Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
Exchange Act of 1934
Check the appropriate box:
| o | Preliminary Information Statement |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) |
| þ | Definitive Information Statement |
PHI, Inc.
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
| þ | No fee required |
| o | Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11 |
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
| o | Fee paid previously with preliminary materials. |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: |
| (4) | Date Filed: |
TABLE OF CONTENTS
Table of Contents
PHI, Inc.
2001 SE Evangeline Thruway
Lafayette, Louisiana 70508
2001 SE Evangeline Thruway
Lafayette, Louisiana 70508
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 5,
2009
To the Holders of Voting Common Stock of PHI, Inc.:
The 2009 Annual Meeting of Stockholders of PHI, Inc.
(“PHI”) will be held at Lafayette Hilton &
Towers (Cedar Room), 1521 West Pinhook Road, Lafayette,
Louisiana, on Tuesday, May 5, 2009, at 8:00 a.m.,
local time, to:
1. Elect directors.
2. Ratify the appointment of Deloitte & Touche as
PHI’s independent registered public accounting firm for the
fiscal year ending December 31, 2009.
3. Transact such other business as may properly be brought
before the meeting or any adjournments thereof.
Holders of record of PHI’s voting common stock at the close
of business on April 8, 2009 are entitled to notice of and
to vote at the meeting.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT
TO SEND US A PROXY.
By Order of the Board of Directors
Michael J. McCann
Secretary
Secretary
Lafayette, Louisiana
April 15, 2009
Important Notice Regarding the Availability of materials for the
Annual Meeting to be held on May 5, 2009: The
Company’s Information Statement and Annual Report to
Shareholders for the fiscal year ended December 31, 2008
are available at www.proxydocs.com/phii.
Table of Contents
PHI, Inc.
2001 SE Evangeline Thruway
Lafayette, Louisiana 70508
2001 SE Evangeline Thruway
Lafayette, Louisiana 70508
INFORMATION
STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
May 5, 2009
This Information Statement is furnished to holders of voting
common stock (“Voting Stock”) of PHI, Inc.
(“PHI” or “the Company”) at the direction of
its Board of Directors (the “Board”) in connection
with the Annual Meeting of Stockholders of PHI (the
“Meeting”) to be held on May 5, 2009, at the time
and place set forth in the accompanying notice and at any
adjournments thereof.
Holders of record of Voting Stock at the close of business on
April 8, 2009 are entitled to notice of and to vote at the
Meeting. On that date, PHI had outstanding 2,852,616 shares
of Voting Stock, each of which is entitled to one vote, and
12,448,992 shares of non-voting common stock, none of which
are entitled to vote.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT
TO SEND US A PROXY.
This Information Statement is first being mailed to stockholders
on or about April 15, 2009. The cost of preparing and
mailing the statement will be borne by PHI. Banks, brokerage
houses and other nominees or fiduciaries will be requested to
forward the material to their principals, and PHI will, upon
request, reimburse them for their expenses in so doing.
ELECTION
OF DIRECTORS
Our Amended and Restated By-Laws (the “By-laws”)
establish the number of directors constituting the Board and to
be elected at the Meeting at six. Al A. Gonsoulin, our Chairman
of the Board and Chief Executive Officer, holds more than a
majority of PHI’s outstanding Voting Stock, and his vote
alone is sufficient to decide all matters to be voted on at the
Meeting. Mr. Gonsoulin has informed PHI that he intends to
vote all of his shares for (i) the election of the six
persons identified below who have been nominated to serve on our
Board; and (ii) ratifying the appointment of
Deloitte & Touche as our independent registered public
accounting firm for the fiscal year ending December 31,
2009. As a result, the outcome of those votes is assured, no
matter how the other holders of Voting Stock vote their shares.
In the unanticipated event that one or more nominees cannot be a
candidate at the Meeting, or is unwilling to serve, the By-laws
provide that the number of authorized directors will be reduced
automatically by the number of such nominees unless the Board by
a majority vote of the entire Board selects an additional
nominee.
Nomination
of Directors
The Board does not have a nominating committee or other
committee performing similar functions. The Marketplace Rules of
the NASDAQ Stock Market (“NASDAQ ‘”) provide that
a “controlled company” is exempt from having its
director nominees selected by a nominating committee. A
controlled company is defined, in part, as a company of which
more than 50% of the voting power is held by an individual. As
Mr. Gonsoulin owns over 50% of the Company’s Voting
Stock, PHI is a “controlled company” within the
definition of the NASDAQ Marketplace Rules, and the Board
believes that it is appropriate for PHI not to have a nominating
committee. The full Board does, however, approve all nominees,
and a stockholder who wishes for the Board to consider an
individual as a director nominee should communicate that desire
in writing to the Chairman of the Board at the Company’s
address. Similarly, a stockholder who wishes to communicate with
the Board on any other subject should direct such communication
to the Secretary of the Company at the Company’s address.
The Secretary will be responsible for disseminating all such
communications to the Board, or to a specific member of the
Board, as appropriate, depending on the facts described in such
communication.
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In addition to suggesting candidates to the Board, stockholders
may nominate candidates directly by following the Board
nomination procedure set forth in the By-laws. Under this
procedure, a stockholder wishing to make a nomination must
provide written notice to the Company’s Secretary
containing all information about the proposed nominee required
by Regulation 14A under the Securities Exchange Act of
1934, including his or her name, age, business and residence
address, principal occupation or employment, class and number of
shares beneficially owned and entitled to vote at the meeting,
and such nominee’s written consent to be named in the proxy
statement as a nominee and to serve as a director if elected.
Also, the stockholder must include his or her own name, address,
and class and number of shares beneficially owned and entitled
to vote at the meeting. Upon receipt of a stockholder’s
nomination, our Secretary will appoint two independent
inspectors to determine whether these procedures were satisfied.
To be timely, a stockholder’s notice must be addressed to
the Secretary, and delivered to us, or mailed and received by us
not less than 45 nor more than 90 days before the meeting.
If we provide less than 55 days notice of the meeting, that
deadline is extended until the close of business on the
10th day following the date notice was given.
Our Board identifies potential nominees for director, other than
current directors standing for re-election, through business and
other contacts. Our Board does not have a formal policy with
regard to the consideration of director candidates nominated by
our other stockholders. Our Board primarily considers a
nominee’s business experience, career positions held and
particular areas of expertise. There is no difference in the
manner in which the Board evaluates nominees for director based
on whether the nominee is recommended by a stockholder or by a
member of our Board.
Information
about Directors
The following table sets forth certain information as of
April 2, 2009, with respect to each candidate nominated by
the Board, and our executive officers. All director nominees
were recommended by our Chairman of the Board. Unless otherwise
indicated, each person has been engaged in the principal
occupation shown for the past five years. Our Board has
determined, using criteria established by NASDAQ and the
Securities and Exchange Commission (the “SEC”), that
each director nominee other than Messrs. Bospflug and
Gonsoulin is independent.
|
Year First |
||||
|
Became a |
||||
|
Director or |
||||
|
Name and Age
|
Principal Occupation or Position
|
Executive Officer | ||
|
Directors and Nominees
|
||||
|
Al A. Gonsoulin, 66
|
Chairman of the Board and Chief Executive Officer of PHI(1) |
2001 | ||
|
Lance F. Bospflug, 54
|
Chief Operating Officer of PHI(2) | 2001 | ||
|
Arthur J. Breault, Jr., 69
|
Tax lawyer and consultant(3) | 1999 | ||
|
C. Russell Luigs, 76
|
Consultant(4) | 2002 | ||
|
Richard H. Matzke, 72
|
Consultant(5) | 2002 | ||
|
Thomas H. Murphy, 54
|
Member, Murco Oil & Gas, LLC (oil & gas production and investments)(6) |
1999 | ||
|
Executive Officers
|
||||
|
Michael J. McCann, 61
|
Chief Financial Officer and Secretary(7) | 1998 | ||
|
Richard A. Rovinelli, 61
|
Chief Administrative Officer and Director of Human Resources(8) | 1999 | ||
|
William P. Sorenson, 60
|
Director, Corporate Business Development(9) | 1999 |
| (1) | For more than five years, until December 31, 2001, Mr. Gonsoulin was President of the Sea Mar division of Nabors Industries. He acquired a controlling interest in PHI in September 2001, and shortly thereafter became Chairman of PHI’s Board. He was appointed Chief Executive Officer of PHI following Mr. Bospflug’s resignation in May 2004. | |
| (2) | Mr. Bospflug joined PHI in September 2000 as President and was appointed Chief Executive Officer in August 2001. Before joining PHI he was Chief Financial Officer, and from 1999 to 2000 Chief Executive Officer, of T.L. James & Company, Inc. Mr. Bospflug resigned as President and Chief Executive Officer of PHI in May |
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| 2004, and was self-employed until August 2008 when he was employed by PHI for special projects, reporting directly to Mr. Gonsoulin. Effective, February 23, 2009, PHI appointed Mr. Bospflug as Chief Operating Officer. | ||
| (3) | For more than 16 years until 1997, when he retired, Mr. Breault was a partner in Deloitte & Touche LLP, concentrating in tax matters. | |
| (4) | Mr. Luigs retired from GlobalSantaFe, Inc. (formerly Global Marine, Inc.) in September 2002. He was President and Chief Executive Officer of Global Marine from the time he joined that company in 1977 until 1998. He was also Chairman of the Board of Global Marine from 1982 until 1999, and Chairman of the Executive Committee of the Board of Global Marine from 1999 until its merger with Santa Fe International Corporation in 2001. He continued as a Director of GlobalSantaFe until May 2005. | |
| (5) | Mr. Matzke retired from ChevronTexaco, Inc. in February 2002, where he had served as Vice Chairman of the Board since January 2000 and as a member of the Board of Directors since 1997. From November 1989 through December 1999, Mr. Matzke served as President of Chevron Overseas Petroleum Inc., where he was responsible for directing Chevron’s oil exploration and production activities outside of North America. Mr. Matzke was employed by Chevron Corporation and its predecessors and affiliates from 1961 through his retirement in 2002. | |
| (6) | For the last nine years, Mr. Murphy has been a member and co-owner of Murco Oil and Gas, LLC. | |
| (7) | Mr. McCann has served as Chief Financial Officer since November 1998 and our Secretary since March 2002. He previously served as our Treasurer from November 1998 to May 2007. From January 1998 to October 1998, he was the Chief Financial Officer for Global Industries Ltd. and Chief Administrative Officer from July 1996 to January 1998. Prior to that, he was Chief Financial Officer for Sub Sea International, Inc. Mr. McCann is a Certified Public Accountant. | |
| (8) | Mr. Rovinelli joined us in February 1999 as Director of Human Resources and became our Chief Administrative Officer in December 1999. Mr. Rovinelli previously served as Manager, Human Resources for Arco Alaska, Inc., Headquarters Staff Manager, Human Resource Services, Arco Oil and Gas Company, as well as numerous other positions within Arco. | |
| (9) | Mr. Sorenson became our Director of Corporate Business Development in April 2007. He previously served as Director of Marketing and Planning from February 2002 to April 2007, and as Director of International, Aeromedical, and Technical Services from January 2001 to February 2002. He served as our Director of Corporate Marketing/New Business from February 1999 to January 2001 after serving as General Manager of Aeromedical Services from November 1995 to February 1999. |
Meetings
of the Board
During the year ended December 31, 2008, the Board held
four meetings. Each incumbent director attended at least 75% of
the aggregate number of Board and Committee meetings of which he
was a member.
The Board does not have a policy regarding Board member
attendance at the annual stockholders meeting, but such meeting
is normally held in conjunction with a regularly scheduled Board
meeting in order to make attendance at both convenient. All
Board members attended the 2008 annual meeting.
Board
Committees
Our Board has an Audit Committee, whose current members are
Messrs. Breault, Luigs, Matzke and Murphy (Chairman). This
committee, which held four meetings during 2008, is responsible
for performing the responsibilities described in the Audit
Committee Charter.
Because PHI is a “controlled company” within the
definition of the NASDAQ Marketplace Rules, it is not required
to have a compensation committee. Nevertheless, our Board has a
Compensation Committee, whose current members are
Messrs. Breault (Chairman), Luigs, Matzke, and Murphy. This
committee met four times during 2008.
The Audit Committee and Compensation Committee charters can be
found at this web site: www.phihelico.com.
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For the reasons discussed above under the caption
“Nomination of Directors,” the Board does not have a
nominating committee.
Director
Compensation
During 2008, each director other than Mr. Gonsoulin
received an annual retainer of $50,000. Additionally, each such
director received a meeting fee of $3,000 for each Board or
Committee meeting attended in person and $1,000 for each meeting
attended by telephone. Committee chairs received an additional
$1,000 per meeting. Director compensation is determined by
reviewing compensation levels at similar size companies. For
2009, the committee meeting fee will be $5,000, board meeting
fee $8,000 and Committee chair fee $2,000 per meeting attended.
The table below summarizes the compensation paid by the Company
to non-employee directors for the fiscal year ended
December 31, 2008.
|
Fees earned or |
All Other |
|||||||||||||||
|
paid in cash |
Compensation |
Total |
||||||||||||||
|
Name(1)
|
($) | ($) | ($) | |||||||||||||
|
Lance F.
Bospflug(2)
|
56,167 | 170,928 | (3) | 227,095 | ||||||||||||
|
Arthur J. Breault, Jr.
|
90,000 | 0 | 90,000 | |||||||||||||
|
C. Russell Luigs
|
86,000 | 0 | 86,000 | |||||||||||||
|
Richard H. Matzke
|
86,000 | 0 | 86,000 | |||||||||||||
|
Thomas H. Murphy
|
90,000 | 0 | 90,000 | |||||||||||||
| (1) | Al A. Gonsoulin, the Company’s Chairman of the Board and Chief Executive Officer is not included in this table as he is an employee of the Company and receives no compensation for his service as a director. | |
| (2) | Lance F. Bospflug was employed by the Company, effective, August 1, 2008 and received no board fees following his employment. | |
| (3) | Represents Mr. Bospflug’s salary and amounts earned under the executive incentive compensation plan with respect to 2008, from his employment date of August 1, 2008. |
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires our directors, executive officers and 10% stockholders
to file with the SEC reports of ownership and changes in
ownership of our equity securities. Based solely on a review of
copies of such forms, or written representations that no filings
were required, we believe that all reports were filed on a
timely basis during fiscal 2008.
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STOCK
OWNERSHIP
Stock
Ownership of Directors and Executive Officers
The following table sets forth certain information concerning
the beneficial ownership of each class of outstanding PHI common
stock as of April 1, 2009 held by (a) each director
and nominee for director of PHI, (b) each executive officer
identified below under “Named Executive Officers” and
(c) all directors and executive officers of PHI as a group,
determined in accordance with
Rule 13d-3
of the SEC. Unless otherwise indicated, the securities shown are
held with sole voting and investment power, and are not pledged.
|
Amount and Nature |
||||||||||
|
Class of PHI |
of Beneficial |
Percent |
||||||||
|
Name of Beneficial Owner
|
Common Stock | Ownership(1) | of Class | |||||||
|
Directors and Nominees
|
||||||||||
|
Al A. Gonsoulin
|
Voting | 1,500,580 | 52.6 | % | ||||||
| Non-Voting | 530,000 | 4.3 | % | |||||||
|
Lance F. Bospflug
|
Voting | 0 | * | |||||||
| Non-Voting | 0 | * | ||||||||
|
Arthur J. Breault, Jr.
|
Voting | 0 | * | |||||||
| Non-Voting | 5,060 | * | ||||||||
|
C. Russell Luigs
|
Voting | 10,000 | * | |||||||
| Non-Voting | 10,000 | * | ||||||||
|
Richard H. Matzke
|
Voting | 0 | * | |||||||
| Non-Voting | 0 | * | ||||||||
|
Thomas H. Murphy
|
Voting | 6,000 | * | |||||||
| Non-Voting | 8,000 | * | ||||||||
|
Named Executive Officers(1)
|
||||||||||
|
Michael J. McCann
|
Voting | 0 | * | |||||||
| Non-Voting | 0 | * | ||||||||
|
Richard A. Rovinelli
|
Voting | 0 | * | |||||||
| Non-Voting | 0 | * | ||||||||
|
William P. Sorenson
|
Voting | 0 | * | |||||||
| Non-Voting | 0 | * | ||||||||
|
All directors and executive officers as a group
(9 persons)
|
Voting | 1,516,580 | 53.2 | % | ||||||
| Non-Voting | 553,060 | 4.4 | % | |||||||
| * | Less than one percent. | |
| (1) | Information on Mr. Gonsoulin’s ownership is included under “Directors and Nominees” above. |
Stock
Ownership of Certain Beneficial Owners
The following table shows the number of shares of PHI voting and
non-voting common stock beneficially owned as of April 1,
2009 by persons known by us to beneficially own more than 5% of
the outstanding shares of PHI’s voting or non-voting common
stock, determined in accordance with
Rule 13d-3
of the SEC. The information in the table is based on a review of
such holders’ filings of Schedules 13D and 13G and
Form 13F with the SEC. Each person listed below has sole
voting and investment power with respect to the shares
beneficially owned unless otherwise stated.
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|
Amount and Nature |
||||||||||
|
Class of PHI Common |
of Beneficial |
Percent |
||||||||
|
Name and Address of Beneficial Owner
|
Stock | Ownership | of Class | |||||||
|
Al A. Gonsoulin
|
||||||||||
|
2001 S.E. Evangeline Thruway
|
Voting | 1,500,580 | 52.6 | % | ||||||
|
Lafayette, Louisiana 70508
|
Non-Voting | 530,000 | 4.3 | % | ||||||
|
Wells Fargo & Company
|
||||||||||
|
420 Montgomery Street
|
Voting | 224,223 | (1) | 7.86 | % | |||||
|
San Francisco, CA 94104
|
Non-Voting | 0 | * | |||||||
|
Wells Capital Management Incorporated
|
||||||||||
|
525 Market Street
|
Voting | 205,050 | (2) | 7.19 | % | |||||
|
San Francisco, CA 94105
|
Non-Voting | 1,098,929 | 8.83 | % | ||||||
|
Barclays Global Investors AG
|
||||||||||
|
Apiansrasse 6 D-85774
|
Voting | 0 | * | |||||||
|
Unterfohring, Germany
|
Non-Voting | 827,420 | 6.65 | % | ||||||
|
St. Dennis J. Villere & Company, L.L.C.
|
||||||||||
|
601 Poydras St., Suite 1808
|
Voting | 243,169 | (3) | 8.52 | % | |||||
|
New Orleans, Louisiana 70130
|
Non-Voting | 1,399,899 | (4) | 11.25 | % | |||||
|
Kensico Capital Management Corporation
|
||||||||||
|
55 Railroad Avenue, 2nd Floor
|
Voting | 252,326 | 8.85 | % | ||||||
|
Greenwich, CT 06830
|
Non-Voting | 39,940 | * | |||||||
|
Woodbourne Partners, L.P.
|
||||||||||
|
200 N. Broadway, Suite 825
|
Voting | 223,765 | (5) | 7.84 | % | |||||
|
St. Louis, Missouri
|
Non-Voting | 0 | * | |||||||
|
Baron Investment Funds Trust
|
||||||||||
|
767 Fifth Avenue
|
Voting | 0 | * | |||||||
|
New York, NY
|
Non-Voting | 1,357,500 | 10.90 | % | ||||||
|
Dimensional Fund Advisors LP
|
||||||||||
|
1299 Ocean Avenue
|
Voting | 0 | * | |||||||
|
Santa Monica, CA 90401
|
Non-Voting | 958,012 | 7.7 | % | ||||||
|
Franklin Resources, Inc.
|
||||||||||
|
One Franklin Parkway
|
Voting | 95,100 | * | |||||||
|
San Mateo, CA 94403
|
Non-Voting | 970,499 | 7.80 | % | ||||||
| * | Less than five percent. | |
| (1) | Wells Fargo & Company has sole voting power with respect to 221,233 of these shares and sole investment power with respect to 209,623 of these shares. | |
| (2) | Wells Capital Management Incorporated has sole voting power with respect to 73,990 of these shares and sole investment power with respect to 205,050 shares. | |
| (3) | St. Denis J. Villere & Company has shared voting and investment power with respect to all of these shares with its clients as an investment advisor. | |
| (4) | St. Denis J. Villere & Company has shared investment power with respect to 1,290,699 of these shares with its clients as investment advisor and sole investment power with respect to the remaining 109,200 shares. | |
| (5) | John D. Weil, the president, sole director and sole stockholder of Clayton Management Company, the general partner of Woodbourne Partners, L.P., has sole voting and investment power with respect to these shares. |
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EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Compensation
Philosophy and Objectives
The objective of our executive compensation policy is to:
| • | Produce long-term success for our stockholders | |
| • | Align executive incentive compensation with the company’s annual and long-term goals | |
| • | Provide competitive compensation and benefits to attract, retain, and motivate top quality executives |
These objectives strive to reward the achievement of goals
tailored to the executive’s area of responsibility and
recognizes individual leadership.
Compensation for our executive officers includes base salary, an
annual incentive bonus opportunity, and a deferred compensation
plan. The executives also participate in benefit plans generally
available to our other salaried employees, including our 401(k)
plan and health, dental, and life insurance.
Process
The executive compensation program is administered by the
Compensation Committee of the Board in accordance with the
Compensation Committee’s charter.
The Compensation Committee has retained FreeGulliver, LLC
(“FreeGulliver”) as an independent compensation
consultant regarding executive compensation matters. As an
advisor, FreeGulliver is retained directly by the Compensation
Committee. All assignments given to FreeGulliver are made by the
Compensation Committee, and the Compensation Committee has the
ability to terminate FreeGulliver’s services at any time.
The Compensation Committee retained FreeGulliver to provide the
following compensation consulting services on an ongoing basis:
| • | Provide peer group compensation data to assist the Committee in establishing executive compensation | |
| • | Assist in the formulation of annual incentive-based awards | |
| • | Make recommendations regarding competitive compensation levels | |
| • | Facilitate a leadership succession process |
The Compensation Committee relies on Watson Wyatt surveys and
peer group data for competitive compensation analysis, which is
compiled for the Compensation Committee by FreeGulliver. The
consultants at FreeGulliver provide a comparison of our
executive compensation with a peer group made up of four
companies in related industries, and a larger survey of service
companies with similar revenues, number of employees or
geographical location. The comparison also considers the scope
and nature of managerial responsibility and reporting
relationships. In the fourth quarter of each year, the
Compensation Committee reviews the comparison data and
recommends salary rates for the upcoming year. Based on this
data, the Compensation Committee established its 2008 target
salary levels at approximately the 60th percentile of
companies in these peer groups in accordance with
recommendations provided by FreeGulliver.
The peer group used in the compensation analysis discussed above
is Bristow Group, Inc., Seacor Holdings, Inc., Air Methods
Corporation, and CHC Helicopter Corporation.
The Compensation Committee believes that its selected salary
target level is consistent with our philosophy of providing
compensation that is competitive with companies that could
attract our executives. The Compensation Committee also
established annual incentive bonus target opportunities,
discussed below, as a percentage of base salary.
The Compensation Committee reviews and approves all compensation
targets and payments for our executive officers. Except with
respect to his own compensation, the CEO may make adjustments to
the compensation based
7
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on an individual’s performance and contributions to the
Company’s performance, subject to reporting any such
adjustments to the Compensation Committee. The compensation of
the CEO is determined by the Compensation Committee.
Elements
of Executive Compensation
Our executive total compensation is a mix of base salary, annual
incentive compensation, and employee benefits. It is the
objective of this mix of components to instill in our executives
the importance of achieving our business goals and thereby
increase stockholder value.
Salary. Salary is based generally upon
the level of responsibility of each executive officer and the
individual’s prior performance. Salary levels are generally
targeted at the 60th percentile of salaries paid by
companies with similar revenues and similar numbers of employees
that are included in the broad Watson Wyatt surveys. The
Committee also considers the salary levels of the peer group
companies as support for its decisions on salary. Base salaries
are approved by the Committee after consideration of the data
described above and the recommendation of FreeGulliver. Base
salary also provides the foundation upon which incentive
opportunities are established.
Annual Incentive Compensation. The
Committee approved a Senior Management Bonus Plan (the
“Annual Incentive Plan” or “AIP”) in
calendar year 2004, in which the Company’s executive
officers participate. As implemented by the Committee, the
annual incentive opportunities are based on the position and
scope of responsibilities of the executive. This is used to
provide a targeted percentage of base salary that may be awarded
in the form of an incentive bonus at three levels — a
threshold, a business plan, and a stretch level —
based upon achieving financial targets. In 2008, the Committee
modified the AIP for fiscal 2008 and forward to include
adjustments to the calculated bonus levels if targeted safety
goals are not met. The potential award for the CEO ranged from
0% if “threshold” goals were not met, to 40% for
meeting “threshold” objectives, to 70% for meeting
“business plan” objectives and 100% for meeting the
“stretch” objectives, adjusted either upwards or
downwards based on the achievement of safety related targets.
The range for our other executive officers was 0% if
“threshold” goals were not met, 25% for
“threshold” objectives, 45% for “business
plan” objectives, and 65% for “stretch”
objectives, adjusted either upwards or downwards based on the
achievement of certain safety related targets. For 2008, the
Compensation Committee set the financial performance objective
of pre-tax income excluding gains on aircraft sales at 25% below
business plan (“threshold”), business plan level, and
25% above business plan (“stretch target”). For 2008,
pre-tax income excluding gains on aircraft sales was
approximately 5% above the threshold level, but certain targeted
safety goals were not met and, therefore, this resulted in a 70%
downward adjustment of the AIP.
With respect to fiscal 2007, the threshold performance target
was not met. Nevertheless, the Committee decided to award
bonuses to the CEO and other executive officers (along with
other senior management members that participate in the plan) at
the threshold performance level (i.e. 40% of salary for the CEO
and 25% of salary for the other executive officers). In
addition, all other eligible employees received a bonus under
the Employee Incentive Bonus Plan at the threshold performance
level. In reaching this decision, the Committee primarily
considered the overall financial performance of the Company, the
fact that no incentive compensation had been paid to senior
management with respect to fiscal 2006 and the effort
contributed by senior management during the last two fiscal
years. The Committee concluded that these bonuses were
appropriate to reward and retain senior management. The CEO did
not make any adjustments to the 2007 bonus amounts for the other
executive officers.
With respect to senior management other than the CEO, the CEO
can modify the award based upon accomplishment of certain
Company financial goals as well as departmental goals and a
subjective evaluation of the individual’s contributions to
the Company, subject to reporting such adjustments to the
Committee.
The AIP provides that one-half of any bonus amount is paid to
the executive on or about the end of the first calendar quarter
of the calendar year following the year with respect to which
the award is determined, with the other half paid equally over
the next three years at the anniversary dates of the first
payment, assuming the executive’s employment continues;
provided that the executive will receive these amounts if he
dies, retires or becomes disabled.
8
Table of Contents
Officers’ Deferred Compensation
Plan. Certain highly compensated executives
have been approved by the Compensation Committee to participate
in the Officers’ Deferred Compensation Plan
(“ODP”), which allows the executive to tax-defer up to
25% of base salary and up to 100% of any bonuses and save those
amounts for retirement. The Company does not contribute to the
ODP, and it is an unfunded, nonqualified deferred compensation
plan within the meaning of Sections 2.01(2), 3.01(a)(3) and
401(a)(1) of ERISA. It is maintained, interpreted and
administered in accordance with Code Section 409A and
applicable regulations and rulings. A separate account is
established for each participant’s deferred compensation
and is deemed invested in securities chosen by each participant
from a list of available investment choices. Accounts are
periodically adjusted for gains or losses to reflect the
investment performance of the eligible securities and any
payments made to a participant under the ODP.
Except as otherwise provided in the ODP, the value of a
participant’s account is distributed at a designated future
date, or at termination of employment or retirement, in either a
single lump sum payment or in annual installments (not to exceed
twenty (20) installments), as designated by the participant.
Equity Compensation. The Company has
not issued any stock, options or other stock-based compensation
to employees since 2001 and has no current plans to do so.
Benefits. All executives are eligible
for the same insurance and welfare benefits (e.g., Medical
Insurance, Dental Insurance, 401(k), Long-term Disability, Life
and AD&D Insurance, AFLAC, etc.) as other employees in the
Company, except that a newly hired executive is credited with
having completed five years of Company service at
his/her hire
date for the purposes of calculating the amount of vacation days
credited each year.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis for the year ended
December 31, 2008 with management. Based on such reviews
and discussions, the Compensation Committee recommended to the
Board of Directors that the Compensation Discussion and Analysis
be included in this Information Statement on Schedule 14C.
By the members of the Compensation Committee:
Arthur J. Breault, Jr., Chairman
C. Russell Luigs
Richard H. Matzke
Thomas H. Murphy
C. Russell Luigs
Richard H. Matzke
Thomas H. Murphy
9
Table of Contents
Summary
Compensation Table for Fiscal 2008
The table below summarizes the total compensation paid to or
earned by each of our executive officers for the fiscal years
ended December 31, 2008, 2007 and 2006. During 2008, we had
four executive officers. We have not entered into employment
agreements with any of our executive officers.
|
Non-equity |
All Other |
|||||||||||||||||||||||
|
incentive plan |
Compen- |
|||||||||||||||||||||||
|
Name and |
Compensation |
Bonus |
sation(3) |
Total |
||||||||||||||||||||
|
Principal Position
|
Year | Salary ($) | ($)(1) | ($)(2) | ($) | ($) | ||||||||||||||||||
|
Al A. Gonsoulin
|
2008 | 586,731 | 70,512 | 0 | 23,936 | 681,179 | ||||||||||||||||||
|
Chairman of the Board and
|
2007 | 563,750 | 0 | 226,000 | 23,826 | 813,576 | ||||||||||||||||||
|
Chief Executive Officer
|
2006 | 500,000 | 0 | 0 | 19,829 | 519,829 | ||||||||||||||||||
|
Michael J. McCann
|
2008 | 264,029 | 19,831 | 0 | 16,081 | 299,941 | ||||||||||||||||||
|
Chief Financial Officer
|
2007 | 253,688 | 0 | 63,562 | 15,165 | 332,415 | ||||||||||||||||||
|
and Secretary
|
2006 | 215,000 | 0 | 0 | 12,609 | 227,609 | ||||||||||||||||||
|
Richard A. Rovinelli
|
2008 | 234,692 | 17,628 | 0 | 14,421 | 266,741 | ||||||||||||||||||
|
Chief Administrative Officer and
|
2007 | 225,500 | 0 | 56,500 | 12,905 | 294,905 | ||||||||||||||||||
|
Director of Human Resources
|
2006 | 199,500 | 0 | 0 | 15,688 | 215,188 | ||||||||||||||||||
|
William P. Sorenson
|
2008 | 222,958 | 16,746 | 0 | 13,390 | 253,094 | ||||||||||||||||||
|
Director, Corporate
|
2007 | 214,225 | 0 | 53,675 | 12,318 | 280,218 | ||||||||||||||||||
|
Business Development
|
2006 | 190,000 | 0 | 0 | 11,793 | 201,793 | ||||||||||||||||||
| (1) | Represents awards under the Annual Incentive Plan, discussed in further detail above under the heading “Annual Incentive Compensation.” Fifty percent of the bonus has been paid and the rest will be paid in three equal installments over the next three years, subject to continuation of employment, or if the executive dies, retires or is permanently disabled. | |
| (2) | For additional information regarding the 2007 Bonus amounts, see the discussion under the heading “Annual Incentive Compensation” in “Compensation Discussion and Analysis” above. | |
| (3) | The amounts shown in this column reflect for each named executive officer: |
| • | Matching contributions allocated by the Company to each of the named executive officers for the 401(k) Retirement Plan. Includes Mr. Gonsoulin $15,500; Mr. McCann $11,881; Mr. Rovinelli $10,561; and Mr. Sorenson $10,300. | |
| • | The cost to the Company of Term Life and Disability Insurance coverage provided by the Company including the cost of Life Insurance exceeding $50,000. |
Grants of
Plan-Based Awards in Fiscal 2008
|
Estimated future payouts under non- |
||||||||||||||||
| equity incentive plan awards(1)(2) | ||||||||||||||||
|
Name
|
Grant Date | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||
|
Al A. Gonsoulin
|
N/A | 234,692 | 410,712 | 586,731 | ||||||||||||
|
Michael J. McCann
|
N/A | 66,007 | 118,813 | 171,619 | ||||||||||||
|
Richard A. Rovinelli
|
N/A | 58,673 | 105,611 | 152,550 | ||||||||||||
|
William P. Sorenson
|
N/A | 55,740 | 100,331 | 144,923 | ||||||||||||
| (1) | The Company’s Annual Incentive Bonus Plan (AIP) for executives is based on annual financial performance, adjusted by certain safety related targets. Estimated payouts would be nil if financial performance goals are not obtained. For additional information about the AIP and payments under the AIP with respect to 2008, see the discussion under the heading “Annual Incentive Compensation” in “Compensation Discussion and Analysis” above. | |
| (2) | Amounts earned under the AIP in a calendar year are payable 50% in the next year and 50% equally over the next three years, subject to continuation of employment, or if the executive dies, retires or is permanently disabled. |
10
Table of Contents
Outstanding
Equity Awards at December 31, 2008
There were no options or other equity awards held as of
December 31, 2008 by the Named Executive Officers.
Option
Exercises and Stock Vested
The following table sets forth certain information about option
exercises during fiscal 2008 for the Named Executive Officers.
| Option Awards | ||||||||
|
Number of shares |
Value realized |
|||||||
|
acquired on exercise |
on exercise |
|||||||
|
Name
|
(#) | ($) | ||||||
|
Al A. Gonsoulin
|
— | — | ||||||
|
Michael J. McCann
|
10,000 | 264,562 | ||||||
|
Richard A. Rovinelli
|
— | — | ||||||
|
William P. Sorenson
|
— | — | ||||||
Nonqualified
Deferred Compensation
The following table describes the contributions, earnings and
balance at the end of fiscal year 2008 for each of the Named
Executive Officers under our Officer Deferred Compensation Plan.
For additional information regarding our Officer Deferred
Compensation Plan, see the heading “Officers Deferred
Compensation Plan” above.
|
Aggregate |
||||||||||||||||||||
|
Earnings |
Aggregate |
|||||||||||||||||||
|
Executive |
Registrant |
(loss) in |
Aggregate |
Balance at |
||||||||||||||||
|
Contributions in |
Contributions in |
Last Fiscal |
Withdrawals/ |
Last Fiscal |
||||||||||||||||
|
Last Fiscal Year |
Last Fiscal Year |
Year |
Distributions |
Year End |
||||||||||||||||
|
Name
|
($) | ($) | ($) | ($) | ($) | |||||||||||||||
|
Al A.
Gonsoulin(1)
|
0 | 0 | 0 | 0 | 0 | |||||||||||||||
|
Michael J. McCann
|
66,007 | 0 | (98,835 | ) | 0 | 663,717 | ||||||||||||||
|
Richard A. Rovinelli
|
58,673 | 0 | (162,780 | ) | 0 | 648,206 | ||||||||||||||
|
W. Pete Sorenson
|
51,280 | 0 | (130,470 | ) | 0 | 443,415 | ||||||||||||||
| (1) | Mr. Gonsoulin elected not to participate in the Officer Deferred Compensation Plan. |
11
Table of Contents
The table below shows the investment choices available under the
ODP and their annual rate of return for the calendar year 2008,
as reported by the plan investment advisor.
|
Name of Fund
|
Rate of Return |
Name of Fund
|
Rate of Return | |||||||
|
Allianz NFJ Div Value Fund A
|
–36.3 | % | FT Templeton Global Bond A | 6.3 | % | |||||
|
Allianz NFJ Intl Value A
|
–44.6 | % | Gateway Fund Class A | –13.9 | % | |||||
|
Allianz OCC Renaissance A
|
–40.0 | % | Harbor Intl Inv | –42.9 | % | |||||
|
Allianz OCC Target A
|
–51.3 | % | Janus Adviser forty A | –43.9 | % | |||||
|
Amer Euro Pacific Grth Fund A
|
–40.5 | % | JHancock Classic Value A | –46.6 | % | |||||
|
Amer Funds Fund Inv Fund A
|
–39.7 | % | JPMorgan Mid Cap Val A | –33.2 | % | |||||
|
Amer Funds Fund Inv F-10
|
–39.7 | % | Managers Bond Fund | –16.3 | % | |||||
|
Amer Funds Grth Fund A
|
–39.1 | % | Managers Short Dur Govt | –1.2 | % | |||||
|
Amer Funds Grth Fund F
|
–39.1 | % | Oppenheimer Cmdty St TR A | –54.6 | % | |||||
|
Amer Funds Income Fund A
|
–28.9 | % | Oppenheimer Quest Intl Val Fund A | –47.8 | % | |||||
|
BlackRock Intl Bond A
|
2.4 | % | PIMCO CommRealRetStrA | –43.7 | % | |||||
|
Calamos Growth A
|
–50.3 | % | PIMCO Low Duration A | –1.7 | % | |||||
|
Davis NY Venture A
|
–40.0 | % | PIMCO Total Ret A | 4.3 | % | |||||
|
DWS Core Fixed Income A
|
–14.3 | % | PIMCO Real Ret A | –6.8 | % | |||||
|
Eaton Vance Fltg Rt A
|
–30.4 | % | Royce Premier Invt | –28.3 | % | |||||
|
Eaton Vance Large Cap Value A
|
–34.5 | % | Thornburg Core Growth A | –51.0 | % | |||||
|
Fidelity Adv Short F/I T
|
–2.8 | % | Thornburg Intl Value A | –41.9 | % | |||||
|
First Eagle Overseas A
|
–21.0 | % | Thornburg Value A | –41.6 | % | |||||
|
First Eagle Global A
|
–21.1 | % | UBS PACE Money Market P | 0.7 | % | |||||
Equity
Compensation Plan Information
The following table provides information about our common stock
that may be issued under equity compensation plans as of
December 31, 2008:
|
Number of Securities |
||||||
|
Remaining Available For |
||||||
|
Future Issuance Under |
||||||
|
Equity Compensation |
||||||
|
Number of Securities to be |
Weighted-Average |
Plans (Excluding |
||||
|
Issued Upon Exercise of |
Exercise Price of |
Securities Reflected |
||||
|
Outstanding Options, |
Outstanding Options |
in the First |
||||
|
Plan Category
|
Warrants and Rights | Warrants and Rights | Column)(1) | |||
|
Equity compensation plans
|
0 (Voting) | — (Voting) | 116,520 (Voting) | |||
|
approved by security holders
|
12,750 (Non-Voting) | 12.75 (Non-Voting) | 183,802 (Non-Voting) | |||
|
Equity compensation plans not approved by security holders
|
— | — | — | |||
|
Total
|
0 (Voting) | — (Voting) | 116,520 (Voting) | |||
| 12,750 (Non-Voting) | 12.75 (Non-Voting) | 183,802 (Non-Voting) |
| (1) | Represents shares of the Company’s voting and non-voting stock available for issuance under the PHI 1995 Incentive Plan. The Company has not issued any shares, options or rights under the PHI 1995 Incentive Plan since 2001, and has no current plans to do so. |
12
Table of Contents
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Arthur J.
Breault, Jr., C. Russell Luigs, Richard H. Matzke and
Thomas H. Murphy. No member of the Compensation Committee has
ever been an officer or employee of PHI or any of our
subsidiaries. In 2008, none of our executive officers served as
a director or member of the compensation committee of another
entity, where an executive officer served as a member of our
Board or Compensation Committee.
Certain
Transactions
Our Code of Ethics and Business Conduct Policy requires our
directors and executive officers to avoid any situation that
would create a conflict of interest unless approved in
accordance with the Company’s Conflict of Interest Policy.
Our Code of Ethics and Business Conduct Policy is available on
our website at www.phihelico.com.
We lease a facility from Mr. Al A. Gonsoulin, our Chairman
and CEO, where we perform maintenance work for a customer. The
lease rate is $6,500 per month. The building was leased for a
one-year term with four one-year options. This transaction was
reviewed and approved by our audit committee, which is our
procedure for any transaction between our Company and an
executive officer or director.
13
Table of Contents
REPORT OF
THE AUDIT COMMITTEE
The Audit Committee of PHI’s Board of Directors is composed
of four outside directors. It operates under a charter that was
revised in early 2005. The Board has made a determination that
all members of the Audit Committee satisfy the requirements of
the SEC and NASDAQ as to independence and are financially
sophisticated within the meaning of the NASDAQ rules. The Board
has also determined that it is not clear whether any member of
the Audit Committee is an “audit committee financial
expert” within the meaning of SEC rules, but the Board does
not believe the presence of an audit committee financial expert
is necessary in view of the overall financial sophistication of
Committee members. This is a report of the Committee’s
activities during 2008.
The Audit Committee reviewed in detail and discussed with
management and the independent auditors, among other things,
(i) all unaudited quarterly financial statements and all
quarterly reports filed with the SEC on
Form 10-Q;
(ii) the annual audited financial statements and the annual
report filed with the SEC on
Form 10-K;
(iii) management’s quarterly and annual certifications
regarding internal control over financial reporting and the
independent auditors’ audit of internal control over
financial reporting, and (iv) the matters required to be
discussed with the independent auditors by statement on Auditing
Standards No. 61, as amended (AICPA, Professional
Standards, Vol. 1 AU section 380). The Committee also
received the written disclosures and the letter from the
independent auditors required by Independence Standards Board
Standard No. 1 (Independent Standards Board Standard
No. 1, Independence Discussions with Audit Committees), and
has discussed with the independent auditors their independence.
Based on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company’s
Annual Report on
Form 10-K
for the 2008 fiscal year for filing with the SEC.
In accordance with the rules of the SEC, the foregoing
information is not deemed to be “soliciting material,”
or “filed” with the SEC or subject to its
Regulation 14C, other than as provided in such rules, or to
be subject to the liabilities of section 18 of the
Securities Exchange Act of 1934, except to the extent that the
Company specifically requests that the information be treated as
soliciting material or specifically incorporates it by reference
into a document filed under the Securities Act of 1933 or the
Securities Exchange Act of 1934.
By the members of the Audit Committee:
Thomas H. Murphy, Chairman
Arthur J. Breault, Jr.
C. Russell Luigs
Richard H. Matzke
Arthur J. Breault, Jr.
C. Russell Luigs
Richard H. Matzke
14
Table of Contents
RELATIONSHIP
WITH REGISTERED INDEPENDENT
PUBLIC ACCOUNTANTS
PUBLIC ACCOUNTANTS
General
Our consolidated financial statements for 2007 and 2008 were
audited by the firm of Deloitte & Touche, LLP, which
was engaged for that purpose by the Audit Committee.
Representatives of Deloitte & Touche, LLP are not
expected to be present at the Meeting.
The Audit Committee has selected Deloitte & Touche,
LLP as PHI’s independent registered public accounting firm
for the fiscal year ending December 31, 2009, subject to
ratification by PHI’s stockholders at the Meeting.
Fees
The following is a summary of the fees billed to PHI and its
subsidiaries by Deloitte & Touche, LLP for
professional services rendered.
| Year Ended December 31, | ||||||||||||||||
| 2008 | 2007 | |||||||||||||||
|
Fee Category
|
Amount | Percentage | Amount | Percentage | ||||||||||||
|
Audit fees
|
$ | 760,000 | 78 | % | $ | 786,000 | 83 | % | ||||||||
|
Audit-Related fees
|
122,600 | 12 | % | 37,000 | 4 | % | ||||||||||
|
Total audit and audit related fees
|
882,600 | 90 | % | 823,000 | 87 | % | ||||||||||
|
Tax fees
|
95,000 | 10 | % | 124,790 | 13 | % | ||||||||||
|
All Other fees
|
— | 0 | % | — | 0 | % | ||||||||||
|
Total fees
|
$ | 977,600 | 100 | % | $ | 947,790 | 100 | % | ||||||||
Audit fees include the aggregate fees billed for professional
services rendered for the audit of the Company’s annual
financial statements and review of financial statements included
in the Company’s
Form 10-Qs,
fees for services that normally would be provided in connection
with statutory and regulatory filings or engagements and
services that generally only the independent accountant
reasonably can provide. Audit related fees include employee
benefit plan audits, due diligence and accounting consultations.
Tax fees include assistance in the preparation of federal and
state tax returns and related advice regarding tax compliance.
Policy on
Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors
All audit and permissible non-audit services provided by the
independent auditors are pre-approved by PHI’s Audit
Committee. These services may include audit services,
audit-related services and other services. Pre-approval is
generally provided for up to one year, and any pre-approval is
detailed as to the particular service or category of service and
is generally subject to a specific budget. The independent
auditors and management are required to periodically report to
the Audit Committee regarding the extent of services provided by
the independent auditors in accordance with this pre-approval,
and the fees for the services performed to date. The Audit
Committee may also pre-approve particular services on a
case-by-case
basis.
15
Table of Contents
OTHER
MATTERS
Quorum
and Voting
The presence, in person or by proxy, of a majority of the
Company’s total voting power is necessary to constitute a
quorum. Stockholders voting or abstaining from voting by proxy
on any issue will be counted as present for purposes of
constituting a quorum. If a quorum is present, the election of
directors will be determined by plurality vote. The proposal to
ratify the appointment of our independent registered public
accounting firm will require approval of holders of a majority
of the Company’s total voting power.
The Board does not know of any matters to be presented at the
Meeting other than those described herein. For directions to be
able to attend the meeting and vote in person, call
337-235-2452.
Stockholder
Proposals
Eligible stockholders who desire to present a proposal qualified
for inclusion in the proxy or information materials relating to
the 2010 annual meeting of stockholders must forward such
proposal to the Company’s Secretary at the address set
forth on the first page of this Information Statement in time to
arrive at PHI no later than December 16, 2009.
The Company’s by-laws state that for any business to be
properly brought before the annual meeting, notice of the
proposal must be received by the Company no later than the close
of business on the 60th day nor earlier than the close of
business on the 90th day before the first anniversary of
the preceding year’s annual meeting. In regard to the 2010
annual meeting, this provision will require notice between
February 4, 2010 and March 6, 2010. If, however, the
date of the annual meeting is more than 30 days before or
more than 60 days after such anniversary date, notice by
the stockholders to be timely must be so delivered not earlier
than the close of business on the 90th day before such
annual meeting and not later than the close of business on the
later of the 60th day before such annual meeting or the
10th day following the day on which public announcement of
the date of such meeting is first made by the Company.
This notice must set forth (a) a brief description of the
business desired to be brought before the meeting, the reasons
for conducting such business at the meeting and any material
interest in such business of such stockholders and the
beneficial owner, if any, on whose behalf the proposal is made;
and (b) as to the stockholders giving the notice and the
beneficial owner, if any, on whose behalf the proposal is made
(i) the name and address of such stockholders, as they
appear on the Company’s books, and of such beneficial owner
and (ii) the class and number of shares of the Company
which are owned beneficially and of record by such stockholders
and such beneficial owner.
By Order of the Board of Directors
Michael J. McCann
Secretary
Secretary
Lafayette, Louisiana
April 15, 2009
16