EXHIBIT 10-02
1996 INCENTIVE PLAN
OF
OCEANEERING INTERNATIONAL, INC.
1. PLAN. This 1996 Incentive Plan of Oceaneering
International, Inc. (the "Plan") was adopted by the Board of
Directors of Oceaneering International, Inc. to reward certain
corporate officers and key employees of Oceaneering
International, Inc. and other persons having an important
business relationship or affiliation with the Company by enabling
them to acquire shares of Common Stock, par value $.25 per share,
of Oceaneering International, Inc.
2. OBJECTIVES. This Plan is designed to attract and retain
key employees of the Company and its Subsidiaries (as hereinafter
defined), to encourage the sense of proprietorship of such
employees, to attract other persons to have an important business
relationship or affiliation with the Company, and to stimulate
the active interest of such persons in the development and
financial success of the Company and its Subsidiaries. These
objectives are to be accomplished by making Awards (as
hereinafter defined) under this Plan and thereby providing
Participants (as hereinafter defined) with a proprietary interest
in the growth and performance of the Company and its
Subsidiaries.
3. DEFINITIONS. As used herein, the terms set forth below
shall have the following respective meanings:
"Authorized Officer" means the Chairman of the Board or the
Chief Executive Officer of the Company (or any other senior
officer of the Company to whom either of them shall delegate the
authority to execute any Award Agreement).
"Award" means the grant of any Option, SAR, Stock Award,
Cash Award or Performance Award, whether granted singly, in
combination or in tandem, to a Participant pursuant to such
applicable terms, conditions and limitations as the Committee may
establish in order to fulfill the objectives of the Plan.
"Award Agreement" means a written agreement between the
Company and a Participant setting forth the terms, conditions and
limitations applicable to an Award.
"Board" means the Board of Directors of the Company.
"Cash Award" means an award denominated in cash.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means the Compensation and Benefits Committee of
the Board or such other committee of the Board as is designated
by the Board to administer the Plan.
"Common Stock" means the Common Stock, par value $.25 per
share, of the Company.
"Company" means Oceaneering International, Inc., a Delaware
corporation.
"Dividend Equivalents" means, with respect to shares of
Restricted Stock that are to be issued at the end of the
Restriction Period, an amount equal to all dividends and other
distributions (or the economic equivalent thereof) that are
payable to stockholders of record during the Restriction Period
on a like number of shares of Common Stock.
"Effective Date" has the meaning set forth in paragraph 18
hereof.
"Employee" means an employee of the Company or any of its
Subsidiaries.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fair Market Value" of a share of Common Stock means, as of
a particular date, (i) if shares of Common Stock are listed on a
national securities exchange, the mean between the highest and
lowest sales price per share of Common Stock on the consolidated
transaction reporting system for the principal national
securities exchange on which shares of Common Stock are listed on
that date, or, if there shall have been no such sale so reported
on that date, on the last preceding date on which such a sale was
so reported, (ii) if shares of Common Stock are not so listed but
are quoted on the Nasdaq National Market, the mean between the
highest and lowest sales price per share of Common Stock reported
by the Nasdaq National Market on that date, or, if there shall
have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (iii) if the
Common Stock is not so listed or quoted, the mean between the
closing bid and asked price on that date, or, if there are no
quotations available for such date, on the last preceding date on
which such quotations shall be available, as reported by the
Nasdaq National Market, or, if not reported by the Nasdaq
National Market, by the National Quotation Bureau Incorporated or
(iv) if shares of Common Stock are not publicly traded, the most
recent value determined by an independent appraiser appointed by
the Company for such purpose.
"Incentive Option" means an Option that is intended to
comply with the requirements set forth in Section 422 of the
Code.
"Independent Contractor" means a person (other than a
Director) determined by the Committee as having an important
business relationship or affiliation with the Company.
"Nonqualified Stock Option" means an Option that is not an
Incentive Option.
"Option" means a right to purchase a specified number of
shares of Common Stock at a specified price.
"Participant" means an Employee or Independent Contractor to
whom an Award has been made under this Plan.
"Performance Award" means an award made pursuant to this
Plan to a Participant who is subject to the attainment of one or
more Performance Goals.
"Performance Goal" means a standard established by the
Committee to determine in whole or in part whether a Performance
Award shall be earned.
"Restricted Stock" means any Common Stock that is restricted
or subject to forfeiture provisions.
"Restriction Period" means a period of time beginning as of
the date upon which an Award of Restricted Stock is made pursuant
to this Plan and ending as of the date upon which the Common
Stock subject to such Award is no longer restricted or subject to
forfeiture provisions.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, or any successor rule.
"SAR" means a right to receive a payment, in cash or Common
Stock, equal to the excess of the Fair Market Value or other
specified valuation of a specified number of shares of Common
Stock on the date the right is exercised over a specified strike
price, in each case, as determined by the Committee.
"Stock Award" means an award in the form of shares of Common
Stock or units denominated in shares of Common Stock.
"Subsidiary" means (i) in the case of a corporation, any
corporation of which the Company directly or indirectly owns
shares representing more than 50% of the combined voting power of
the shares of all classe oorr serriieess of capital stock of such
corporation which have the right to vote generally on matters
submitted to a vote of the stockholders of such corporation and
(ii) in the case of a partnership or other business entity not
organized as a corporation, any such business entity of which the
Company directly or indirectly owns more than 50% of the voting,
capital or profits interests (whether in the form of partnership
interests, membership interests or otherwise).
4. ELIGIBILITY. Key Employees eligible for Awards under this
Plan are those who hold positions of responsibility and whose
performance, in the judgment of the Committee, can have a
significant effect on the success of the Company and its
Subsidiaries and those Independent Contractors selected by the
Committee.
5. COMMON STOCK AVAILABLE FOR AWARDS. Subject to the
provisions of paragraph 14 hereof, there shall be available for
Awards under this Plan granted wholly or partly in Common Stock
(including rights or options that may be exercised for or settled
in Common Stock) an aggregate of 1,165,000 shares of Common Stock
plus the number of shares repurchased in the open market and
otherwise with an aggregate price no greater than the cash
proceeds received by the Company from the sale of shares under
this Plan. The number of shares of Common Stock that are the
subject of Awards under this Plan, that are forfeited or
terminated, expire unexercised, are settled in cash in lieu of
Common Stock or in a manner such that all or some of the shares
covered by an Award are not issued to a Participant or are
exchanged for Awards that do not involve Common Stock, shall
again immediately become available for Awards hereunder.
Notwithstanding the foregoing, (i) in no event may an Award be
issued that would bring the total of all outstanding awards under
this Plan, and all other Company stock option or employee or
long-term incentive plans to more than 9.9% of the total number
of shares of Common Stock of the Company at the time outstanding
and (ii) no more than 1,165,000 shares of Common Stock may be the
subject of Incentive Options. The Committee may from time to time
adopt and observe such procedures concerning the counting of
shares against the Plan maximum as it may deem appropriate. The
Board and the appropriate officers of the Company shall from time
to time take whatever actions are necessary to file any required
documents with governmental authorities, stock exchanges and
transaction reporting systems to ensure that shares of Common
Stock are available for issuance pursuant to Awards.
6. ADMINISTRATION.
(a) This Plan shall be administered by the Committee. To the
extent required in order for Awards to be exempt from Section 16
of the Exchange Act by virtue of the provisions of Rule 16b-3,
the Committee shall consist of at least two members of the Board
who meet the requirements of the definition of "non-employer
director" set forth in Rule 16b-3(b)(3)(i) promulgated under the
Exchange Act.
(b) Subject to the provisions hereof, the Committee shall
have full and exclusive power and authority to administer this
Plan and to take all actions that are specifically contemplated
hereby or are necessary or appropriate in connection with the
administration hereof. The Committee shall also have full and
exclusive power to interpret this Plan and to adopt such rules,
regulations and guidelines for carrying out this Plan as it may
deem necessary or proper, all of which powers shall be exercised
in the best interests of the Company and in keeping with the
objectives of this Plan. The Committee may, in its discretion,
provide for the extension of the exercisability of an Award,
accelerate the vesting or exercisability of an Award, eliminate
or make less restrictive any restrictions contained in an Award,
waive any restriction or other provision of this Plan or an Award
or otherwise amend or modify an Award in any manner that is
either (i) not adverse to the Participant to whom such Award was
granted or (ii) consented to by such Participant. The Committee
may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to
the extent the Committee deems necessary or desirable to further
the Plan purposes. Any decision of the Committee in the
interpretation and administration of this Plan shall lie within
its sole and absolute discretion and shall be final, conclusive
and binding on all parties concerned.
(c) No member of the Committee or officer of the Company to
whom the Committee has delegated authority in accordance with the
provisions of paragraph 7 of this Plan shall be liable for
anything done or omitted to be done by him or her, by any member
of the Committee or by any officer of the Company in connection
with the performance of any duties under this Plan, except for
his or her own willful misconduct or as expressly provided by
statute.
7. DELEGATION OF AUTHORITY. The Committee may delegate to
the Chief Executive Officer and to other senior officers of the
Company its duties under this Plan pursuant to such conditions or
limitations as the Committee may establish, except that the
Committee may not delegate to any person the authority to grant
Awards to, or take other action with respect to, Participants who
are subject to Section 16 of the Exchange Act.
8. AWARDS.
(a) Subject to paragraphs 8(b) and (c), the Committee shall
determine the type or types of Awards to be made under this Plan
and shall designate from time to time the Employees who are to be
the recipients of such Awards. Each Award may be embodied in an
Award Agreement, which shall contain such terms, conditions and
limitations as shall be determined by the Committee in its sole
discretion and shall be signed by the Participant to whom the
Award is made and by an Authorized Officer for and on behalf of
the Company. Awards may consist of those listed in this paragraph
8 hereof and may be granted singly, in combination or in tandem.
Awards may also be made in combination or in tandem with, in
replacement of, or as alternatives to, grants or rights under
this Plan or any other employee plan of the Company or any of its
Subsidiaries, including the plan of any acquired entity; provided
that, except as contemplated in paragraph 14, no Option may be
issued in exchange for the cancellation of an Option with a
higher exercise price nor may the exercise price of any Option be
reduced. An Award may not provide for an automatic grant of a new
Option upon the exercise of an Option. All or part of an Award
may be subject to conditions estaliished by the Committee, which
may include, but are not limited to, continuous service with the
Company and its Subsidiaries, achievement of specific business
objectives, increases in specified indices, attainment of
specified growth rates and other comparable measurements of
performance. Upon the termination of employment by a Participant,
any unexercised, deferred, unvested or unpaid Awards shall be
treated as set forth in the applicable Award Agreement.
(i) STOCK OPTION. An Award may be in the form of an
Option. An Option awarded pursuant to this Plan may consist
of an Incentive Option or a Nonqualified Option. The price
at which shares of Common Stock may be purchased upon the
exercise of an Incentive Option shall be not less than the
greater of the Fair Market Value of the Common Stock on the
date of grant or its par value. The price at which shares of
Common Stock may be purchased upon the exercise of a
Nonqualified Option shall be not less than the greater of
the Fair Market Value of the Common Stock on the date of
grant or its par value. Subject to the foregoing provisions,
the terms, conditions and limitations applicable to any
Options awarded pursuant to this Plan, including the term of
any Options and the date or dates upon which they become
exercisable, shall be determined by the Committee.
(ii) STOCK APPRECIATION RIGHT. An Award may be in the
form of an SAR. The terms, conditions and limitations
applicable to any SARs awarded pursuant to this Plan,
including the term of any SARs and the date or dates upon
which they become exercisable, shall be determined by the
Committee.
(iii) STOCK AWARD. An Award may be in the form of a
Stock Award. The terms, conditions and limitations
applicable to any Stock Awards granted pursuant to this Plan
shall be determined by the Committee.
(iv) CASH AWARD. An Award may be in the form of a
Cash Award. The terms, conditions and limitations applicable
to any Cash Awards granted pursuant to this Plan shall be
determined by the Committee.
(v) PERFORMANCE AWARD. Without limiting the type or
number of Awards that may be made under the other provisions
of this Plan, an Award may be in the form of a Performance
Award. A Performance Award shall be paid, vested or
otherwise deliverable solely on account of the attainment of
one or more pre-established, objective Performance Goals
established by the Committee prior to the earlier to occur
of (x) 90 days after the commencement of the period of
service to which the Performance Goal relates and (y) the
lapse of 25% of the period of service (as scheduled in good
faith at the time the goal is established), and in any event
while the outcome is substantially uncertain. A Performance
Goal is objective if a third party having knowledge of the
relevant facts could determine whether the goal is met. Such
a Performance Goal may be cumulative, annual or
end-of-performance period goals and may be based on one or
more business criteria that apply to the individual, one or
more business units of the Company, or the Company as a
whole, and either as an absolute measure or as a measure of
comparative performance, and may include one or more of the
following: revenues, income from operations, net income,
stock price, market share, earnings per share, return on
equity, assets or invested capital, economic value added,
market value added, decrease in costs or achievement of
balance sheet, income statement or cash flow objectives.
Unless otherwise stated, such a Performance Goal need not be
based upon an increase or positive result under a particular
business criterion and could include, for example,
maintaining the status quo or limiting economic losses
(measured, in each case, by reference to specific business
criteria). In interpreting Plan provisions applicable to
Performance Goals and Performance Awards, it is the intent
of the Plan to conform with the standards of Section 162(m)
of the Code and Treasury Regulation ss. 1.162-27(e)(2)(i),
and the Committee in establishing such goals and
interpreting the Plan shall be guided by such provisions.
Prior to the payment of any compensation based on the
achievement of Performance Goals, the Committee must certify
in writing that applicable Performance Goals and any of the
material terms thereof were, in fact, satisfied. Subject to
the foregoing provisions, the terms, conditions and
limitations applicable to any Performance Awards made
pursuant to this Plan shall be determined by the Committee.
(b) Notwithstanding anything to the contrary contained in
this Plan, the following limitations shall apply to any Awards
made hereunder:
(i) no Participant may be granted, during any one-year
period, Awards consisting of Options or SARs that are
exercisable for more than 300,000 shares of Common Stock;
(ii) no Participant may be granted, during any one-year
period, Awards consisting of shares of Common Stock or units
denominated in such shares (other than any Awards consisting
of Options or SARs) covering or relating to more than
300,000 shares of Common Stock (the limitation set forth in
this clause (ii), together with the limitation set forth in
clause (i) above, being hereinafter collectively referred to
as the "Stock Based Awards Limitations"); and
(iii) no Participant may be granted Awards consisting
of cash or in any other form permitted under this Plan
(other than Awards consisting of Options or SARs or
otherwise consisting of shares of Common Stock or units
denominated in such shares) in respect of any one-year
period having a value determined on the date of grant in
excess of $3,000,000.
(c) Independent Contractors may not be granted Incentive
Options.
9. PAYMENT OF AWARDS.
(a) GENERAL. Payment of Awards may be made in the form of
cash or Common Stock, or a combination thereof, and may include
such restrictions as the Committee shall determine, including, in
the case of Common Stock, restrictions on transfer and forfeiture
provisions. If payment of an Award is made in the form of
Restricted Stock, the Award Agreement relating to such shares
shall specify whether they are to be issued at the beginning or
end of the Restriction Period. In the event that shares of
Restricted Stock are to be issued at the beginninoff the
Restriction Period, the certificates evidencing such shares (to
the extent that such sharesree sso evidenced) shall contain
appropriate legends and restrictions that describe the terms and
conditions of the restrictions applicable thereto. In the event
that shares of Restricted Stock are to be issued at the end of
the Restricted Period, the right to receive such shares shall be
evidenced by book entry registration or in such other manner as
the Committee may determine.
(b) DEFERRAL. With the approval of the Committee, payments
in respect of Awards may be deferred, either in the form of
installments or a future lump-sum payment. The Committee may
permit selected Participants to elect to defer payments of some
or all types of Awards in accordance with procedures established
by the Committee. Any deferred payment of an Award, whether
elected by the Participant or specified by the Award Agreement or
by the Committee, may be forfeited if and to the extent that the
Award Agreement so provides.
(c) DIVIDENDS AND INTEREST. Rights to dividends or Dividend
Equivalents may be extended to and made part of any Award
consisting of shares of Common Stock or units denominated in
shares of Common Stock, subject to such terms, conditions and
restrictions as the Committee may establish. The Committee may
also establish rules and procedures for the crediting of interest
on deferred cash payments and Dividend Equivalents for Awards
consisting of shares of Common Stock or units denominated in
shares of Common Stock.
(d) SUBSTITUTION OF AWARDS. Subject to paragraph 8(a), at
the discretion of the Committee, a Participant may be offered an
election to substitute an Award for another Award or Awards of
the same or different type.
10. STOCK OPTION EXERCISE. The price at which shares of
Common Stock may be purchased under an Option shall be paid in
full at the time of exercise in cash or, if elected by the
optionee, the optionee may purchase such shares by means of
tendering Common Stock or surrendering another Award, including
Restricted Stock, valued at Fair Market Value on the date of
exercise, or any combination thereof. The Committee shall
determine acceptable methods for Participants to tender Common
Stock or other Awards; provided that any Common Stock that is or
was the subject of an Award may be so tendered only if it has
been held by the Participant for six months. The Committee may
provide for procedures to permit the exercise or purchase of such
Awards by use of the proceeds to be received from the sale of
Common Stock issuable pursuant to an Award. Unless otherwise
provided in the applicable Award Agreement, in the event shares
of Restricted Stock are tendered as consideration for the
exercise of an Option, a number of the shares issued upon the
exercise of the Option, equal to the number of shares of
Restricted Stock used as consideration therefor, shall be subject
to the same restrictions as the Restricted Stock so submitted as
well as any additional restrictions that may be imposed by the
Committee.
11. TAX WITHHOLDING. The Company shall have the right to
deduct applicable taxes from any Award payment and withhold, at
the time of delivery or vesting of cash or shares of Common Stock
under this Plan, an appropriate amount of cash or number of
shares of Common Stock or a combination thereof for payment of
taxes required by law or to take such other action as may be
necessary in the opinion of the Company to satisfy all
obligations for withholding of such taxes. The Committee may also
permit withholding to be satisfied by the transfer to the Company
of shares of Common Stock theretofore owned by the holder of the
Award with respect to which withholding is required. If shares of
Common Stock are used to satisfy tax withholding, such shares
shall be valued based on the Fair Market Value when the tax
withholding is required to be made. The Committee may provide for
loans, on either a short-term or demand basis, from the Company
to a Participant to permit the payment of taxes required by law.
12. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION. The
Board may amend, modify, suspend or terminate this Plan for the
purpose of meeting or addressing any changes in legal
requirements or for any other purpose permitted by law, except
that (i) no amendment or alteration that would adversely affect
the rights of any Participant under any Award previously granted
to such Participant shall be made without the consent of such
Participant and (ii) no amendment will be made to increase the
maximum number of shares subject to Awards (except as provided in
paragraph 14) without the approval of the Company's stockholders.
13. ASSIGNABILITY. The Committee may prescribe and include
in applicable Award Agreements restrictions on transfer. Any
attempted assignment of an Award or any other benefit under this
Plan in violation of this paragraph 13 shall be null and void.
14. ADJUSTMENTS.
(a) The existence of outstanding Awards shall not affect in
any manner the right or power of the Company or its stockholders
to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital stock of the
Company or its business or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior
preference stock (whether or not such issue is prior to, on a
parity with or junior to the Common Stock) or the dissolution or
liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or
proceeding of any kind, whether or not of a character similar to
that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of
outstanding shares of Common Stock, declaration of a dividend
payable in shares of Common Stock or other stock split, then (i)
the number of shares of Common Stock reserved under this Plan,
(ii) the number of shares of Common Stock covered by outstanding
Awards in the form of Common Stock or units denominated in Common
Stock, (iii) the exercise or other price in respect of such
Awards, (iv) the appropriate Fair Market Value and other price
determinations for such Awards and (v) the Stock Based Awards
Limitations shall each be proportionately adjusted by the Board
to reflect such transaction. In the event of any other
recapitalization or capital reorganization of the Company, any
consolidation or merger of the Company with another corporation
or entity, the adoption by the Company of any plan of exchange
affecting the Common Stock or any distribution to holders of
Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board shall
make appropriate adjustments to (i) the number of shares of
Common Stock covered by Awards in the form of Common Stock or
units denominated in Common Stock, (ii) the exercise or other
price in respect of such Awards, (iii) the appropriate Fair
Market Value and other price determinations for such Awards and
(iv) the Stock Based Awards Limitations to give effect to such
transaction shall each be proportionately adjusted by the Board
to reflect such transaction; provided that such adjustments shall
only be such as are necessary to maintain the proportionate
interest of the holders of the Awards and preserve, without
exceeding, the value of such Awards. In the event of a corporate
merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be
authorized to issue or assume Awards by means of substitution of
new Awards, as appropriate, for previously issued Awards or to
assume previously issued Awards as part of such adjustment.
15. RESTRICTIONS. No Common Stock or other form of payment
shall be issued with respect to any Award unless the Company
shall be satisfied based on the advice of its counsel that such
issuance will be in compliance with applicable federal and state
securities laws. Certificates evidencing shares of Common Stock
delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or transaction reporting
system upon which the Common Stock is then listed or to which it
is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be
placed upon such certificates (if any) to make appropriate
reference to such restrictions.
16. UNFUNDED PLAN. Insofar as it provides for Awards of
cash, Common Stock or rights thereto, this Plan shall be
unfunded. Although bookkeeping accounts may be established with
respect to Participants who are entitled to cash, Common Stock or
rights thereto under this Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Company shall not be
required to segregate any assets that may at any time be
represented by cash, Common Stock or rights thereto, nor shall
this Plan be construed as providing for such segregation, nor
shall the Company, the Board or the Committee be deemed to be a
trustee of any cash, Common Stock or rights thereto to be granted
under this Plan. Any liability or obligation of the Company to
any Participant with respect to an Award of cash, Common Stock or
rights thereto under this Plan shall be based solely upon any
contractual obligations that may be created by this Plan and any
Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other
encumbrance on any property of the Company. Neither the Company
nor the Board nor the Committee shall be required to give any
security or bond for the performance of any obligation that may
be created by this Plan.
17. GOVERNING LAW. This Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise
governed by mandatory provisions of the Code or the securities
laws of the United States, shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. EFFECTIVENESS. This Plan shall be effective as of June
21, 1996, (the "Effective Date"), the date on which it was
approved by the Board of Directors of the Company.
Notwithstanding the foregoing, the adoption of this Plan is
expressly conditioned upon the approval by the holders of a
majority of shares of Common Stock present, or represented, and
entitled to vote at a meeting of the Company Stockholders held on
or before December 31, 1996. If the Stockholders of the Company
should fail to so approve this Plan prior to such date, this Plan
shall terminate and cease to be of any further force or effect
and all grants of Awards hereunder shall be null and void.