EMPLOYMENT AGREEMENT
This
Agreement (“Agreement”) is entered into by and between
Offshore Logistics, Inc. , a Delaware corporation (the
“Company”) and Brian C. Voegele , an individual
(the “Executive”), effective as of the 1 st
day of June, 2005 (“Effective Date”).
WHEREAS , the Company desires to employ the Executive and to
enter into an employment agreement embodying the terms of such
employment and services; and
WHEREAS , the Executive desires to accept such employment
and service as Senior Vice President – Chief Financial
Officer (“CFO”) of the Company and to enter into this
Agreement.
NOW , THEREFORE , in consideration of the premises
and mutual covenants contained herein and for other good and
valuable consideration, the receipt of which is mutually
acknowledged, the Company and the Executive agree as
follows:
1.
Employment, Duties and Acceptance .
(a) Employment Period.
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(i)
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The Company
hereby agrees to employ the Executive for a term commencing on the
Effective Date and expiring at the end of the day on May 31, 2006
(the “Initial Employment Period”).
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(ii)
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The Initial
Employment Period shall be automatically extended so as to
terminate two (2) years from the end of the Initial Employment
Period (the “Extended Employment Period”), unless at
least ninety (90) days prior to the end of the Initial Employment
Period, either Party gives written notice to the other Party that
the Initial Employment Period should not be extended (a
“Notice of Non-Renewal”) after the end of the Initial
Employment Period, in which event the term of the Executive’s
employment by the Company shall expire at the end of the Initial
Employment Period.
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(iii)
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The Extended
Employment Period shall be automatically further extended at the
end of the Extended Employment Period and on each anniversary
thereafter (each such date being a “Renewal Date”), so
as to terminate one (1) year from such Renewal Date, unless at
least ninety (90) days prior to a Renewal Date either Party gives a
Notice of Non-Renewal to the other Party that the Employment Period
should not be further extended after the next Renewal Date, in
which event the end of the term of the Executive’s employment
by the Company shall be the Renewal Date next following such Notice
of Non-Renewal. As used in this Agreement, the “Employment
Period” shall mean the period beginning on the Effective Date
and ending on the expiration of the term of the Executive’s
employment with the Company pursuant to this Section 1(a), subject
to earlier termination of the Executive’s employment with the
Company pursuant to Section 3 hereof.
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(iv)
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Notwithstanding
the foregoing provisions of this Section 1(a), if a Change of
Control Effective Date (as defined in Section 10(j) hereof) occurs
during the Employment Period, then the Employment Period shall
extend to include and shall terminate at the end of the Change of
Control Period, subject to earlier termination pursuant to Section
3 hereof, and the Employment Period shall no longer be subject to
extension on the Renewal Date.
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(b) Position .
From and after the Effective Date during the remainder of the
Employment Period, the Executive shall serve as Senior Vice
President – CFO of the Company and shall report to the
President and Chief Executive Officer of the Company. Executive
shall also serve in those offices and directorships of subsidiary
corporations or entities of the Company to which the Executive may
from time to time be appointed or elected. During the Employment
Period, the Executive shall devote substantially all of the
Executive’s business time, energy and talents to the Company
and its Affiliated Group. During the Employment Period, it shall
not be a violation of this Agreement for the Executive, subject to
the requirements of Section 5, to (A) serve on corporate, civic or
charitable boards or committees, including the Supervisory
Committee for the Southern Federal Credit Union, provided that,
without the written approval of the Board, the Executive shall be
permitted to serve on no more than one such corporate board, (B)
deliver lectures or fulfill speaking engagements and (C) manage
personal investments, so long as such activities do not interfere
with the performance of the Executive’s responsibilities as
the Senior Vice President — CFO of the Company or violate any
Company policies.
(c) Location of Services
.
The Executive’s principal location of employment shall be at
the Company offices located in Houston, Texas; provided ,
that the Executive will be required to travel frequently outside of
the applicable principal location of employment in connection with
the performing the Executive’s duties under this
Agreement.
(d) Duties .
The Executive agrees that during the Employment Period, the
Executive shall be responsible for the management and supervision
of the Accounting, Finance, Tax, and Treasury functions of the
Company (collectively, the “Finance Functions”),
including, without limitation, the following
responsibilities:
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(i)
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formulating
short and long term goals and developing, implementing, and
executing strategies to attain Company objectives;
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(ii)
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participating
as a key member of the senior management team and as the Chief
Executive Officer's financial advisor in setting and executing on
strategies to meet Company objectives;
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(iii)
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endeavoring to
establish and maintain a relationship of trust and credibility with
members of the senior management team, the Board, outside auditors
and legal counsel;
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(iv)
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supervising the
implementation of the Company’s policies and business
processes in order to meet the corporate governance and internal
control requirements established by the senior management team, the
Board and relevant laws, including, but not limited to:
(A) designing and implementing effective disclosure controls
and procedures that are necessary to insure accurate financial
reporting; (B) conducting periodic reviews and evaluations of
the effectiveness of the Company’s disclosure controls and
procedures, including, without limitation, interfacing with the
senior management team and other Company personnel, the Board,
Audit Committee, outside auditors and legal counsel to insure the
effectiveness of the Company’s disclosure controls and
procedures and related matters; (C) accurately reporting the
results of Company operations and related matters to the Securities
& Exchange Commission, the New York Stock Exchange, and
other regulatory agencies; and (D) acting as a certifying
officer for the Company’s financial reporting under the
Exchange Act and other regulatory agencies;
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(v)
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interfacing, as
the Company's primary representative, with the financial/investment
community;
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(vi)
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managing and
protecting the Company's capital and liquid assets and monitoring
and advising management regarding the availability of adequate
capital at all times;
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(vii)
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regularly and
systematically appraising and evaluating the Company's performance
results against the Company's established objectives;
and
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(viii)
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consistent with
the foregoing, such other Finance Functions as the President and
CEO may assign to Executive from time to time during the Employment
Period.
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During any Change of Control
Period, the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and
assigned to the Executive at any time during the 120-day period
immediately preceding the Change of Control Effective
Date.
(e) Acceptance of Employment
by the Executive .
The Executive hereby accepts such employment and shall render the
services and perform the duties described above.
2.
Compensation and Benefits .
(a) Base Salary .
During the Employment Period, the Executive shall receive an
annualized base salary (“Annual Base Salary”) at the
rate of $250,000 (Company salary grade 11), payable semi-monthly or
such other payroll period pursuant to the Company’s normal
payroll practices for its senior executives. The current Annual
Base Salary shall be reviewed at such time as the salaries of other
senior executives of the Company are reviewed generally;
provided , that the Executive’s reviews shall occur at
least annually and may be increased, but not decreased, during the
Employment Period. All such reviews shall consider factors the
Company deems material; including, but not limited to: (i) market
benchmarking; (ii) increases in cost of living; (iii)
Executive’s job performance; and (iv) overall Company
performance. During any Change of Control Period, the Annual Base
Salary shall be at least equal to 12 times the highest monthly base
salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and the
Affiliated Group in respect of the 12-month period immediately
preceding the month in which the Change of Control Effective Date
occurs. During any Change of Control Period, the term “Annual
Base Salary” as utilized in this Agreement shall refer to
Annual Base Salary as determined pursuant to the foregoing
sentence.
(b) Annual Bonus .
For each fiscal year completed during the Employment Period, the
Executive shall be eligible to receive an annual cash bonus
(“Annual Bonus”) based upon performance targets that
are established by the Committee, provided that the
Executive’s target Annual Bonus shall be equal to 50% of the
Executive’s Annual Base Salary (the “Target
Bonus”), and the maximum Annual Bonus shall be equal to 100%
of the Executive’s Annual Base Salary. The Annual Bonus will
be pro-rated for partial fiscal years during the Employment Period.
Annual performance metrics will be set by the Committee based upon
objective performance criteria of the Company, such as earnings per
share and return on capital employed, as well as individual
performance and for the Company’s fiscal year ending March
31, 2006 pursuant to the provisions of the FY 2006 Annual Incentive
Compensation Plan. During any Change of Control Period, the
Executive shall be awarded, for each fiscal year ending during the
Change of Control Period, an Annual Bonus in cash at least equal to
the Recent Annual Bonus. Each such Annual Bonus shall be paid no
later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such
Annual Bonus.
(c) Initial Stock Option
Grant .
The Company shall grant to the Executive stock options pursuant to
the Incentive Plan to purchase 6,500 shares of the Company’s
Common Stock (the “Stock Options”). The Stock Options
shall have a per share exercise price equal to the closing price of
a share of Common Stock on the date of grant which shall be as soon
as reasonably practicable after approval of this Agreement by the
Committee, shall have a ten-year term, and shall vest in three
annual installments on each of the first three anniversaries of the
Effective Date, with 33% of the Stock Options vesting on each of
first two anniversaries of the Effective Date, and the remaining
34% vesting on the third anniversary of the Effective Date,
provided in each case that the Executive remains in the
employ of the Company through such date. Except as specifically
provided herein, the terms and conditions of the Stock Options
shall be subject to the terms of the Incentive Plan and the award
agreement evidencing the grant. During the Employment Period, the
Executive may receive such additional Awards (as defined in the
Incentive Plan), if any, pursuant to the Incentive Plan as may be
determined, from time to time, by the Committee.
(d) Initial Performance
Accelerated Restricted Stock Unit Grant .
The Company shall grant to the Executive pursuant to the Incentive
Plan, 6,500 Performance Accelerated Restricted Stock Units (the
“Restricted Shares”). The Restricted Shares will vest
five years after the Effective Date so long as Executive has been
continuously employed by the Company and the Company’s
annualized total shareholder return (as defined in the award
agreement) is at least 3% during the entire vesting period. Vesting
of the Restricted Shares will be accelerated if the Company’s
annualized total shareholder returns during such vesting period
reach certain thresholds provided in the award agreement evidencing
the grant of the Restricted Shares (which thresholds shall be
consistent with those provided in awards to other senior executives
of the Company) and under the circumstances described in Section
3(e). Except as specifically provided herein, the terms and
conditions of the Restricted Shares shall be subject to the terms
of the Incentive Plan and the award agreement evidencing the
grant.
(e) Deferred Compensation
.
As soon as reasonably practicable after December 31 of each year
during the Employment Period the Company will credit an amount
equal to ten percent (10%) of the aggregate cash paid by the
Company to Executive as Annual Base Salary and Annual Bonus for the
calendar year ended December 31 (less Company contributions to
qualified plans) into a Company deferred compensation plan (the
Offshore Logistics, Inc. Deferred Compensation Plan Effective:
January 1, 2004, as amended from time to time), which will be
subject to the vesting schedule set forth in such plan. In the
event that legislation implemented subsequent to the date of this
Agreement causes the deferrals contemplated hereby not to be
respected for tax purposes, such amounts shall be paid to the
Executive in the year of accrual on December 31st of each such year
(conditioned on the Executive’s continued employment on such
date), on a fully taxable basis, and without adjustment for tax
impact.
(f) Employee Benefits
.
From and after the Effective Date and during the Employment Period,
the Executive (subject to applicable law and regulation) shall be
eligible for participation in the Company health and medical,
welfare, retirement (including the Offshore Logistics, Inc.
Employee Savings and Retirement Plan, as amended from time to
time), non-qualified deferred compensation, perquisite, fringe
benefit, and other benefit plans, practices, policies and programs,
as may be in effect from time to time, for executives of the
Company generally; provided , that, except as otherwise
provided in this Agreement, the Executive shall not be eligible for
any Company severance benefit plans, practices, policies and
programs. The Company agrees to reimburse Executive for all costs
of coverage provided pursuant to COBRA, and associated federal
income and withholding taxes on such reimbursement, for medical
insurance for Executive and the Executive’s immediate family
for the period beginning on the Effective Date and ending on the
date Executive first becomes eligible for coverage under the
Company health and medical plan. In addition, the Company shall
provide the Executive, beginning on the date Executive first
becomes eligible for coverage under the Company health and medical
plan and continuing during the Employment Period, with a
Company-paid portable, term life insurance policy covering the
Executive’s life in the amount of $500,000 with death
benefits payable to the Executive’s designated beneficiaries.
During any Change of Control Period, in no event shall the benefits
described in this Section 2(f) provide the Executive with benefits
that are less favorable, in the aggregate, than the most favorable
of such benefits in effect for the Executive at any time during the
120-day period immediately preceding the Change of Control
Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Change of Control
Effective Date to other peer executives of the Company and the
Affiliated Group.
(g) Expenses and Club Dues
.
During the Employment Period, the Executive shall be eligible for
prompt reimbursement for business expenses reasonably incurred by
the Executive in accordance with the policies of the Company as may
be in effect from time to time for Company executives generally.
For this purpose, business expenses shall include, but not be
limited to, costs incurred by the Executive for (i) the
Executive’s annual CPA dues, (ii) annual membership in the
Tax Executive Institute and the Financial Executive International,
and (iii) all dues and assessments up to $500 per month (which
amount shall be reviewed in March of each year during the
Employment Period) for one country club or athletic club of the
Executive’s choosing.
(h) Vacation .
The Executive shall be eligible for paid vacation at the rate of
four (4) weeks per year in accordance with the policies of the
Company.
(i) Company Automobile .
From and after the Effective Date and during the Employment Period,
the Company shall provide the Executive with an automobile
allowance of $1,250 per month to be used by Executive to acquire,
maintain and operate an automobile which Executive may use for
business purposes during the Employment Period.
(j) Office and Support
Staff .
During any Change of Control Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other
assistants, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and the Affiliated Group
at any time during the 120-day period immediately preceding the
Change of Control Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Group.
3.
Termination of Employment .
(a) Death or Disability
.
The Executive’s employment shall terminate automatically upon
the Executive’s death during the Employment Period. If the
Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to
the definition of Disability set forth below), it may provide the
Executive with written notice in accordance with Section 9(b) of
this Agreement of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with
the Company shall terminate effective on the 30th day after receipt
of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30-day period after such
receipt, the Executive shall not have returned to full time
performance of the Executive’s duties.
(b) Cause.
The Company may terminate the Executive's employment during the
Employment Period with or without Cause.
(c) Good Reason .
The Executive’s employment may be terminated by the Executive
with or without Good Reason. The Executive’s employment may
be terminated by the Executive for Good Reason if (x) an event or
circumstance set forth in Section 10(bb) shall have occurred and
the Executive provides the Company with written notice thereof
within 30 days after the Executive has knowledge of the occurrence
or existence of such event or circumstance, which notice shall
specifically identify the event or circumstance that the Executive
believes constitutes Good Reason, (y) the Company fails to correct
the circumstance or event so identified within 30 days after the
receipt of such notice, and (z) the Executive resigns within 90
days after the date of delivery of the notice referred to in clause
(x) above.
(d) Notice of Termination
.
Any termination by the Company for Cause, or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the
other Party hereto given in accordance with Section 9(b) of this
Agreement. The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the rights of the
Executive or the Company hereunder.
(e) Special Vesting Terms for
Stock Option and Awards .
All unvested Stock Options and other Awards (including, without
limitation, the Restricted Shares) granted pursuant to this
Agreement or the Incentive Plan will become fully vested and
unrestricted (i) in the event of the Company’s termination of
the Executive’s employment without Cause during the
Employment Period, (ii) in the event of the Executive’s
resignation during the Employment Period for Good Reason, or (iii)
upon the occurrence of a Change of Control. If the
Executive’s employment is terminated prior to the Termination
Date, the period of exercise for the Executive’s vested Stock
Options shall be as follows:
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(i)
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Upon the
Executive’s termination of employment by reason of the
Executive’s death or Disability, any Stock Options held by
the Executive that were exercisable immediately before the Date of
Termination may be exercised at any time until the earlier of (A)
the second anniversary of the Date of Termination and (B) the
expiration date of the Stock Options.
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(ii)
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Upon the
Executive’s termination of employment by the Company for
Cause, any Stock Options and Restricted Shares held by the
Executive shall be forfeited, effective as of the Date of
Termination.
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(iii)
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Upon
termination of the Executive’s employment for any reason
other than the Executive’s death or Disability or termination
by the Company for Cause, any Stock Options held by the Executive
that were exercisable immediately before the Date of Termination
may be exercised at any time until the earlier of (A) the 90
th day following the Date of Termination and (B) the
expiration date of such Stock Options.
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(iv)
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Notwithstanding
the foregoing provisions of this Section 3(e), if the Executive
dies after the Executive’s employment by the Company is
terminated but while any of the Stock Options remain exercisable as
set forth above, such Stock Options may be exercised at any time
until the later of (A) the earlier of (1) the first anniversary of
the date of such death and (2) the expiration date of such Stock
Options and (B) the last date on which such Stock Options would
have been exercisable, absent this Section 3(e)(iv).
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(v)
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Notwithstanding
the foregoing provisions of this Section 3(e), upon the termination
of the Executive’s employment with the Company for any
reason, other than termination for Cause by the Company, during the
24-month period following any Change of Control Effective Date, any
Stock Options held by the Executive as of the Change of Control
Effective Date that remain outstanding as of the Date of
Termination may thereafter be exercised, until the later of (A) the
last date on which such Stock Options would be exercisable in the
absence of this Section 3(e)(v) and (B) the earlier of (1) the
third anniversary of the Change of Control Effective Date and (2)
the expiration date of such Stock Options.
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Notwithstanding anything in this
Agreement to the contrary, express or implied, except as provided
in Section 4(a)(ii), the provisions of this Agreement are in
addition to and not in limitation of the Executive’s rights
under the Incentive Plan and any other plan, program, policy or
practice provided by the Company or any of the Affiliated Group and
for which the Executive may qualify.
(f) Resignation from All
Positions .
Notwithstanding any other provision of this Agreement, upon the
termination of the Executive’s employment for any reason,
unless otherwise requested by the President and Chief Executive
Officer and accepted by the Executive, the Executive shall
immediately resign as of the Date of Termination from all positions
that the Executive holds or has ever held with the Company and any
other member of the Affiliated Group (and with any other entities
with respect to which the Company has requested the Executive to
perform services and which has been accepted by the Executive),
including, without limitation, all boards of directors of any
member of the Affiliated Group. The Executive hereby agrees to
execute any and all documentation to effectuate such resignations
upon request by the Company, but the Executive shall be treated for
all purposes as having so resigned upon termination of the
Executive’s employment, regardless of when or whether the
Executive executes any such documentation.
4.
Obligations upon Termination .
(a) Good Reason; Other Than
for Cause; Non-Renewal by Company; Expiration .
If, during the Employment Period, (1) the Company shall terminate
the Executive’s employment other than for Cause, death or
Disability, (2) the Executive shall terminate the Executive’s
employment for Good Reason, (3) the Executive’s employment
terminates voluntarily or involuntarily by reason of the Company
providing to the Executive a Notice of Non-Renewal, or (4) the
Executive’s employment terminates voluntarily or
involuntarily upon expiration of the term of this Agreement at the
end of a Change of Control Period:
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(i)
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The Company
shall pay to the Executive in a lump sum in cash within 30 days
after the Date of Termination the aggregate of the following
amounts:
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A.
the Accrued Amounts (as defined in Section 10(a) hereof);
and
B.
an amount equal to:
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(1)
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in the event
such termination occurs at any time other than a Change of Control
Period, the product of (x) two and (y) the sum of (i) the
Executive’s Annual Base Salary at the Date of Termination and
(ii) the Target Bonus; or
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(2)
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in the event
such termination occurs during or at the end of a Change of Control
Period, the product of (x) three and (y) the sum of
(i) the Executive’s Annual Base Salary and (ii) the
Highest Annual Bonus.
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(ii)
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To the extent
not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or
agreement (other than, in the event the Executive’s
termination occurs outside of a Change of Control Period, any
severance plan, program, policy or practice or contract or
agreement) of the Company and its Affiliated Group (such amounts
and benefits, the “Other Benefits”) in accordance with
the terms and normal procedures of each such plan, program, policy
or practice, based on accrued benefits through the Date of
Termination.
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(iii)
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Until the
earlier to occur of (A) the expiration of eighteen months after the
Date of Termination, (B) the date on which the Executive attains
the age of 65, (C) the date the Executive first becomes eligible to
receive health benefits under another employer-provided plan, from
and after the Executive’s Date of Termination, or (D) the
death of the Executive, the Company shall, via proper COBRA
election by Executive, continue medical and dental benefits to the
Executive (and, if applicable, to the spouse and dependents of the
Executive who received such benefits under the Executive’s
coverage immediately prior to the Date of Termination) at least
equal to those that would have been provided to the Executive (and
to any such dependent) in accordance with the plans, programs,
practices and policies of the Company had the Executive remained
actively employed, provided that Executive makes all required COBRA
payments to the Company, and the Company shall immediately
reimburse Executive for each such COBRA payment.
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(iv)
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As a condition
to the Executive’s receipt of payments and benefits described
under Sections 4(a)(i), 4(a)(ii) and 4(a)(iii) in the event the
Executive’s termination occurs outside of a Change of Control
Period, the Executive must execute and deliver to the Company a
full release of all claims that the Executive may have (and such
release must become irrevocable) against the Company, its
Affiliated Group, and all of their officers, employees, directors,
and agents, in a form mutually and reasonably agreeable to the
Parties hereunder; provided, however, that the Executive shall
retain the Executive’s indemnification and related rights as
a former officer and director under the Certificate of
Incorporation and Bylaws of the Company and the Executive’s
rights under the Directors and Officers Insurance Policy(ies)
maintained by the Company from time to time.
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(b) Cause; Without Good
Reason; Non-Renewal by Executive .
If the Executive’s employment shall be terminated for Cause
during the Employment Period, if the Executive shall resign without
Good Reason during the Employment Period, or if the
Executive’s employment terminates by reason of the Executive
providing to the Company a Notice of Non-Renewal, this Agreement
shall terminate without further obligations to the Executive, other
than the Company’s obligation to pay or provide to the
Executive an amount equal to the Accrued Amounts and the Other
Benefits. For purposes of this Section 4(b) only, the Accrued
Amounts shall not include the amount described in Section
10(a)(i)(2).
(c) Death or Disability
.
If the Executive’s employment is terminated by reason of the
Executive’s death or Disability during the Employment Period,
this Agreement shall terminate without further obligations to the
Executive’s legal representatives under this Agreement, other
than the Company’s obligation to pay or provide to
Executive’s estate, heirs or beneficiaries or to Executive,
as the case may be: (i) the Accrued Amounts; and (ii) the Other
Benefits. With respect to the provision of Other Benefits, in the
event the Executive’s termination occurs during a Change of
Control Period, the term “Other Benefits” as utilized
in this Section 4(c) shall include, without limitation, and the
Executive’s estate and/or beneficiaries shall be entitled to
receive, benefits at least equal to the most favorable benefits
provided by the Company and the Affiliated Group to the estates and
beneficiaries of peer executives of the Company and the Affiliated
Group under such plans, programs, practices and policies relating
to death benefits, if any, as in effect with respect to other peer
executives and their beneficiaries at any time duri
