Document:

exv10w4

 

Exhibit 10.4

NON-QUALIFIED STOCK OPTION AGREEMENT

UNDER THE

PHI, INC.

1995 INCENTIVE COMPENSATION PLAN

     THIS AGREEMENT is entered into as of ___, by and between PHI, Inc., a Louisiana
corporation (“PHI”), and ___ (“Optionee”).

     WHEREAS Optionee is a key employee of PHI or one of its subsidiaries (collectively, the
“Company”) and PHI considers it desirable and in its best interest that Optionee be given an
inducement to acquire a proprietary interest in PHI and an incentive to advance the interests of
PHI by possessing an option to purchase shares of the voting common stock, $.10 par value per
share, of PHI (the “Common Stock”) under the PHI, Inc. 1995 Incentive Compensation Plan (the
“Plan”), which was adopted by the Board of Directors of PHI on May 31, 1995, and will be submitted
to the shareholders for approval at PHI’s next annual meeting of shareholders;

     NOW, THEREFORE, in consideration of the premises, it is agreed as follows:

1.

Grant of Option

     1.1
PHI hereby grants to Optionee effective ___ (the “Date of Grant”) the right,
privilege and option to purchase ___ shares of Common Stock (the “Option”) at an exercise prices
of $ ___ per share (the “Exercise Price”). The Option shall vest, become exercisable and expire as
provided in Sections 2 and 3 below.

     1.2 The Option is a non-qualified stock option and shall not be treated as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended.

2.

Vesting of Option

     2.1 Effective ___, the Compensation Committee of the Board of Directors of PHI (the
“Committee”) shall make a determination as to the portion of the Option that is vested as follows:

     (a) Company Performance Goals

     (1) If the Company’s consolidated earnings before income taxes for the fiscal year
ending ___, as adjusted by the Committee for extraordinary items (“Actual
Operating Income”), equals the consolidated earnings before income taxes reflected in the
Company’s annual budget for the fiscal year ending ___

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	 	 	(“Budgeted Operating Income”), the Option shall vest with respect to ___of the
shares covered thereby.

     (2) If Actual Operating Income exceeds Budgeted Operating Income, the Option shall vest
with respect to an additional ___ shares for each _% by which Actual Operating Income
exceeds Budgeted Operating Income, up to a maximum of ___ additional shares.

     (3) If Actual Operating Income is less than Budgeted Operating Income, but is between
___% and ___% of Budgeted Operating Income, then the Option shall vest with respect to ___
shares, less ___shares for each _% or fraction of _% by which Actual Operating Income is
less than Budgeted Operating Income.

     (4) If Actual Operating Income is less than ___% of Budgeted Operating Income, no
portion of the Option shall vest based upon Company performance.

(b) Individual Performance

     The
Option may vest with respect to up to an additional ___ shares in the discretion
of the Compensation Committee based on an evaluation of the Optionee’s performance for the
year.

     2.2 All unvested Options or portions thereof shall be forfeited.

3.

Time of Exercise

     3.1 Subject to the provisions of the Plan and Section 2 hereof, the Optionee shall be entitled
to exercise the vested portion of the Option with respect to ___% of the shares beginning
___ and with respect to the remaining ___% of the shares beginning ___.

     3.2 The Option shall expire and may not be exercised later than ten years following the Date
of Grant.

     3.3 Notwithstanding the foregoing, the Option shall become accelerated and immediately
exercisable to the extent vested if (a.) Optionee dies while he is employed by the Company (b.)
Optionee becomes disabled within the meaning of Section 22(e)(3) of the Code (“Disability”) while
he is employed by the Company, (c.) Optionee retires from employment with the Company on or after
attaining the age of 65 or is granted early retirement by a vote of the Board of Directors
(“Retirement”) or (d.) pursuant to the provisions of the Plan.

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4.

Conditions for Exercise of Option

     During Optionee’s lifetime, the Option may be exercised only by him or by his guardian or
legal representative. The Option must be exercised while Optionee is employed by the Company, or,
to the extent exercisable at the time of termination of employment, within 190 days of the date on
which he ceases to be an employee, except that (a.) if he ceases to be an employee because of
Retirement or Disability, the Option may be exercised within three years from the date on which he
ceases to be an employee, (b.) if an Optionee’s employment is terminated for cause, the
unexercised portion of the Option is immediately terminated, and (c.) in the event of Optionee’s
death, the Option may be exercised by his estate, or by the person to whom such right devolves from
him by reason of his death within two years after the date of his death; provided, however, that
no Option may be exercised later than 10 years after the Date of Grant.

5.

Additional Conditions

     Anything in this Agreement to the contrary notwithstanding, if at any time PHI further
determines, in its sole discretion, that the listing, registration or qualification (or any
updating of any such document) of the shares of Common Stock issuable pursuant to the exercise of
an Option is necessary on any securities exchange or under any federal or state securities or blue
sky law, or that the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the issuance of shares of Common Stock pursuant
thereto, or the removal of any restrictions imposed on such shares, such shares of Common Stock
shall not be issued, in whole or in part, unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not acceptable to PHI.

6.

No Contract of Employment Intended

     Nothing in this Agreement shall confer upon Optionee any right to continue in the employ of
the Company or to interfere in any way with the right of PHI to terminate Optionee’s employment
relationship with the Company at any time.

7.

Taxes

     The Company may make such provisions as it may deem appropriate for the withholding of any
federal, state and local taxes that it determines are required to be withheld on the exercise of
the Option.

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8.

Binding Effect

     This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators and successors.

9.

Inconsistent Provisions

     The Option granted hereby is subject to the provisions of the Plan. If any provision of this
Agreement conflicts with a provision of the Plan, the Plan provision shall control.

10.

Adjustments to Options

     Appropriate adjustments shall be made to the number and class of shares of Common Stock
subject to the Option and to the exercise price in certain situations described in Section 12.6 of
the Plan.

11.

Termination of Option

     The Committee, in its sole discretion, may terminate the Option. However, no termination may
adversely affect the rights of Optionee to the extent that the Option is currently vested on the
date of such termination.

     IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed as of the day
and year first above written.

By: PHI, INC.

4exv10w5

 

Exhibit 10.5

PETROLEUM HELICOPTERS, INC.

OFFICER DEFERRED COMPENSATION PLAN II

	1.	 	Purpose. The purpose of the Petroleum Helicopters, Inc. Officer Deferred
Compensation Plan II (the “Plan”) is to provide certain officers of Petroleum Helicopters,
Inc. and its subsidiaries and affiliates (hereinafter collectively referred to as “PHI”)
designated by the Compensation Committee of the Board of Directors of Petroleum Helicopters,
Inc. with an opportunity to defer compensation earned in calendar years beginning on and after
January 1, 2005, to assist said officers in their individual financial planning. This Plan is
intended to be an unfunded nonqualified deferred compensation plan maintained primarily for
the purpose of providing deferred compensation for a select group of management or highly
compensated employees within the meaning of Sections 2.01(2), 3.01(a)(3) and 401(a)(1) of
ERISA. It shall be maintained, interpreted and administered in accordance with Internal
Revenue Code Section 409A and applicable regulations and rulings.

	2.	 	Effective Date and Term of Plan. The effective date of the Plan is January 1, 2005,
and the Plan shall remain in effect until terminated by the Board.

	3.	 	Duties of General Administration Vested in Committee. The general administration of
the Plan shall be the responsibility of the Committee. The Committee shall have full
discretionary power and authority necessary or appropriate to enable it to carry out its
administrative duties, including but not limited to: the power to make rules and regulations
relating to the Plan; the power to construe and interpret the Plan and to determine all
questions that arise thereunder; the power to determine all questions of the eligibility,
rights and status of Participants and others under the Plan; the power to determine from time
to time the method for crediting earnings and losses on Accounts; and the power to review and
decide all disputes arising under the provisions of the Plan. The Committee may delegate its
rights and duties under this Plan, including administration of the Plan. The Committee may
also delegate responsibility for maintenance of each Account to a director or officer of the
Company other than the Participant with respect to whom any such Account is maintained or to
an unrelated third party. The Committee shall have the broadest discretion with respect to
interpretation and amendment of the Plan to ensure its compliance with applicable law.

	4.	 	Definitions.

	 	4.1.	 	“Account” means the notational account established by the Committee with
respect to each Participant pursuant to Section 6.
	 
	 	4.2.	 	“Beneficiary” means the person or persons, including a trust, last designated
by a Participant, by written notice filed with the Committee, as the recipient of any
benefits payable under the Plan with respect to such Participant after his or her
death. If a Participant fails to designate a Beneficiary, or if no designated

 

 

	 	 	 	Beneficiary survives the Participant, then the Beneficiary shall be the
Participant’s estate.

	 	4.3.	 	“Beneficiary Designation Form” means a Beneficiary Designation Form in the form
attached hereto as Exhibit B, as it may be revised by the Committee from time
to time. Any designation of a Beneficiary shall be made by the Participant on a
Beneficiary Designation Form filed with the Committee, and may be changed by the
Participant at any time by filing a new Beneficiary Designation Form.
	 
	 	4.4.	 	“Board” means the Board of Directors or similar governing body of the Company.
	 
	 	4.5.	 	“Bonus Compensation” means cash bonuses payable by the Company which may
include Performance-Based Compensation payable with respect to a specified calendar
year.
	 
	 	4.6.	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	4.7.	 	“Committee” means the Compensation Committee of the Board of Directors of the
Company.
	 
	 	4.8.	 	“Company” means Petroleum Helicopters, Inc.
	 
	 	4.9.	 	“Compensation” means the Participant’s base pay as reflected on the Company’s
payroll records, excluding all other types of remuneration such as, but not limited to,
Bonus Compensation or any benefits or special allowances.
	 
	 	4.10.	 	“Deferral Election Form” means a Deferral Election Form in the form attached
hereto as Exhibit A, as it may be revised by the Committee from time to time.
	 
	 	4.11.	 	“Deferred Compensation” means the aggregate amount of all Compensation and
Bonus Compensation that the Participant elects to defer from time to time under the
Plan.
	 
	 	4.12.	 	“Disabled” means with respect to a Participant:

	 	(a)	 	being unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or
	 
	 	(b)	 	having received income replacement benefits for a period of not
less than 3 months under an accident and health plan of the Company by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months,

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	 	4.13.	 	“Eligible Employee” means an officer of the Company designated by the
Committee as eligible to participate in the Plan.
	 
	 	4.14.	 	“Eligible Securities” means the investments selected by the Committee which
may be chosen by a Participant to measure gains and loss on Deferred Compensation.
	 
	 	4.15.	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	 	4.16.	 	“Key Employee” means an employee of a publicly-traded company who is
determined to be a key employee under Internal Revenue Code Section 416(i).
	 
	 	4.17.	 	“Participant” means an Eligible Employee who participates in the Plan in
accordance with Article 5.
	 
	 	4.18.	 	“Payment Commencement Date” means the date elected by the Participant in
accordance with Article 6, on which the Account will begin to be paid to the
Participant.
	 
	 	4.19.	 	“Payment Election Form” means a Payment Election Form in the form attached
hereto as Exhibit C, as it may be revised by the Committee from time to time.
	 
	 	4.20.	 	“Performance-Based Compensation” means compensation based on services
performed by the Participant over a period of at least 12 months that is

	 	(a)	 	variable and contingent on the satisfaction of pre-established
organizational or individual performance criteria, and
	 
	 	(b)	 	not readily ascertainable at the time of election, and will be
determined based on the rules and regulations issued by the Secretary of the
Treasury.

	 	4.21.	 	“Rabbi Trust” means the trust attached as Exhibit D which is intended
to satisfy the requirements of Revenue Procedure 92-64.
	 
	 	4.22.	 	“Unforeseeable Emergency” means a severe financial hardship to the
Participant, resulting from:

	 	(a)	 	an illness or accident of the Participant, the Participant’s
spouse, or a dependent (as defined in Code Section 152(a));
	 
	 	(b)	 	loss of the Participant’s property due to casualty; or
	 
	 	(c)	 	other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.

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	5.	 	Election to Defer Compensation and Bonus Compensation.

	 	5.1.	 	Deferral Election Amount. Each Participant may elect to defer up to
twenty-five percent (25%) of his Compensation in one percent (1%) increments and up to
one hundred percent (100%) of any Bonus Compensation received for services provided to
PHI in one percent (1%) increments up to twenty-five (25%) of said bonus and in five
percent (5%) increments thereafter.
	 
	 	5.2.	 	Deferral Election Form.

	 	(a)	 	An election to defer Compensation and Bonus Compensation shall
be made by the Participant on a Deferral Election Form. Deferrals shall be
effective only if the Participant executes a Deferral Election Form and such
Deferral Election Form is received by the Committee prior to January 1 of the
calendar year for which the election is to be effective.
	 
	 	(b)	 	If a Participant first becomes eligible to participate in the
Plan after January 1 of a particular year, he may, in that year only, make an
election to defer Compensation or Bonus Compensation to be paid for services
that he will perform after the date of said election and until the end of such
year, within thirty (30) days after the date on which such officer becomes
eligible to participate in the Plan.
	 
	 	(c)	 	A Participant shall make a new deferral election with respect
to each calendar year for which he wishes to defer Compensation or Bonus
Compensation by completing and returning a Deferral Election Form to the
Committee in accordance with paragraph (a) above.

	 	5.3.	 	Revocation of Election. A Participant’s election made pursuant to Section 5.2
may be revoked only if such revocation is in writing and received by the Committee
prior to January 1 of the calendar year for which the election is made. Any such
revocation shall also be subject to such other rules as may be established by the
Committee. If a Participant revokes an election to defer Compensation, he may not
again elect to participate in the Plan for the calendar year for which the election was
revoked. On and after January 1 of a calendar an election is irrevocable.
	 
	 	5.4.	 	Election as to Time and Form of Payment. Not later than the date an Eligible
Employee files a Deferral Election Form with the Committee, the Eligible Employee also
may file a Payment Election Form. Participants shall elect on the Payment Election
Form to have the payment of the Account commence upon:

	 	(a)	 	Attainment of an age not younger than 50 and not older than 70; or
	 
	 	(b)	 	Termination of the Participant’s employment with the Company.

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	 	 	 	Participants also may elect to have payments made in either a single lump sum
payment or annual installments over a specified period not to exceed 20 years.
	 
	 	 	 	Except as provided in Section 5.5, all elections made pursuant to this section shall
be irrevocable.
	 
	 	 	 	Notwithstanding the foregoing, the Company reserves the right to modify a
Participant’s election in any manner to the extent necessary to comply with
applicable representations and rulings.

	 	5.5.	 	Changes in Time and Form of Payment. Deferral Election Forms. A Participant
may make a subsequent election to change the time or form of payment but such election
is effective only if:

	 	(a)	 	Such election is not effective for at least 12 months after the
date the election is made;
	 
	 	(b)	 	The first payment with respect to which the election is made is
deferred for at least 5 years from the date such payment, would otherwise have
been made; and
	 
	 	(c)	 	The election is made not less than 12 months prior to the date
of the first scheduled payment.

	 	 	 	The acceleration of the time or schedule of any payment under the Plan is not
permitted, except as provided in regulations issued by the Secretary of the
Treasury.

	6.	 	Deferred Compensation Accounts.

	 	6.1.	 	Establishment of Deferred Compensation Accounts. A separate Account shall be
established for each Participant’s Deferred Compensation. Each Account shall be deemed
to have been invested and reinvested from time to time in such Eligible Securities as
the Participant shall designate. Accounts shall periodically be adjusted for gains or
losses to reflect the investment performance of the Eligible Securities and any
payments made to a Participant under the Plan.
	 
	 	6.2.	 	Unfunded Plan.

	 	(a)	 	This Plan is an unfunded arrangement, maintained primarily to
provide deferred compensation benefits to Participants. Should the Company
elect to set aside assets for any obligations under this Plan outside the Rabbi
Trust through the purchase of mutual funds, such assets shall not constitute
funding for the Plan, shall be owned by the Company and shall be subject to the
claims of the Company’s creditors. The Company

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	 	 	 	reserves the right in its sole and absolute discretion to sell any such
assets, in whole or in part, at any time. Notwithstanding anything to the
contrary contained herein, the Company shall not be required to purchase,
set aside or segregate assets of any kind to meet any obligations that it
may have hereunder; and any obligations of the Company to pay benefits
hereunder shall be an unsecured promise only, and a Participant’s right to
enforce such obligation shall be solely as a general unsecured creditor of
the Company.
	 
	 	(b)	 	Notwithstanding the foregoing, it is the intention of the
Company to hold assets equal to the value of the Participants’ Accounts in the
Rabbi Trust attached as Exhibit D.

	 	6.3.	 	Distribution of Account.

	 	(a)	 	Except as otherwise provided in this Plan, the value of a
Participant’s Account shall be distributed in either a single lump sum or
annual installments (not to exceed twenty (20) installments), as designated by
the Participant on his Deferral Election Form. Distribution of such amount
shall be made (in the case of a lump sum payment) or commence (in the case of
installment payments) thirty (30) days following the Payment Commencement Date
elected by the Participant on the Deferral Election Form.
	 
	 	(b)	 	If a Participant elects to have the value of his Account
distributed in installments, the amount of the first installment shall be a
fraction of the value of the Account, the numerator of which is one and
denominator of which is the total number of installments elected, and the
amount of each subsequent installment shall be a fraction of the value of the
Account on the date preceding each subsequent payment, the numerator of which
is one and the denominator of which is the total number of installments elected
minus the number of installments previously paid.

	 	6.4.	 	Death Benefits. Upon the death of a Participant either (a) prior to the
Payment Commencement Date or (b) subsequent to the Payment Commencement Date but prior
to the distribution of the full value of the Participant’s Account, the Company shall
distribute to the Beneficiary of such Participant, within 90 days of the death of such
Participant, a lump-sum benefit equal to the remaining balance of the Participant’s
Account, notwithstanding any election made by the Participant on the Deferral Election
Form as to the time and form of payment.
	 
	 	6.5.	 	Benefits for Unforeseeable Emergencies. If a Participant experiences
unforeseen, adverse circumstances that the Committee determines to constitute an
Unforeseeable Emergency, then the Committee, in its sole discretion, may pay to such
Participant, from the Participant’s Account, a lump-sum emergency benefit as soon as
administratively practicable. Any benefits distributable pursuant to this section
shall not exceed the amount that the Committee determines is necessary to

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	 	 	 	defray the costs arising from or attributable to such Unforeseeable Emergency,
including any federal, state or local income taxes reasonably anticipated to result
from such distribution. The Committee shall take into account the extent to which
such hardship is or may be relieved through reimbursement or compensation by
insurance or otherwise or by liquidation of the Participant’s assets (to the extent
the liquidation of such assets would not itself cause severe financial hardship).

	 	6.6.	 	Disabled Participants. A Participant’s Account shall be paid in a lump sum to
the Participant within 90 days of a determination by the Committee that the Participant
is Disabled, notwithstanding any election made by the Participant on the Deferral
Election Form as to the time and form of payment.
	 
	 	6.7.	 	Distribution Restrictions. Notwithstanding anything to the contrary contained
herein, in the case of any Key Employee who separates from service, distributions may
not be made for six months after the date of separation from service. However, Section
6.4 will apply in the event of the Participant’s death.
	 
	 	6.8.	 	Taxes. All federal, state or local taxes that the Plan Administrator
determines are required to be withheld from any payments made pursuant to the Plan
shall be withheld.
	 
	 	6.9.	 	Statement of Account. Each Participant shall be provided with a statement of
his Account not less frequently than one time per year.

	7.	 	No Right to Continue as an Officer or an Employee. Neither this Plan nor any action
taken pursuant to this Plan shall constitute evidence of any agreement or understanding,
express or implied, that the Company will retain a Participant in the capacity of an officer
or as an employee in any capacity for any period of time, or at any particular rate of
Compensation.
	 
	8.	 	Rules of Construction. All pronouns used in the Plan shall include all genders.
Words used in the singular shall be construed to include the plural, where appropriate, and
vice versa. The headings and subheadings in the Plan are inserted for convenience of
reference only and are not to be considered as conclusive in the construction of any provision
of the Plan. The provisions of the Plan shall be construed and governed by the laws of the
State of Louisiana, to the extent not preempted by ERISA.
	 
	9.	 	Amendment, Modification and Termination. The Committee may at any time terminate,
amend or modify this Plan. No amendment, modification or termination of the Plan shall in any
manner adversely affect the amount credited to a Participant’s Account immediately prior to
such amendment, modification or termination. The Committee shall have the right to merge this
Plan with another nonqualified deferred compensation plan or to accept the merger of another
such plan into this one.
	 
	10.	 	Nonalienation of Benefits. No Participant or Beneficiary shall have any power or
right to transfer, assign, anticipate, pledge, hypothecate or otherwise encumber all or any
part

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	 	 	of any amount credited to his Account or any right to payment of benefits hereunder, which
credits, benefits and rights are expressly declared to be nonassignable and nontransferable.

	11.	 	Notices. Unless otherwise expressly provided by applicable federal law, if any, any
notice, consent or demand required or permitted to be given under the provisions of this Plan
shall be in writing and shall be signed by the party giving or making the same. If such
notice, consent or demand is mailed, it shall be sent by United Stats certified mail, postage
prepaid. If the intended recipient is a Participant or Beneficiary, such notice, consent or
demand shall be addressed to such person at such person’s last known address as shown on
Company’s records. If the intended recipient is the Company, such notice, consent or demand
shall be addressed to the Company at its principal place of business at the time of the
mailing of such notice, consent or demand. Unless otherwise expressly provided by applicable
federal law, if any, the date of such mailing shall be deemed the date of such notice, consent
or demand.
	 
	12.	 	Claims Procedure. Any Participant or Beneficiary (“Claimant”) who believes he or she
is entitled to benefits under this Plan that have not been granted, may submit a written claim
for benefits to the Committee which shall be handled in accordance with the Plan’s claim
procedure set forth in Exhibit E.
	 
	13.	 	Waiver and Severability. No waiver of any term shall constitute a continuing waiver
nor shall it constitute a waiver of any other term. The waiver by any party of a breach or
violation of any provision of this Plan shall not operate as, or be construed to constitute, a
waiver of any subsequent breach of the same or any other provision hereof. If a provision of
the Plan is held to be invalid or does not comply with applicable federal law, it shall be
severed from the Plan unless appropriately modified by the Committee.

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