
|
(3) |
|
Amount reflects: (a) the value of shares of Common Stock that would be delivered for
each outstanding restricted stock unit pursuant to the executives 2002, 2006 and 2007
Restricted Stock Unit Agreements and Change of Control Agreement; and (b) the value of the
tax-assistance payment that would be provided pursuant to the executives 2002 Restricted
Stock Unit Agreement and Change of Control Agreement. |
|
(4) |
|
Amount reflects the value of shares of Common Stock that would be delivered for each
outstanding restricted stock unit pursuant to the executives 2006 and 2007 Restricted
Stock Unit Agreements and Change of Control Agreement. |
|
(5) |
|
Upon death or disability, the performance units awarded pursuant to the 2006 and 2007
Performance Unit Agreements would vest; however, the amount payable, if any, will not be
known until the completion of the three-year performance periods January 1, 2006 December
31, 2009 and January 1, 2007 December 31, 2010, respectively, at which time the
performance will be measured. For information about goals and measures and amounts
payable, see Compensation Discussion and Analysis Long-Term Incentive Compensation
above. |
|
(6) |
|
Amount reflects cash payment for outstanding performance units at the target goal level
of $100 per unit pursuant to the executives 2006 and 2007 Performance Unit Agreements and
Change of Control Agreements. |
|
(7) |
|
Vested SERP amounts include the aggregate of Oceaneering and executive contributions
and earnings. For more information on vested SERP amounts, see Nonqualified Deferred
Contributions Aggregate Balance at December 31, 2007 above. |
|
(8) |
|
Amount reflects: (a) the value of shares of Common Stock that would be delivered for
each outstanding restricted stock unit pursuant to Mr. Gardners 2002, 2006 and 2007
Restricted Stock Unit Agreements; and (b) the value of the tax-assistance payment that
would be provided pursuant to Mr. Gardners 2002 Restricted Stock Unit Agreement. |
|
(9) |
|
Amount reflects cash payment for outstanding performance units at the target level of
$100 per unit pursuant to Mr. Gardners 2006 and 2007 Performance Unit Agreements. |
|
(10) |
|
Amount reflects unvested accrued amount in our SERP for Mr. Gardner. Accrued amounts
in our SERP for all other Named Executive Officers are fully vested at December 31, 2007. |
|
(11) |
|
Amount reflects the value of vested stock options. |
29
Director Compensation
During 2007, we paid our nonemployee directors, on a quarterly basis, an annual retainer of
$40,000 with an additional annual retainer of $15,000 to the Chairman of the Audit Committee and an
additional annual retainer of $8,000 to the Chairmen of the Compensation Committee and the
Nominating and Corporate Governance Committee. We pay our nonemployee directors $1,000 for each
Board meeting attended, $1,000 for each committee meeting attended (if the meeting is on a day
other than the date of the Board meeting) and a fee of $125 per hour, up to a maximum of $1,000 per
day, for any other services directly related to activities of the Board or a Committee of the
Board. Mr. Huff, the Chairman of the Board, did not receive the above board and meeting fees in
2007, nor will he receive such fees 2008, pursuant to the terms of his Amended Service Agreement.
For a description of Mr. Huffs compensation as a nonemployee director, see Service Agreement and
Change of Control Agreement with Mr. Huff below.
Besides payment of annual retainers and meeting fees, our nonemployee directors may also
participate in our basic medical plans. Nonemployee directors may elect to participate in our
health care plan without payment of any monthly premium and participate in a supplemental medical
plan at no cost to the director. We pay the Medicare premium for Mr. Hughes. Mr. Huffs Amended
Service Agreement, as did his prior employment agreement, provides for medical coverage on an
after-tax basis to Mr. Huff, his spouse and children for their lives. All directors are provided a
group personal excess liability insurance policy at no cost to the directors and they are
reimbursed for their travel and other expenses involved in attendance at Board and committee
meetings and activities.
In 2007, our nonemployee directors participated in our shareholder-approved 2005 Incentive
Plan. Under this plan in 2007, our nonemployee directors, Messrs. DesRoche, Hooker, Hughes and
Pappas, were each awarded 8,000 shares of restricted stock. The restricted stock awards are
scheduled to vest in full on the first anniversary of the award date, subject to (1) earlier
vesting on a change of control or the termination of the directors service due to death, and (2)
such other terms as are set forth in the award agreement. Under this plan in 2007, Mr. Huff was
awarded 28,000 restricted common stock units and 14,000 performance units in accordance with Mr.
Huffs Amended Service Agreement described in Service Agreement and Change of Control Agreement
with Mr. Huff below. This is an award level equal to and upon terms and conditions substantially
the same as that granted in 2007 to our Chief Executive Officer, except as described below. For
more information on these restricted common stock unit and performance unit awards, see
Compensation Discussion and Analysis Long Term Incentive Compensation.
The table below summarizes the compensation we paid to our nonemployee directors during the
year ended December 31, 2007.
Director Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
Value and |
|
|
All Other |
|
|
|
|
|
|
Fees Earned or |
|
|
Stock |
|
|
Option |
|
|
Incentive Plan |
|
|
Nonqualified Deferred |
|
|
Compensation |
|
|
|
Name |
|
|
Paid in Cash ($)(1) |
|
|
Awards ($)(2) |
|
|
Awards ($) |
|
|
Compensation ($) |
|
|
Compensation Earnings |
|
|
($)(3)(4) |
|
|
Total ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Huff |
|
|
|
400,000 |
|
|
|
|
2,667,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,431,990 |
|
|
|
|
5,499,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerold J. DesRoche |
|
|
|
61,000 |
|
|
|
|
320,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,838 |
|
|
|
|
396,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Michael Hughes |
|
|
|
71,000 |
|
|
|
|
320,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,488 |
|
|
|
|
415,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David S. Hooker |
|
|
|
75,000 |
|
|
|
|
320,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,666 |
|
|
|
|
396,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harris J. Pappas |
|
|
|
67,000 |
|
|
|
|
320,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,666 |
|
|
|
|
388,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts shown are attributable entirely to fees for attendance at meetings of the Board
and committees of the Board, and annual retainers as described in Director Compensation
above and Service Agreement and Change of Control Agreement with Mr. Huff below. |
|
(2) |
|
The amounts represent the compensation costs recognized by us in 2007 related to
restricted stock and stock unit awards to nonemployee directors computed in accordance with
SFAS 123R. For Mr. Huff, the compensation cost is comprised of awards prior to 2007 -
$1,965,183, at which time he also served as Chief Executive Officer, and in 2007 -
$702,753. The grant date fair market value of awards made in 2007 computed in accordance
with SFAS 123R is $328,560 for each of Messrs. DesRoche, Hughes, Hooker and Pappas; and
$1,149,960 for Mr. Huff. For a discussion of valuation assumptions, see Note 8 to our
consolidated financial statements included in our annual report on Form 10-K for the year
ended December 31, 2007. The aggregate number of restricted shares or units of stock
outstanding for each of Messrs. DesRoche, Hooker, |
30
|
|
|
|
|
Hughes and Pappas is 8,000, and for Mr. Huff is 152,000. The aggregate number of shares
subject to outstanding stock options is: Mr. Hooker 40,000; and Mr. Pappas 60,000. |
|
(3) |
|
The amounts shown for each attributable perquisite or benefit does not exceed the
greater of $25,000 or 10% of the total amount of perquisite received by any director except
as quantified for a director in the footnotes below. |
|
(4) |
|
The amounts shown in All Other Compensation column are attributable to the following: |
|
|
|
Mr. Huff: $1,573,020 and $10,556 for tax gross-up payments associated with vestings
of restricted stock units and Mr. Huffs medical coverage described above, respectively
for 2007; $765,000 for lump-sum cash buyout in lieu of the perquisites to which Mr.
Huff would have been entitled during his Post-Employment Service Period as described in
Service Agreement and Change of Control Agreement with Mr. Huff below; perquisites
and other personal benefits totaling $83,414 comprised of: provision of excess
liability insurance; tax advice and tax return preparation ($35,852); personal use of
company-owned fishing camp, annual premiums and reimbursement of medical costs for
health care, including medical premium and costs for a supplemental medical insurance
plan ($40,585). |
|
|
|
|
Mr. DesRoche: perquisites and other personal benefits totaling $14,838 comprised of:
provision of excess liability insurance, personal use of a company-owned fishing camp
and premium and costs reimbursed for a supplemental medical insurance plan. |
|
|
|
|
Mr. Hughes: perquisites and other personal benefits totaling $24,488 comprised of:
provision of excess liability insurance, personal use of a company-owned fishing camp,
annual premium for basic health care provided by us, Medicare premium paid by us and
premium and medical costs reimbursed for a supplemental medical insurance plan. |
|
|
|
|
Mr. Hooker and Mr. Pappas: perquisites and other personal benefits totaling $1,666
each comprised of provision of excess liability insurance and premium for a
supplemental medical insurance plan. |
Service Agreement and Change of Control Agreement With Mr. Huff
As we previously disclosed, we entered into a Service Agreement with Mr. Huff in November 2001
(the Service Agreement), when Mr. Huff was serving as our Chairman of the Board and Chief
Executive Officer. The Service Agreement replaced Mr. Huffs prior employment agreement. As did the
prior employment agreement, the Service Agreement provided medical coverage on an after-tax basis
to Mr. Huff, his spouse and children during his employment with us and thereafter for their lives.
The Service Agreement provided for a specific employment period (which, as subsequently amended,
extended through December 30, 2006), followed by a specific service period ending no later than
August 15, 2011 (the Post-Employment Service Period), during which time it was contemplated that
Mr. Huff, acting as an independent contractor, would serve as nonexecutive Chairman of our Board of
Directors.
The Service Agreement provided that, following the completion of Mr. Huffs employment period,
we could request that he serve as Chairman of the Board during the Post-Employment Service Period,
and if he refused to serve and we were fulfilling our obligations under the Service Agreement, no
salary or benefits not previously vested as of the time of his refusal would have been payable to
him under the Service Agreement. If Mr. Huff was not requested to serve as Chairman of the Board or
if he did serve as Chairman of the Board for any portion of the Post-Employment Service Period and
his service as Chairman of the Board thereafter terminated at any time and for any reason (other
than his refusal to serve during the Post-Employment Service Period), including by reason of his
death or disability, or our failure to fulfill our obligations under the Service Agreement, he
would be entitled to receive various severance benefits. During the Post-Employment Service Period
under the Service Agreement, for so long as Mr. Huff was serving as Chairman of the Board, his
annual rate of cash compensation would have been equal to 50% of his highest annual base salary
during the employment period (or $400,000 per year). In addition, throughout that period, Mr. Huff
would have continued to receive certain perquisites and administrative assistance, and he would
have continued to participate in various benefit plans; however, he would not have been eligible
for subsequent grants or contributions made under any such plan after the completion of his
employment period.
In 2006, the Compensation Committee of our Board of Directors determined that it would approve
timely modifications to the Service Agreement to address changes in the tax law and anticipated
additional guidance from the Internal Revenue Service regarding nonqualified deferred compensation
arrangements under Section 409A of the Internal Revenue Code. In the absence of appropriate
modifications, the impact of these tax law changes could have resulted in a 20% additional tax
payable by Mr. Huff, at least some of which would have been recoverable by Mr. Huff from us under
tax reimbursement provisions of the Service Agreement. On December 21, 2006, acting pursuant to a
recommendation of the Compensation Committee, our Board of Directors approved an amendment and
restatement of the Service Agreement (the Amended Service Agreement). Although the principal
purpose for entering into the Amended
31
Service Agreement was to address issues arising under Section 409A of the Internal Revenue
Code, the Amended Service Agreement also clarified or resolved other issues that existed under the
Service Agreement.
The Amended Service Agreement, among other things, provides for:
|
|
|
the commencement of the Post-Employment Service Period on December 31, 2006; |
|
|
|
|
a $6.4 million lump-sum cash buyout of Mr. Huffs entitlement to perquisites and
administrative assistance for ten years from the termination of the Post-Employment
Service Period, with the lump-sum amount being paid in 2007 at an amount equal to a
negotiated net present value of those items; |
|
|
|
|
annual payments of $765,000 in 2007, $540,000 in 2008, $540,000 in 2009 and $540,000
in 2010, in each case as long as Mr. Huff is then continuing to serve as our Chairman
of the Board, in lieu of the perquisites to which Mr. Huff would have been entitled
during the Post-Employment Service Period; |
|
|
|
|
a tax-protection clause, to ensure that Mr. Huff will not be impacted adversely by
taxes under Section 409A of the Internal Revenue Code in the event the amendments
effected pursuant to the Amended Service Agreement (including those described above)
are insufficient to ensure that the arrangements with Mr. Huff do not constitute
nonqualified deferred compensation arrangements, provided that Mr. Huff agreed to
changes in the Amended Service Agreement and his separate Change of Control Agreement
to satisfy the requirements of the applicable provisions of Section 409A and applicable
Treasury Regulations yet to be finalized, unless such changes would cause more than
insubstantial harm to him; |
|
|
|
|
the continuation of long-term incentive plan awards to Mr. Huff in 2007 and 2008 at
a level equal to the awards granted to our Chief Executive Officer, to: (1) partially
compensate Mr. Huff for the understanding that he would provide services in addition to
those normally provided by a chairman of the board (Additional Services), with those
Additional Services to be as mutually agreed but to initially involve assistance with
strategic initiatives and business expansion efforts; and (2) place Mr. Huff in the
equivalent position as if a three-year award had been granted in 2005, as would have
been anticipated based on the practice in effect in 2001; |
|
|
|
|
the eligibility of Mr. Huff to receive long-term incentive plan awards after 2008,
provided that, for any year that Mr. Huff receives a long-term incentive award in
excess of awards applicable to our other nonemployee directors, Mr. Huff will not
receive an additional long-term incentive award equal to the award granted to our other
nonemployee directors for that year; |
|
|
|
|
the entitlement for Mr. Huff to receive, after 2008, the same pay as our other
nonemployee directors during the period that Mr. Huff continues to serve as one of our
directors, (in addition to the $400,000 amount per year for up to five years if
Mr. Huff continues to serve as Chairman of the Board during the Post-Employment Service
Period), to provide compensation for the post-2008 portion of the Post-Employment
Service Period for the understanding that Mr. Huff would provide Additional
Services; and |
|
|
|
|
in the event of his disability, the provision of the same acceleration of payment of
the benefits payable to him for the ten years following the Post-Employment Service
Period as would be available in the event of his death or a change of control (a
lump-sum, undiscounted payment). |
As part of its actions on December 21, 2006, our Board of Directors also formally requested
that Mr. Huff begin the Post-Employment Service Period by continuing to serve as Chairman of the
Board, and Mr. Huff has done so.
Also as part of the negotiated arrangements relating to Mr. Huffs retirement benefits, the
Compensation Committee authorized and approved our establishment of an irrevocable grantor trust,
commonly known as a rabbi trust, to provide Mr. Huff greater assurance that we would set aside an
adequate source of funds to fund the payment of the post-retirement benefits under the Amended
Service Agreement, including the medical coverage benefits payable to Mr. Huff, his spouse and
their children for their lives. In connection with establishment of the rabbi trust, we
contributed to the trust a life insurance policy on the life of Mr. Huff which we had previously
obtained and we agreed to continue to pay the premiums due on that policy. When the life insurance
policy matures, the proceeds of the policy will become assets of the trust. If the value of trust
assets exceeds $4 million, as adjusted by the consumer price index, at any time after January 1,
2012, the excess may be paid to us. However, because the trust is irrevocable, the assets of the
trust are generally not otherwise available to fund our future operations until the trust
terminates, which is not expected to occur
32
during the lives of Mr. Huff, his spouse or his children. Furthermore, no tax deduction will
be available for our contributions to the trust; however, we may benefit from future tax deductions
for benefits actually paid from the trust (although benefit payments from the trust are not
expected to occur in the near term, because we expect to make direct payments of those benefits for
the foreseeable future).
As we previously described, in November 2001 we entered into a change of control agreement
with Mr. Huff who was then serving as our Chairman of the Board and Chief Executive Officer upon
terms and conditions substantially the same as the Change of Control Agreement described in the
Compensation Discussion and Analysis Change of Control Agreements, except as described below.
Mr. Huffs Change of Control Agreement replaced his prior senior executive and supplemental senior
executive agreements. While Mr. Huff is nonexecutive Chairman of the Board, a termination of his
service for any reason other than his refusal to serve as nonexecutive Chairman of the Board would
entitle Mr. Huff to the severance package under his agreement. The calculated minimum amount for
determining the amount of the severance package under the change of control agreement described in
the Compensation Discussion and Analysis-Change of Control Agreements is applicable to Mr. Huff
for any termination occurring during his service as nonexecutive Chairman of the Board. Any
payment of the Change of Control severance package to Mr. Huff would not reduce any benefits or
compensation due Mr. Huff under the Amended Service Agreement; provided, however, that the benefit
in the Change of Control Agreement regarding benefits under compensation plans and other benefits
payable for three years are not provided under the Change of Control Agreement to Mr. Huff to the
extent they are duplicative of benefits provided to him under the Amended Service Agreement.
Assuming a December 31, 2007 termination date of Mr. Huff serving as our Chairman of the Board
for reasons other than his refusal to serve as our Chairman of the Board for any reason other than
we have failed to fulfill our obligations under his Amended Service Agreement, and, where
applicable using the closing price of our Common Stock of $67.35 on December 31, 2007 (as reported
by the New York Stock Exchange), potential payments to Mr. Huff consist of: $8,000,000, which
reflects $800,000 per year payable in advance for ten years provided in the event of Mr. Huffs
death, disability or a change of control, all unpaid amounts would be accelerated and become
payable in a non-discounted lump-sum payment; $17,445,868 which reflects (1) the value of shares of
Common Stock that would be delivered for each outstanding vested and unvested restricted stock unit
pursuant to Mr. Huffs Amended Service Agreement, his 2002, 2006 and 2007 Restricted Stock Unit
Agreements and, if applicable, his Change of Control Agreement, (2) the value of the tax-assistance
payment that would be provided pursuant to his Amended Service Agreement, his 2002 Restricted Stock
Agreement, and if applicable, his Change of Control Agreement and (3) a cash payment for
outstanding performance units under the 2006 and 2007 Performance Unit Agreements at the maximum
goal level of $125 per unit pursuant to the Amended Service Agreement. If termination of Mr.
Huffs service as our Chairman of the Board is the result of a Change of Control, an additional
amount of $4,650,000 would be payable as described above. Based upon these amounts, Mr. Huff would
not be subject to an excise tax liability. However, whether an excise tax liability will arise in
the future will depend on the facts and circumstances in existence at the time a change of control
payment becomes payable. We have agreed to reimburse Mr. Huff for all such excise taxes that may
be imposed and any income taxes and excise taxes that may become payable as a result of the
reimbursement.
Assuming a December 31, 2007 termination date of Mr. Huff serving as our Chairman of the Board
as a result of his refusal to serve as our Chairman of the Board for any reason other than we have
failed to fulfill our obligations under his Amended Service Agreement, Mr. Huff would not receive
the above described severance payments; would forfeit all unvested restricted stock units and
performance units that were awarded to him and potential payments to Mr. Huff would have consisted
of $3,285,800, which reflects (1) the value of shares of common stock using the price of our common
stock of $67.35 per share on December 31, 2007 (as reported by the New York Stock Exchange), that
would be delivered for each outstanding vested restricted stock unit under Mr. Huffs 2006 and 2007
Restricted Stock Unit Agreements and (2) a cash payment for outstanding vested performance units
under Mr. Huffs 2006 and 2007 Performance Unit Agreements at the target goal level of $100 per
unit pursuant to the Amended Service Agreement. These outstanding restricted stock units and
performance units are vested by reason of Mr. Huff having met age and years of service
requirements.
33
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our
Board of Directors adopted a written policy with respect to related-person transactions to
document procedures pursuant to which such transactions are reviewed and approved or ratified. The
policy applies to any transaction in which (1) Oceaneering or any of its subsidiaries is a
participant, (2) any related person has a direct or indirect material interest and (3) the amount
involved exceeds $120,000, but excludes any transaction that does not require disclosure under Item
404(a) of Regulation S-K promulgated by the SEC. Under the policy related persons include our
directors, nominees to become a director, executive officers, beneficial owners of 5% or more of
our voting securities, immediate family members of any of the foregoing persons, and any entity in
which any of the foregoing persons is employed as an executive officer or is a partner or principal
or in a similar position or in which such person has a 5% or greater beneficial ownership. Our
policy includes a process to monitor related-person transactions and, if a determination is made
that a proposed transaction or category of transaction is a related person transaction, a
submission is made to the Nominating and Corporate Governance Committee, which will consider all of
the relevant facts and circumstances available and evaluate whether to approve or ratify the
transaction.
Except as set forth in this Proxy Statement, no director or executive officer of Oceaneering
or nominee for election as a director of Oceaneering, or holder of more than 5% of the outstanding
shares of Common Stock, and no member of the immediate family of any such director, nominee,
officer or security holder, to our knowledge, had any material interest in any transaction during
the year ended December 31, 2007, or in any currently proposed transaction, to which Oceaneering or
any subsidiary of Oceaneering was or is a party in which the amount involved exceeds $120,000.
No director or executive officer of Oceaneering who has served in such capacity since January
1, 2007 or any associate of any such director or officer, to the knowledge of the executive
officers of Oceaneering, has any material interest in any matter proposed to be acted on at the
2008 Annual Meeting of Shareholders, other than as described in this Proxy Statement.
PROPOSAL 2
Amendment of the Restated Certificate of Incorporation to Increase the
Number of Authorized Shares of Common Stock
Our Board has determined that it is an appropriate time to propose an amendment to our
Restated Certificate of Incorporation to increase the number of authorized shares of capital stock
from 93 million to 183 million and to increase the number of authorized shares of common stock from
90 million to 180 million.
Under our Restated Certificate of Incorporation as currently in effect, the total number of
shares of capital stock which we have the authority to issue is 93 million. Of these authorized
shares, common stock comprises 90 million shares and preferred stock comprises three million
shares. As of March 24, 2008, the number of shares of common stock outstanding was 55,118,588
(there were no shares held in treasury), 1,364,275 shares of common stock were reserved for
issuance on exercise of options and vesting and settlement of restricted stock units under our
incentive plans and 1,806,142 shares of common stock were reserved for future grants under those
plans. As a result, as of March 24, 2008, we have a total of 31,710,995 shares of Common Stock
available for issuance, after taking into account shares reserved for issuance on the exercise of
stock options and future grants. This number of shares available for issuance takes into account
our two-for-one stock split effected in the form of a stock dividend, which we completed on June
19, 2006. As a result of that stock split, we reduced our shares of common stock available for
issuance by approximately 26,938,000 shares. There are no outstanding shares of preferred stock and
the proposed amendment would not increase the authorized number of shares of preferred stock.
Our Board believes that it is advisable and in the best interests of our shareholders to
increase the number of authorized shares of common stock to provide a sufficient reserve of shares
for our future business and financial needs. These additional authorized shares would provide us
greater flexibility in the consideration of future stock dividends or stock splits, sales of common
stock or convertible securities to enhance capital and liquidity, possible future acquisitions, and
other corporate purposes as our Board may consider appropriate from time to time. Assuming our
shareholders approve the proposed amendment to our Restated Certificate of Incorporation set forth
below, we do not expect that further authorization from our shareholders will be solicited for the
issuance of any shares of Common Stock, except to the extent required by applicable law or by the
rules of the New York Stock Exchange. Existing holders of shares of common stock would have no
preemptive rights under our Restated Certificate of Incorporation to purchase any additional shares
of common stock we may issue. It is possible that we may issue additional shares of common stock at
a
34
time and under circumstances that may dilute the voting power of existing shareholders, decrease
earnings per share and decrease the book value per share of shares presently held.
Our Board has unanimously adopted a resolution approving, subject to shareholder approval, and
declaring the advisability of an amendment to Article Fourth of our Restated Certificate of
Incorporation to increase the number of authorized shares of capital stock from 93 million to 183
million and to increase the number of authorized shares of common stock from 90 million to 180
million. The specific amendment to Article Fourth being proposed as follows:
The first paragraph of Article Fourth is proposed to be deleted in its entirety. This
paragraph currently provides that:
Fourth: The total number of shares of stock which the Corporation shall have authority
to issue is Ninety-Three Million (93,000,000), consisting of Ninety Million (90,000,000) shares of Common Stock of the par value of Twenty-Five Cents ($.25) per share and Three
Million (3,000,000) shares of Preferred Stock of the par value of One Dollar ($1.00) per
share.
The following paragraph is proposed to be the new first paragraph of Article Fourth:
Fourth: The total number of shares of capital stock which the Corporation shall have
authority to issue is 183 Million (183,000,000), consisting of 180 Million (180,000,000) shares of Common Stock of the par value of Twenty-Five Cents ($.25) per share and Three
Million (3,000,000) shares of Preferred Stock of the par value of One Dollar ($1.00) per
share.
If approved, this amendment will become effective upon the filing of a certificate of
amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of
Delaware, which we would complete promptly after the annual meeting.
The persons named in the accompanying proxy card intend to vote each proxy received in favor
of the amendment of the Restated Certificate of Incorporation as set forth above, unless a contrary
choice or an abstention is indicated thereon.
PROPOSAL 3
Ratification of Appointment of Independent Auditors
Subject to ratification by the shareholders, the Audit Committee of the Board of Directors has
appointed Ernst & Young LLP, independent certified public accountants, as independent auditors of
Oceaneering for the year ending December 31, 2008. Representatives of Ernst & Young LLP will be
present at the meeting, will be given the opportunity to make a statement if they so desire and
will be available to respond to appropriate questions of any shareholders.
In accordance with our bylaws, the approval of the proposal to ratify the appointment of Ernst
& Young LLP as independent auditors of Oceaneering for the year ending December 31, 2008 requires
the affirmative vote of a majority of the shares of Common Stock voted on this proposal at the
meeting. Accordingly, abstentions and broker non-votes marked on proxy cards will not be
included in the tabulation of votes cast on this proposal.
The persons named in the accompanying proxy intend to vote such proxy in favor of the
ratification of the appointment of Ernst & Young LLP as independent auditors of Oceaneering for the
year ending December 31, 2008, unless a contrary choice is set forth thereon or unless an
abstention or broker non-vote is indicated thereon.
35
The following table shows the fees incurred by Oceaneering for the audit and other services
provided by Ernst & Young LLP for 2007 and 2006.
|
|
|
|
|
|
|
|
|
|
|
Fees Incurred by Oceaneering for Ernst & Young LLP |
|
|
2007 |
|
|
|
2006 |
|
|
|
|
|
|
|
|
Audit Fees (1) |
|
|
$ |
2,224,000 |
|
|
|
$ |
2,232,000 |
|
Audit-Related Fees (2) |
|
|
|
95,000 |
|
|
|
$ |
132,000 |
|
Tax Fees (3) |
|
|
|
44,000 |
|
|
|
|
86,000 |
|
All Other Fees (4) |
|
|
|
4,000 |
|
|
|
|
10,000 |
|
|
|
|
|
|
|
|
Total |
|
|
$ |
2,367,000 |
|
|
|
$ |
2,460,000 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit Fees represent fees for professional services provided in connection
with; (a) the audit of our financial statements for the years indicated and the reviews
of our financial statements included in our Forms 10-Q during those years; and (b)
audit services provided in connection with other statutory or regulatory filings. |
|
(2) |
|
Audit-Related Fees consisted of accounting, consultations, employee benefit
plan audits, services related to due diligence for business transactions, and statutory
and regulatory compliance. |
|
(3) |
|
Tax Fees consisted of tax compliance and consultation fees. |
|
(4) |
|
All Other Fees consisted of a subscription to Ernst & Young LLPs informational
on-line service and special purpose foreign regulatory certifications. |
The Audit Committee has concluded that Ernst & Young LLPs provision of services that were not
related to the audit of our financial statements in 2007 was compatible with maintaining that
firms independence from us.
The Audit Committee has established a policy that requires pre-approval of the audit and
non-audit services performed by our independent auditors. Unless a service proposed to be provided
by the independent auditors has been pre-approved by the Audit Committee under its pre-approval
policies and procedures, it will require specific pre-approval of the engagement terms by the Audit
Committee. Under the policy, pre-approved service categories are generally provided for up to 12
months and must be detailed as to the particular services provided and sufficiently specific and
objective so that no judgments by management are required to determine whether a specific service
falls within the scope of what has been pre-approved. In connection with any pre-approval of
services, the independent auditors are required to provide detailed back-up documentation
concerning the specific services to be provided. The Audit Committee does not delegate to
management any of its responsibilities to pre-approve services performed by our independent
auditors.
None of the services related to the Audit-Related Fees, Tax Fees or All Other Fees described
above were approved by the Audit Committee pursuant to the waiver of pre-approval provisions set
forth in applicable rules of the SEC.
The Audit Committee has delegated to the Chairman of the Audit Committee the authority to
pre-approve audit-related and non-audit-related services not prohibited by law to be performed by
Ernst & Young LLP, provided that the Chairman is required to report any decisions to pre-approve
such audit-related or non-audit-related services and fees to the full Audit Committee at its next
regular meeting.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to have a qualified proposal considered for inclusion in our proxy
statement for our 2009 Annual Meeting of Shareholders must send notice of the proposal to our
Corporate Secretary at our principal executive offices, 11911 FM 529, Houston, Texas 77041-3000, so
that such notice is received no later than November ___, 2008. If you submit such a proposal, you
must provide your name, address, the number of shares of Common Stock held of record or
beneficially, the date or dates on which you acquired those shares and documentary support for any
claim of beneficial ownership.
36
In addition, any shareholder who intends to submit a proposal for consideration at our 2009
Annual Meeting of Shareholders, regardless of whether the proposal is submitted for inclusion in
our proxy statement for that meeting, or who intends to submit nominees for election as directors
at that meeting, must notify our Corporate Secretary. Under our bylaws, such notice must:
|
|
|
be received at our executive offices no earlier than November 17, 2008 and no later
than close of business on January 16, 2009; and |
|
|
|
|
satisfy requirements that our bylaws specify. |
A copy of the pertinent bylaw provisions can be obtained from our Corporate Secretary on
written request.
We received no shareholder proposals and no shareholder director nominations for the 2008
Annual Meeting of Shareholders.
TRANSACTION OF OTHER BUSINESS
Should any other matter requiring the vote of shareholders arise at the meeting, it is
intended that proxies will be voted for or against that matter in accordance with the judgment of
the person or persons voting the proxies.
Please return your proxy as soon as possible. Unless a quorum consisting of a majority of the
outstanding shares entitled to vote is represented at the 2008 Annual Meeting of Shareholders, no
business can be transacted. Therefore, please be sure to date and sign your proxy exactly as your
name appears on your stock certificate and return it in the enclosed postage-paid return envelope,
or vote by telephone or over the Internet by following the instructions included in this package.
Please act promptly to ensure that you will be represented at the meeting.
WE WILL PROVIDE WITHOUT CHARGE ON THE WRITTEN REQUEST OF ANY PERSON SOLICITED HEREBY A COPY OF
OUR ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR
ENDED DECEMBER 31, 2007. WRITTEN REQUESTS SHOULD BE MAILED TO GEORGE R. HAUBENREICH, JR.,
CORPORATE SECRETARY, OCEANEERING INTERNATIONAL, INC., 11911 FM 529, HOUSTON, TEXAS 77041-3000.
|
|
|
|
|
By Order of the Board of Directors, |
|
|
|
|
|
George R. Haubenreich, Jr. |
|
|
Senior Vice President, General Counsel
and Secretary |
April __, 2008
37
Appendix A
Oceaneering International, Inc.
Audit Committee Charter
The Audit Committee of the Board of Directors (the Committee) is appointed by the Board of
Directors (the Board) to assist the Board in its oversight of (1) the integrity of the financial
statements of the Company, (2) the compliance by the Company with legal and regulatory
requirements, (3) the independence, qualifications and performance of the Companys independent
auditors and (4) the performance of the Companys internal audit function. Pursuant to the
Sarbanes-Oxley Act of 2002 and the rules and regulations of the Securities and Exchange Commission
(the SEC), the Committee shall be directly responsible for the appointment, compensation,
retention and oversight of the work of any registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or performing other audit, review or attest
services for the Company. The Committee shall also make regular reports to the Board and deliver
any reports that may from time to time be required by the rules of the New York Stock Exchange (the
NYSE) or the SEC to be included in the Companys annual proxy statement or Annual Report on Form
10-K. The Committee shall have and may exercise all the powers of the Board, except as may be
prohibited by law, with respect to all matters encompassed by this Charter, and all the power and
authority required under the Sarbanes-Oxley Act of 2002.
The Committee shall be appointed by the Board and shall consist of not less than three members
of the Board, each of whom shall serve at the discretion of the Board. The Board shall also elect
a chairman of the Committee (the Chairman). The members of the Committee shall meet the
independence, expertise, financial literacy and experience requirements of the NYSE, Section
10A(m)(3) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and the rules
and regulations of the SEC. At least one member of the Committee shall be an audit committee
financial expert as defined by Item 407(d)(5) of Regulation S-K promulgated by the SEC. No member
of the Committee shall simultaneously serve on the audit committees of more than two other public
companies.
The independent auditors of the Company are ultimately accountable to the Board and the
Committee. The Committee shall have the sole authority to appoint and, where appropriate, replace
the Companys independent auditors (subject to stockholder ratification) and to approve all audit
engagement fees and terms. The Committee shall be directly responsible for the compensation and
oversight of the work of the independent auditors (including resolution of disagreements between
the Companys management and the independent auditors regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work or performing other audit, review
or attest services for the Company. The independent auditors shall report directly to the
Committee.
The Committee shall preapprove all audit, review or attest engagements and permissible
non-audit services, including the fees and terms thereof, to be performed by the independent
auditors, subject to, and in compliance with, the de minimis exception for non-audit services
described in Section 10A(i)(1)(B) of the Exchange Act and the applicable rules and regulations of
the SEC.
The Committee may form and delegate authority to subcommittees consisting of one or more
members when appropriate, including the authority to grant preapprovals of audit and permissible
non-audit services. Any decisions of such subcommittee to grant preapprovals shall be reported to
the full Committee at its next scheduled meeting.
The Committee shall:
|
1. |
|
Review and discuss with management and the independent
auditors, on an annual basis, the annual audited financial statements
and the disclosures to be made in managements discussion and analysis
of financial condition and results of operations in the Companys Annual
Report on Form 10-K. |
|
|
2. |
|
Make a recommendation to the Board each year as to
whether the Companys annual audited financial statements for the
immediately preceding fiscal year and accompanying notes should be
included in the Companys Annual Report on Form 10-K for such fiscal
year. |
|
|
3. |
|
Prepare and approve the audit committee report as
required by the SEC to be included in the Companys proxy statement for
the annual meeting (or in the Companys Annual Report on Form 10-K if
required to be included therein). |
A - 1
|
4. |
|
Review and discuss with management and the independent
auditors, on a quarterly basis, the Companys quarterly financial
statements and disclosures to be made in managements discussion and
analysis of financial condition and results of operations, prior to the
filing of the Companys Quarterly Reports on Form 10-Q for such fiscal
quarter, including any matters provided in Statement on Auditing
Standards No. 100 arising in connection with the Companys quarterly
financial statements. |
|
|
5. |
|
Review and discuss with management and the independent
auditors: |
|
a. |
|
Major issues and judgments (i) regarding
accounting principles and financial statement presentations or
(ii) otherwise made in connection with the preparation of the
Companys financial statements, including any significant
changes in the selection or application of accounting
principles, any major issues concerning the adequacy of the
Companys internal controls, any special audit steps adopted in
light of material control deficiencies and the adequacy of
disclosures about changes in internal control over financial
reporting. |
|
|
b. |
|
Analyses prepared by management and/or
the independent auditors setting forth significant financial
reporting issues and judgments made in connection with the
preparation of the Companys financial statements, including
analyses of the effects of alternative methods of generally
accepted accounting principles (GAAP) on the financial
statements. |
|
6. |
|
Review and discuss with management and the independent
auditor managements annual report on internal control over financial
reporting prior to the filing of the Companys Annual Report on Form
10-K. |
|
|
7. |
|
Review and discuss annual reports from the independent
auditors on: |
|
a. |
|
All critical accounting policies and
practices to be used. |
|
|
b. |
|
All alternative treatments of financial
information within GAAP that have been discussed with
management, including (1) ramifications of the use of such
alternative disclosures and treatments and (2) the treatment
preferred by the independent auditors. |
|
|
c. |
|
Other material written communications
between the independent auditors and management, such as any
management letter provided by the independent auditors and
managements response to that letter, any management
representation letter, any reports on observations and
recommendations on internal controls, any schedule of unadjusted
audit differences and a listing of adjustments and
reclassifications not recorded, if any, and any engagement or
independence letters. |
|
8. |
|
Review with management the Companys earnings press
releases, including the use of any non-GAAP financial measures, as
well as financial information and earnings guidance provided to analysts
and rating agencies. Such discussion may be done generally (covering,
for example, the types of information to be disclosed and the types of
presentation to be made). |
|
|
9. |
|
Review with management and the independent auditors the
effect of regulatory and accounting initiatives as well as off-balance
sheet structures on the Companys financial statements. |
|
|
10. |
|
Meet periodically with management to review the Companys
major financial risk exposures and the steps management has taken to
monitor and control those exposures, including the Companys policies
and guidelines concerning risk assessment and risk management. |
A - 2
11. |
|
Discuss with the independent auditors the matters
required to be communicated by the independent auditors pursuant to
Statement on Auditing Standards No. 61 relating to the conduct of the
audit, including any problems or difficulties encountered in the course
of the audit work and managements response, any restrictions on the
scope of activities or access to requested information and any
significant disagreements with management. |
|
12. |
|
Review with management (including the Chief Financial
Officer) and the independent auditors the Companys internal system of
audit and financial controls and the results of internal audits. |
|
13. |
|
Review the disclosures that the Companys Chief Executive
Officer and Chief Financial Officer make to the Committee and the
independent auditors in connection with the certification process for
the Companys Annual Report on Form 10-K and Quarterly Reports on Form
10-Q concerning any significant deficiencies or weaknesses in the design
or operation of internal control over financial reporting and any fraud
that involves management or other employees who have a significant role
in the Companys internal control over financial reporting. |
|
14. |
|
Review and evaluate the capabilities and performance of
the lead partner of the independent auditors. |
|
15. |
|
At least annually, obtain and review a report by the
independent auditors describing (i) the independent auditors internal
quality-control procedures; (ii) any material issues raised by the most
recent internal quality-control review, or peer review, of the
independent auditors, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years, respecting
one or more independent audits carried out by the firm, and any steps
taken to deal with any such issues; and (iii) all relationships between
the independent auditors and the Company as contemplated by Independence
Standards Board Standard No. 1. Evaluate the independent auditors
qualifications, performance and independence, including considering
whether the independent auditors quality controls are adequate and the
provision of permitted non-audit services is compatible with maintaining
the independent auditors independence. In making this evaluation, the
Committee shall take into account the opinions of management and
internal auditors. The Committee shall present its conclusions with
respect to the independent auditors to the full Board. |
|
16. |
|
Confirm the regular rotation of the audit partners as
required by applicable law. Consider whether there should be regular
rotation of the independent auditing firm. |
|
17. |
|
Establish hiring policies for the Companys employment of
the independent auditors personnel or former personnel, including those
who participated in any capacity in the audit of the Company. |
|
18. |
|
Review with the independent auditors any communication or
consultation between the Companys audit team and the independent
auditors national office respecting auditing or accounting issues
presented by the engagement. |
|
19. |
|
Meet with the independent auditors prior to the audit to
review the planning and staffing of the audit. |
|
20. |
|
Review the appointment and replacement of the Companys
senior internal auditor. The senior internal auditor shall make direct,
periodic reports to the Committee regarding the matters within his or
her authority. |
|
21. |
|
At least annually, review with management and the
independent auditors the responsibilities, authority, internal reporting
lines, budget and staffing of the internal auditors and review and
approve any changes in the planned scope of the annual internal audit
and any restrictions or limitations thereon. The internal audit
function |
A - 3
|
|
(which may be outsourced to a third-party provider other than the
independent auditor) is intended to provide management and the
Committee with ongoing assessments of the Companys risk management
processes and system of internal controls. Accordingly, the
Committee shall also meet, from time to time, separately with
management, the senior internal auditor and the independent auditors
to discuss issues relating to the internal audit function which
warrant attention by the Committee. |
|
22. |
|
Review the results of the internal audit process with
management and the senior internal auditor, including significant
findings, managements responses thereto, and the status of corrective
actions or implementation of recommendations. |
|
23. |
|
Evaluate the budget, activities, organizational
structure, and qualifications of the internal audit department and its
impact on the accounting practices, internal controls and financial
reporting of the Company. |
|
24. |
|
Obtain from the independent auditors assurance that
Section 10A(b) of the Exchange Act has not been implicated. |
|
25. |
|
Make inquiries of management, the Companys senior
internal auditor and the independent auditors as to their knowledge
whether the Company and its subsidiary and affiliated entities are in
conformity with applicable legal requirements and the Companys Code of
Business Conduct and Ethics. |
|
26. |
|
Advise the Board with respect to the Companys policies
and procedures regarding compliance with applicable laws and regulations
and with the Companys Code of Business Conduct and Ethics. |
|
27. |
|
Establish and review procedures for the receipt,
retention and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters, and the
confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters. |
|
28. |
|
Discuss with management and the independent auditor any
correspondence with regulators or governmental agencies and any
published reports that raise material issues regarding the Companys
financial statements or accounting policies. |
|
29. |
|
Review with the Companys General Counsel legal matters
that may have a material impact on the Companys financial statements,
the Companys compliance policies and any material reports or inquiries
received from regulators or governmental agencies. |
|
30. |
|
In its discretion, conduct or authorize investigations
into matters within its scope of responsibility. |
|
31. |
|
Meet periodically with management (including the Chief
Financial Officer and the General Counsel), the internal auditors and
the independent auditors in separate executive sessions and have such
other direct and independent interaction with such persons from time to
time as the members of the Committee deem appropriate. |
|
32. |
|
Review and reassess the adequacy of this Charter annually
and recommend any proposed changes to the Board for approval. |
|
33. |
|
Evaluate annually the Committees own performance. |
|
34. |
|
Make regular reports to the Board. |
A - 4
While the Committee has the responsibilities and powers set forth in this Charter, it is not
the duty of the Committee to plan or conduct audits or to determine that the Companys financial
statements are complete and accurate and are in accordance with GAAP. It is also not the duty of
the Committee to conduct investigations, to resolve any disagreements between management and the
independent auditors or to assure compliance with laws and regulations and the Companys Code of
Business Conduct and Ethics.
The Committee shall have the authority to retain and obtain advice and assistance from current
or independent legal, accounting or other advisors without seeking approval of the Board. The
Committee may request any officer or employee of the Company or the Companys outside counsel or
independent auditors to attend a meeting of the Committee or to meet with any members of, or
advisors to, the Committee. The Company shall provide for appropriate funding, as determined by
the Committee, for payment of compensation to the independent auditors for the purpose of preparing
or issuing an audit report or performing other audit, review or attest services for the Company,
compensation to any advisors employed by the Committee, and ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its duties.
The Committee will meet as often as the members shall determine to be necessary or
appropriate, but at least four times during each year. The Chairman shall be responsible for
scheduling all meetings of the Committee and providing the Committee with a written agenda for each
meeting. The Chairman shall preside at the meeting. In the absence of the Chairman, the majority
of the members of the Committee present at a meeting shall appoint a member to preside at the
meeting. In addition, the Committee shall make itself available to the independent auditors and
the internal auditors of the Company as requested. A majority of the Committee members shall
constitute a quorum. The Committee shall cause to be kept adequate written minutes of all its
proceedings. The Committee may meet by teleconference and may take action by unanimous written
consent as permitted by Delaware law. Reports of meetings of the Committee shall be made to the
Board at its next regularly scheduled meeting following the Committee meeting, accompanied by any
recommendations to the Board approved by the Committee.
A - 5
Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote
your proxy. |
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. |
Proxies submitted by the Internet or telephone must be received by 11:00 p.m., Central Time, on May
15, 2008. |
· Log on to the Internet and go to |
· Follow the steps outlined on the secured website. |
· Call toll free 1-800-652-VOTE (8683) within the United |
States, Canada & Puerto Rico any time on a touch tone
telephone. There is NO CHARGE to you for the call. |
· Follow the instructions provided by the recorded message. |
Using a black ink pen, mark your votes with an X as shown in
this example. Please do not write outside the designated areas. |
Annual Meeting Proxy Card |
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND
RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. |
A Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR
Proposals 2 and 3. |
01 T. Jay Collins
For Withhold [ ] [ ]
02 D. Michael Hughes
For Withhold
[ ] [ ] |
2. Proposal to amend the Restated Certificate of Incorporation to increase the number of authorized
shares of capital stock from 93,000,000 to 183,000,000 and increase the number of authorized shares
of Common Stock from 90,000,000 to 180,000,000.
For Against Abstain |
3. Proposal to ratify the appointment of Ernst & Young LLP as independent auditors for the year
ending December 31, 2008. |
4. In their discretion, the proxies are authorized to vote upon such other business as may properly
come before the meeting or any adjournment thereof, including procedural matters and matters
relating to the conduct of the meeting. |
Change of Address Please print new address below. |
C Authorized Signatures This section must be completed for your vote to be counted. Date and
Sign Below
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as
attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give
full title. |
Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box.
Signature 2 Please keep signature within the box. |
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND
RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. |
Proxy Oceaneering International |
Notice of 2008 Annual Meeting of Shareholders Proxy Solicited on behalf of the Board of Directors
for the 2008 Annual Meeting |
M. Kevin McEvoy and George R. Haubenreich, Jr., and each of them individually, are hereby appointed
as agents and proxies, with full power of substitution and resubstitution, to vote all the shares
of common stock of the undersigned in Oceaneering International, Inc., held of record by the
undersigned on March 24, 2008, at the Annual Meeting of Shareholders to be held on May 16, 2008 at
Oceaneerings regional offices at 5004 Railroad Ave., Morgan City, Louisiana 70380, and at any
adjournment or postponement thereof, as indicated on the reverse side hereof. The undersigned
acknowledges receipt of Oceaneerings annual report for the year ended December 31, 2007 and the
Notice of the 2008 Annual Meeting of Shareholders and related Proxy Statement. This proxy, when
properly executed, will be voted as directed herein. If no direction is made, this Proxy will be
voted FOR Proposals 1, 2 and 3. The proxy holders named above also will vote in their discretion on
any other matter that may properly come before the meeting.You are encouraged to specify your
choices by marking the appropriate boxes on the reverse side. The proxies cannot vote your shares
unless you sign and return this card or vote by telephone or Internet as described below before the
Annual Meeting. Voting by telephone or Internet eliminates the need to return this proxy card.
Your vote authorizes the proxies named on the reverse side to vote your shares to the same extent
as if you had marked, signed, dated and returned the proxy card. Before voting, read the proxy
statement and voting instructions form. Follow the steps listed on the reverse side. Your vote
will be immediately confirmed and posted. Thank you
for voting. (Items to be voted appear on reverse side.) |
Providing Voting Instructions ElectronicallyYou can provide your voting instructions by Internet or
telephone! Available 24 hours a day, 7 days a week! |
Instead of mailing your Voting Instruction Form, you may choose one of the two methods outlined
below to provide your voting instructions. |
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. |
Voting instructions submitted by the Internet or telephone must be received by 11:00 p.m., Central
Time, on May 8, 2008. |
Voting instructions by Internet Log on to the Internet and go to |
· Follow the steps outlined on the secured website. |
Voting instructions by telephone |
· Call toll free 1-800-652-VOTE (8683) within the United |
States, Canada & Puerto Rico any time on a touch tone
telephone. There is NO CHARGE to you for the call. |
· Follow the instructions provided by the recorded message. |
Using a black ink pen, mark your voting instructions with an X as shown in this example.
Please do not write outside the designated areas. |
Confidential Voting Instruction Form |
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND
RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. |
A Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR
Proposals 2 and 3. |
For Withhold
[ ] [ ]
02 D. Michael Hughes |
2. Proposal to amend the Restated Certificate of Incorporation to increase the number of authorized
shares of capital stock from 93,000,000 to 183,000,000 and increase the number of authorized shares
of Common Stock from 90,000,000 to 180,000,000. |
3. Proposal to ratify the appointment of Ernst & Young LLP as independent auditors for the year
ending December 31, 2008.
For Against Abstain |
4. In their discretion, the proxies are authorized to vote upon such other business as may properly
come before the meeting or any adjournment thereof, including procedural matters and matters
relating to the conduct of the meeting. |
Change of Address Please print new address below. |
C Authorized Signatures This section must be completed for your vote to be given effect. Date
and Sign Below |
Please sign exactly as name(s) appears hereon. When signing as attorney, executor, administrator,
trustee, guardian, or custodian, please give full title. |
Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box.
Signature 2 Please keep signature within the box. |
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND
RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. |
Notice of 2008 Annual Meeting of Shareholders
Confidential Voting Instruction Form for 2008 Annual Meeting |
The undersigned participant in the Oceaneering Retirement and Investment Plan (Plan) hereby
directs Wells Fargo Bank, N.A. , the trustee for the Plan (the Trustee), to vote all shares of
common stock of Oceaneering International, Inc., held in the undersigneds Plan account held of
record by the undersigned at the close of business on March 24, 2008, at the Annual Meeting of
Shareholders to be held on May 16, 2008 at Oceaneerings regional offices at 5004 Railroad Ave.,
Morgan City, Louisiana 70380, and at any adjournment or postponement thereof, as indicated on the
reverse side hereof. The undersigned acknowledges receipt of Oceaneerings annual report for the
year ended December 31, 2007 and the Notice of the 2008 Annual Meeting of Shareholders and related
Proxy Statement. |
This Voting Instruction Form, when properly executed and delivered to the Trustee, will provide the
Trustee with instructions to vote the shares in your Plan account as of the record date as directed
herein. If your Voting Instruction Form is not properly signed or dated or if no direction is
provided, the shares in your Plan account as of the record date will be voted in the same
proportion as the shares for which the Trustee timely receives valid voting instructions from
participants in the Plan. You are encouraged to specify your choices by marking the appropriate
boxes on the reverse side. Providing voting instructions by telephone or Internet eliminates the
need to return this Voting Instruction Form. Before providing your voting instructions, read the
proxy statement and Voting Instruction Form. Follow the steps listed on the reverse side. Your
voting instructions will be immediately confirmed and posted. Thank you for participating. (Items
to be voted appear on reverse side.) |