Contract
Exhibit 10.4
Performance Units
2008 CHAIRMAN PERFORMANCE UNIT AGREEMENT
This 2008 Performance Unit Agreement (this “Agreement”) is between Oceaneering
international, inc. (the “Company”) and (the “Participant”), the non-employee
Chairman of the Board of Directors of the Company (“Chairman”), regarding an award (“2008
Performance Award”) of ___ units (“Performance Units”), each representing an initial notional
value of $100.00, under the 2005 Incentive plan of oceaneering international, inc. (the
“Plan”), awarded to the Participant effective February 22, 2008 (the “Award Date”), and subject to
the following terms and conditions:
1. Relationship to Plan. This Award is subject to all of the terms, conditions and provisions
of (i) the Plan and administrative interpretations thereunder, if any, which have been adopted by
the Committee thereunder and are in effect on the date hereof, and (ii) the Amended and Restated
Service Agreement dated December 21, 2006 between the Participant and the Company (the “Service
Agreement”). In the event of a conflict between this Agreement and the Service Agreement, the
Service Agreement shall control the Participant’s rights under this Agreement. Except as defined
or otherwise specifically provided herein, capitalized terms shall have the same meanings ascribed
to them under the Plan and the Service Agreement.
2. Vesting.
(a) The 2008 Performance Award hereby granted shall become vested in full on the third
anniversary of the Award Date, provided the Participant is Chairman on such anniversary
date.
(b) Performance Units subject to this 2008 Performance Award shall vest, irrespective
of the provisions set forth in subparagraph (a) above, provided that the Participant has
continuously served as Chairman from the Award Date until the applicable December 15th
following the later of (i) the Award Date, and (ii) his attainment of Retirement Age, in the
following amounts provided the Participant is serving as Chairman on the applicable December
15th:
(i) on December 15, 2008, one-third of the 2008 Performance Award shall
be vested;
(ii) on December 15, 2009, an additional one-third of the 2008
Performance Award shall be vested; and
(iii) on December 15, 2010, the entire 2008 Performance Award shall be
vested.
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(c) All Performance Units subject to this 2008 Performance Award shall vest,
irrespective of the provisions set forth in subparagraphs (a) or (b) above, provided that
the Participant has continuously served as Chairman since the Award Date, upon the
Participant ceasing to serve as Chairman pursuant to Section 4(a) of the Service Agreement.
(d) For purposes of this Agreement:
(i) “Change of Control” means:
(A) any Person is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company’s outstanding Voting Securities, other
than through the purchase of Voting Securities directly from the Company
through a private placement; or
(B) individuals who constitute the Board on the date hereof (the
“Incumbent Board”) cease for any reason to constitute at least a majority
thereof, provided that any person becoming a Director subsequent to the date
hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least two-thirds of the Directors
comprising the Incumbent Board shall from and after such election be deemed
to be a member of the Incumbent Board; or
(C) the Company is merged or consolidated with another corporation or
entity and as a result of such merger or consolidation less than 60% of the
outstanding Voting Securities of the surviving or resulting corporation or
entity shall then be owned by the former shareholders of the Company; or
(D) a tender offer or exchange offer is made and consummated by a
Person other than the Company for the ownership of 20% or more of the Voting
Securities of the Company then outstanding; or
(E) all or substantially all of the assets of the Company are sold or
transferred to a Person as to which:
(1) the Incumbent Board does not have authority (whether by law
or contract) to directly control the use or further disposition of
such assets; and
(2) the financial results of the Company and such Person are not
consolidated for financial reporting purposes.
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(F) Anything else in this definition to the contrary notwithstanding:
(1) no Change of Control shall be deemed to have occurred by virtue of
any transaction which results in the Participant, or a group of Persons
which includes the Participant, acquiring more than 20% of either the
combined voting power of the Company’s outstanding Voting Securities or the
Voting Securities of any other corporation or entity which acquires all or
substantially all of the assets of the Company, whether by way of merger,
consolidation, sale of such assets or otherwise; and
(2) no Change of Control shall be deemed to have occurred unless such
event constitutes an event specified in Code Section 409A(2)(a)(v) and the
Treasury Regulations promulgated thereunder.
(ii) “Person” means, any individual, corporation, partnership, group,
association or other “person,” as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, and the related
rules and regulations promulgated thereunder.
(iii) “Retirement Age” means the earlier to occur of:
(A) age 65 or more, or
(B) age 60 or more with at least 15 years of continuous service with
the Company,
provided that the Participant has remained in service with the Company until the
earlier to occur of (A) or (B). The Company hereby acknowledges that Participant
has satisfied the requirements of “Retirement Age” as set forth herein as of the
date of this Agreement
(iv) “Voting Securities” means, with respect to any corporation or
other business enterprise, those securities, which under ordinary
circumstances are entitled to vote for the election of directors or others
charged with comparable duties under applicable law.
3. Forfeiture of 2008 Performance Award. If the Participant ceases to serve as Chairman
pursuant to Section 4(b) of the Service Agreement, all unvested Performance Units as of the date
Participant no longer serves as Chairman shall be forfeited.
4. Determination of Final Value of Performance Units. The Committee shall, as soon as
practicable after the close of the 2008-2010 Performance Period, determine the final value of each
Performance Unit granted hereunder in accordance with the 2008 Performance Award: Goals and
Measures (a copy of which has been furnished to the Participant). Such final value may range from
$0 to $125.
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5. Settlement and Payment.
(a) Unless paid earlier pursuant to Sections 5(b) or 5(c) below, payment of 2008
Performance Awards that vest by reason of Subparagraph 2(a) or 2(b) of this Agreement shall
be made as soon as administratively practicable after the close of the 2008-2010 Performance
Period. In no event shall such payment be made later than the 15th day of the third
calendar month following the calendar month that includes the close of the 2008-2010
Performance Period. In the event a Change of Control occurs during the 2008-2010
Performance Period, the amount of such payment shall be determined as if each Performance
Goal had been satisfied at the Target Level.
(b) Upon Participant ceasing to serve as Chairman pursuant to Section 4(b) of the
Service Agreement, the portion of the 2008 Performance Award that has vested by reason of
Subparagraph 2(b) shall be paid as soon as administratively practicable after such cessation
of service as if each Performance Goal had been satisfied at the Target Level, with no
reduction for such date occurring prior to the close of the 2008-2010 Performance Period.
In no event shall such payment be made later than the 15th day of the third calendar month
following the calendar month that includes the date of such cessation of service.
(c) Upon Participant ceasing to serve as Chairman pursuant to Section 4(a) of the
Service Agreement, the entire 2008 Performance Award shall be paid as soon as
administratively practicable after such cessation of service as if each Performance Goal had
been satisfied at the Maximum Level, with no reduction for such date occurring prior to the
close of the 2008-2010 Performance Period. In no event shall such payment be made later
than the 15th day of the calendar month following the calendar month that includes the date
of such cessation of service.
(d) Settlement of all 2008 Performance Awards will be made by payment in cash.
6. Notices. Unless the Company notifies the Participant in writing of a different procedure,
any notice or other communication to the Company with respect to this Agreement or the Plan shall
be in writing addressed to the Corporate Secretary of the Company and shall be: (a) by registered
or certified United States mail, postage prepaid, to 00000 XX 000, Xxxxxxx, Xxxxx 00000-0000; or
(b) by hand delivery or otherwise to 00000 XX 000, Xxxxxxx, Xxxxx 00000-0000. Any such notice
shall be deemed effectively delivered or given upon receipt.
Notwithstanding the foregoing, in the event that the address of the Company’s principal
executive offices is changed prior to the date of any exercise of this 2008 Performance Award,
notices shall instead be made pursuant to the foregoing provisions at the then current address of
the Company’s principal executive offices.
Any notice or other communication to the Participant with respect to this Agreement or the
Plan shall be given in writing and shall be deemed effectively delivered or given upon receipt or,
in the case of notices mailed by the Company to the Participant, five days after deposit in the
United States mail, postage prepaid, addressed to the Participant at the address specified at the
end of this Agreement or at such other address as the Participant hereafter designates by written
notice to the Company.
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7. Assignment of 2008 Performance Award. Except as otherwise permitted by the Committee and
as provided in the immediately following paragraph, the Participant’s rights under the Plan and
this Agreement are personal, and no assignment or transfer of the Participant’s rights under and
interest in this 2008 Performance Award may be made by the Participant other than by a domestic
relations order. This 2008 Performance Award is payable during his lifetime only to the
Participant, or in the case of the Participant being mentally incapacitated, this 2008 Performance
Award shall be payable to his guardian or legal representative.
The Participant may designate a beneficiary or beneficiaries (the “Beneficiary”) to whom the
2008 Performance Award under this Agreement, if any, will pass upon the Participant’s death and may
change such designation from time to time by filing with the Company a written designation of
Beneficiary on the form attached hereto as Exhibit A, or such other form as may be prescribed by
the Committee; provided that no such designation shall be effective unless so filed prior to the
death of the Participant and no such designation shall be effective as of a date prior to receipt
by the Company. The Participant may change his Beneficiary without the consent of any prior
Beneficiary by filing a new designation with the Company. The last such designation that the
Company receives in accordance with the foregoing provisions will be controlling. Following the
Participant’s death, the 2008 Performance Award, if any, will pass to the designated Beneficiary
and such person will be deemed the Participant for purposes of any applicable provisions of this
Agreement. If no such designation is made or if the designated Beneficiary does not survive the
Participant’s death, the 2008 Performance Award shall pass by will or, if none, then by the laws of
descent and distribution.
8. Withholding. The Company’s obligations under this Agreement shall be subject to the
satisfaction of all applicable federal, state and local income and employment tax withholding
requirements (the “Required Withholding”). The Company may withhold an appropriate amount of cash
necessary to satisfy the Participant’s Required Withholding, and deliver the remaining amount of
cash to the Participant, unless the Participant has made arrangements with the consent of the
Company for the Participant to deliver to the Company cash, check, other available funds or shares
of previously owned Common Stock for the full amount of the Required Withholding by 5:00 p.m.
Central Standard Time on the date an amount is included in the income of the Participant. The
amount of the Required Withholding and the number of shares to satisfy the Participant’s Required
Withholding shall be based on the Fair Market Value of the shares on the date prior to the
applicable date of income inclusion.
9. Successors and Assigns. This Agreement shall bind and inure to the benefit of and be
enforceable by the Participant, the Company and their respective permitted successors and assigns
(including personal representatives, heirs and legatees), except that the Participant may not
assign any rights or obligations under this Agreement except to the extent and in the manner
expressly permitted in Section 7 of this Agreement.
10. No Service as Chairman Guaranteed. No provision of this Agreement shall confer any right
upon the Participant to serve as Chairman.
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11. Qualified Performance Awards. The Performance Units and the related 2008 Performance
Award granted hereunder are intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code. The Committee shall take such action as necessary to so qualify such
2008 Performance Award under the provisions of Section 162(m) and the related regulations and
Treasury pronouncements. No action taken to comply with Section 162(m) shall be deemed to impair a
benefit under this Agreement.
12. Code Section 409A Compliance. If any provision of this Agreement would result in the
imposition of an additional tax under Section 409A of the Code and related regulations and Treasury
pronouncements (“Section 409A”), that provision will be reformed to avoid imposition of the
additional tax and no action taken to comply with Section 409A shall be deemed to impair a benefit
under this Agreement.
13. Participant Limit. The 2008 Performance Award made hereunder shall not be in an amount
greater than $5,000,000 for any Participant.
14. Governing Law. This Agreement shall be governed by, construed, and enforced in accordance
with the laws of the State of Texas, excluding any choice of law provision thereof that would
result in the application of the laws of any other jurisdiction.
15. Amendment. Except as set forth herein, this Agreement cannot be modified, altered or
amended except by an agreement, in writing, signed by both the Company and the Participant.
| OCEANEERING INTERNATIONAL, INC. |
||||
| Award Date: February 22, 2008 | By: | |||
| Xxxxxx X. Xxxxxxxxxxx, Xx. | ||||
| Senior Vice President, General Counsel and Secretary | ||||
The Participant hereby accepts the foregoing 2008 Performance Unit Agreement, subject to the
terms and provisions of the Plan and administrative interpretations thereof referred to above.
| PARTICIPANT: | ||||||||
Date: |
||||||||
| Participant’s Address: | ||||||||
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Exhibit A to 2008 Chairman
Performance Unit Agreement
Performance Unit Agreement
Designation of Beneficiary
I, (“Participant”), hereby declare that upon my death,
(the “Beneficiary”) of (address), who is my (relationship), will be entitled to the 2008 Performance Award which may
become payable under the Plan and all other rights accorded the Participant under the Participant’s
2008 Performance Unit Agreement (capitalized terms used but not defined herein have the respective
meanings assigned to them in such agreement).
It is understood that this designation of Beneficiary is made pursuant to the Agreement and is
subject to the conditions stated therein, including the Beneficiary’s survival of Participant. If
any such condition is not satisfied, such rights shall devolve according to the Participant’s last
will and testament, or if none, then the laws of descent and distribution.
It is further understood that all prior designations of beneficiary under the Agreement are
hereby revoked upon the filing of this designation with the Company. This designation of
Beneficiary may only be revoked in writing, signed by the Participant, and filed with the Corporate
Secretary of the Company prior to the Participant’s death.
| Date |
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