SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
1993 FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________________ to ________________
Commission file number 1-5471
GLOBAL MARINE INC.
(Exact name of registrant as specified in its charter)
Delaware 95-1849298
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
777 N. Eldridge Road, Houston, Texas 77079
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 596-5100
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.10 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]
As of January 31, 1994, the aggregate market value of the Company's
common stock, $.10 par value, held by non-affiliates was $650.5
million.
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes X No ___
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date: Common Stock, $.10 par value, 162,909,295 shares outstanding
as of January 31, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement in connection with the 1994
Annual Meeting of Stockholders are incorporated into Part III of this report.
TABLE OF CONTENTS TO FORM 10-K
<TABLE>
<CAPTION>
Page
Part I
<S> <C>
1. and 2. Business and Properties 3
Marine Drilling 3
Oil and Gas Operations 11
Employees 14
Executive Officers of the Registrant 14
3. Legal Proceedings 15
4. Submission of Matters to a Vote of Security Holders 15
Part II
5. Market for Registrant's Common Equity and
Related Stockholder Matters 15
6. Selected Financial Data 16
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 17
8. Financial Statements and Supplementary Data 25
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 55
Part III
10. Directors and Executive Officers of the Registrant 55
11. Executive Compensation 55
12. Security Ownership of Certain Beneficial Owners and
Management 55
13. Certain Relationships and Related Transactions 55
Part IV
14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 56
Signatures 65
</TABLE>
<PAGE>
PART I
ITEMS 1. AND 2. BUSINESS AND PROPERTIES
Global Marine Inc., a Delaware corporation incorporated in
1964, is a holding company that engages in various businesses
through its operating subsidiaries. Unless otherwise provided, the
terms "Global Marine" and "Company" refer to Global Marine Inc.
and, unless the context otherwise requires, to the Company's
consolidated subsidiaries.
The Company is a major international offshore drilling
contractor with a modern, diversified fleet of 27 mobile offshore
drilling rigs. In addition, the Company participates in oil and
gas exploration, development and production, and provides offshore
drilling management services on a turnkey basis. Industry segment
information relative to the Company is set forth in Note 10 of
Notes to Consolidated Financial Statements in Item 8 of this Annual
Report on Form 10-K.
MARINE DRILLING
The Company's marine drilling business includes offshore
contract drilling and drilling management services. Substantially
all of the Company's offshore contract drilling operations are
conducted by or through Global Marine Drilling Company ("GMDC"),
which is headquartered in Houston, Texas, and has principal
offices in Aberdeen, Scotland; Anchorage, Alaska; Jakarta,
Indonesia; Lafayette, Louisiana; London, England; Luanda, Angola;
and Port Gentil, Gabon. The remainder of the Company's marine
drilling operations are conducted through Applied Drilling
Technology Inc. ("ADTI"), which provides offshore drilling
management services on a turnkey basis. The Company has a fleet of
27 mobile offshore drilling rigs, consisting of 23 cantilevered
jackup drilling rigs, two semisubmersible drilling rigs, one self-
propelled drillship and one concrete island drilling system (the
"CIDS"). (Two of the 23 cantilevered jackup rigs were purchased in
February 1994 and are not currently in service or expected to be
placed in service by the Company until refurbishments are
completed. See discussion below.) All of the Company's active
drilling rigs were placed in service in 1979 or thereafter, and, as
of February 22, 1994, the average age of the fleet was
approximately 11.7 years. Ten of the Company's jackup rigs have
maximum drilling depth capabilities of 25,000 feet and can operate
in up to 300 feet of water. One of these ten jackup rigs is
designed for drilling in harsh environments, referred to in the
industry as a "heavy weather" rig. The Company's thirteen
remaining jackup rigs have maximum drilling depth capabilities of
20,000 feet and can operate in up to 250 to 300 feet of water. The
two semisubmersible drilling rigs have maximum drilling depth
capabilities of 25,000 feet and maximum water depth capabilities of
1,800 feet. The Company's drillship has a maximum drilling depth
capability of 25,000 feet and can operate in water depths of up to
2,500 feet. Over the last five years, the Company has undertaken
in excess of $75 million in capital expenditures to maintain and
upgrade its fleet, including approximately $21 million for the
purchase and installation of "top drive" drilling systems on 17 of
the Company's rigs. Top drives are now installed on 19 of the
Company's 27 rigs. "Top drive" drilling systems permit drilling
with extended stands of drill pipe and enable operators to rotate
the drill pipe when exiting the well bore, thereby increasing both
the speed and safety of drilling operations and reducing the risk
of the drill pipe becoming stuck within the well bore.
The Company owns 26 of the 27 rigs in its fleet. The rig not
owned by the Company is the CIDS, also known as the Glomar Beaufort
Sea I, which is leased through 1994 under a long-term lease.
Twenty-three of the twenty-six rigs owned by the Company are
subject to first mortgages granted to collateralize the Company's
12-3/4% Senior Secured Notes due 1999 (the "Senior Secured Notes").
The Company's fleet is deployed in the major offshore oil and
gas operating areas worldwide. The principal areas of the
Company's operations currently include the Gulf of Mexico, the
North Sea, and offshore West Africa.
The Company continues to consider and pursue the acquisition
of suitable additional rigs and other assets on an ongoing basis.
In the event that the Company decides to undertake an acquisition,
the issuance of additional shares of stock or, in certain limited
instances, additional debt could be required. In February 1994,
the Company purchased two cantilevered jackup drilling rigs, the
Glomar Adriatic IX and Glomar Adriatic X, for a total combined
purchase price of $26.0 million in cash, $1.0 million in notes
payable from the rigs' net cash flow, and up to 900,000 shares of
Global Marine common stock. The Glomar Adriatic IX and the Glomar
Adriatic X will not be marketed or placed in service by the Company
until market conditions warrant and the Company substantially
completes the anticipated $15 million of refurbishments, both of
which are expected to occur sometime during 1995.
The following table lists the Company's drilling rigs in
service as of February 22, 1994, indicating for each rig the year
it was placed in service, as well as its water and drilling depth
capabilities, current location, customer, and estimated contract
expiration date.
<PAGE>
MARINE DRILLING FLEET
Status as of February 22, 1994
<TABLE>
<CAPTION>
YEAR
PLACED WATER DRILLING
IN DEPTH DEPTH CONTRACT
SERVICE CAPABILITY CAPABILITY LOCATION CUSTOMER TERM (1)
<S> <C> <C> <C> <C> <C> <C>
Rigs in Service
Cantilevered Jackup
Glomar High Island I 1979 250 ft. 20,000 ft. Gulf of Mexico Pennzoil expires 7/94
Glomar High Island II 1979 270 ft. 20,000 ft. Gulf of Mexico Unocal expires 3/94
Glomar High Island III 1980 250 ft. 20,000 ft. Gulf of Mexico Enron expires 3/94
Glomar High Island IV 1980 250 ft. 20,000 ft. Gulf of Mexico Unocal expires 4/94
Glomar High Island V 1981 270 ft. 20,000 ft. West Africa Cabinda Gulf Oil Co. expires 6/94
Glomar High Island VII 1982 250 ft. 20,000 ft. West Africa Walter International expires 5/94
Glomar High Island VIII 1982 250 ft. 20,000 ft. Gulf of Mexico Mobil expires 4/94
Glomar High Island IX(2) 1983 250 ft. 20,000 ft. Saudi Arabia Arabian Drilling Co. expires 5/94
Glomar Adriatic I 1981 300 ft. 25,000 ft. West Africa Elf Gabon expires 4/94
Glomar Adriatic II 1981 328 ft. 25,000 ft. Gulf of Mexico Shell expires 3/94
Glomar Adriatic III 1982 300 ft. 25,000 ft. Gulf of Mexico Shell expires 3/94
Glomar Adriatic IV 1983 328 ft. 25,000 ft. Trinidad Enron expires 9/94
Transocean No. 5 1979 300 ft. 20,000 ft. Abu Dhabi Total expires 1/95
Glomar Adriatic VI 1981 328 ft. 20,000 ft. Gulf of Mexico Shell expires 4/94
Glomar Adriatic VII 1983 300 ft. 20,000 ft. Gulf of Mexico Pogo Producing expires 3/94
Glomar Adriatic VIII 1983 300 ft. 25,000 ft. Alaska Arco Alaska expires 10/94
Glomar Main Pass I 1982 300 ft. 25,000 ft. Gulf of Mexico Mobil expires 3/94
Glomar Main Pass III 1982 300 ft. 25,000 ft. India Dual Drilling expires 5/97(3)
Glomar Main Pass IV 1982 300 ft. 25,000 ft. Gulf of Mexico Mobil expires 4/94
Glomar Labrador I 1983 300 ft. 25,000 ft. North Sea Arco British Ltd. expires 10/94
Glomar Baltic I 1983 375 ft. 25,000 ft. Gulf of Mexico Texaco expires 4/94
Semisubmersible
Glomar Arctic I 1983 1,800 ft. 25,000 ft. North Sea Amerada Hess expires 3/94
Glomar Arctic III 1984 1,800 ft. 25,000 ft. North Sea - available
Drillship
Glomar Robert F. Bauer 1983 2,500 ft. 25,000 ft. Indonesia WAPET expires 11/94
Concrete Island Drilling System
Glomar Beaufort Sea I (4) 1984 55 ft. 25,000 ft. Alaska - available
Rigs Undergoing Refurbishment
Cantilevered Jackup
Glomar Adriatic IX 1981 300 ft. 20,000 ft. Dubai - -
Glomar Adriatic X 1982 300 ft. 20,000 ft. Dubai - -
(1) Expiration dates include firm commitments for extensions of current contracts and for new contracts which have not
yet commenced. Expiration dates relate to both term and well-to-well contracts and, as to well-to-well contracts,
are estimates only.
(2) Subject to purchase option in favor of charterer.
(3) Contract is firm through May 1994; thereafter, customer may cancel contract upon 60-day prior notice.
(4) Leased from an unaffiliated third party.
</TABLE>
As indicated by the table, 23 of the Company's 25 rigs in
service were employed at February 22, 1994, and all but one of the
employed rigs were on short-term or well-to-well contracts. No
assurance can be made that the Company will be able to obtain
drilling contracts for the rigs upon the completion of current
contracts.
Competition and Industry Conditions. The offshore contract
drilling industry is a highly competitive and cyclical business.
It is characterized by high capital costs, long lead times for
construction of new rigs and numerous industry participants, none
of which has a significant market share but several of which have
substantially greater financial resources than the Company.
Offshore drilling rigs have few alternative uses and, because of
their nature and the environment in which they work, have
relatively high maintenance costs whether employed or unemployed.
Contracts are awarded on a competitive bid basis and, while an
operator selecting a rig may consider, among other things, quality
of service and equipment, the current oversupply of rigs has led to
a market in which intense price competition is the primary factor
in determining which qualified contractor is awarded a job. In
addition, the Company's offshore drilling business is subject to
the usual risks associated with having a limited number of
customers for its services.
Since 1982, the offshore contract drilling market has been
adversely affected by a supply of offshore rigs that has
significantly exceeded the demand for such equipment as well as by
a reduced level of demand generally for such equipment. The
reduced demand principally has been the result of low oil and gas
prices, an oversupply of oil and domestic natural gas, reductions
in the exploration and development expenditures of the Company's
customers, and prolonged uncertainty and volatility in oil and gas
prices. Over the last two years, however, the spot market price of
domestic offshore natural gas at the wellhead has increased
significantly from a low of $0.90 per thousand cubic feet in
February 1992 to a recent price of $2.18 per thousand cubic feet as
of January 31, 1994. Given the historic volatility in gas prices,
there can be no assurance that current prices will be sustained.
Worldwide military, political and economic events, including
initiatives by the Organization of Petroleum Exporting Countries
("OPEC"), are likely to continue to cause oil price volatility.
Factors which influence demand for the Company's services include
the ability of OPEC to set and maintain production levels and
prices, the level of production by non-OPEC countries, worldwide
demand for oil and gas, and contract and other terms sought by
various governments to explore and develop oil, gas and other
hydrocarbons within their offshore waters. The Company cannot
predict the timing or extent of any improvement in the industry or
the future level of demand for the Company's drilling services.
The Company believes that an increasing number of its customers
are seeking to establish continuing relationships with a relatively
small number of preferred drilling contractors. This represents a
departure from the traditional approach of seeking bids for each
drilling contract from a large number of contractors. The Company
further believes that preferred contractor status is being and will
continue to be conferred upon those contractors who provide the
highest quality and the greatest range of services. More
specifically, the Company expects that contracts increasingly will
be awarded to contractors who are certified under a recognized
standard such as the ISO 9000 series of standards and who are able
to perform the role of general contractor rather than just the
traditional drilling contractor's role of providing a rig and
crew.
With respect to its North Sea, European and North African
operations, the Company recently received certification under ISO
9002/British Standard 5750, part 2, and European Norm 29002. While
only four of the Company's major competitors are currently believed
to be so certified, the Company believes that others are seeking
certification.
The Company, as well as several of its offshore drilling
competitors and other oil service companies, has started offering
a greater range of services as general contractors under
arrangements variously described as "partnering," "full service
contracting," and "integrated drilling services" arrangements,
among others. When the Company acts as a general contractor, it
provides planning, engineering and management services beyond the
scope of its traditional contract drilling business, and thereby
assumes greater liability. The Company drilled one well in 1992 as
general contractor and is actively seeking similar arrangements
with other customers.
Rig Utilization. The average utilization rate for a period is
based on the ratio of days in the period during which the rigs were
under contract to the total days in the period during which the
rigs were available to work. For the year ended December 31, 1993,
the Company's average utilization rate for its drilling fleet was
87 percent compared to an average utilization rate of 78 percent in
1992. As of February 22, 1994, the Company's utilization rate was
92 percent. The Company anticipates that contracts on 13 of the
Company's 23 rigs under contract as of February 22, 1994, will
expire at varying times on or prior to April 30, 1994. No
assurance can be made that the Company will obtain drilling
contracts for the two rigs that are currently available or for its
other rigs upon the completion of existing contracts. Short-term
contracts have been typical in the industry for the past decade,
and the Company considers its upcoming contract expirations typical
of prevailing market conditions in the normal course of business.
As of December 31, 1993, all of the Company's twelve rigs in
the Gulf of Mexico were employed. As of that date, the industry
utilization rate in the Gulf of Mexico was 78 percent compared with
a rate of 72 percent as of December 31, 1992. Revenues from this
market accounted for 38 percent, 7 percent and 15 percent of the
Company's contract drilling revenues in 1993, 1992, and 1991,
respectively.
As of December 31, 1993, all three of the Company's rigs in the
North Sea were employed. As of that date, the industry utilization
rate in the North Sea was 82 percent compared with a rate of 78
percent as of December 31, 1992. Revenues from this market
accounted for 28 percent, 46 percent and 49 percent of the
Company's contract drilling revenues in 1993, 1992, and 1991,
respectively.
As of December 31, 1993, all three of the Company's rigs
offshore West Africa were employed. As of that date, the industry
utilization rate offshore West Africa was 75 percent compared with
a rate of 79 percent as of December 31, 1992. Revenues from this
market accounted for 16 percent, 23 percent and 19 percent of the
Company's contract drilling revenues in 1993, 1992, and 1991,
respectively.
The following table sets forth the size and average utilization
rate of the Company's fleet.
<TABLE>
<S> <C> <C> <C> <C> <C>
1993 1992 1991 1990 1989
Rigs in fleet at year-end 25 25 27 27 27
Average rig utilization 87% 78% 86% 90% 70%
</TABLE>
The following tables show, for each of the Company's four
principal groups of drilling rigs and each of the major geographic
areas in which the Company operates, the number of contract months
available, the number of contract months under firm commitments and
the percentage of available months committed as of December 31,
1993, determined on the basis of executed contracts as of that
date, excluding customer option periods. The number of rigs in
each category is indicated in parenthesis. As of December 31,
1993, none of the Company's rigs were committed beyond 1994.
<TABLE>
1994
Rig Contract Rig Contract Percentage
Months Months Committed/
Available Committed Available
<S> <C> <C> <C>
Jackups (21) 252 92 37%
Semisubmersibles (2) 24 2 8%
Drillships (1) 12 9 75%
CIDS (1) 12 - -
Total 300 103 34%
1994
Rig Contract Rig Contract Percentage
Months Months Committed/
Available Committed Available
Gulf of Mexico (12) 144 50 35%
West Africa (3) 36 10 28%
North Sea (3) 36 5 14%
Other (7) 84 38 45%
Total 300 103 34%
</TABLE>
The numbers of rigs in the preceding table reflect their
locations as of December 31, 1993.
As of December 31, 1993, the Company's marine drilling revenue
backlog was approximately $102 million, $90 million of which will
be realized in 1994. The portion of the Company's backlog which
will be realized subsequent to 1994 relates to a customer's rig
which the Company manages under a long-term contract. The marine
drilling revenue backlog at December 31, 1992, was $110 million.
Drilling Contracts and Major Customers. Each of the Company's
drilling rigs is employed under an individual contract which
extends over a period of time covering either a stated term or the
time required to drill a well or number of wells. While the final
contract for employment of a rig is the result of negotiations
between the Company and the customer, most contracts are awarded
based upon competitive bidding. The rates specified in drilling
contracts are generally on a per day basis, payable in U.S.
dollars, and vary depending upon the equipment and services
supplied, the areas involved, the duration of the work, competitive
conditions and other variables. The contracts provide for a basic
dayrate during drilling operations, with lower rates for periods of
equipment breakdown, adverse weather, or other conditions which may
be beyond the control of the Company. When a rig mobilizes to or
demobilizes from an operating area, a contract may provide for
different dayrates, specified fixed amounts, or for no payment
during the redeployment period. As a result of competitive
conditions within the industry, the Company is, in certain cases,
paying the cost of mobilizing to and/or demobilizing from an
operating area, thus reducing further the Company's operating
margins. A contract may be terminated by the customer if the rig
is destroyed or lost, if drilling operations are suspended for a
specified period of time due to a breakdown of major equipment or,
in some cases, if other events occur that are beyond the control of
either party.
The Company's offshore contract drilling business is subject
to the usual risks associated with having a limited number of
customers for its services. In 1993, one customer provided $29.2
million, or 11 percent, of consolidated revenues. In 1992, one
customer provided $37.8 million and another customer provided $34.0
million, representing 15 percent and 13 percent, respectively, of
consolidated revenues. In 1991, no single customer provided more
than 10 percent of consolidated revenues.
Operational Risks and Insurance. The Company's operations are
subject to the usual hazards incident to the drilling of oil and
gas wells, such as blowouts, explosions, oil spills and fires,
which can severely damage or destroy equipment or cause
environmental damage. The Company's activities are also subject to
perils peculiar to marine operations, such as collision, grounding
and damage or loss from severe weather. These hazards can cause
personal injury and loss of life, severe damage to and destruction
of property and equipment, pollution or environmental damage and
suspension of operations.
The Company maintains insurance coverage against certain
general and marine public liability, including liability for
personal injury, in the amount of $200 million, subject to a self-
insured retention of no more than $250,000 per occurrence. In
addition, the Company's rigs and related equipment are separately
insured under hull and machinery policies against certain marine
and other perils, subject to a self-insured retention generally of
no more than $250,000 per occurrence. The Company's current
practice is to insure each rig for its market value. Although each
rig is insured for more than its carrying value, the Company's
insurance may not cover all costs that would be required to
replace each rig. In certain cases, the Company maintains
insurance against loss due to war, political risks and loss of
hire. The Company purchases the majority of the insurance
protecting it from the consequences of these hazards from the
marine and energy insurance market. This market historically is
cyclical in nature, and over the past few years it has experienced
a decline in capacity of available insurance resulting in increased
premiums and reduced coverage for the Company. In particular, as
a result of historical claims involving damage to the "spud cans"
(i.e., the bases of the legs of jackup rigs) of certain of the
Company's jackup drilling units, insurers have imposed a $2.0
million annual aggregate deductible for physical damage and have
excluded business interruption coverage with respect to spud can
damage incurred after May 3, 1992. In addition, the deductible for
rig business interruption claims has been increased from 14 days to
30 days. The Company currently purchases rig business interruption
insurance with respect to 14 rigs. All of the Company's rigs which
are operated internationally are presently insured against loss due
to war, including terrorism. The Company's insurance coverage does
not protect against loss of revenues except in the limited
instances described above.
The Company is permitted under the terms of the rig mortgages
securing the Senior Secured Notes to change the limits on its
general and marine public liability insurance to $150 million, and
to be subject, with respect to such liability insurance and its
marine hull and machinery insurance, to self-insured retention
amounts of up to $1 million per occurrence. In addition, the
indenture governing the Senior Secured Notes contains certain
restrictions regarding the use of insurance proceeds realized by
the Company due to the loss of any Company-owned rig, other than
the Glomar Baltic I, the Glomar Adriatic IX and the Glomar
Adriatic X.
None of the above policies cover liability for pollution or
environmental damage. In connection with the Company's offshore
contract drilling operations, the Company is generally indemnified
against pollution and environmental liability by its customers and,
in any event, maintains insurance against such liabilities (other
than such liabilities assumed by the Company by contract for
damages caused by third parties) in the amount of $50 million per
occurrence, subject to a self-insured retention of $200,000. In
the case of ADTI's turnkey drilling operations, the Company
maintains insurance against pollution and environmental damage in
an amount of $20 million per occurrence, subject to a self-insured
retention of $200,000. Under turnkey drilling contracts, ADTI
generally assumes the risk of pollution and environmental damage,
but on occasion receives indemnification from the customer for
environmental and pollution liabilities in excess of the Company's
insurance coverage of $20 million. In many instances, however,
ADTI is not indemnified by its customers for pollution and
environmental damage. Furthermore, ADTI is not insured against
certain drilling risks that could result in delays or the
nonperformance of a turnkey drilling contract.
The occurrence of a significant event, including pollution or
environmental damage, not fully insured or indemnified against or
the failure of a customer to meet its indemnification obligations,
could materially and adversely affect the Company's operations and
financial condition. Moreover, no assurance can be made that the
Company will be able to maintain adequate insurance in the future
at rates it considers reasonable. See "-- Governmental Regulation
and Environmental Matters."
Foreign Operations. A significant portion of the Company's
revenues is attributable to drilling operations in foreign
countries. Such activities accounted for 44 percent, 71 percent
and 65 percent of the Company's total revenues in 1993, 1992 and
1991, respectively. Risks associated with the Company's operations
in foreign areas include risks of war and civil disturbances or
other risks that may limit or disrupt markets, expropriation,
nationalization, renegotiation or nullification of existing
contracts, foreign exchange restrictions and currency fluctuations,
foreign taxation, changing political conditions and foreign and
domestic monetary policies. To date, the Company has experienced
no material loss as a result of any of these factors.
Additionally, the ability of the Company to compete in the
international drilling market may be adversely affected by foreign
governmental regulations which favor or require the awarding of
drilling contracts to local contractors, or by regulations
requiring foreign contractors to employ citizens of, or purchase
supplies from, a particular jurisdiction. Furthermore, foreign
governmental regulations, which may in the future become applicable
to the industry served by the Company, could reduce demand for the
Company's services, or such regulations could directly affect the
Company's ability to compete for customers.
Governmental Regulation and Environmental Matters. The
Company's business is affected by changes in public policy and by
federal, state, foreign and local laws and regulations relating to
the energy industry. The adoption of laws and regulations
curtailing exploration and development drilling for oil and gas for
economic, environmental and other policy reasons adversely affects
the Company's operations by limiting available drilling and other
opportunities in the energy service industry.
The Company's operations are subject to numerous federal, state
and local laws and regulations controlling the discharge of
materials into the environment or otherwise relating to the
protection of the environment. For example, the Company, as an
operator of mobile offshore drilling units in navigable United
States waters and certain offshore areas, including the Outer
Continental Shelf, is liable for damages and for the cost of
removing oil spills for which it may be held responsible, subject
to certain limitations. The Company does not believe that
environmental regulations have had any material adverse effect on
its capital expenditures, results of operations or competitive
position to date, and presently does not anticipate that any
material expenditures will be required to enable it to comply with
existing laws and regulations. It is possible, however, that
modification of existing regulations or the adoption of new
regulations in the future, particularly with respect to
environmental and safety standards, could have such a material
adverse effect on the Company's operations.
The U.S. Oil Pollution Act of 1990 ("OPA '90") and similar
legislation enacted in Texas, Louisiana and other coastal states
address oil spill prevention and control and significantly expand
liability exposure across all spectrums of the oil and gas
industry. The Company is of the opinion that it maintains
sufficient insurance coverage to respond to the added exposures.
OPA '90 also mandates increases in the amounts of financial
responsibility that must be certified with respect to mobile
offshore drilling units and offshore facilities (e.g., oil and gas
production platforms) operating in U.S. waters. The increased
amounts are $15 million per occurrence for operators of mobile
offshore drilling units and $150 million per occurrence for
operators of offshore facilities. The U.S. Coast Guard is
responsible for promulgating regulations implementing the new
financial responsibility requirements with respect to mobile
offshore drilling units. Regulations were proposed in August 1991,
the comment period expired in January 1992, and the Coast Guard is
presently reviewing its proposals. These regulations, if adopted
as proposed, would, as a practical matter, preclude the use of
insurance as evidence of financial responsibility. In effect, the
regulations would require the Company and most other drilling
contractors and lease operators to post cash bonds or provide
evidence of adequate U.S.-based net worth, thereby making it more
difficult or, depending on factors such as financial strength and
market conditions, impossible for many of such companies to operate
in U.S. waters. No assurance can be made that the Company will be
able to satisfy the financial responsibility requirements for many
of operators of mobile offshore drilling units under the
regulations as proposed or eventually promulgated, and its
inability to do so might have a material adverse effect on its
operations and financial condition. Although concerned industry
groups have requested that the proposed regulations or OPA '90 be
modified to allow insurance of the type maintained by the Company
to satisfy the financial responsibility requirements, the Company
does not know to what extent, if any, the proposals will be
modified, and it does not know when the final regulations will go
into effect. During 1993, 45 percent of the Company's contract
drilling revenues were attributable to operations in U.S. waters,
and, as of February 22, 1994, 14 of the Company's 25 rigs in
service were located in U.S. waters.
The Department of the Interior ("DOI") is responsible for
promulgating regulations implementing the new financial
responsibility requirements with respect to offshore facilities,
and its regulations are not expected to be finalized until 1995.
The Minerals Management Service of the DOI issued an Advance Notice
of Proposed Rulemaking in 1993 which contemplated regulations for
offshore facilities similar to the Coast Guard regulations. The
DOI solicited comments from the offshore oil industry with respect
to the proposed regulations, which will also be subject to review
and comment before adoption. The DOI regulations, with the
regulations promulgated by the Coast Guard (if adopted in their
proposed form), could adversely affect Challenger Minerals Inc.,
the Company's wholly-owned oil and gas producing subsidiary
("CMI"), Global Marine Oil & Gas Company ("GMOG"), GMDC and ADTI.
CMI presently operates an offshore production platform, GMOG
anticipates operating production platforms in the future, and
ADTI's business and GMDC's operations in the Gulf of Mexico are
largely dependent on oil and gas companies' drilling activities
which, in turn, ultimately depend on these companies' ability to
operate offshore facilities. To the extent OPA '90 and these
regulations have the effect of precluding the use of insurance as
evidence of financial responsibility, operators of offshore
facilities would be subject to the same types of concerns discussed
above with respect to operators of mobile offshore drilling units.
The Company cannot predict the exact nature or effect of any
regulations promulgated under OPA '90.
Drilling Management Services. The Company provides drilling
management services through ADTI and GMDC, which are wholly-owned
subsidiaries. On a turnkey basis, the Company assumes
responsibility for the design and execution of specific offshore
drilling programs for oil and gas operators who require drilling
expertise. The Company will agree under certain conditions to
deliver a logged or loggable hole to an agreed depth for a
guaranteed price. Under such an arrangement, compensation to the
Company is contingent upon satisfactory completion of the drilling
program.
The demand for drilling management services has been impacted
by low oil prices, the oversupply of oil, prolonged uncertainty in
oil and gas prices, and reductions in exploration and development
expenditures of customers. The Company competes with other
industry participants, several of which have substantially greater
resources than the Company. In addition, the Company's drilling
management services business is subject to the usual risks
associated with having a limited number of customers for its
services.
Through December 31, 1993, the Company had completed 126
turnkey wells, including 18 in 1993, 10 in 1992, and 16 in 1991.
OIL AND GAS OPERATIONS
Oil and gas exploration, development and production activities
are conducted through Challenger Minerals Inc. and Global Marine
Oil and Gas Company, each of which is a wholly-owned subsidiary of
the Company. Such activities primarily include participation in
the development and operation of properties for oil and gas
production. In addition, the Company has, on occasion, incurred
through ADTI and other subsidiaries certain limited exploration and
leasehold acquisition costs in connection with its turnkey drilling
operations. Substantially all of the Company's oil and gas
activities are conducted in the United States offshore Louisiana
and Texas in the Gulf of Mexico and onshore in Louisiana, Oklahoma
and Texas.
<PAGE>
Capital Expenditures for Oil and Gas Operations. Capital
expenditures related to the Company's oil and gas activities were
as follows:
<TABLE>
1993 1992 1991 1990 1989
(In millions)
<S> <C> <C> <C> <C> <C>
Exploration costs $ 2.2 $ (.7)* $ .3 $ .5 $ -
Acquisition of properties .6 - .1 .3 -
Development costs .3 2.4 1.7 3.7 2.5
Oil and Gas Capital Expenditures $ 3.1 $ 1.7 $ 2.1 $ 4.5 $ 2.5
</TABLE>
* The 1992 exploration costs were negative as a result of the
deferral of profit attributable to drilling contracts on oil and
gas properties in which the Company had working interests and was
the operator. (See Note 1 of Notes to Consolidated Financial
Statements in Item 8 of this Annual Report on Form 10-K.)
The Company does not expect oil and gas capital expenditures
in 1994 to exceed $6 million.
Sales Prices and Production Costs. The following table
summarizes the Company's sales prices and production costs:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Average sales prices:
Gas (per MCF) $ 1.98 $ 1.60 $ 1.52
Oil (per barrel) $16.89 $19.43 $20.16
Average production cost:
Oil and Natural Gas (per BTU equivalent MCF of gas) $ .37 $ .30 $ .28
Productive Wells. The following table summarizes the Company's
gross and net wells as of December 31, 1993, including those that
are producing and those that are shut-in but capable of producing:
Gross Wells Net Wells
Oil Gas Oil Gas
<S> <C> <C> <C> <C>
Offshore
Louisiana 12 5 1.61 .77
Texas - 19 - 3.22
Total offshore 12 24 1.61 3.99
Onshore
Louisiana - 2 - .13
Oklahoma 2 - .14 -
Texas - 1 - .11
Total onshore 2 3 .14 .24
Total 14 27 1.75 4.23
</TABLE>
For purposes of the tables included in this report, a gross
well or a gross acre is a well or acre in which a working interest
is owned by the Company. A net well or net acre is used to show
the cumulative total of the Company's fractional working interests
in one or more wells or acres.
<PAGE>
Developed and Undeveloped Acreage. The following table
summarizes the Company's developed and undeveloped acreage as of
December 31, 1993:
<TABLE>
Developed Acreage Undeveloped Acreage
Gross Acres Net Acres Gross Acres Net Acres
<S> <C> <C> <C> <C>
Offshore
Louisiana 19,323 3,356 26,549 3,989
Texas 10,280 2,023 - -
Total offshore 29,603 5,379 26,549 3,989
Onshore
Louisiana 845 75 - -
Oklahoma 64 18 - -
Texas 325 74 - -
Total onshore 1,234 167 - -
Total 30,837 5,546 26,549 3,989
</TABLE>
Drilling Activities. The following table shows the Company's
gross and net exploratory and development wells drilled during the
years indicated:
<TABLE>
1993 1992 1991
Gross Net Gross Net Gross Net
<S> <C> <C> <C> <C> <C> <C>
Exploratory
Gas 1 .20 2 .29 1 .15
Dry 4 .88 - - 1 .20
Development
Oil - - - - 1 .13
Gas - - 2 .30 1 .28
Dry - - - - - -
Total
Productive* 1 .20 4 .59 3 .56
Dry 4 .88 - - 1 .20
5 1.08 4 .59 4 .76
</TABLE>
______________
* Includes wells that are shut-in but capable of producing.
At December 31, 1993, the Company was not participating in the
drilling or completing of any wells.
Industry Conditions and Regulation. The Company experiences
competition from other oil and gas companies in all phases of its
operations. Many competing companies have substantially greater
financial and other resources than the Company. The Company's
business has been adversely affected by the same oil and gas market
conditions which resulted in the decline of the offshore drilling
market following the 1986 collapse in oil prices. A worldwide
surplus of oil has affected and continues to affect the prices
received for the Company's oil production.
The Company's oil and gas production operations and economics
are also affected by governmental regulation of production, the use
and allocation of oil and natural gas, the extent of domestic
production and the level of imports, prices of competitive fuels,
fluctuation in demand in the Company's market areas due to excess
supplies of oil as well as seasonal demand factors, tax and other
laws relating to the petroleum industry and the changes in such
laws, and by constantly changing administrative regulations.
The Company's domestic natural gas sales continue to be subject
in varying degrees to regulation by the Federal Energy Regulatory
Commission ("FERC") under the Natural Gas Act and the Natural Gas
Policy Act of 1978. Pursuant to these statutes, certain domestic
natural gas production is subject to maximum lawful price ceilings
applicable to first sales. During 1993, market prices were
generally below the price ceilings. Approval by the FERC continues
to be required for both the commencement and abandonment of certain
sales, and the FERC has general investigatory and other powers.
Production Regulations and Environmental Matters. State and
federal laws affect production in various ways, including requiring
permits for the drilling of wells, regulating the spacing of wells,
the prevention of waste of oil and gas resources, regulating the
rate of production, the prevention and clean-up of pollution, and
other matters. The Company's operations are subject to numerous
federal, state and local laws and regulations controlling the
discharge of materials into the environment or otherwise relating
to the protection of the environment. The Company believes such
matters have not had any material effect on its capital
expenditures, results of operations or competitive position.
EMPLOYEES
The Company had approximately 1,500 employees at December 31,
1993. The Company requires highly skilled personnel to operate its
drilling rigs. In recognition of this, the Company conducts
extensive personnel training and safety programs.
EXECUTIVE OFFICERS OF THE REGISTRANT
The name, age as of December 31, 1993, and office or offices
currently held by each of the executive officers of the Company are
as follows:
<TABLE>
Name Age Office or Offices
<S> <C> <S>
David A. Herasimchuk 51 Vice President, Market Development
Thomas R. Johnson 45 Vice President and Corporate Controller
Gary L. Kott 51 President and Chief Operating
Officer, Global Marine Drilling Co.
C. Russell Luigs 60 Chairman of the Board, President and
Chief Executive Officer
Jon A. Marshall 42 President, Applied Drilling
Technology Inc. and Challenger
Minerals Inc.
Jerry C. Martin 61 Senior Vice President and Chief
Financial Officer
James L. McCulloch 41 Vice President and General Counsel
John G. Ryan 41 Chairman and Chief Executive
Officer, Global Marine Drilling Co.,
and Corporate Secretary of the
Company
Robert E. Sleet, Jr. 47 Vice President and Treasurer
</TABLE>
Officers each serve for a one-year term or until their
successors are elected and qualified to serve. Each executive
officer's principal occupation has been as an executive officer of
the Company for more than the past five years, with the exception
of Messrs. Marshall and McCulloch. Mr. Marshall has served in his
present position since April 1992. From 1990 to April 1992, he was
Applied Drilling Technology's Vice President of Operations, prior
to which he held various operating positions with Applied Drilling
Technology Inc. and with Global Marine Drilling Co. Mr. McCulloch
has served in his present position since May 1993 and has had
general supervision of the Company's legal affairs since February
1993, prior to which he was the Company's Vice President,
Litigation and Risk Management.
ITEM 3. LEGAL PROCEEDINGS
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
There were no matters submitted to a vote of the Company's
security holders during the fourth quarter of the fiscal year ended
December 31, 1993.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company's Common Stock, $.10 par value per share (the
"Common Stock"), is listed on the New York Stock Exchange under the
symbol "GLM." At January 31, 1994, there were 10,775 stockholders
of record of the Common Stock. The high and low sales prices of
the Common Stock as reported on the New York Stock Exchange
Composite Transactions Tape for each full quarterly period within
the past two years appear under "Consolidated Selected Quarterly
Financial Data" on page 49 of this Annual Report on Form 10-K.
The Company has not declared any dividends on Common Stock
since February 1985. Subject to the preferential dividend rights
of holders of the Company's preferred stock, if any, the holders of
the Common Stock will be entitled to receive when, as and if
declared by the Board of Directors out of funds legally available
therefor, all other dividends payable in cash, in property, or in
shares of Common Stock. The indenture governing the Senior Secured
Notes contains certain restrictions with respect to the payment of
dividends on the Common Stock (other than stock dividends). (See
Note 6 of Notes to Consolidated Financial Statements in Item 8 of
this Annual Report on Form 10-K.) It is not expected that
dividends will be declared or paid on the Common Stock in the
foreseeable future.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
GLOBAL MARINE INC. AND SUBSIDIARIES
FIVE-YEAR REVIEW
(Dollars in millions, except per share data)
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Financial Performance
Revenues:
Contract drilling $ 203.1 $ 216.5 $ 252.6 $ 220.4 $ 147.7
Turnkey drilling 59.9 27.9 37.4 42.4 30.5
Elimination (5.6) (3.4) (2.9) (6.4) (3.2)
Total marine drilling 257.4 241.0 287.1 256.4 175.0
Oil and gas 11.6 19.3 28.1 25.4 13.2
Total revenues $ 269.0 $ 260.3 $ 315.2 $ 281.8 $ 188.2
Operating income (loss):
Contract drilling 4.5 $ 28.2(2) $ 49.2 $ 18.7 $ (15.6)
Turnkey drilling 9.8 0.2 4.8 2.1 7.2
Elimination (1) (2.2) (2.4) ( .3) - -
Total marine drilling 12.1 26.0 53.7 20.8 (8.4)
Oil and gas 5.3 3.2 9.1 10.8 4.3
Corporate expenses (14.2) (13.5) (13.7) (13.3) (11.3)
Total operating income (loss) 3.2 15.7 49.1 18.3 (15.4)
Other income (expense):
Interest expense (32.1) (43.6) (49.9) (53.9) (54.8)
Interest income 2.7 2.8 3.5 5.4 8.8
Litigation settlement - 55.0 - - -
Other - 0.7 0.8 (4.3) 1.9
Total other income (expense) (29.4) 14.9 (45.6) (52.8) (44.1)
Income (loss) before income taxes (26.2) 30.6 3.5 (34.5) (59.5)
Income tax expense .3 3.1 2.5 1.3 2.0
Income (loss) before extraordinary item and
cumulative effect of accounting changes (26.5) 27.5 1.0 (35.8) (61.5)
Extraordinary gain on extinguishment of debt - 28.3 - - -
Cumulative effect of accounting changes, net - 1.4 - - -
Net income (loss) $ (26.5) $ 57.2 $ 1.0 $ (35.8) $ (61.5)
Net income (loss) per common share:
Before extraordinary item and cumulative
effect of accounting changes $ (0.17) $ 0.24 $ 0.01 $ (0.35) $ (0.61)
Extraordinary gain on extinguishment of debt - 0.24 - - -
Cumulative effect of accounting changes, net - 0.01 - - -
Net income (loss) per common share $ (0.17) $ 0.49 $ 0.01 $ (0.35) $ (0.61)
Average common shares outstanding 152.0 116.3 109.2 102.6 100.0
Dividends declared per common share (3) $ - $ - $ - $ - $ -
Cash flow provided by (used in) operations $ (.7) $ 66.0 $ 66.7 $ 42.7 $ 23.7
Capital expenditures $ 40.6 $ 20.9 $ 22.7 $ 19.3 $ 9.9
Financial Position (end of year)
Working capital $ 107.2 $ 30.7 $ 88.4 $ 71.5 $ 67.5
Net properties $ 314.6 $ 318.0 $ 353.7 $ 378.2 $ 401.6
Total assets $ 492.9 $ 479.9 $ 523.7 $ 543.7 $ 572.8
Long-term debt, including current maturities $ 225.0 $ 249.0 $ 391.8 $ 444.7 $ 454.8
Shareholders' equity $ 205.4 $ 154.5 $ 44.6 $ .9 $ 12.9
Operational Data
Proved oil and gas reserves (end of year) (4) 2,133 2,917 3,739 7,884 10,027
Oil and gas production (4) 914 1,841 2,842 2,158 1,126
Average rig utilization (5) 87% 78% 86% 90% 70%
Total rigs in drilling fleet (end of year) 25 25 27 27 27
Number of employees (end of year) 1,500 1,500 1,900 1,700 1,600
</TABLE>
(1) Deferral of turnkey profit on oil and gas wells drilled on properties in
which the Company had an economic interest and was the operator.
(2) Contract drilling operating income for 1992 includes a net gain of $10.9
million relating to the sale of two offshore drilling rigs.
(3) The indenture governing the Senior Secured Notes contains certain
restrictions with respect to the payment of dividends on the Common Stock
(other than stock dividends). See Note 6 of Notes to Consolidated
Financial Statements.
(4) Barrels of oil equivalent, in thousands, applying a BTU conversion factor
of six MCF of gas per barrel of oil.
(5) The average utilization rate for a period is based on the ratio of days in
the period during which the rigs were under contract to the total days in
the period during which the rigs were available to work.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Operating Results
Summary
For 1993, the Company reported operating income of $3.2
million, compared to operating income of $15.7 million for 1992.
The prior-year period includes an $11.0 million gain on the sale of
one of the Company's offshore drilling rigs, the Glomar High Island
VI. Aside from the sale of the High Island VI, the decline in
operating results is attributable to lower contract drilling
dayrates and utilization in the North Sea and higher expense
associated with rig relocations, partially offset by higher
contract drilling dayrates and utilization in the Gulf of Mexico,
and by improvements in turnkey drilling and oil and gas. The
turnkey drilling operating income increased to $9.8 million for
1993 from $0.2 million in 1992, primarily due to completing 18
turnkey wells in 1993 compared to 10 turnkey wells in 1992. The
1993 turnkey wells also had, on average, higher gross margins. Oil
and gas operating income increased from $3.2 million in 1992 to
$5.3 million in 1993, despite lower revenues, primarily due to a
lower depletion rate as a result of property sales.
The Company's operating income of $15.7 million in 1992
decreased from $49.1 million in 1991. Excluding the gain on the
sale of the rig noted above, the decrease in operating income was
attributable to lower average dayrates and rig utilization, lower
volumes of oil and gas produced, lower oil prices and decreased
turnkey drilling.
Data relating to the Company's operations by business segment
follows:
<TABLE>
<CAPTION>
Increase/ Increase/
1993 (Decrease) 1992 (Decrease) 1991
(Dollars in millions)
<S> <C> <C> <C> <C> <C>
Revenues:
Marine drilling:
Contract drilling $203.1 (6%) $216.5 (14%) $252.6
Turnkey drilling 59.9 115% 27.9 (25%) 37.4
Intrasegment elimination (5.6) (3.4) (2.9)
Total marine drilling 257.4 7% 241.0 (16%) 287.1
Oil and gas 11.6 (40%) 19.3 (31%) 28.1
Total revenues $269.0 3% $260.3 (17%) $315.2
Operating income:
Marine drilling:
Contract drilling $ 4.5 (84%) $ 28.2 (43%) $ 49.2
Turnkey drilling 9.8 N/M(2) 0.2 (96%) 4.8
Elimination (1) (2.2) (2.4) (.3)
Total marine drilling 12.1 (53%) 26.0 (52%) 53.7
Oil and gas 5.3 66% 3.2 (65%) 9.1
Corporate expenses (14.2) 5% (13.5) (1%) (13.7)
Total operating income $ 3.2 (80%) $ 15.7 (68%) $ 49.1
</TABLE>
(1) Deferral of turnkey profit on oil and gas wells drilled on properties in
which the Company had an economic interest and was the operator.
(2) The percentage change results in a figure which, because of its
magnitude, is not meaningful.
Although certain drilling markets have shown marked
improvement over the past year, most notably the U.S. Gulf of
Mexico, the offshore drilling industry overall has been
characterized by an oversupply of and low demand for rigs,
resulting in low dayrates and operating margins. As a result, the
Company reported a net loss of $26.5 million for 1993, as compared
with a net loss of $37.1 million for 1992, excluding nonrecurring
gains and income, and net income of $1.0 million for 1991.
Marine Drilling Operations
Contract drilling. Data with respect to the Company's contract
drilling operations follows:
<TABLE>
<CAPTION>
Increase/ Increase/
1993 (Decrease) 1992 (Decrease) 1991
(Dollars in millions, except for fleet average dayrate)
<S> <C> <C> <C> <C> <C>
Contract drilling revenues by area:
Gulf of Mexico $ 76.4 390% $ 15.6 (59%) $ 37.9
North Sea 57.2 (43%) 100.3 (19%) 123.4
West Africa 31.6 (37%) 50.5 5% 47.9
Other 37.9 (24%) 50.1 15% 43.4
Total $203.1 (6%) $216.5 (14%) $252.6
Average rig utilization 87% 78% 86%
Fleet average dayrate $25,400 $27,600 $29,300
</TABLE>
Revenues from the Gulf of Mexico increased to $76.4 million in
1993 from $15.6 million in 1992, as indicated in the table above.
The increase resulted from the redeployment to the Gulf of (i) one
rig from the Mediterranean in November 1992, (ii) two rigs from
West Africa in April 1993, (iii) three rigs from the North Sea,
one in April 1993, one in June 1993 and another in November 1993,
and (iv) two rigs acquired in September 1993 from Transocean
Drilling AS, as more fully described below, as well as from higher
dayrates and higher rig utilization in the Gulf of Mexico. The
decrease in revenues attributable to the North Sea was due to the
decline in North Sea dayrates, the redeployment of the three rigs
from the North Sea to the Gulf of Mexico, and the completion of a
management contract with respect to another company's rig. The
decrease in revenues attributable to offshore West Africa was
primarily the result of the sale of the Glomar Biscay II in the
first quarter of 1993 and the redeployment of the two rigs from
offshore West Africa to the Gulf of Mexico in April 1993. The
decline in revenues in the "Other" category for 1993 compared to
1992 was due to the sale of the Glomar Biscay I and the Glomar
Atlantic in the fourth quarter of 1992 and the first quarter of
1993, respectively.
Revenues from the Gulf of Mexico decreased during 1992
compared to 1991 due to the sale of the Glomar High Island VI in
the first quarter of 1992 and to lower dayrates and utilization
resulting from the decline in domestic natural gas prices during
1991 and the first quarter of 1992. The decrease in 1992 revenues
attributable to the North Sea as compared to 1991 was due to the
redeployment of one rig from the North Sea to the Gulf of Mexico in
November 1991 and to lower dayrates and utilization.
As of December 31, 1993, the worldwide industry utilization
rate for competitive offshore rigs was 83 percent, with 98 of the
577 worldwide rigs unemployed. The offshore drilling markets in
which the Company participates continue to be characterized by
contracts that are, generally, of a short-term or well-to-well
nature, as they have been for the past several years. The Company
anticipates that contracts on 13 of the Company's 23 rigs under
contract as of February 22, 1994, will expire at varying times on
or prior to April 30, 1994. No assurance can be made that the
Company will obtain drilling contracts for the two rigs that are
currently available or for its other rigs upon the completion of
existing contracts. Short-term contracts have been typical in the
industry for the past decade, and the Company considers its
upcoming contract expirations typical of prevailing market
conditions in the normal course of business.
Drilling activity in the U.S. Gulf of Mexico increased in 1993,
coinciding with the increase in domestic natural gas prices. This
increase in drilling activity has resulted in an average industry
utilization rate for this area of 77 percent for 1993 compared to
51 percent for 1992. Given the historic volatility in gas prices,
no assurance can be made that current prices will be sustained. In
1993 the spot market price of domestic offshore natural gas at the
wellhead ranged from a low of $1.49 per thousand cubic feet in
January to a high of $2.54 in April. As of January 31, 1994, the
price was $2.18 per thousand cubic feet. The Company has twelve
rigs in the Gulf of Mexico, all of which were employed as of
February 22, 1994.
In the North Sea, the average industry utilization rate for
1993 decreased to 80 percent from 82 percent in 1992. As of
February 22, 1994, the Company had three rigs in the North Sea, two
of which were under contract.
In the United Kingdom, a reduction in tax relief for
exploration and appraisal expenditures has further depressed the
outlook for a market already weakened by reduced exploration
activity. The U.K. currently levies a petroleum revenue tax
("PRT") on revenue derived from the extraction of oil and natural
gas from the U.K. sector of the North Sea. A company is permitted
to reduce the amount of PRT it owes by taking as a credit against
its revenues certain of its expenditures used to explore for oil
and natural gas in the U.K. On March 16, 1993, the Chancellor of
the Exchequer announced certain proposed changes in the PRT. These
changes, which were implemented in 1993, among other things, (i)
reduced the rate of PRT from 75 percent to 50 percent on revenues
derived from existing fields; (ii) abolished the PRT for new
fields, defined as those for which development consent is received
after March 15, 1993; and (iii) eliminated the credit attributable
to exploration costs. The Company cannot predict what effect, if
any, these changes in the PRT might have on the demand for offshore
drilling rigs in the U.K. sector of the North Sea or on the
Company.
As a result of the market conditions and the legislation
discussed above, the outlook for North Sea activity remains
uncertain.
In West Africa, a renewal of the civil war in Angola and a
reduction of the Nigerian national oil company's participation in
ongoing projects have caused a reduction in the demand for offshore
drilling rigs. Average industry utilization rates offshore West
Africa declined to 72 percent for 1993 from 83 percent for the
prior year. All three of the Company's rigs in this area were
employed as of February 22, 1994.
The Company has recently taken a number of steps to strengthen
its position within its markets. In September 1993, the Company
acquired from Transocean Drilling AS, a Norwegian drilling
contractor ("Transocean"), a 100 percent ownership interest in
three 300-foot jackup drilling rigs, the Transocean No. 5, the
Transocean No. 6 and the Transocean No. 7, in exchange for a 100
percent ownership interest in the Company's heavy-weather jackup
drilling rig, the Glomar Moray Firth I, plus $17.0 million in cash.
Under the terms of the transaction, hereafter referred to as the
"Transocean Transaction," the parties will share in the aggregate
cash flow of the four rigs with approximately 57 percent going to
the Company and approximately 43 percent to Transocean (see Note 13
of Notes to Consolidated Financial Statements). The Transocean No.
6 and Transocean No. 7, which were redeployed by the Company from
the North Sea to the Gulf of Mexico in August 1993 under a prior
management agreement with Transocean, have been renamed the Glomar
Adriatic VI and the Glomar Adriatic VII, respectively, and are
currently being marketed and managed by the Company in the Gulf of
Mexico. The Transocean No. 5 is operating under Transocean's
management in Abu Dhabi pursuant to a pre-existing contract
expected to continue through January 1995; thereafter, the customer
has options which may extend the contract through the first quarter
of 1996. The Glomar Moray Firth I, which has been renamed the
Transocean No. 9, is under contract through March 1994 in the North
Sea. The revenue sharing arrangement with Transocean improves the
Company's access to the Norwegian North Sea market, where
Transocean has a strong presence, and provides the Company with
additional exposure in the strengthening U.S. Gulf of Mexico
market.
Additionally, in April 1993 the Company redeployed three jackup
rigs, one from the North Sea and two from offshore West Africa, to
the Gulf of Mexico. These three rigs are currently under contract.
In May 1993 the Company redeployed another rig, the Glomar Adriatic
IV, which had been drilling in the Gulf of Mexico, to Trinidad
under a multi-well contract that the Company expects will continue
through September 1994. In June and November 1993, the Company
redeployed the Glomar Baltic I and the Glomar Adriatic III,
respectively, from the North Sea to the Gulf of Mexico, where they
are currently under contract. Although the costs of the various
redeployments described above have negatively affected operating
results for 1993, the Company expects these rigs to generate higher
net operating cash flows as a result of their deployment to
stronger markets. The Company will consider additional
redeployments as market conditions warrant. Since December 1992,
the Company also has sold its three oldest drilling rigs, the
Glomar Biscay I, the Glomar Biscay II, and the Glomar Atlantic.
Turnkey Drilling. Turnkey drilling operations reported a $32.0
million increase in revenues and a $9.6 million increase in
operating income in 1993 as compared to 1992. This increase
resulted from the completion of 18 wells in 1993 compared to 10 in
1992, higher average gross margins on the 1993 wells and a $1.8
million loss incurred on one of the 1992 well completions due to
mechanical problems.
Turnkey drilling operations reported a $9.5 million decrease
in revenues and a $4.6 million decrease in operating income in 1992
as compared to 1991. This decrease resulted from the completion of
10 wells in 1992 compared to 16 in 1991 and the $1.8 million loss
incurred on one of the 1992 well completions, as noted above.
Oil and Gas Operations
Data related to the Company's oil and gas production follows:
<TABLE>
<CAPTION>
Increase/ Increase/
1993 (Decrease) 1992 (Decrease) 1991
<S> <C> <C> <C> <C> <C>
Gas:
Production (in millions
of cubic feet) 4,557 (55%) 10,055 (37%) 15,910
Average sale price (per
thousand cubic feet) $1.98 24% $1.60 5% $1.52
Oil:
Production (in barrels) 154,436 (6%) 164,560 (14%) 190,752
Average sale price (per barrel) $16.89 (13%) $19.43 (4%) $20.16
</TABLE>
Revenues from gas production decreased significantly in 1993
as compared with 1992 despite higher gas prices, primarily due to
overproduction in 1992 from one of the Company's primary offshore
gas producing properties, Matagorda Island Block 668, in order to
make up a prior gas production imbalance between the Company and
its working interest partner. Revenues from oil production in 1993
also decreased as compared with 1992 due to lower oil prices, the
1993 sale of an oil producing property, and normal production
decline. Despite the decrease in revenues, operating income
increased in 1993 as compared with 1992 due to a lower depletion
rate resulting from property sales and the attendant reduction in
the depletable base, lower overhead expenses and lower lease
operating expenses resulting from property sales.
Oil and gas revenues and operating income for 1992 were lower
than for 1991 due to lower volumes of gas and oil produced and
lower oil prices, offset in part by slightly higher 1992 gas
prices. The decrease in gas volume was primarily attributable to
the Company reaching production balance in 1992 with respect to its
interest in Matagorda Island Block 668 and to a 1991 lump sum
settlement of a gas imbalance on another one of the Company's
properties, High Island Block A-567. The decrease in the volume of
oil production was due primarily to normal decline.
Other Income and Expense
Interest expense for 1993 declined by $11.5 million from 1992
due to the reduction in long-term debt resulting from the Company's
recapitalization in December 1992 and the retirement of the rig
mortgage note for the Glomar Baltic I in August 1993. Interest
expense for 1992 declined from 1991 by $6.3 million due to the
reduction in long-term debt resulting from debt service payments
and from the Company's receipt of Units (as defined in Note 9 of
Notes to Consolidated Financial Statements) in connection with the
exercise of outstanding warrants to purchase the Company's common
stock.
Interest income in 1993 was approximately equal to interest
income in 1992. Interest income in 1992 fell by $0.7 million from
1991 primarily due to lower interest rates earned on the Company's
cash and marketable securities balances.
During 1992, the Company settled its take-or-pay litigation
with Transcontinental Gas Pipe Line Corporation, resulting in a
gain of $55.0 million.
Income tax expense of $0.3 million for 1993 consists of $0.8
million in current foreign income tax expense offset by a gain of
$0.5 million related to an adjustment to a state income tax
liability. Income tax expense of $3.1 million for 1992 consists of $2.8
million and $0.3 million in current foreign and U.S. federal income
tax expense, respectively. Income tax expense of $2.5 million for
1991 consists of foreign and state income taxes.
During 1992, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," and SFAS No. 109,
"Accounting for Income Taxes." The effect of SFAS No. 106 was to
decrease 1992 net income by $1.9 million, and the effect of SFAS
No. 109 was to increase 1992 net income by $3.3 million, each
representing the cumulative effect of the change as of January 1,
1992.
During 1992, the Company recognized an extraordinary gain of
$28.3 million on the early retirement of debt in connection with
the Company's recapitalization.
The Company's net loss for 1993 was $26.5 million compared to
net income of $57.2 million for 1992 and net income of $1.0 million
for 1991. The Company would have reported a net loss of $37.1
million for 1992 absent the settlement of the Transco litigation,
the extraordinary gain on extinguishment of debt and the sale of
one of the Company's High Island class jackup rigs.
Liquidity and Capital Resources
The Company completed a recapitalization (the
"Recapitalization") in December 1992 in order to reduce the amount
and extend the maturity of its outstanding debt and to reduce its
debt service requirements. The Recapitalization was comprised of
(i) the offering and sale of 26,000,000 shares of common stock and
a concurrent offering and sale of 12-3/4% Senior Secured Notes due
1999 in an aggregate principal amount of $225.0 million and (ii)
the application of the aggregate net proceeds from the offerings,
plus a portion of the Company's available funds, to retire long-
term debt in the amount of $342.7 million, including interest, at
a total reacquisition cost of $314.4 million. In January 1993, the
Company sold an additional 3,900,000 shares of common stock
pursuant to the exercise of the underwriters' over-allotment option
and received cash in the amount of $7.8 million, net of expenses.
In August 1993, the Company completed the sale of 17,250,000
shares of common stock in a public offering and received cash
proceeds of $66.4 million, net of expenses. The Company used $17.0
million of the proceeds to complete the Transocean Transaction and
$26.0 million to retire the rig mortgage note for the Glomar Baltic
I.
As of December 31, 1993, the Company's long-term debt totaled
$225.0 million, as compared to total shareholders' equity of $205.4
million.
The indenture under which the Senior Secured Notes are issued
imposes significant operating and financial restrictions on the
Company and provides for the granting of a first lien in favor of
the trustee, for the benefit of the holders of Senior Secured
Notes, on a significant portion of the Company's material assets.
Such restrictions affect, and in many respects limit or prohibit,
among other things, the ability of the Company to incur additional
indebtedness, make certain investments, create liens, sell assets,
engage in mergers or acquisitions and make dividends or other
payments. The highly leveraged position of the Company and the
restrictive covenants contained in and liens provided for under the
indenture could significantly limit the ability of the Company to
respond to changing business or economic conditions or to respond
to substantial declines in operating results.
The Senior Secured Notes do not require any payments of
principal prior to the stated maturity thereof in December 1999,
except that the Company is required to make offers to purchase
Senior Secured Notes with the proceeds of certain asset sales, upon
a change of control, or if the Company's excess cash flow, as
defined in the indenture, exceeds certain specified levels. The
annual interest on the Senior Secured Notes is $28.7 million,
payable semiannually, each June and December.
Net cash flow from operating activities for the year ended
December 31, 1993 was a net use of $0.7 million as compared to a
positive $66.0 million in the prior year. Operating cash flow for
1992 included $20.0 million in cash received in the settlement of
the Transco litigation. Furthermore, operating cash flow for 1993
included, among other things, the cost of redeploying eight rigs
during 1993 as compared with one in 1992 and higher interest
payments required under the Company's Senior Secured Notes.
In February 1994, the Company purchased two jackup drilling
rigs for $26.0 million in cash, $1.0 million in notes payable from
the rigs' net cash flow, and up to 900,000 shares of Global Marine
common stock. The Company anticipates spending an additional $15
million to refurbish and upgrade the rigs over approximately the
next 12 months.
Other capital expenditures for the Company's drilling fleet in
1994 are estimated to be $26 million for capital additions and improvements to
the Company's existing drilling fleet and for the possible purchase of another
drilling rig. Capital expenditures for the Company's oil and gas
operations are estimated to be $6 million in 1994, principally for
exploratory drilling, development drilling of producing properties,
the purchase of equipment used in connection with the producing
properties, and workovers and recompletions.
As of December 31, 1993, the Company had $44.6 million in
available liquidity, including $31.2 million in cash and cash
equivalents and $13.4 million in marketable securities, net of
restricted amounts of $6.8 million.
The Company regards the consideration received under the
previously reported settlement of the Transco litigation as an
additional source of liquidity (see Note 14 of Notes to
Consolidated Financial Statements). In particular, the Company
received the Transco Note, in the principal amount of $20.0
million, which has been defeased with U.S. government securities.
Payments under the Transco Note are due in eight equal quarterly
installments of $2.5 million each, plus interest, the first of
which was received in October 1993. In addition, on February 1,
1994, the Company received 1,017,771 previously escrowed shares of
Transco common stock plus $0.9 million in dividends declared and
paid on the escrowed shares. The Transco shares received by the
Company will not be available for sale by the Company in the public
market prior to May 1994. Furthermore, the number of shares of
Transco common stock which the Company may sell during any single
three-month period will be limited; as a result, the Company may
not be able to complete the sale of all of the Transco shares until
late 1994. Consequently, the Company will be subject to the risk
of any decline in value resulting from any decrease in the market
value of the Transco common stock during the period from February
1, 1994 until such time as the shares are sold. As of February 11,
1994, the market value of the Transco shares held by the Company
exceeded the carrying value of $15.0 million.
An additional source of liquidity is the cash flow from the
Company's oil and gas properties and turnkey drilling operations,
both of which are available to service the Company's debt and to
fund its working capital requirements. Cash flow from the
Company's oil and gas operations (other than the proceeds from the
Transco Litigation) and turnkey drilling may be limited by certain
factors. In particular, the anticipated capital expenditures
during 1994 for oil and gas activities are expected to equal
approximately two-thirds of the net cash flow from the Company's
oil and gas properties. Cash flow from turnkey drilling operations
is dependent on the ability of the Company to obtain and perform
successfully turnkey contracts based on competitive bids and on the
number of such contracts available for bid. Accordingly, results
of the Company's turnkey drilling operations may vary widely from
year to year.
In June 1993, the Company entered into a revolving credit
agreement with a major international bank to provide a three-year
revolving credit and letter of credit facility for up to $25
million to be collateralized by accounts receivable due under
drilling contracts. The amount the Company is able to borrow under
the facility is subject to a borrowing base consisting of 80
percent of eligible accounts receivable. There were no amounts
outstanding under this credit line as of December 31, 1993. The
Company estimates that, as of December 31, 1993, it would have been
able to borrow the full $25 million under the revolving credit
agreement.
The Company believes that it will be able to meet all of its
current obligations, including capital expenditures and
debt service, from its cash flow from operations, proceeds from the
Transco litigation, and its cash, cash equivalents and marketable
securities. The Company's ability, however, to pay the principal amount of
the Senior Secured Notes upon maturity in December 1999 would require a
substantial improvement in current industry conditions. The Company estimates
that the average dayrate earned by the Company's contract drilling fleet would
have to increase from $25,400 per rig earned for 1993 to approximately $29,000
per rig during the period from January 1, 1994, through the date of maturity of
the Senior Secured Notes in order to cover all cash operating, capital and
financing costs, including principal payments, during the period up to and
including the maturity of the Senior Secured Notes. This estimate assumes
the continuation of rig utilization and operating expenses at current levels and
does not include sources of liquidity other than cash flow from the Company's
contract drilling fleet.
In the first quarter of 1994, the Company will adopt Statement
of Financial Accounting Standards No. 112, "Employers' Accounting
for Postemployment Benefits." SFAS No. 112 requires the
recognition of expense for postemployment benefits on an accrual
basis, rather than the pay-as-you-go approach used previously.
Postemployment benefits include severance pay, disability-related
benefits and continuation of health care costs during the period
after employment but before retirement. The cumulative impact of
this change as of January 1, 1994, will be a charge to earnings in
the first quarter of 1994 in the amount of $3.5 million. Other
than the cumulative effect, the effect of the change on earnings is
not expected to be material.
In addition, in the first quarter of 1994, the Company will
adopt the provisions of SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The new standard
expands the use of fair value accounting for certain investments in
debt and equity securities but retains the use of the amortized
cost method for investments in debt securities that the Company has
the intent and ability to hold to maturity. The adoption of the
new standard will have no effect on the accounting for the
Company's investments in marketable securities, which consisted
entirely of debt securities as of December 31, 1993, because the
Company holds such securities to maturity. Adoption of the new
standard also will have no effect on the accounting for the
Company's investment in common stock, which had both a carrying
value and a fair value of $15.0 million as of December 31, 1993.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Global Marine Inc.
We have audited the consolidated balance sheet of Global Marine
Inc. and subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of operations, shareholders'
equity, and cash flows for each of the three years in the period
ended December 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Global Marine Inc. and subsidiaries as of December 31,
1993 and 1992, and the consolidated results of their operations and
their cash flows for each of the three years in the period ended
December 31, 1993 in conformity with generally accepted accounting
principles.
As discussed in Notes 1, 8 and 11 to the consolidated financial
statements, in 1992 the Company adopted the new methods of
accounting for income taxes and for postretirement benefits other
than pensions as prescribed by applicable statements of the
Financial Accounting Standards Board.
\s\ Coopers & Lybrand
Houston, Texas
February 11, 1994
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Revenues
Marine drilling $257.4 $241.0 $ 287.1
Oil and gas 11.6 19.3 28.1
Total revenues 269.0 260.3 315.2
Expenses
Marine drilling 213.3 189.2 197.7
Oil and gas 3.0 6.1 8.3
Depreciation, depletion and amortization 35.9 47.1 46.6
Gain on sale of offshore drilling rigs, net - (10.9) -
General and administrative 13.6 13.1 13.5
265.8 244.6 266.1
Operating income 3.2 15.7 49.1
Other income (expense)
Interest expense (32.1) (43.6) (49.9)
Interest income 2.7 2.8 3.5
Litigation settlement (Note 14) - 55.0 -
Other (Note 9) - .7 .8
Total other income (expense) (29.4) 14.9 (45.6)
Income (loss) before income taxes (26.2) 30.6 3.5
Income tax expense (Note 8) .3 3.1 2.5
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting principles (26.5) 27.5 1.0
Extraordinary gain on extinguishment of debt - 28.3 -
Cumulative effect of change in accounting for
income taxes - 3.3 -
Cumulative effect of change in accounting for
postretirement health care and life insurance benefits - (1.9) -
Net income (loss) $(26.5) $ 57.2 $ 1.0
Net income (loss) per common share (Note 7)
Before extraordinary item and cumulative effect
of changes in accounting principles $(0.17) $ 0.24 $ 0.01
Extraordinary gain on extinguishment of debt - 0.24 -
Cumulative effect of change in accounting for
income taxes - 0.03 -
Cumulative effect of change in accounting for
postretirement health care and life insurance benefits - (0.02) -
Net income (loss) per common share $(0.17) $ 0.49 $ 0.01
See notes to consolidated financial statements.
</TABLE>
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
ASSETS
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Current assets
Cash and cash equivalents $ 31.2 $ 23.3
Marketable securities 20.2 10.3
Accounts receivable, less allowance for
doubtful accounts of $1.2 in 1993 and 1992 57.9 46.3
Note receivable (Note 14) 10.2 2.7
Investment, at cost (Note 14) 15.0 -
Prepaid expenses 6.5 5.9
Other current assets 3.4 2.8
Total current assets 144.4 91.3
Properties (Note 2)
Rigs and drilling equipment, less accumulated
depreciation of $134.0 in 1993 and $128.7 in 1992 311.2 310.4
Oil and gas properties, full cost method, less accumulated
depreciation, depletion and amortization of $29.5 in
1993 and $24.6 in 1992 3.4 7.6
Net properties 314.6 318.0
Funds in escrow for operating lease 8.5 19.7
Note receivable (Note 14) 7.5 17.5
Investment, at cost (Note 14) - 15.0
Other assets 17.9 18.4
Total assets $492.9 $479.9
</TABLE>
See notes to consolidated financial statements.
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in millions)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Current liabilities
Current maturities of long-term debt (Note 2) $ - $24.0
Accounts payable 19.9 15.2
Accrued liabilities (Note 3) 17.3 21.4
Total current liabilities 37.2 60.6
Long-term debt (Note 2) 225.0 225.0
Reserve for loss on operating lease 8.4 19.6
Other long-term liabilities 16.9 20.2
Commitments and contingencies (Note 4) - -
Shareholders' equity
Preferred stock, $.01 par value, 10 million shares
authorized, no shares issued or outstanding - -
Common stock, $.10 par value, 200 million shares
authorized, 162,832,799 shares and 140,228,732
shares issued and outstanding at December 31, 1993
and 1992, respectively (Note 6) 16.3 14.0
Additional paid-in capital 254.7 179.6
Accumulated deficit (65.6) (39.1)
Total shareholders' equity 205.4 154.5
Total liabilities and shareholders' equity $492.9 $479.9
</TABLE>
See notes to consolidated financial statements.
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $(26.5) $ 57.2 $ 1.0
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation, depletion and amortization 35.9 47.1 46.6
Deferred interest - 18.3 26.8
Proceeds from settlement of litigation - (35.0) 17.8
Gain on extinguishment of debt - (28.3) -
Gain on sale of offshore drilling rigs, net - (10.9) -
Cumulative effect of changes in accounting
principles, net - (1.4) -
(Increase) decrease in accounts receivable (11.5) 11.9 (17.9)
(Increase) decrease in other current assets (2.2) 1.7 (6.4)
Increase (decrease) in accounts payable 4.7 .8 (4.2)
Increase (decrease) in accrued liabilities (2.5) 3.1 5.8
Other, net 1.4 1.5 (2.8)
Net cash flow provided by
(used in) operating activities (.7) 66.0 66.7
Cash flows from investing activities
Capital expenditures (40.6) (20.9) (22.7)
Purchases of marketable securities (26.7) (48.8) (75.1)
Proceeds from sales or maturities of marketable securities 16.8 70.2 61.5
Disposals of properties 10.3 21.8 .6
Other (1.9) (.3) .4
Net cash flow provided by
(used in) investing activities (42.1) 22.0 (35.3)
Cash flows from financing activities
Common stock offerings, net of expenses 74.2 51.3 -
Payments on long-term debt (25.4) (359.1) (67.2)
Issuance of long-term debt - 225.0 -
Debt issue costs - (8.2) -
Exercise of stock purchase warrants - - 11.5
Other 1.9 .8 .9
Net cash flow provided by (used in) financing activities 50.7 (90.2) (54.8)
Increase (decrease) in cash and cash equivalents 7.9 (2.2) (23.4)
Cash and cash equivalents at beginning of year 23.3 25.5 48.9
Cash and cash equivalents at end of year $ 31.2 $ 23.3 $ 25.5
</TABLE>
See notes to consolidated financial statements.
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Dollars in millions)
<TABLE>
<CAPTION>
Additional Estimated Pro-
Common Stock Paid-in Accumulated eeds from Future
Shares Par Value Capital Deficit Sale of Stock Total
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990 105,425,099 $10.5 $105.4 $(97.3) $(17.7) $ .9
Net income - - - 1.0 - 1.0
Settlement of surety litigation - - - - 17.7 17.7
Exercise of warrants 7,389,279 .8 24.0 - - 24.8
Exercise of stock options 449,450 - .2 - - .2
Common stock issued under
other employee benefit plans 29,652 - - - - -
Reorganization adjustments (17,932) - - - - -
Balance, December 31, 1991 113,275,548 11.3 129.6 (96.3) - 44.6
Net income - - - 57.2 - 57.2
Common stock offering 26,000,000 2.6 48.7 - - 51.3
Exercise of stock options 319,750 - .2 - - .2
Common stock issued under other
employee benefit plans 633,434 .1 1.1 - - 1.2
Balance, December 31, 1992 140,228,732 14.0 179.6 (39.1) - 154.5
Net loss - - - (26.5) - (26.5)
Common stock offerings 21,150,000 2.1 72.1 - - 74.2
Exercise of stock options 779,500 .1 1.0 - - 1.1
Common stock issued under
other employee benefit plans 674,567 .1 2.0 - - 2.1
Balance, December 31, 1993 162,832,799 $16.3 $254.7 $(65.6) $ - $205.4
</TABLE>
See notes to consolidated financial statements.
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
Principles of Consolidation. The consolidated financial
statements include the accounts of Global Marine Inc. and its
majority-owned subsidiaries. Unless the context otherwise
requires, the term "Company" refers to Global Marine Inc. and its
consolidated subsidiaries. Intercompany accounts and
transactions are eliminated.
Reclassifications. Certain previously reported amounts have
been reclassified to conform to the 1993 presentation.
Cash Equivalents. Cash equivalents consist of all highly
liquid debt instruments with remaining maturities of three months
or less at the time of purchase.
Marketable Securities. Marketable securities are debt
securities consisting of commercial paper, Eurodollar time deposits
and certificates of deposit which are purchased with remaining
maturities greater than three months and are carried at cost.
In the first quarter of 1994, the Company will adopt the
provisions of SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." The new standard expands the use of
fair value accounting for certain investments in debt and equity
securities but retains the use of the amortized cost method for
investments in debt securities that the Company has the intent and
ability to hold to maturity. The adoption of the new standard will
have no effect on the accounting for the Company's investments in
marketable securities, which consisted entirely of debt securities
as of December 31, 1993, because the Company holds such securities
to maturity. Adoption of the new standard also will have no effect
on the accounting for the Company's investment in common stock,
which had both a carrying value and a fair value of $15.0 million
as of December 31, 1993.
Rigs and Drilling Equipment. The carrying values for rigs and
drilling equipment were reduced to their estimated fair market
values as of December 31, 1988, the date of accounting recognition
of the Company's 1989 plan of reorganization. Depreciation of rigs
and drilling equipment is computed using the straight-line method
over their estimated service lives, which range from four to
fourteen years, assuming a salvage value of ten percent.
Expenditures for maintenance and repairs are charged to expense as
incurred, while expenditures for betterments are capitalized.
Costs of property sold or retired and the related accumulated
depreciation are removed from the accounts; resulting gains or
losses are included in income.
Oil and Gas Properties. The Company capitalizes all costs
attributable to the acquisition, exploration and development of oil
and gas reserves under the full cost method of accounting. The
depreciation, depletion and amortization provision is computed
using the units of production method. The depletable base consists
of capitalized costs, estimated future costs to develop proved
reserves, and estimated future dismantlement costs. The costs of
unproved properties and major development projects are not subject
to depreciation, depletion and amortization until they are fully
evaluated. All unproved properties are reviewed periodically to
ascertain if impairment has occurred. Costs of proved oil and gas
properties which exceed the present value of estimated future net
revenues are charged to expense. Proceeds from sales of oil and
gas properties are applied to reduce the depletable base unless the
sale involves a significant quantity of reserves in relation to
total reserves, in which case a gain or loss would be recognized.
Accounting for Drilling Contracts on Properties in which the
Company has a Working Interest. From time to time, the Company may
obtain a service contract to drill a well on an oil and gas
property in which the Company has a working interest and in which
the Company is the operator of the property. In such instances,
any profit on the drilling contract attributable to the Company's
working interest is eliminated, and any profit attributable to non-
affiliates is deferred to future periods. Drilling profit is
deferred by charging income and reducing the carrying value of oil
and gas properties. Such deferred profit is recognized over the
life of the Company's oil and gas properties through lower
depletion charges as a result of reducing the depletable base.
Gas Balancing. The Company uses the sales method to account
for its undertaken positions subject to gas balancing agreements.
Under the sales method, the Company postpones revenue recognition
of its proportionate share in production delivered to another
producer's customer, and postpones recognition of the related lease
operating expense until such time as (i) the Company's customer
begins taking delivery of the product and/or (ii) the cessation of
production, in which case the Company's related gas balancing
agreements require monetary settlement.
Foreign Currency Translation. The U.S. dollar is the
functional currency for all of the Company's operations. Foreign
currency transaction gains and losses are included in income during
the period in which they arise. Such amounts for 1993, 1992 and
1991 were not material.
Postretirement Health Care and Life Insurance Benefits. The
Company adopted SFAS No. 106, "Employers' Accounting for
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Postretirement Benefits Other than Pensions," effective January 1,
1992. SFAS No. 106 requires that an employer account for the
estimated cost of an employee's postretirement health care and life
insurance benefits on an accrual basis over the period of time that
the employee renders the required service (see Note 11).
Postemployment Benefits. In the first quarter of 1994, the
Company will adopt Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits." SFAS No.
112 requires the recognition of expense for postemployment benefits
on an accrual basis, rather than the pay-as-you-go approach used
previously. Postemployment benefits include severance pay,
disability-related benefits and continuation of health care costs
during the period after employment but before retirement. The
cumulative impact of this change as of January 1, 1994, will be a
charge to earnings in the first quarter of 1994 in the amount of
$3.5 million. Other than the cumulative effect, the effect of the
change on earnings is not expected to be material.
Note 2 - Long-term Debt
Long-term debt as of December 31 consisted of the following:
1993 1992
(In millions)
[S] [C] [C]
Senior Secured Notes, 12-3/4%, due December 15, 1999 $225.0 $225.0
Petdrill Note, 8%, maturing quarterly through
December 31, 1993 (the note had an
effective interest rate of 12% and was recorded
net of an unamortized discount of $0.9 million as of
December 31, 1992) - 24.0
Total long-term debt including current maturities 225.0 249.0
Less current maturities - 24.0
Long-term debt $225.0 $225.0
Interest on the Senior Secured Notes is payable semi-annually
each June and December. The Senior Secured Notes do not require
any payments of principal prior to the stated maturity thereof on
December 15, 1999, except that the Company is required to make
offers to purchase Senior Secured Notes upon the occurrence of
certain events, which are defined in the indenture governing the
Senior Secured Notes, such as asset sales or a change of control or
if the excess cash flow of the Company exceeds certain specified
levels.
The Senior Secured Notes are not redeemable at the option of
the Company prior to December 15, 1997. On or after December 15,
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1997, the Senior Secured Notes are redeemable at the option of the
Company, in whole at any time or in part from time to time, at a
price of 102 percent of principal if redeemed during the twelve
months beginning December 15, 1997, or at a price of 100 percent of
principal if redeemed on or after December 15, 1998, in each case
together with interest accrued to the redemption date.
The Senior Secured Notes are collateralized by 23 rigs and all
of the capital stock of the Company's direct or indirect
subsidiaries, excluding the stock of Petdrill, Inc., and certain
other subsidiaries as defined in the indenture. The indenture
under which the Senior Secured Notes are issued imposes significant
operating and financial restrictions on the Company. Such
restrictions affect, and in many respects limit or prohibit, among
other things, the ability of the Company to incur additional
indebtedness, make capital expenditures, create liens, sell assets,
engage in mergers or acquisitions and make dividends or other
payments.
In August 1993, the Company used $26.0 million of the proceeds
from a public offering of common stock to retire the rig mortgage
note for the Glomar Baltic I (the "Petdrill Note"), including
interest.
In June 1993, the Company entered into a revolving credit
agreement with a major international bank to provide a three-year
revolving credit and letter of credit facility for up to $25
million to be collateralized by accounts receivable due under
drilling contracts. The amount the Company is able to borrow under
the facility is subject to a borrowing base consisting of 80
percent of eligible accounts receivable. Borrowings under the
facility would accrue interest at the lowest of one of three
market-based interest rates, one of which is the prime rate plus 1-
1/2 percent. The unused portion of the line of credit is subject
to an annual commitment fee of one-half of one percent. There were
no amounts outstanding under this credit line as of December 31,
1993. The Company estimates that, as of December 31, 1993, it
would have been able to borrow the full $25 million under the
revolving credit agreement.
Note 3 - Accrued Liabilities
Accrued liabilities as of December 31 consisted of the
following:
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
1993 1992
(In millions)
<S> <C> <C>
Compensation and related employee costs $ 9.4 $ 9.7
Claims and allowances 3.0 2.0
Income taxes 2.0 4.5
Interest 1.2 1.2
Other 1.7 4.0
Total accrued liabilities $17.3 $21.4
</TABLE>
Note 4 - Commitments and Contingencies
The Company operates its Concrete Island Drilling System (the
"CIDS"), also known as the Glomar Beaufort Sea I, under a
noncancelable operating lease. Also, the Company has numerous
noncancelable operating leases for office facilities and equipment.
The leases have remaining terms ranging of up to eight years, some
of which may be renewed at the Company's option. Certain leases
are subject to rent revisions based on changes in interest rates,
the Consumer Price Index and/or escalations due to increases in
building operating costs. Rent expense for 1993, 1992, and 1991
was $6.1 million, $6.8 million and $5.9 million, respectively.
Future minimum rental payments for the Company's lease
obligations as of December 31, 1993, net of payments which were
previously deposited into escrow, were as follows:
<TABLE>
(In millions)
<S> <C>
Year ending December 31:
1994 $ 2.7
1995 2.2
1996 .6
1997 .3
1998 .3
Later years .6
Total future minimum rental payments $ 6.7
</TABLE>
As of December 31, 1993, $6.8 million of the Company's
marketable securities was restricted from general use, including
$5.0 million in proceeds from sales of oil and gas properties and
$1.8 million collateralizing outstanding operating letters of
credit. The use of the proceeds from sales of oil and gas
properties and other assets is limited under the terms of the
indenture governing the Senior Secured Notes.
The lease for the CIDS expires in December 1994. Prior to
expiration, the Company may make arrangements with the lessor to
extend the term of the lease beyond the current expiration date or
to purchase the CIDS at a price to be negotiated between the two
parties. If such an agreement cannot be reached, the Company may
be required to redeliver the CIDS to the lessor at the nearest ice-
free port.
The Company is involved in various lawsuits resulting from
personal injury and, from time to time, performance of services and
property damage. The Company believes that resolution of these
matters will not have a material adverse effect on its financial
position.
Note 5 - Financial Instruments
Concentrations of Credit Risk
As indicated in the industry segment information which appears
in Note 10, the market for the Company's services and products is
the offshore oil and gas industry, and the Company's customers
consist primarily of major integrated international oil companies
and independent oil and gas producers. The Company performs
ongoing credit evaluations of its customers and generally does not
require material collateral. The Company maintains reserves for
potential credit losses, and such losses have been within
management's expectations.
At December 31, 1993 and 1992, the Company had cash deposits
concentrated primarily in four major banks. In addition, the
Company had certificates of deposits, commercial paper and
Eurodollar time deposits with a variety of companies and financial
institutions with strong credit ratings. As a result of the
foregoing, the Company believes that credit risk in such
instruments is minimal.
Fair Values of Financial Instruments
As of December 31, 1993 and 1992, the estimated fair value of
the Company's investment in common stock approximated its carrying
value of $15.0 million. The estimated fair value of the Company's
$225.0 million carrying value of long-term debt approximated $249.2
million and $225.0 million as of December 31, 1993 and 1992,
respectively. The estimates of fair values were based on quoted
market prices. The carrying values of the Company's cash and cash
equivalents, marketable securities, trade receivables and payables,
note receivable and current maturities of long-term debt
approximate their fair values due to the short-term maturities of
these instruments.
Note 6 - Capital Stock
The Company is authorized to issue 200,000,000 shares of common
stock, $0.10 par value per share, and 10,000,000 shares of
preferred stock, $0.01 par value per share. As of December 31,
1993, 37,167,201 shares of common stock were unissued, including
15,404,391 shares reserved for issuance under stock option plans.
None of the preferred stock was issued or outstanding as of
December 31, 1993.
In February 1994, the Company's board of directors approved an
increase in the number of authorized shares of the Company's common
stock, from 200,000,000 shares to 300,000,000 shares. This
increase is subject to stockholder approval, which the Company
intends to seek at its annual meeting of stockholders to be held in
May 1994. The additional shares, if authorized by the
stockholders, would have the same rights and privileges as shares
of the common stock presently outstanding and could be used in the
future for any proper corporate purpose.
The indenture governing the Senior Secured Notes contains
certain restrictions with respect to the payment of dividends on
the common stock (other than stock dividends). Specifically, the
indenture restricts the payment of dividends based on (i)
availability of funds under a formula based on previously unapplied
cumulative net income since September 30, 1992 plus certain stock
sale proceeds after December 23, 1992 and (ii) satisfaction of the
then applicable minimum interest coverage ratio for debt
incurrence. Cumulative net income for purposes of the test
excludes gains or losses on asset sales and certain other
nonrecurring charges or credits specified in the indenture. Based
on the above restrictions, the Company was prohibited from paying
dividends on the common stock as of December 31, 1993.
The Company has two stock option plans, the Global Marine Inc.
1989 Stock Option and Incentive Plan and the 1990 Non-Employee
Director Stock Option Plan (the "Stock Option Plans"). Under the
Stock Option Plans, options to purchase shares of common stock may
be granted to key employees and directors, and shares of common
stock may be sold to employees at incentive prices below the market
price at the time of the sale. One-half of each option grant is
exercisable beginning one year after the date of grant with the
remainder exercisable after two years. Options expire ten years
after the date of grant. Options become exercisable in full if
more than 50 percent of the Company's outstanding common stock is
acquired by a person or a single group of persons. Shares of
common stock available for future option grants and stock sales
under the Stock Option Plans totaled 7,041,691 and 2,787,488 at
December 31, 1993 and 1992, respectively.
The following is a summary of stock option transactions:
<TABLE>
Number Option Price
Of Shares Per Share
<S> <C> <C>
Outstanding, December 31, 1990 4,617,900 $.56 to $5.44
Granted 1,679,000 $3.50 to $4.69
Exercised (449,450) $.56
Canceled (54,700) $4.44 to $5.38
Outstanding, December 31, 1991 5,792,750 $.56 to $5.44
Granted 2,118,500 $1.69 to $2.56
Exercised (319,750) $.56
Canceled (91,100) $2.00 to $5.38
Outstanding, December 31, 1992 7,500,400 $.56 to $5.44
Granted 1,825,000 $3.00 to $4.63
Exercised (779,500) $.56 to $4.81
Canceled (183,200) $1.69 to $5.44
Outstanding, December 31, 1993 8,362,700 $.56 to $5.44
Exercisable, December 31,
1993 5,596,200
1992 4,538,150
</TABLE>
Note 7 - Net Income (Loss) per Common Share
Net income per common share is based on the weighted average
number of common shares outstanding and, for those periods in which
they have a dilutive effect, shares contingently issuable due to
outstanding options. The net loss per share is based on the
weighted average number of common shares outstanding. The number
of shares used were 151,984,669 for 1993, 116,337,978 for 1992, and
109,156,271 for 1991. Shares for 1992 include 1,703,048 share
equivalents attributable to outstanding options. Shares for 1993
and 1991 exclude the effect of outstanding options because their
effect was either immaterial or antidilutive.
Assuming the Company paid off the Petdrill Note (see Note 2)
on January 1, 1993, the net loss for 1993 would have decreased from
$26.5 million ($0.17 per share) to $24.3 million ($0.16 per share).
The pro forma amounts give effect to a reduction in interest
expense and assume that 6,698,985 of the 17,250,000 shares issued
in connection with the Company's August 1993 public offering and
utilized to repay the Petdrill Note were outstanding for all of
1993.
Note 8 - Income Taxes
The provision for income taxes consisted of the following:
<TABLE>
1993 1992 1991
(In millions)
<S> <C> <C> <C>
Current - Foreign $ .8 $ 2.8 $ 2.3
- U.S. federal - .3 -
- State (.5) - .5
Total current .3 3.1 2.8
Deferred - U.S. federal - - (.3)
Provision for income taxes $ .3 $ 3.1 $ 2.5
</TABLE>
Effective January 1, 1992, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." Under SFAS No. 109, deferred income taxes are
recorded to reflect the tax consequences on future years of
differences between the tax bases of assets and liabilities and
their financial reporting amounts at each year-end. The new
standard replaced SFAS No. 96, which the Company adopted in 1988.
The cumulative effect of the accounting change on years prior to
1992 was a $3.3 million reduction in the Company's deferred tax
liability as of January 1, 1992. The Company reported the
cumulative effect of the change in the 1992 statement of operations
and, as a result, increased 1992 net income by $3.3 million ($0.03
per share). The effect of the change on 1992 net income, excluding
the cumulative effect upon adoption, was not material. Assuming
the accounting change was applied retroactively to 1991, the effect
on net income and on net income per share for 1991 would not have
been material.
<PAGE>
A reconciliation of the differences between income taxes
computed at the U.S. federal statutory rate of 35 percent for 1993
and 34 percent for 1992 and 1991, and the Company's reported
provision for income taxes follows:
<TABLE>
1993 1992 1991
(Dollars in millions)
<S> <C> <C> <C>
Income tax expense (benefit) at statutory rate $(9.2) $10.4 $1.2
Income (deductions) not recognized for books 8.7 (9.9) -
Foreign tax provision .8 2.8 2.3
State tax provision (.5) - .5
Amortization of discount on note payable .3 (.7) (.6)
Alternative minimum tax - .3 -
Deferred tax benefit - - (.3)
Other, net .2 .2 (.6)
Provision for income taxes $ .3 $ 3.1 $2.5
Effective tax rate 1.1% 10.1% 71.4%
</TABLE>
As of December 31, 1993, the Company had deferred tax assets
totaling $441.4 million, deferred tax liabilities totaling $46.5
million, and a valuation allowance in the amount of $394.9 million.
The valuation allowance is based on the likelihood that the net
deferred tax asset in the amount of $394.9 million will not be
realized. The net change in the valuation allowance during 1993
was an increase of $9.3 million. The components of the deferred
tax amounts as of December 31 were as follows:
<TABLE>
<CAPTION>
Asset (Liability)
1993 1992
(In millions)
<S> <C> <C>
Net operating and capital loss carryforwards $ 398.2 $ 384.7
Investment tax credit carryforwards 29.8 35.0
Reserves for operating lease, pensions and claims 9.1 13.6
Income recognized for tax in excess of book income 4.3 4.0
Depreciation and depletion (16.9) (26.0)
Tax benefit transfers (29.4) (24.3)
Deferred charges (.2) (1.4)
Net deferred tax asset before valuation allowance 394.9 385.6
Valuation allowance (394.9) (385.6)
Net deferred tax asset recognized in
consolidated balance sheet $ - $ -
</TABLE>
As of December 31, 1993, the Company had $1,120.9 million in
net operating loss carryforwards ("NOLs") expiring from 1999 to
2008 and $29.8 million in investment tax credit carryforwards
("Credits") expiring from 1994 to 2000.
The NOLs and Credits are subject to review and potential
disallowance by the Internal Revenue Service ("IRS") upon audit of
the federal income tax returns of the Company. For example, the
IRS might assert that the NOLs and the Credits were adversely
affected by the implementation of the Company's 1989 plan of
reorganization (the "Plan"). Section 382 of the Internal Revenue
Code of 1986, as amended, may impair the future availability of the
NOLs and the Credits if there is a change in ownership of more than
50 percent of the Company's common stock since the effective date
of the Plan, including future changes in the ownership of the
common stock. This limitation, if it applied, would limit the
utilization of the NOLs and the Credits in each taxable year to an
amount equal to the product of the federal long-term tax-exempt
bond rate prescribed monthly by the IRS and the fair market value
of all the Company's stock at the time of the ownership change.
The interpretation of Section 382 is subject to numerous
uncertainties. Accordingly, while the Company believes its loss
carryforwards are available to it without limitation, such
availability is not certain, nor is it certain that such
carryforwards, if presently available without limitation, will
continue to be available without limitation.
Note 9 - Other Income (Expense)
Other income for 1992 consisted of a $0.5 million gain
resulting from an adjustment to the remaining accrual for the costs
of debt restructuring relating to the Company's 1989 plan of
reorganization and a $0.2 million gain on the sale of an investment
in common stock. For 1991, other income included a $0.9 million
gain recognized on the extinguishment of debt resulting from the
Company's receipt of previously outstanding units of beneficial
interest in the Global Marine Drilling Company Series B Trust
("Units") in connection with the exercise of outstanding warrants
to purchase the Company's common stock.
Note 10 - Industry Segment Information
The principal industry segments of the Company are marine
drilling and oil and gas exploration, development and production.
Marine drilling includes offshore contract drilling and turnkey
drilling management services. Contract drilling services are
performed generally on a daily rate basis under individual
contracts for either a stated period of time or the time required
to drill a well or number of wells. Revenues from turnkey drilling
services are derived from the design and execution of a specific
offshore drilling program at a fixed price to the oil and gas
operator and are recognized under the completed contract method of
accounting. In the industry segment data which follows,
intrasegment revenues are recorded at transfer prices which
approximate the prices charged to unaffiliated customers and have
been eliminated from consolidated revenues. Operating income
consists of revenues less the related operating costs and expenses,
excluding interest and unallocated corporate expenses. Adjustments
and eliminations as they relate to operating income include the
reduction to turnkey drilling operating income attributable to
service contracts on oil and gas properties in which the Company
had an economic interest and was the operator. In that regard,
operating income for turnkey drilling for 1992 and 1991 has been
restated to conform to the 1993 presentation. Such restatement had
no effect on the consolidated operating income for either 1992 or
1991.
<PAGE>
<TABLE>
<CAPTION>
Contract Turnkey Adjustments
Drilling Drilling Oil and Gas Corporate & Eliminations Consolidated
(In millions)
<C> <C> <C> <C> <C> > <C> <C>
Revenues from unaffiliated customers
1993 $200.3 $57.1 $11.6 $ - $ - $269.0
1992 214.1 26.9 19.3 - - 260.3
1991 249.9 37.2 28.1 - - 315.2
Intrasegment revenues
1993 2.8 2.8 - - (5.6) -
1992 2.4 1.0 - - (3.4) -
1991 2.7 0.2 - - (2.9) -
Total revenues
1993 203.1 59.9 11.6 - (5.6) 269.0
1992 216.5 27.9 19.3 - (3.4) 260.3
1991 252.6 37.4 28.1 - (2.9) 315.2
Operating income
1993 4.5 9.8 5.3 (14.2) (2.2) 3.2
1992 28.2(1) 0.2 3.2 (13.5) (2.4) 15.7
1991 49.2 4.8 9.1 (13.7) (0.3) 49.1
Depreciation, depletion
and amortization
1993 32.0 - 3.3 0.6 - 35.9
1992 36.7 - 10.0 0.4 - 47.1
1991 35.7 - 10.7 0.2 - 46.6
Capital expenditures
1993 36.7 - 3.1 0.8 - 40.6
1992 18.3 - 1.7 0.9 - 20.9
1991 20.3 - 2.1 0.3 - 22.7
Identifiable assets
1993 379.6 5.4 43.2 64.7 - 492.9
1992 384.6 0.9 52.1 42.3 - 479.9
1991 434.6 4.7 30.4 54.0 - 523.7
</TABLE>
__________________________________
(1) Includes a $10.9 million net gain on the sale of two offshore
drilling rigs.
In 1993 one customer provided $29.2 million of marine drilling
revenues. In 1992 one customer provided $37.8 million and another
customer provided $34.0 million of marine drilling revenues. No
single customer provided more than ten percent of revenues for
1991.
<PAGE>
A breakdown of export sales by geographic area follows:
<TABLE>
1993 1992 1991
(In millions)
<S> <C> <C> <C>
North Sea $ 62.9 $ 100.3 $ 123.4
West Africa 31.6 50.5 47.9
Far East and Australia 10.4 16.1 12.5
Mediterranean - 12.0 17.5
Other 13.3 5.9 3.0
Total export sales $118.2 $ 184.8 $ 204.3
</TABLE>
The Company may be exposed to the risk of foreign currency
exchange losses in connection with its foreign operations. Such
losses are the result of holding net monetary assets (cash and
receivables in excess of payables) denominated in foreign
currencies during periods of a strengthening U.S. dollar. The
Company's foreign exchange gains and losses, which are primarily
attributable to the British pound, have not been and are not
expected to be material. This is because the Company's revenues
are primarily denominated in U.S. dollars; revenues in each foreign
currency are approximately equal to the Company's local expenses in
that currency; and the Company does not speculate in foreign
currencies or maintain significant foreign currency cash balances.
Note 11 - Retirement Plans
Pensions
The Company has defined benefit pension plans covering
substantially all of its employees. For the most part, benefits
are based on the employee's length of service and average earnings
for the five highest consecutive calendar years of compensation
during the last fifteen years of service. Substantially all
benefits are paid from funds previously provided to trustees. The
Company is the sole contributor to the plans, and its funding
objective is to fund participants' benefits under the plans as they
would accrue, taking into consideration future salary increases.
The components of net pension cost were as follows:
<TABLE>
1993 1992 1991
(In millions)
<S> <C> <C> <C>
Service cost - benefits earned during the period $ 1.5 $ 1.8 $ 2.0
Interest cost on projected benefit obligation 3.3 3.1 2.9
Actual return on plan assets (2.9) (1.3) (3.0)
Net amortization and deferral 0.3 (0.9) 1.7
Net pension cost $ 2.2 $ 2.7 $ 3.6
</TABLE>
The following table sets forth the funded status of the plans
and the amounts recognized in the Company's consolidated balance
sheet as of December 31:
<PAGE>
<TABLE>
1993 1992
(In millions)
<S> <C> <C>
Actuarial present value of plan benefits:
Vested $39.2 $ 32.2
Nonvested 3.3 3.0
Accumulated benefit obligation 42.5 35.2
Effect of projected salary increases 6.9 6.2
Projected benefit obligation 49.4 41.4
Plan assets at fair value 36.7 31.3
Projected benefit obligation in excess of plan assets 12.7 10.1
Unrecognized net loss (6.5) (2.3)
Unrecognized net transition obligation (0.1) (0.1)
Accrued pension liability $ 6.1 $ 7.7
</TABLE>
Plan assets consist primarily of listed stocks and bonds,
fixed-income investments and real estate. The increase in the
projected benefit obligation during 1993 was attributable in part
to the decrease in the discount rate for 1993 noted below.
The expected long-term rate of return on plan assets used to
compute pension cost was 9.0 percent for 1993, 1992, and 1991. The
assumed rate of increase in future compensation levels ranged from
5.5 percent to 6.5 percent for 1993 and 1992, and was 6.5 percent
for 1991. The discount rate used to calculate the actuarial
present value of the projected benefit obligation was 7.5 percent
for 1993, 8.5 percent for 1992, and 7.25 percent for 1991.
The Company has a defined contribution savings plan in which
substantially all of the Company's domestic employees are eligible
to participate. Company contributions to this plan are based on
the amount of employee contributions. Charges to expense with
respect to this plan totaled $0.5 million for each of 1993, 1992
and 1991.
Other Postretirement Benefits
The Company provides life insurance and health care benefits
to substantially all retired employees, their covered dependents
and beneficiaries. Generally, employees who have reached the age
of 55 and have rendered a minimum of five years of service are
eligible for these benefits. For the most part, health care
benefits are contributory while life insurance benefits are
noncontributory.
Effective January 1, 1992, the Company adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," with respect to
retiree life insurance and health care benefits. Under SFAS No.
106, the Company is required to accrue the estimated cost of such
benefits during the employees' active service period. The Company
previously expensed the cost of these benefits as benefits were
paid. The cumulative effect on prior years of adopting SFAS No.
106 was a $1.9 million increase to a liability for retiree life
insurance and health care benefits as of January 1, 1992. The
Company elected to recognize immediately in income the cumulative
effect of the change and charged 1992 earnings in the amount of
$1.9 million ($.02 per share). The effect of the adoption of SFAS
No. 106 on 1992 net income excluding the cumulative effect of the
change was not material. Assuming the accounting change was
applied retroactively to 1991, the effect on net income and on net
income per share would not have been material.
Net postretirement life insurance and health care cost
consisted of the following components:
<TABLE>
<CAPTION>
1993 1992
(In millions)
<S> <C> <C>
Service cost - benefits earned during the period $0.1 $0.1
Interest cost on accumulated postretirement benefit obligation 0.2 0.1
Net postretirement life insurance and health care cost $0.3 $0.2
</TABLE>
Benefits under the Company's postretirement life insurance and
health care plans are not funded. The status of the plans as of
December 31 was as follows:
<TABLE>
<CAPTION>
1993 1992
(In millions)
<S> <C> <C>
Actuarial present value of accumulated postretirement benefit obligation:
Retirees and dependents $1.1 $1.1
Active employees eligible for benefits 0.5 0.4
Active employees not yet eligible for benefits 0.6 0.4
Unrecognized net loss (0.2) -
Accrued postretirement life insurance and health care liability $ 2.0 $1.9
</TABLE>
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefit obligation was 9.0 percent for
1994, gradually declining to 6.0 percent by the year 2015 and
remaining at that level thereafter. The effect of a one-percentage
point increase in the assumed health care cost trend rate for each
future year on (i) the portion of the accumulated postretirement
benefit obligation applicable to health care benefits as of
December 31, 1993 and (ii) the net postretirement health care cost
for the year then ended would be immaterial. The assumed discount
rate used in determining the accumulated postretirement benefit
obligation was 7.0 percent for 1993 and 7.75 percent for 1992.
Note 12 - Supplemental Cash Flow Information
Cash interest payments during 1993, 1992, and 1991 totaled
$28.9 million, $23.5 million and $20.8 million, respectively. Cash
payments for income taxes totaled $5.4 million in 1993, $1.4
million in 1992, and $0.9 million in 1991.
In September 1993, the Company acquired a 100 percent ownership
interest in three offshore drilling rigs in exchange for a 100
percent ownership interest in its offshore drilling rig, the Glomar
Moray Firth I, plus $17.0 million in cash (see Note 13).
During 1992, in accordance with provisions of its debt
agreements, the Company deferred the payment of interest totaling
$18.3 million. This amount was added to outstanding principal
prior to payment.
During 1991, the Company reduced long-term debt by $14.4
million as a result of the receipt of Units in connection with the
exercise of warrants to purchase common stock of the Company.
<PAGE>
Note 13 - Transocean Transaction
On September 10, 1993, the Company acquired from Transocean
Drilling AS, a Norwegian drilling contractor ("Transocean"), a 100
percent ownership interest in three 300-foot jackup drilling rigs,
the Transocean No. 5, the Transocean No. 6 and the Transocean No.
7, in exchange for a 100 percent ownership interest in one of the
Company's heavy-weather jackup rigs, the Glomar Moray Firth I, plus
a cash payment of $17.0 million. Under the terms of the
transaction, the aggregate cash flow generated by all four rigs
will be shared in proportion to the relative fair market values of
the four rigs, with 56.59 percent going to the Company and 43.41
percent to Transocean.
The purchase and sale were accounted for as an exchange of
similar productive assets. The cost of the three rigs acquired was
based on (i) the recorded value of the asset surrendered, the
Glomar Moray Firth I, which totaled $23.2 million, plus (ii) the
$17.0 million cash payment. No gain or loss was recorded.
The Transocean No. 6 and Transocean No. 7, which have been
renamed the Glomar Adriatic VI and the Glomar Adriatic VII,
respectively, are currently being marketed and managed by the
Company in the Gulf of Mexico. The name of the Transocean No. 5
will remain unchanged as long as it is operating under Transocean's
management pursuant to a pre-existing contract in Abu Dhabi.
Note 14 - Litigation Settlement
On May 27, 1992, the Company settled its take-or-pay litigation
(the "Transco Litigation") with Transcontinental Gas Pipe Line
Corporation ("TGPL"), a subsidiary of Transco Energy Company
("Transco"), which had been filed in the United States District
Court for the Southern District of Texas, Houston Division. Under
the settlement, the Company received $20.0 million in cash and
$20.0 million in the form of a note of TGPL (the "Transco Note").
In late 1992 Transco deposited U.S. government securities into a
trust account in an amount sufficient to satisfy the required
principal and interest payments due under the Transco Note. The
Transco Note bears interest at the annual rate of 4.937 percent and
is payable in eight quarterly principal installments of $2.5
million each, the first of which was received in October 1993.
In addition, on February 1, 1994, the Company received
1,017,771 previously escrowed shares of Transco common stock plus
$0.9 million in dividends declared and paid on the escrowed shares.
The Transco shares received by the Company will not be available
for sale by the Company in the public market prior to May 1994.
Furthermore, the number of shares of Transco common stock which the
Company may sell during any single three-month period will be
limited; as a result, the Company may not be able to complete the
sale of all of the Transco shares until late 1994. Consequently,
the Company will be subject to the risk of any decline in value
resulting from any decrease in the market value of the Transco
common stock during the period from February 1, 1994 until such
time as the shares are sold. As of February 11, 1994, the market
value of the Transco shares held by the Company exceeded the
carrying value of $15.0 million. No assurance can be made that the
Company will be able to sell the Transco shares on favorable terms.
<PAGE>
Note 15 - Subsequent Event
In February 1994, the Company purchased two jackup drilling
rigs for $26.0 million in cash, $1.0 million in notes payable from
the rigs' net cash flow, and up to 900,000 shares of Global Marine
common stock. The Company anticipates spending an additional $15
million to refurbish and upgrade the rigs over approximately the
next 12 months.
<PAGE>
SUPPLEMENTAL OIL AND GAS DISCLOSURE (Unaudited)
The Company's estimated net proved reserves and proved
developed reserves of crude oil, natural gas and natural gas
liquids are shown in the table below:
<TABLE>
<CAPTION>
1993 1992 1991
Gas Oil Gas Oil Gas Oil
Millions of Thousands of Millions of Thousands of Millions of Thousands of
Cubic Feet Barrels Cubic Feet Barrels Cubic Feet Barrels
<S> <C> <C> <C> <C> <C> <C>
Proved Reserves:
Balance, January 1 11,816 948 17,992 740 39,869 1,239
Increase (decrease) during the
year attributable to:
Revisions of previous estimates 1,209 (55) 2,566 229 (6,726) (378)
Extensions, discoveries and
other additions 2,120 29 1,652 152 759 70
Production (4,557) (154) (10,055) (165) (15,910) (191)
Sales of minerals in place - (400) (339) (8) - -
Balance, December 31 10,588 368 11,816 948 17,992 740
Proved Developed Reserves:
January 1 11,816 948 17,992 740 37,365 1,193
December 31 10,588 368 11,816 948 17,992 740
</TABLE>
Proved reserves are estimated quantities of crude oil, natural
gas and natural gas liquids which geological and engineering data
demonstrate with reasonable certainty to be recoverable in future
years from known reservoirs under existing economic and operating
conditions. All of the Company's proved reserves are located in
the United States. Proved developed reserves are those proved
reserves that can be expected to be recovered through existing
wells with existing equipment and operating methods.
The estimates of the Company's proved oil and gas reserves were
prepared by Ryder Scott Company Petroleum Engineers and were based
on data supplied to them by the Company. Ryder Scott Company
Petroleum Engineers has issued reports that include descriptions of
the bases used in preparing the reserve estimates. These reports
are filed as exhibits to this Annual Report on Form 10-K.
<PAGE>
SUPPLEMENTAL OIL AND GAS DISCLOSURE (Unaudited)
Capitalized costs of oil and gas properties excluded from the full cost
amortization pool as of December 31, 1993 were not material. Costs incurred
related to oil and gas activities consisted of the following:
<TABLE>
1993 1992 1991
(In millions)
<S> <C> <C> <C>
Exploration costs $ 2.2 $ (.7) $ .3
Acquisition of properties .6 - .1
Development costs .3 2.4 1.7
Total $ 3.1 $ 1.7 $ 2.1
</TABLE>
The 1992 exploration costs were negative as a result of the
deferral of profit attributable to drilling contracts on oil and
gas properties in which the Company had working interests and was
the operator.
The calculation of estimated future net cash flows in the following table
assumed the continuation of existing economic conditions. Future net cash
inflows were computed by applying year-end prices (except for future price
changes as allowed by contract) of oil and gas to the expected future production
of proved reserves, less estimated future expenditures (based on year-end costs)
expected to be incurred in developing and producing such reserves.
The standardized measure of discounted future net cash flows
relating to proved oil and gas reserves as of December 31 follows:
<TABLE>
1993 1992 1991
(In millions)
<S> <C> <C> <C>
Future cash inflows $ 29.9 $ 40.7 $ 47.0
Future production and development costs 9.4 16.0 17.4
Future net cash flows 20.5 24.7 29.6
Ten percent annual discount for estimated
timing of cash flows 4.2 4.2 3.5
Standardized measure of discounted
future net cash flows relating to
proved oil and gas reserves $ 16.3 $ 20.5 $ 26.1
</TABLE>
<PAGE>
SUPPLEMENTAL OIL AND GAS DISCLOSURE (Unaudited)
Principal sources of changes in the standardized measure of
discounted future net cash flows follow:
<TABLE>
1993 1992 1991
(In millions)
<S> <C> <C> <C>
Balance, January 1 $ 20.5 $ 26.1 $ 67.7
Revisions:
Quantity estimates and production rates 2.4 4.5 (19.5)
Prices, net of lifting costs (.1) .3 (8.5)
Estimated future development costs (.6) (.2) .7
Accretion of ten percent discount 2.0 2.6 6.8
Net revisions 3.7 7.2 (20.5)
Additions, extensions and discoveries
plus improved recovery 3.0 3.6 1.9
Net sales of production (9.6) (16.2) (24.2)
Sales and purchases of reserves in place (2.5) (.4) -
Development costs incurred 1.2 .2 1.2
Balance, December 31 $ 16.3 $ 20.5 $ 26.1
Results of operations from producing activities follow:
1993 1992 1991
(In millions)
Revenues $ 11.6 $ 19.3 $28.1
Expenses
Production costs 2.0 3.3 4.8
Depreciation, depletion and amortization 3.3 10.0 10.7
Technical support and other 1.0 2.8 3.6
6.3 16.1 19.1
Income before income taxes 5.3 3.2 9.0
Income tax expense (benefit) (.5) - .5
Results of operations from producing activities
(excluding corporate overhead and interest) $ 5.8 $ 3.2 $ 8.5
</TABLE>
<PAGE>
CONSOLIDATED SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
(In millions, except per share data)
<TABLE>
<CAPTION>
1993 1992
First Second Third Fourth First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $61.0 $ 54.5 $ 67.4 $ 86.1 $ 68.3 $ 69.8 $ 57.5 $ 64.7
Operating income (loss) (0.8) (4.3) 1.2 7.1 11.2 4.4 .1 -
Income (loss):
Before extraordinary item $(9.3) $(11.9) $ (6.8) $ 1.5 $ (0.5) $ 49.1 $(10.4) $(10.7)
Extraordinary gain on
extinguishment of debt - - - - - - - 28.3
Cumulative effect of changes
in accounting principles - - - - 1.4 - - -
Net income (loss) $(9.3) $(11.9) $ (6.8) $ 1.5 $ 0.9 $ 49.1 $(10.4) $ 17.6
Income (loss) per share:
Before extraordinary item $(.06) $ (.08) $ (.04) $ .01 $(.01) $ .42 $ (.09) $ (.09)
Extraordinary gain on
extinguishment of debt - - - - - - - 0.24
Cumulative effect of changes
in accounting principles - - - - .02 - - -
Net income (loss) per share $(.06) $ (.08) $ (.04) $ .01 $ .01 $ .42 $ (.09) $ .15
Price ranges of common stock:
High 3-3/4 5-3/8 5-5/8 5-1/2 2-1/2 2-1/4 2-7/8 3
Low 2-1/8 3-3/8 3-3/4 3-1/2 1-1/8 1-1/8 1-5/8 2
</TABLE>
Net income for the fourth quarter of 1993 includes a gain of $1.0
million related to a favorable settlement of a foreign income tax liability.
During the fourth quarter of 1992, the Company adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," with respect to retiree life
insurance and health care benefits. The Company elected to recognize
immediately in income the cumulative effect of the change, which amounted to
$1.9 million as of January 1, 1992, and reduced 1992 net income by that
amount. Net income for the first quarter of 1992 has been restated to
reflect the cumulative effect of this change on prior years. As a result,
first quarter net income for 1992 decreased from $2.8 million, as previously
reported, to $0.9 million. The effect of the adoption of this statement on
subsequent quarters of 1992 was not material. Net income for the first
quarter of 1992 also includes a gain of $3.3 million, representing the
cumulative effect on prior years of adopting the change in accounting for
income taxes.
Operating income for the first quarter of 1992 includes a gain of $11.0
million on the sale of an offshore drilling rig.
Income before extraordinary item for the second quarter of 1992 includes
income of $55.0 million received in the Transco settlement.
The Company did not declare any dividends on its common stock in either
1993 or 1992.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Global Marine Inc.
Our report on the consolidated financial statements of Global
Marine Inc. and subsidiaries is included on page 25 of this Form
10-K. In connection with our audits of such financial statements,
we have also audited the related financial statement schedules
listed in the index on page 56 of this Form 10-K.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information required to be included therein.
/s/ Coopers & Lybrand
Houston, Texas
February 11, 1994
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
(In millions)
<TABLE>
<CAPTION>
Other
Balance at Retire- Changes Balance at
Beginning Additions ments Add End
Description of Year at Cost or Sales (Deduct) of Year
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Rigs and equipment $ 439.1 $ 60.7 $ 54.6 $ - $ 445.2
Oil and gas properties 32.2 3.1 2.4 - 32.9
$ 471.3 $ 63.8 $ 57.0 $ - $ 478.1
Year ended December 31, 1992:
Rigs and equipment $ 440.1 $ 19.2 $ 20.2 $ - $ 439.1
Oil and gas properties 38.0 1.7 7.5 - 32.2
$ 478.1 $ 20.9 $ 27.7 - $ 471.3
Year ended December 31, 1991:
Rigs and equipment $ 420.7 $ 20.6 $ 1.2 $ - $ 440.1
Oil and gas properties 36.6 2.1 .7 - 38.0
$ 457.3 $ 22.7 $ 1.9 $ - $ 478.1
</TABLE>
The methods of depreciation of property, plant and equipment are
described in Note 1 of Notes to Consolidated Financial Statements in
this Annual Report on Form 10-K.
Additions for 1993 include the acquisition of three offshore drilling
rigs at a recorded cost of $40.2 million, $23.2 million of which was
noncash (see Note 13 of Notes to Consolidated Financial Statements in
this Annual Report on Form 10-K).
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
(In millions)
<TABLE>
<CAPTION>
Other
Balance at Charged to Retire- Changes Balance at
Beginning Costs and ments Add End
Description of Year Expenses or Sales (Deduct) of Year
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Rigs and equipment $128.7 $ 32.6 $ 27.3 $ - $134.0
Oil and gas properties 24.6 3.3 (1.6) - 29.5
$153.3 $ 35.9 $ 25.7 $ - $163.5
Year ended December 31, 1992:
Rigs and equipment $102.5 $ 37.1 $ 10.9 $ - $128.7
Oil and gas properties 21.9 10.0 7.3 - 24.6
$124.4 $ 47.1 $ 18.2 $ - $153.3
Year ended December 31, 1991:
Rigs and equipment $ 67.1 $ 35.9 $ .5 $ - $102.5
Oil and gas properties 12.0 10.7 .8 - 21.9
$ 79.1 $ 46.6 $ 1.3 $ - $124.4
</TABLE>
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(In millions)
<TABLE>
<CAPTION>
Additions
Balance at Charged to Charged to Balance
Beginning Costs and Other at End
Description of Year Expenses Accounts (a) Deductions(b) of Year
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Reserve for loss on
operating lease $19.6 $ - $ .7 $11.9 $ 8.4
Year ended December 31, 1992:
Reserve for loss on
operating lease $29.8 $ - $1.3 $11.5 $19.6
Year ended December 31, 1991:
Reserve for loss on
operating lease $38.9 $ - $2.4 $11.5 $29.8
</TABLE>
(a) Represents unearned interest income which was charged to an escrow account
for the lease of the Glomar Beaufort Sea I and which is classified as a
noncurrent asset.
(b) Represents lease payments for the Glomar Beaufort Sea I which were made
from the escrow account described in (a) above.
<PAGE>
GLOBAL MARINE INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(In millions)
<TABLE>
1993 1992 1991
<S> <C> <C> <C>
Maintenance and repairs $ 24.2 $ 24.1 $ 25.6
Amortization of deferrals:
Drydock $ 2.4 $ 1.9 $ 1.4
Mobilization 7.5 2.3 .2
$ 9.9 $ 4.2 $ 1.6
</TABLE>
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
As permitted by General Instruction G, the information called
for by this item with respect to the Company's directors is
incorporated by reference from the Company's definitive proxy
statement to be filed pursuant to Regulation 14A within 120 days
after the end of the last fiscal year. Information with respect to
the Company's executive officers is set forth in Part I of this
Annual Report on Form 10-K under the caption "Executive Officers of
the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
As permitted by General Instruction G, the information called
for by this item is incorporated by reference from the Company's
definitive proxy statement to be filed pursuant to Regulation 14A
within 120 days after the end of the last fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As permitted by General Instruction G, the information called
for by this item is incorporated by reference from the Company's
definitive proxy statement to be filed pursuant to Regulation 14A
within 120 days after the end of the last fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As permitted by General Instruction G, the information called
for by this item is incorporated by reference from the Company's
definitive proxy statement to be filed pursuant to Regulation 14A
within 120 days after the end of the last fiscal year.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Page
(a) Financial Statements, Schedules and Exhibits
(1) Financial Statements
Report of Independent Accountants 25
Consolidated Statement of Operations 26
Consolidated Balance Sheet 27
Consolidated Statement of Cash Flows 29
Consolidated Statement of Shareholders' Equity 30
Notes to Consolidated Financial Statements 31
(2) Financial Statement Schedules
Report of Independent Accountants 50
Schedule V - Property, Plant and Equipment 51
Schedule VI - Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment 52
Schedule VIII - Valuation and Qualifying Accounts 53
Schedule X - Supplementary Income Statement Information 54
Schedules other than those listed above are omitted for the
reason that they are not required or are not applicable or
the required information is included in the financial
statements or related notes.
(3) Exhibits
The following instruments are included as exhibits to this
Annual Report on Form 10-K and are filed herewith unless
otherwise indicated. Exhibits incorporated by reference are
so indicated by parenthetical information.
3(i).1 Restated Certificate of Incorporation of the
Company as filed with the Secretary of State of
Delaware on March 15, 1989, effective March 16,
1989.
3(i).2 Certificate of Amendment of the Restated
Certificate of Incorporation of the Company as
filed with the Secretary of State of Delaware on
May 11, 1990.
3(i).3 Certificate of Correction of the Restated
Certificate of Incorporation of the Company as
filed with the Secretary of State of Delaware on
September 25, 1990.
3(i).4 Certificate of Amendment of the Restated
Certificate of Incorporation of the Company as
filed with the Secretary of State of Delaware on
May 11, 1992.
3(ii).1 By-laws of the Company as amended on May 10, 1989.
4.1 Indenture, dated as of December 23, 1992, between
the Company and Wilmington Trust Company, as
Trustee, with respect to the Senior Secured Notes.
(Incorporated herein by this reference to Exhibit
4.5 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.2 First Priority Naval Mortgage, dated April 29,
1993, from Global Marine Drilling Company to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.6 of the Registrant's Registration Statement on
Form S-3 (No. 33-65272) filed with the Commission
on June 30, 1993.)
4.3 First Preferred Fleet Mortgage, dated December 23,
1992, from Global Marine Drilling Company to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.7 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.4 Release of Vessel from Lien of First Preferred
Fleet Mortgage, dated April 30, 1993, by Wilmington
Trust Company, as Trustee. (Incorporated herein by
this reference to Exhibit 4.8 of the Registrant's
Registration Statement on Form S-3 (No. 33-65272)
filed with the Commission on June 30, 1993.)
4.5 First Preferred Fleet Mortgage, dated December 23,
1992, from Global Marine Deepwater Drilling Inc. to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.8 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.6 Release of Vessel from Lien of Mortgage, dated
January 27, 1993, by Wilmington Trust Company, as
Trustee.
4.7 First Priority Naval Mortgage, dated March 17,
1993, from Global Marine Nautilus Inc. to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.10 of the Registrant's Registration Statement on
Form S-3 (No. 33-65272) filed with the Commission
on June 30, 1993.)
4.8 Release of Vessel from Lien of First Priority Naval
Fleet Mortgage, dated September 8, 1993, by
Wilmington Trust Company, as Trustee.
4.9 Supplement No. 1, dated September 8, 1993, to First
Priority Naval Fleet Mortgage from Global Marine
Nautilus Inc. to Wilmington Trust Company, as
Trustee.
4.10 Assumption Agreement and Supplement No. 2, dated
December 16, 1993, to First Priority Naval Fleet
Mortgage among Global Marine Drilling Company and
Wilmington Trust Company, as Trustee.
4.11 First Preferred Fleet Mortgage, dated December 23,
1992, from Global Marine West Africa Inc. to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.10 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.12 First Preferred Ship Mortgage, dated December 23,
1992, from Global Marine Adriatic Inc. to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.11 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.13 Assumption Agreement and Supplement No.1, dated
March 4, 1993, to First Preferred Ship Mortgage
among Global Marine Adriatic Inc., as Original
Mortgagor, Global Marine Drilling Company, as
Assuming Mortgagor, and Wilmington Trust Company,
as Trustee. (Incorporated herein by this reference
to Exhibit 4.13 of the Registrant's Registration
Statement on Form S-3 (No. 33-65272) filed with the
Commission on June 30, 1993.)
4.14 First Preferred Ship Mortgage, dated December 23,
1992, from Global Marine Australia Inc. to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.12 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.15 First Preferred Ship Mortgage, dated December 23,
1992, from Global Marine Bismarck Sea Inc. to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.13 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.16 First Priority Naval Mortgage, dated March 17,
1993, from Global Marine North Sea Inc. to
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.16 of the Registrant's Registration Statement on
Form S-3 (No. 33-65272 ) filed with the Commission
on June 30, 1993.)
4.17 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine Adriatic Inc. and
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.15 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.18 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine Australia Inc. and
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.16 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.19 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine Bismarck Sea Inc. and
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.17 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.20 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine Deepwater Drilling Inc.
and Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.18 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.21 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine Drilling Company Inc.
and Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.19 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.22 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine Nautilus Inc. and
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.20 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.23 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine North Sea Inc. and
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.21 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
4.24 Subsidiary Pledge Agreement, dated December 23,
1992, between Global Marine West Africa Inc. and
Wilmington Trust Company, as Trustee.
(Incorporated herein by this reference to Exhibit
4.22 of Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form S-3
(No. 33-34013) filed with the Commission on January
22, 1993.)
10.1 Credit Agreement, dated June 24, 1993, among Global
Marine Inc., Global Marine Drilling Company, Global
Marine Australia Inc., Global Marine Baltic Inc.,
Global Marine Deepwater Drilling Inc. and Societe
Generale, New York Branch. (Incorporated herein by
this reference to Exhibit 10.1 of the Registrant's
Registration Statement on Form S-3 (No. 33-65272)
filed with the Commission on June 30, 1993.)
10.2 Memorandum of Agreement, dated June 6, 1993,
between Global Marine Inc. and Transocean Drilling
AS, and Amendment No. 1 thereto dated June 16,
1993. (Incorporated herein by this reference to
Exhibit 99.1 of the Registrant's Registration
Statement on Form S-3 (No. 33-65272) filed with the
Commission on June 30, 1993.)
10.3 Letter of Intent in Order to Form a Joint Venture,
dated June 6, 1993, between Global Marine Inc. and
Transocean Drilling AS. (Incorporated herein by
this reference to Exhibit 99.2 of the Registrant's
Registration Statement on Form S-3 (No. 33-65272)
filed with the Commission on June 30, 1993.)
10.4 Purchase and Sale Agreement, dated August 24, 1993,
between Global Marine Inc. and Transocean Drilling
AS. (Incorporated herein by this reference to
Exhibit 10.3 of the Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30,
1993.)
10.5 Management Agreement (relating to Glomar Moray
Firth I), dated September 10, 1993, between Global
Marine Nautilus Inc. and Transocean Drilling AS.
(Incorporated herein by this reference to Exhibit
10.4 of the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1993.)
10.6 Management Agreement (relating to Transocean No.
5), dated September 10, 1993, between Global Marine
Nautilus Inc. and Transocean Drilling AS.
(Incorporated herein by this reference to Exhibit
to 10.5 of the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30,
1993.)
10.7 Purchase and Sale Agreement (relating to the Uxmal,
subsequently renamed the Glomar Adriatic IX), dated
as of December 13, 1993, and Amendment No. 1
thereto, dated as of February 10, 1994, each
between Global Marine Inc. and Aban Loyd Chiles
Offshore Limited.
10.8 Purchase and Sale Agreement (Supplementary)
(relating to the Uxmal, subsequently renamed the
Glomar Adriatic IX), dated as of December 13, 1993,
and Amendment No. 1 thereto, dated as of February
10, 1994, each between Global Marine Inc. and Aban
Loyd Chiles Offshore Limited.
10.9 Purchase and Sale Agreement (relating to the
Chichen Itza, subsequently renamed the Glomar
Adriatic X), dated as of December 13, 1993, and
Amendment No. 1 thereto, dated as of February 11,
1994, each between Global Marine Inc. and Aban Loyd
Chiles Offshore Limited.
10.10 Purchase and Sale Agreement (Supplementary)
(relating to the Chichen Itza, subsequently renamed
the Glomar Adriatic X), dated as of December 13,
1993, and Amendment No. 1 thereto, dated as of
February 11, 1994, each between Global Marine Inc.
and Aban Loyd Chiles Offshore Limited.
10.11 Letter Employment Agreement dated as of February
28, 1992, between the Company and C. Russell Luigs.
(Incorporated herein by this reference to Exhibit
10.1 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1991.)
10.12 Consulting Agreement dated as of February 18, 1986,
between Challenger Minerals Inc. and Donald B.
Brown. (Incorporated herein by this reference to
Exhibit 10.2 of the Company's Annual Report on Form
10-K for the year ended December 31, 1987.)
10.13 Consulting Agreement dated as of February 18, 1986,
between Challenger Minerals Inc. and William C.
Walker. (Incorporated herein by this reference to
Exhibit 10.3 of the Company's Annual Report on Form
10-K for the year ended December 31, 1987.)
10.14 Six Letter Severance Agreements dated February 7,
1989, between the Company and six executive
officers, respectively. (Incorporated herein by
this reference to Exhibit 10.5 of the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1988.)
10.15 Letter Severance Agreement dated May 7, 1992,
between the Company and Jon A. Marshall.
(Incorporated herein by this reference to Exhibit
10.5 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992.)
10.16 Global Marine Inc. 1989 Stock Option and Incentive
Plan. (Incorporated herein by this reference to
Exhibit 10.6 of the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1988.)
10.17 First Amendment to Global Marine Inc. 1989 Stock
Option and Incentive Plan. (Incorporated herein by
this reference to Exhibit 10.6 of the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1990.)
10.18 Second Amendment to Global Marine Inc. 1989 Stock
Option and Incentive Plan. (Incorporated herein by
this reference to Exhibit 10.7 of the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1991.)
10.19 Third Amendment to Global Marine Inc. 1989 Stock
Option and Incentive Plan.
10.20 Eight Incentive Stock Sale Agreements dated
February 9, 1993, between the Company and eight
executive officers, respectively. (Incorporated
herein by this reference to Exhibit 10.10 of the
Company's Annual Report on Form 10-K for the year
ended December 31, 1992.)
10.21 Nine Incentive Stock Sale Agreements dated February
8, 1994, between the Company and nine executive
officers, respectively.
10.22 Executive Life Insurance Plan. (Incorporated
herein by this reference to Exhibit 10.5 of the
Company's Annual Report on Form 10-K for the year
ended December 31, 1988.)
10.23 Global Marine Inc. Executive Supplemental
Retirement Plan of 1990. (Incorporated herein by
this reference to Exhibit 10.8 of the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1990.)
10.24 Global Marine Benefit Equalization Retirement Plan
effective January 1, 1990. (Incorporated herein by
this reference to Exhibit 10.8 of the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1989.)
10.25 Global Marine Benefit Equalization Retirement Trust
as established effective January 1, 1990.
(Incorporated herein by this reference to Exhibit
10.9 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1989.)
10.26 Form of Indemnification Agreement entered into
between the Company and each of its directors and
officers. (Incorporated herein by this reference
to Exhibit 10.12 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1986.)
10.27 Amended and Restated Retirement Plan for Outside
Directors. (Incorporated herein by this reference
to Exhibit 10.12 of the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1990.)
10.28 Global Marine Inc. 1990 Non-Employee Director Stock
Option Plan (Incorporated herein by this reference
to Exhibit 10.18 of the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1991.)
10.29 Global Marine Inc. 1993 Management Incentive Award
Plan. (Incorporated herein by this reference to
Exhibit 10.18 of the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992.)
10.30 Global Marine Inc. 1994 Management Incentive Award
Plan.
11.1 Computation of Earnings Per Common Share.
21.1 List of Subsidiaries.
23.1 Consent of Coopers & Lybrand, Independent Accountants.
23.2 Consent of Independent Petroleum Engineers (Ryder
Scott Company Petroleum Engineers).
27.1 Financial Data Schedule. (Exhibit 27.1 is being
submitted as an exhibit only in the electronic
format of this Annual Report on Form 10-K being
submitted to the Securities and Exchange
Commission. Exhibit 27.1 shall not be deemed filed
for purposes of Section 11 of the Securities Act of
1933, Section 18 of the Securities Exchange Act of
1934 or Section 323 of the Trust Indenture Act, or
otherwise be subject to the liabilities of such
sections, nor shall it be deemed a part of any
registration statement to which it relates.)
99.1 Report of Independent Petroleum Engineers dated
February 7, 1994.
99.2 Reports of Independent Petroleum Engineers dated
January 29, 1993. (Incorporated herein by this
reference to Exhibit 28.1 of the Company's Annual
Report on Form 10-K for the year ended December 31,
1992.)
99.3 Reports of Independent Petroleum Engineers dated
January 29, 1992. (Incorporated herein by this
reference to Exhibit 28.1 of the Company's Annual
Report on Form 10-K for the year ended December 31,
1991.)
99.4 Fourth Proposed Plan of Reorganization Under
Chapter 11 of the United States Bankruptcy Code for
Global Marine Inc. and its Affiliated Debtors, as
filed by the Registrant on October 5, 1988, in the
United States Bankruptcy Court for the Southern
District of Texas, Houston Division (Incorporated
herein by this reference to Exhibit 2.2 of the
Registrant's Current Report on Form 8-K dated
October 5, 1988.)
99.5 Modifications to Plan of Reorganization Under
Chapter 11 of the United States Bankruptcy Code for
Global Marine Inc. and its Affiliated Debtors, as
filed by the Registrant on February 1, 1989, in the
United States Bankruptcy Court for the Southern
District of Texas, Houston Division. (Incorporated
herein by this reference to Exhibit 2.2 of the
Registrant's Current Report on Form 8-K dated
February 2, 1989.)
99.6 Order Confirming Plan of Reorganization Under
Chapter 11 of the United States Bankruptcy Code for
Global Marine Inc. and its Affiliated Debtors, as
Modified by Modifications to Plan of Reorganization
Under Chapter 11 of the United States Bankruptcy
Code for Global Marine Inc. and its Affiliated
Debtors. (Incorporated herein by this reference to
Exhibit 28.1 of the Registrant's Current Report on
Form 8-K dated February 2, 1989.)
99.7 Additional Modifications to Plan of Reorganization
Under Chapter 11 of the United States Bankruptcy
Code for Global Marine Inc. and its Affiliated
Debtors, as filed by the Registrant on March 2,
1989, in the United States Bankruptcy Court for the
Southern District of Texas, Houston Division.
(Incorporated herein by this reference to Exhibit
2.3 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1988.)
99.8 Order Allowing Modification of Confirmed Plan of
Reorganization dated March 14, 1989. (Incorporated
herein by this reference to Exhibit 28.5 of the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1988.)
99.9 Order Modifying Provisions of Plan of
Reorganization dated May 5, 1989. (Incorporated
herein by this reference to Exhibit 28.6 of the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1989.)
99.10 Order Extending Delivery Deadline with Respect to
Documents Evidencing Long-Term Debt Obligations
Created Under Confirmed Plan, dated June 29, 1989;
Order Further Extending Delivery Deadline with
Respect to Documents Evidencing Long-Term Debt
Obligations Created Under Confirmed Plan, dated
July 11, 1989; Order Granting Additional 30-day
Extension of Delivery Deadline with Respect to
Documents Evidencing Long-Term Debt Obligations
Created by Confirmed Plan, dated November 7, 1989;
and Order Granting Additional Time to Execute and
Deliver Plan Documents Evidencing Obligations to
Unsecured Creditors, dated January 3, 1990.
(Incorporated herein by this reference to Exhibit
28.7 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1989.)
The Company hereby undertakes, pursuant to Regulation S-K,
Item 601(b), paragraph (4) (iii), to furnish to the Securities
and Exchange Commission on request agreements defining the
rights of holders of long-term debt of the Company and its
consolidated subsidiaries not filed herewith in accordance
with said Item.
Management Contracts, Compensatory Plans and Arrangements:
The following management contracts, compensatory plans and
arrangements, which are required to be filed as exhibits to
this Annual Report on Form 10-K, are included in the
immediately preceding list as Exhibits 10.11 through 10.30.
The parenthetical information in the following list
specifies, for each such contract, plan or arrangement, its
exhibit number in the immediately preceding list, which
list includes information regarding the filing with which
it can be found.
Employment Agreement:
Letter Employment Agreement dated as of February 28, 1992,
between the Company and C. Russell Luigs (Exhibit 10.11).
Consulting Agreements:
Consulting Agreement, dated as of February 18, 1986,
between Challenger Minerals Inc. and Donald B. Brown
(Exhibit 10.12); Consulting Agreement, dated as of
February 18, 1986, between Challenger Minerals Inc. and
William C. Walker (Exhibit 10.13)
Severance Agreements:
Six Letter Severance Agreements dated February 7, 1989,
between the Company and six executive officers,
respectively (Exhibit 10.14); Letter Severance Agreement
dated May 7, 1992, between the Company and one executive
officer (Exhibit 10.15).
Stock Option Plans and Agreements Thereunder:
Global Marine Inc. 1989 Stock Option and Incentive Plan
(Exhibit 10.16); First Amendment thereto (Exhibit 10.17);
Second Amendment thereto (Exhibit 10.18); Third Amendment
thereto (Exhibit 10.19).
Eight Incentive Stock Sale Agreements dated
February 9, 1993, between the Company and eight
executive officers, respectively (Exhibit 10.20);
Nine Incentive Stock Sale Agreements dated February
8, 1994, between the Company and nine executive
officers, respectively (Exhibit 10.21).
Global Marine Inc. 1990 Non-Employee Director Stock Option
Plan (Exhibit 10.28).
Life Insurance Plan:
Executive Life Insurance Plan (Exhibit 10.22).
Retirement Plans:
Global Marine Inc. Executive Supplemental Retirement Plan
of 1990 (Exhibit 10.23).
Global Marine Benefit Equalization Retirement Plan
effective January 1, 1990 (Exhibit 10.24).
Global Marine Benefit Equalization Retirement Trust as
established effective January 1, 1990 (Exhibit 10.25).
Amended and Restated Retirement Plan for Outside Directors
(Exhibit 10.27).
Indemnification Agreements:
Form of Indemnification Agreement entered into between the
Company and each of its directors and officers (Exhibit
10.26).
Incentive Award Plans:
Global Marine Inc. 1993 Management Incentive Award Plan
(Exhibit 10.29); Global Marine Inc. 1994 Management
Incentive Award Plan (Exhibit 10.30).
(b) Reports on Form 8-K
The Company did not file any Current Reports on Form 8-K
during the last quarter of 1993.
<PAGE>
SIGNATURES REQUIRED FOR FORM 10-K
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GLOBAL MARINE INC.
(REGISTRANT)
Date: February 28, 1994 By: J. C. MARTIN
(J. C. Martin)
Senior Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
C. R. LUIGS Chairman of the Board, February 28, 1994
(C. R. Luigs) President and Chief
Executive Officer
J. C. MARTIN Senior Vice President and February 28, 1994
(J. C. Martin) Chief Financial Officer
(Principal Financial
Officer) and Director
THOMAS R. JOHNSON Vice President and February 28, 1994
(Thomas R. Johnson) Controller (Principal
Accounting Officer)
PATRICK M. AHERN Director February 28, 1994
(Patrick M. Ahern)
DONALD B. BROWN Director February 28, 1994
(Donald B. Brown)
E. J. CAMPBELL Director February 28, 1994
(E. J. Campbell)
PETER T. FLAWN Director February 28, 1994
(Peter T. Flawn)
JOHN M. GALVIN Director February 28, 1994
(John M. Galvin)
L. L. LEIGH Director February 28, 1994
(L. L. Leigh)
SIDNEY A. SHUMAN Director February 28, 1994
(Sidney A. Shuman)
Director
(William R. Thomas)
WILLIAM C. WALKER Director February 28, 1994
(William C. Walker)
</TABLE>
<PAGE>
EXHIBIT INDEX
A. Copies of exhibits listed below are submitted with this Annual
Report on Form 10-K, immediately following this index.
3(i).1 Restated Certificate of Incorporation of the
Company as filed with the Secretary of State of
Delaware on March 15, 1989, effective March 16,
1989.
3(i).2 Certificate of Amendment of the Restated
Certificate of Incorporation of the Company as
filed with the Secretary of State of Delaware on
May 11, 1990.
3(i).3 Certificate of Correction of the Restated
Certificate of Incorporation of the Company as
filed with the Secretary of State of Delaware on
September 25, 1990.
3(i).4 Certificate of Amendment of the Restated
Certificate of Incorporation of the Company as
filed with the Secretary of State of Delaware on
May 11, 1992.
3(ii).1 By-laws of the Company as amended on May 10, 1989.
4.6 Release of Vessel from Lien of Mortgage, dated
January 27, 1993, by Wilmington Trust Company, as
Trustee.
4.8 Release of Vessel from Lien of First Priority Naval
Fleet Mortgage, dated September 8, 1993, by
Wilmington Trust Company, as Trustee.
4.9 Supplement No. 1, dated September 8, 1993, to First
Priority Naval Fleet Mortgage from Global Marine
Nautilus Inc. to Wilmington Trust Company, as
Trustee.
4.10 Assumption Agreement and Supplement No. 2, dated
December 16, 1993, to First Priority Naval Fleet
Mortgage among Global Marine Drilling Company and
Wilmington Trust Company, as Trustee.
10.7 Purchase and Sale Agreement (relating to the Uxmal,
subsequently renamed the Glomar Adriatic IX), dated
as of December 13, 1993, and Amendment No. 1
thereto, dated as of February 10, 1994, each
between Global Marine Inc. and Aban Loyd Chiles
Offshore Limited.
10.8 Purchase and Sale Agreement (Supplementary)
(relating to the Uxmal, subsequently renamed the
Glomar Adriatic IX), dated as of December 13, 1993,
and Amendment No. 1 thereto, dated as of February
10, 1994, each between Global Marine Inc. and Aban
Loyd Chiles Offshore Limited.
10.9 Purchase and Sale Agreement (relating to the
Chichen Itza, subsequently renamed the Glomar
Adriatic X), dated as of December 13, 1993, and
Amendment No. 1 thereto, dated as of February 11,
1994, each between Global Marine Inc. and Aban Loyd
Chiles Offshore Limited.
10.10 Purchase and Sale Agreement (Supplementary)
(relating to the Chichen Itza, subsequently renamed
the Glomar Adriatic X), dated as of December 13,
1993, and Amendment No. 1 thereto, dated as of
February 11, 1994, each between Global Marine Inc.
and Aban Loyd Chiles Offshore Limited.
II-1
<PAGE>
10.19 Third Amendment to Global Marine Inc. 1989 Stock
Option and Incentive Plan.
10.21 Nine Incentive Stock Sale Agreements dated February
8, 1994, between the Company and nine executive
officers, respectively.
10.30 Global Marine Inc. 1994 Management Incentive Award
Plan.
11.1 Computation of Earnings Per Common Share.
21.1 List of Subsidiaries.
23.1 Consent of Coopers & Lybrand, Independent
Accountants.
23.2 Consent of Independent Petroleum Engineers (Ryder
Scott Company Petroleum Engineers).
27.1 Financial Data Schedule. (Exhibit 27.1 is being
submitted as an exhibit only in the electronic
format of this Annual Report on Form 10-K being
submitted to the Securities and Exchange
Commission. Exhibit 27.1 shall not be deemed filed
for purposes of Section 11 of the Securities Act of
1933, Section 18 of the Securities Exchange Act of
1934 or Section 323 of the Trust Indenture Act, or
otherwise be subject to the liabilities of such
sections, nor shall it be deemed a part of any
registration statement to which it relates.)
99.1 Report of Independent Petroleum Engineers dated
February 7, 1994.
B. The following exhibits are incorporated by reference in this
Annual Report on Form 10-K, as stated in Item 14(a)(2).
Descriptions of such exhibits are incorporated herein by this
reference to Item 14(a)(2) of this Report.
4.1, 4.2, 4.3, 4.4, 4.5, 4.7, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 4.24, 10.1,
10.2, 10.3, 10.4, 10.5, 10.6, 10.11, 10.12, 10.13, 10.14,
10.15, 10.16, 10.17, 10.18, 10.20, 10.22, 10.23, 10.24,
10.25, 10.26, 10.27, 10.28, 10.29, 99.2, 99.3, 99.4, 99.5,
99.6, 99.7, 99.8, 99.9, and 99.10.
II-2
<PAGE>
EXHIBIT 11.1
GLOBAL MARINE INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Shares for primary and fully diluted computations:
Weighted average shares of common stock outstanding 151,984,669 114,634,930 109,156,271
Shares issuable on assumed exercise of stock options - 1,703,048 -
Weighted average shares for primary earnings per share 151,984,669 116,337,978 109,156,271
Incremental shares issuable on assumed exercise of stock
options and warrants to reflect maximum dilutive effect (1):
Options 3,269,447 124,744 2,404,011
Warrants - - 3,881,028
Weighted average shares for fully
diluted earnings per share 155,254,116 116,462,722 115,441,310
Earnings for primary and
fully diluted computations:
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting principles $ (26.5) $ 27.5 $ 1.0
Extraordinary gain on extinguishment of debt - 28.3 -
Cumulative effect of change in accounting
for income taxes - 3.3 -
Cumulative effect of change in accounting for
postretirement health care and life insurance
benefits - (1.9) -
Net income (loss) $ (26.5) $ 57.2 $ 1.0
Primary earnings (loss) per share:
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting principles $ (0.17) $ 0.24 $ 0.01
Extraordinary gain on extinguishment of debt - 0.24 -
Cumulative effect of change in accounting
for income taxes - 0.03 -
Cumulative effect of change in accounting for
postretirement health care and life insurance
benefits - (0.02) -
Primary net income (loss) per common share $ (0.17) $ 0.49 $ 0.01
Fully diluted net income (loss) per share:
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting principles $ (0.17) $ 0.24 $ 0.01
Extraordinary gain on extinguishment of debt - 0.24 -
Cumulative effect of change in accounting
for income taxes - 0.03 -
Cumulative effect of change in accounting for
postretirement health care and life insurance
benefits - (0.02) -
Fully diluted net income (loss) per common share $ (0.17) $ 0.49 $ 0.01
(1) Shares issuable upon the assumed exercise of stock options are included in the
calculation of fully diluted net loss per common share in accordance with
Regulation S-K, Item 601(b)(11), although for 1993 their inclusion is
contrary to paragraph 40 of APB Opinion No. 15 because their inclusion produces
an antidilutive result.
</TABLE>
HeaderA will print on Page 1 only.FooterA will print on Page 1 only.HeaderA will
print on Pages 2-.EXHIBIT 3(i).1
RESTATED CERTIFICATE OF INCORPORATION
OF
GLOBAL MARINE INC.
GLOBAL MARINE INC., a corporation organized and
existing under the laws and by virtue of the General Corporation
Law of the State of Delaware,
DOES HEREBY CERTIFY:
1. The name of the corporation is GLOBAL MARINE INC.
2. The date of filing of its original Certificate of
Incorporation with the Secretary of State was October 7, 1964.
3. This Restated Certificate of Incorporation is
adopted pursuant to the authority granted to the corporation
under Section 303 of the General Corporation Law of the State of
Delaware to put into effect and carry out the Plan of
Reorganization Under Chapter 11 of the United States Bankruptcy
Code for Global Marine Inc. and its Affiliated Debtors, as
modified by the Modification to Plan of Reorganization Under
Chapter 11 of the United States Bankruptcy Code For Global Marine
Inc. and its Affiliated Debtors (as so amended, the "Plan"), as
confirmed on February 2, 1989 by order of the United States
Bankruptcy Court for the Southern District of Texas, Houston
Division.
4. The Restated Certificate of Incorporation, as pre-
viously and herewith amended, is hereby restated to read in its
entirety as follows:
FIRST: The name of the corporation is GLOBAL MARINE
INC.
SECOND: Its registered office in the State of
Delaware is located at Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle. The
name and address of its registered agent is The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware.
THIRD: The nature of the business, or objects or
purposes to be transacted, promoted or carried on are:
To engage in the ownership, operation or charter of
vessels used in the exploring (through seismographic study or
otherwise) for minerals of all kinds (including oil, gas and
other hydrocarbon substances).
To buy, build, lease, or otherwise acquire, and to own,
hold, maintain, improve, equip, manage, operate, lease, hypothe-
cate, sell, convey, or otherwise encumber, ships, boats, barges,
tankers, floats and other vessels, wharves, docks, dry docks,
repair shops, piers and other facilities, tools, rigs, and other
equipment useful in exploring for and acquiring underwater miner-
als of all kinds.
To charter, hire, equip, loan on commission, or other-
wise use, repair, let out on hire, and trade with such vessels,
facilities and equipment, and to otherwise carry on the business
of shipowner and operator in all its branches with respect to
such facilities and equipment.
To carry on the business of drilling, boring and
exploring for any and all mineral, hydrocarbon or metal
substances, and of discovering, producing, storing, transporting,
extracting, processing and otherwise and in any and every manner
searching for, finding, acquiring, holding, moving, dealing in
and with, contracting in any manner with respect to said
substances, such business to be transacted on behalf of this
corporation or on behalf of others under contract with this
corporation.
To conduct, furnish and sell or otherwise dispose of
geological, geophysical and exploratory surveys, instruments,
appliances and equipment for the determination of regional and/or
other geological conditions, and to search for and to determine
subsurface geological structures that may contain water or miner-
als of any kind whatsoever, whether metallic or non-metallic, or
that may be favorable to the accumulation of oil, gas, and other
hydrocarbon substances, and to aid in the working of any geologi-
cal structures.
To develop, apply for, obtain, purchase, lease, take
licenses in respect of or otherwise acquire, and to hold, own,
enjoy, turn to account, sell, convey, grant licenses in respect
of, manufacture under, introduce, sell, assign, improve, exploit,
mortgage, pledge or otherwise dispose of, any and all inventions,
devices, processes and improvements and modifications thereof;
any and all letters patent of the United States or of any other
country and all rights connected therewith or appertaining
thereto; any and all copyrights granted by the United States or
any other country or by any other governmental authority; and any
and all trademarks, trade names, trade symbols and other indica-
tions of origin and ownership granted or recognized under the
laws of the United States or of any other country.
To engage in and conduct any and all kinds of treating,
processing, manufacturing, and/or mercantile businesses.
To do, either as principal or agent, and either alone
or in conjunction or by agreement with other corporations,
partnerships, firms, associations and/or individuals, in any
legal relationship or status, including, without in any wise
limiting the generality of the foregoing, partnerships,
associations, unit or co-operative plans of operation or
development, and joint ventures, all and everything necessary,
suitable, convenient or proper for the accomplishment of any of
the purposes or the attainment of any of the objects in these
Articles of Incorporation enumerated, or incidental to the powers
herein specified; and to contract, upon any terms, and so as to
establish any legal relationship or status, with any person, firm
or corporation to do for this corporation, and to contract with
any person, firm or corporation for this corporation to do for
him or it, each and everything and anything which this
corporation could do for itself.
To buy, contract for, lease and in any and all other
ways, acquire, take, hold, own, and to sell, mortgage, hypothe-
cate, lease and otherwise dispose of, franchise rights and
governmental, state, territorial, county and municipal grants and
concessions of every character which this corporation may deem
advantageous in the prosecution of its business, or in the
maintenance, operation, development or extension of its
properties.
To enter into, make, perform and carry out contracts of
every kind for any lawful purpose, without limitation as to
amount, with any person, firm, association or corporation,
municipality, county, parish, state, territory, government or
other municipal or other governmental subdivision.
From time to time to apply for, purchase, acquire by
assignment, transfer or otherwise, exercise, carry out and enjoy
any benefit, right, privilege, prerogative or power conferred by,
acquired under or granted by any statute, ordinance, order,
license, power, authority, franchise, commission, right or privi-
lege which any government authority or governmental agency or
corporation or other public body may be empowered to enact, make
or grant; to pay for, aid in and contribute toward carrying the
same into effect, and to appropriate any of this corporation's
shares, bonds or assets to defray the costs, charges and expenses
thereof.
To purchase or otherwise acquire all or any part of the
goodwill, rights, assets, property and business of any person,
firm, association or corporation heretofore or hereafter engaged
in any business similar or dissimilar to the business herein men-
tioned, and to pay for the same in cash or in stock, bonds, notes
or other obligations of this corporation or otherwise, with or
without assuming in connection therewith any liabilities of any
such person, firm, association or corporation, and to hold, enjoy
and in any manner hypothecate or dispose of the whole or any part
of the rights and property so acquired, and to conduct in any
lawful manner and in the country, state or locality the whole or
any part of the business thus acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
To acquire by purchase, subscription, exchange or
otherwise, and to own, hold, sell, assign, transfer, exchange,
hypothecate, pledge or otherwise dispose of, any of the shares of
the capital stock of, and/or voting trust certificates for any
shares of the capital stock of, and/or any bonds, debentures,
notes, securities, mortgages or other evidences of indebtedness
created or incurred by, any public, municipal, quasi-public or
private corporation or association of any kind or any
partnership, trust or individual; to pay cash therefor or to
issue and exchange therefor shares of stock, bonds, notes or
other obligations of this corporation; and as owner thereof to
exercise all the rights, powers and privileges of ownership,
including the right to vote any of the shares of stock or voting
trust certificates thus owned; with power to designate some
person or persons for that purpose from time to time and to the
same extent as natural persons might or could do.
To guarantee the payment of dividends or the payment of
sinking fund requirements upon the stock, or the payment of the
sinking fund requirements, or the principal, interest, premium,
or any of them, of any bonds or obligations or evidences of
indebtedness, or the performance of any contract, or any person,
firm, trust, corporation or association, in so far as to the
extent that such guarantee may be permitted by law.
To borrow and lend money, but nothing herein contained
shall be construed as authorizing the business of banking, or as
including the business purposes of a commercial bank, savings
bank or trust company.
To purchase, hold, sell and transfer the shares of its
own capital stock, provided it shall not use its funds or
property for the purchase of its own shares of capital stock when
such use would cause any impairment of its capital except as
otherwise permitted by law, and provided further that shares of
its own capital stock belonging to it shall not be voted upon
directly or indirectly.
To issue bonds, debentures, notes and other obligations
of this corporation from time to time for any of the objects or
purposes of the corporation, and to secure the same by mortgage,
pledge, deed of trust or otherwise, or to issue the same unse-
cured; to purchase or otherwise acquire its own bonds, debentures
or other evidences of its indebtedness or obligations; to pur-
chase, hold, sell and transfer the shares of its own capital
stock to the extent and in the manner provided by the laws of the
State of Delaware as the same are in force or may hereafter be
amended.
To carry on any other lawful business whatsoever which
the directors may deem advisable or proper or convenient, or
which may be calculated directly or indirectly to promote the
interests of the corporation, or to enhance the value of its
properties; and to have, engage in and exercise all the rights,
powers and privileges which are now, or which may hereafter be
conferred by the laws of Delaware upon corporations existing
under its laws, and to do any and all of the things hereinbefore
set forth to the same extent as natural persons could do.
To transact, promote and carry on business and the
objects or purposes herein enumerated in the State of Delaware or
in any other jurisdiction of the United States of America or
elsewhere in the world.
To have one or more offices, to carry on all or any of
its operations and business and without restriction or limit as
to amount to purchase or otherwise acquire, hold, own, mortgage,
sell, convey or otherwise dispose of, real and personal property
of every class and description in any of the states, districts or
territories of the United States, and in any and all foreign
countries, subject to the laws of such state, district, territory
or country.
In general, to carry on any other business in
connection with the foregoing, and to have and exercise all the
powers conferred by the laws of Delaware upon corporations formed
under the General Corporation Law of the State of Delaware, and
to do any or all of the things hereinbefore set forth to the same
extent as natural persons might or could do.
The objects and purposes specified in the foregoing
clauses shall, except where otherwise expressed, be in nowise
limited or restricted by reference to, or inference from, the
terms of any other clause in this Certificate of Incorporation,
but the objects and purposes specified in each of the foregoing
clauses of this article shall be regarded as independent objects
and purposes.
FOURTH: The corporation is authorized to issue one
class of shares of stock to be designated "Common Stock." The
total number of shares of Common Stock which the corporation is
authorized to issue is One Hundred Fifty-Five Million shares
(155,000,000), $.10 par value per share.
1. Dividend Provisions. The holders of the Common
Stock shall be entitled to receive, when, as and if declared by
the board of directors of the corporation out of funds legally
available therefor, dividends payable in cash, in property or in
shares of Common Stock.
2. Liquidation Provisions. Upon any dissolution,
liquidation or winding up of the corporation, the holders of out-
standing shares of Common Stock shall be entitled to receive,
ratably, all assets of the corporation available for distribution
to stockholders.
Neither the consolidation nor merger of the corporation
with or into any other corporation or corporations, nor the sale
of all or substantially all of its assets, shall be deemed to be
a dissolution, liquidation or winding up within the meaning of
this section captioned "Liquidation Provisions."
3. Voting Rights. Each holder of shares of Common
Stock issued and outstanding, except where otherwise provided by
law or by this Certificate of Incorporation, as amended, shall be
entitled to one vote, in person or by proxy, for each share of
Common Stock standing in his name on the books of the
corporation.
(a) Cumulative Voting. At all elections of directors
of the corporation, each stockholder entitled to vote shall have
as many votes in the election of the directors to be elected as
shall be equal to the number of votes to which (except for this
provision as to cumulative voting) his shares are entitled
multiplied by the number of directors to be elected, or in the
case of a class vote for directors, the number of votes to which
his shares of any class are entitled multiplied by the number of
directors to be elected by such class, and he may cast all of
such votes for a single director or may distribute them among the
number to be voted for or any two or more of them as he may see
fit, which right when exercised shall be termed cumulative
voting.
(b) No Stockholder Action Without a Meeting. No
action required to be taken or which may be taken at any annual
or special meeting of stockholders of the corporation may be
taken without a meeting and the power of stockholders to consent
in writing to the taking of any action is specifically denied.
4. No Pre-Emptive Rights. No stockholder of this
corporation shall by reason of his holding shares of any class
have any pre-emptive or preferential right to purchase or sub-
scribe to any shares of any class of this corporation, now or
hereafter to be authorized, or any notes , debentures, bonds or
other securities convertible into or carrying options or warrants
to purchase shares of any class, now or hereafter to be author-
ized, whether or not the issuance of any such shares, or such
notes, debentures, bonds or other securities, would adversely
affect the dividend or voting rights of such stockholder, other
than such rights, if any, as the board of directors in its
discretion from time to time may grant and at such price as the
board of directors in its discretion may fix; and the board of
directors may issue shares of any class of this corporation, or
any notes, debentures, bonds, or other securities convertible
into or carrying options or warrants to purchase shares of any
class, without offering any such shares of any class, either in
whole or in part, to the existing stockholders of any class.
FIFTH: The corporation is to have perpetual exist-
ence.
SIXTH: The private property of the stockholders
shall not be subject to the payment of corporate debts to any
extent whatever.
SEVENTH:
1. All corporate powers shall be exercised by
the board of directors except as otherwise provided by
law or by this Certificate of Incorporation.
In furtherance and not in limitation of the powers
conferred by statute, the board of directors is
expressly authorized:
(a) To make, alter, amend and repeal the by-laws
of the corporation, subject always to the power of the
stockholders to change such action, and provided that
such by-laws are not inconsistent with any provisions
of this Certificate of Incorporation.
(b) To fix, determine and vary from time to time
the amount to be maintained as surplus and the amount
or amounts to be set apart as working capital.
(c) To authorize and cause to be executed
mortgages and liens upon the real and personal property
of the corporation.
(d) To set apart out of any of the funds of the
corporation available for dividends a reserve or
reserves for any proper purposes or to abolish any such
reserve in the manner in which it was created or both.
(e) To designate by resolution or resolutions
passed by a majority of the whole board one (1) or more
committees, each committee to consist of two (2) or
more of the directors of the corporation, which, to the
extent provided in said resolution or resolutions or in
the by-laws of the corporation, shall have and may
exercise the powers of the board of directors in the
management of the business and affairs of the
corporation, and may authorize the seal of the
corporation to be affixed to all papers which may
require it. Such committee or committees shall have
such name or names as may be stated in the by-laws of
the corporation or as may be determined from time to
time by resolution adopted by the board of directors.
2. The number of directors which shall
constitute the whole board of directors of the
corporation shall not be less than three (3) nor more
than fifteen (15), as specified from time to time by
resolution or resolutions passed by a majority of the
whole board. The board of directors is divided into
three classes, Class I, Class II and Class III. Such
classes shall be as nearly equal in number of directors
as possible. Each director shall serve for a term
ending on the third annual meeting following the annual
meeting at which such director was elected: the
directors first designated to Class I shall serve for a
term ending on the date of the annual meeting next
following the end of the calendar year 1989, the
directors first designated to Class II shall serve for
a term ending on the date of the second annual meeting
next following the end of the calendar year 1989 and
the directors first designated to Class III shall serve
for a term ending on the date of the third annual
meeting next following the end of the calendar year
1989. The foregoing notwithstanding, each director
shall serve until his successor shall have been duly
elected and qualified, unless he shall resign, become
disqualified, disabled or shall otherwise be removed.
At each annual election, the directors chosen to
succeed those whose terms then expire shall be of the
same class as the directors they succeed, unless, by
reason of any intervening changes in the authorized
number of directors, the board shall designate one or
more directorships which term then expires as director-
ships of another class in order more nearly to achieve
equality of number of directors among the classes.
Notwithstanding the rule that the three (3)
classes shall be as nearly equal in number of directors
as possible, in the event of any change in the
authorized number of directors, each director then
continuing to serve as such shall nevertheless continue
as a director of the class of which he is a member
until the expiration of his current term, or his prior
death, resignation or removal. If any newly created
directorship may, consistent with the rule that the
three (3) classes shall be as nearly equal in number of
directors as possible, be allocated to one (1) or two
(2) or more classes, the board shall allocate it to
that of the available classes whose terms of office are
due to expire at the earliest date following such
allocation.
3. Any director of the corporation may be
removed at any annual or special meeting of
stockholders from his office as a director by vote of
the stockholders with or without cause, provided,
however, that until following the second annual
meeting of stockholders after February 28, 1989, the
effective date of the Plan, no director may be removed
without cause.
4. Newly created directorships resulting from
any increase in the number of directors and any
vacancies on the board of directors resulting from
death, resignation, disqualification, removal or other
cause shall be filled by the affirmative vote of a
majority of the remaining directors then in office,
even though less than a quorum of the board of
directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder
of the full term of the class of directors in which the
new directorship was created or the vacancy occurred
and until such director's successor shall have been
elected and qualified. No decrease in the number of
directors constituting the board of directors shall
shorten the term of any incumbent director.
5. No contract or other transaction between the
corporation and any other corporation shall be affected
or invalidated by the fact that one or more of the
directors of this corporation are interested in, or is
a director or directors or officer or officers of such
other corporation, and no contract or other transaction
between the corporation and any other person or firm
shall be affected or invalidated by the fact that one
or more of the directors of this corporation is a party
to, or are parties to, or interested in, such contract
or transaction; provided that in each such case the
nature and extent of the interest of such director or
directors in such contract or other transaction and/or
the fact that such director or directors is or are a
director or directors is or are a director or directors
or officer or officers of such other corporation is
known to the board of directors or is disclosed at the
meeting of the board of directors at which such
contract or other transaction is authorized, and if
stockholder approval is required, that such information
is disclosed to the stockholders prior to the meeting
of stockholders at which such contract or other
transaction is voted upon.
6. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the
affirmative vote of the holders of more than 50% of the
voting power of all shares of the corporation entitled
to vote generally in the election of directors, voting
together as a single class, shall be required to alter,
amend or adopt any provision of this Certificate of
Incorporation or the by-laws of the corporation, or any
other provision, inconsistent with or repeal this
Article SEVENTH.
EIGHTH: Meetings of stockholders may be held outside
the State of Delaware, if the by-laws so provide. The books of
the corporation may be kept (subject to any provision contained
in the statutes) outside the State of Delaware at such place or
places as may be designated from time to time by the board of
directors or in the by-laws of the corporation. Special meetings
of stockholders may be called at such times and by such persons
as provided in the by-laws of the corporation, or within not less
than 120 days before the annual meeting of stockholders is held
by the holders of at least 25% of the issued and outstanding
common stock of the corporation provided that notice of such
meeting is given as provided in the by-laws.
NINTH: The vote of the holders of shares of Common
Stock of this corporation required to approve certain business
transactions shall be as set forth in this Article NINTH. Each
capitalized term shall have the meaning ascribed to it herein.
Section 1. Vote Required for Certain Business Transac-
tions.
A. Higher Vote for Certain Business Transactions. In
addition to any affirmative vote required by law or this Certifi-
cate of Incorporation or the by-laws, and except as otherwise
expressly provided in Section 2 of this Article NINTH, any Busi-
ness Transaction (as hereinafter defined) shall require the
affirmative vote of the holders of at least 75% of the voting
power of the then outstanding shares of capital stock of this
corporation entitled to vote generally in the election of
directors (the "Voting Stock"), voting together as a single
class. Such affirmative vote shall be required notwithstanding
the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any
national securities exchange or otherwise.
B. Definition of "Business Transaction." For
purposes of this Article NINTH, the term "Business Transaction"
used in this Article NINTH shall mean:
(i) any merger or consolidation of this corpora-
tion or any Subsidiary (as hereinafter defined) with (a) any
Interested Stockholder (as hereinafter defined) or (b) any other
corporation (whether or not itself an Interested Stockholder)
which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Stockholder;
or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of this
corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) of $10 million or more; or
(iii) the issuance or transfer by this
corporation or any Subsidiary (in one transaction or a series of
transactions) of any securities of this corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of any
Interested Stockholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate Fair
Market Value of $10 million or more, other than the issuance of
securities upon the conversion of convertible securities of this
corporation or any Subsidiary which were not acquired by such
Interested Stockholder (or such Affiliate) from this corporation
or a Subsidiary; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of this corporation proposed by or on
behalf of any Interested Stockholder or any Affiliate of any
Interested Stockholder;
(v) any reclassification of securities (including
any reverse stock split), or recapitalization of this
corporation, or any merger or consolidation of this corporation
with any of its Subsidiaries or any other transaction (whether or
not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of
any class or series of Equity Security (as hereinafter defined)
of this corporation or any Subsidiary which is directly or
indirectly beneficially owned by any Interested Stockholder or
any Affiliate of any Interested Stockholder.
Section 2. When Higher Vote is Not Required. The pro-
visions of Section 1 of this Article NINTH shall not be
applicable to any particular Business Transaction, and such
Business Transaction shall require only such affirmative vote, if
any, as may be required by law, this Certificate of
Incorporation, the by-laws, any agreement with any national
securities exchange or otherwise, if all of the conditions
specified in either of the following paragraphs A and B are met:
A. Approval by Disinterested Directors. The Business
Transaction shall have been approved by a majority of the Disin-
terested Directors (as hereinafter defined); such approval (or
any action or other approval required by the Disinterested
Directors pursuant to this Certificate of Incorporation) may be
made by a majority of the Disinterested Directors even if such
majority does not constitute a quorum of the members of the Board
of Directors then in office and shall be in addition to any other
approval of this corporation's Board of Directors required by
applicable law, this Certificate of Incorporation, the by-laws,
any agreement with any national securities exchange or otherwise.
If there are no Disinterested Directors, or if a tie vote shall
occur, then this provision cannot be used to avoid the higher
voting requirement and any action or other approval required by
Disinterested Directors may not be taken and shall not be
effective.
B. Price and Procedure Requirements. All of the fol-
lowing conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the con-
summation of the Business Transaction of consideration other than
cash to be received per share by holders of common stock in such
Business Transaction shall be at least equal to the higher of the
following:
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid by the Interested
Stockholder for any shares of common stock acquired by
it (1) within the twenty-four month period immediately
prior to the first public announcement of the terms of
the proposed Business Transaction (the "Announcement
Date") or (2) in the transaction in which it became an
Interested Stockholder, whichever is higher; and
(b) the Fair Market Value per share of common
stock on the Announcement Date or on the date on which
the Interested Stockholder became an Interested Stock-
holder (such latter date is referred to in this Article
NINTH as the "Determination Date"), whichever is
higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business
Transaction of consideration other than cash to be received per
share by holders of shares of any class or series of outstanding
Voting Stock (other than Common Stock) shall be at least equal to
the highest of the following (it being intended that the require-
ments of this paragraph B(ii) shall be required to be met with
respect to every class of outstanding Voting Stock (other than
Common Stock), whether or not the Interested Stockholder has pre-
viously acquired any shares of a particular class or series of
Voting Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid by the Interested
Stockholder for any shares of such class of Voting
Stock acquired by it (1) within the twenty-four month
period immediately prior to the Announcement Date or
(2) in the transaction in which it became an Interested
Stockholder, whichever is higher; and
(b) (if applicable) the highest preferential
amount per share to which the holders of shares of such
class or series of Voting Stock are entitled in the
event of any voluntary or involuntary liquidation, dis-
solution or winding up of this corporation; and
(c) the Fair Market Value per share of such class
of Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher.
(iii) The consideration to be received by holders of a
particular class or series of outstanding Voting Stock (including
common stock) shall be in cash or in the same form as the Inter-
ested Stockholder has previously paid for shares of such class or
series of Voting Stock. If the Interested Stockholder has paid
for shares of any class or series of Voting Stock with varying
forms of consideration, the form of consideration for such class
or series of Voting Stock shall be either cash or the form used
to acquire the largest number of shares of such class or series
of Voting Stock previously acquired by it.
(iv) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Transaction, except as approved by a majority of the
Disinterested Directors, (a) there shall have been no failure to
declare and pay at the regular date therefor any full quarterly
dividends (whether or not cumulative) on any outstanding stock
having preference over the common stock as to dividends or upon
liquidation; (b) there shall have been (1) no reduction in the
annual rate of dividends paid on the common stock (except as
necessary to reflect any subdivision of the common stock), and
(2) an increase in such annual rate of dividends as necessary to
reflect each reclassification (including any reverse stock
split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of
outstanding shares of common stock; and (c) such Interested
Stockholder shall have not become the beneficial owner of any
additional shares of Voting Stock except as part of the
transaction which results in such Interested Stockholder becoming
an Interested Stockholder.
(v) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Transaction, except as approved by a majority of the
Disinterested Directors, there shall have been no amendment to
any trust or other agreement with respect to any employee
savings, stock, pension or other benefit plan the effect of which
is to change in any manner the provisions governing the voting of
any stock in such plan.
(vi) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by this corporation,
whether in anticipation of or in connection with such Business
Transaction or otherwise.
(vii) A proxy or information statement describing the
proposed Business Transaction and complying with the requirements
of the Securities Exchange Act of 1934 and the rules and regula-
tions thereunder (or any subsequent provisions replacing such
Act, rules or regulations) shall have been mailed to public
stockholders of this corporation at least 30 days prior to the
consummation of such Business Transaction (whether or not such
proxy or information statement is required to be mailed pursuant
to such Act or any subsequent provisions). The proxy or
information statement shall contain at the front thereon, in a
prominent place, any recommendations as to the advisability (or
inadvisability) of the Business Transaction which the
Disinterested Directors, or any of them, may choose to state and,
if deemed useful by a majority of the Disinterested Directors, an
opinion of a reputable investment banking firm as to the fairness
(or not) of the terms of such Business Transaction, from the
point of view of the remaining public stockholders of this
corporation (such investment banking firm to be selected by a
majority of the Disinterested Directors and to be paid a
reasonable fee for its services by this corporation upon receipt
of such opinion).
(viii) The price determined in accordance with para-
graph B(i) and B(ii) of this Section 2 shall be subject to appro-
priate adjustment in the event of any stock dividend, stock
split, combination of shares or similar event.
Section 3. Certain Definition. For the purpose of
this Article NINTH:
A. A "person" shall mean any individual, corporation,
association, group (as such term is used in Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act
of 1934 as in effect on January 1, 1989), partnership or other
entity.
B. "Interested Stockholder" shall mean any person
(other than this corporation or any Subsidiary or any employee
benefit plan of this corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of 10% or more of the combined voting power of the then
outstanding shares of Voting Stock; or
(ii) is an Affiliate of this corporation and at any
time within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 10%
or more of the combined voting power of the then outstanding
shares of Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to
the beneficial ownership of any shares of Voting Stock which were
at any time within the twenty-four month period immediately prior
to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred
in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities
Act of 1933.
C. A person shall be a "beneficial owner" of any
Voting Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns directly or
indirectly; or
(ii) which such person or any of its Affiliates or
Associates has the right to acquire, hold, vote or direct the
vote (whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise; or
(iii) which are beneficially owned, directly or indi-
rectly, by any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or under-
standing (including, but not limited to, warrants, options or
rights) for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
D. For the purposes of determining whether a person
is an Interested Stockholder pursuant to paragraph B of this sec-
tion 3, the number of shares of Voting Stock deemed to be out-
standing shall include shares deemed owned through application of
paragraph C of this Section 3 but shall not include any other
shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of con-
version rights, exchange rights, warrants or options, or other-
wise.
E. "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as in effect on January 1, 1989.
F. "Subsidiary" means any corporation of which a
majority of any class of Equity Security is owned, directly or
indirectly, by this corporation, provided, however, that for the
purposes of the definition of "Interested Stockholder" set forth
in paragraph B of this Section 3, the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
Equity Security is owned, directly or indirectly, by this
corporation.
G. "Disinterested Director" shall mean any member of
the Board of Directors who is unaffiliated with the Interested
Stockholder and was a member of the Board of Directors prior to
the Effective Date, and any newly-elected or appointed director
or any successor of a Disinterested Director who is unaffiliated
with the Interested Stockholder and is recommended to succeed a
Disinterested Director by a majority of Disinterested Directors
then on the Board of Directors.
H. "Fair Market Value" shall mean:
(i) in the case of stock, the highest closing sale
price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New
York Stock Exchange-Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or,
if such stock is not listed on such Exchange, on the principal
United States securities Exchange registered under the Securities
Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing
sales price or bid quotation with respect to a share of such
stock during the 30-day period preceding the date in question on
the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or, if no such
quotations are available, the fair market value on the date in
question of a share of such stock as determined by a majority of
the Disinterested Directors in good faith; and
(ii) in the case of stock of any class or series which
is not traded on any United States registered securities exchange
nor in the over-the-counter market or in the case of property
other than cash or stock, the fair market value of such property
on the date in question as determined by a majority of Disinter-
ested Directors in good faith.
I. In the event of any Business Transaction in which
this corporation survives, the phrase "consideration other than
cash to be received" as used in paragraphs B(i) and (ii) of Sec-
tion 2 of this Article NINTH shall include the shares of common
stock and/or the shares of any other class of outstanding Voting
Stock retained by the holders of such shares.
J. "Equity Security" shall have the meaning ascribed
to such term in Section 3(a)(11) of the Securities Exchange Act
of 1934, as in effect on January 1, 1989.
Section 4. Powers of the Board of Directors. A major-
ity of the Disinterested Directors, or if there are no Disinter-
ested Directors, a majority of the Directors, shall have the
power and duty, consistent with their fiduciary obligations, to
determine for the purposes of this Article NINTH, on the basis of
information known to them after reasonable inquiry, (A) whether a
person is an Interested Stockholder, (B) the number of shares of
Voting Stock beneficially owned by any person, (C) whether a per-
son is an Affiliate or Associate of another, (D) whether the
assets which are the subject of any Business Transaction have, or
the consideration to be received for the issuance or transfer of
securities by this corporation or any Subsidiary in any Business
Transaction has, an aggregate Fair Market Value of $10 million or
more. A majority of the Directors shall have the further power
to interpret all of the terms and provisions of this Article
NINTH.
Section 5. No Effect on Fiduciary Obligations.
Nothing contained in this Article NINTH shall be construed to
relieve the Board of Directors or any Interested Stockholder from
any fiduciary obligation imposed by law.
Section 6. Amendment, Repeal, etc. Notwithstanding
any other provisions of this Certificate of Incorporation or the
by-laws (and notwithstanding the fact that a lesser percentage
may be specified by law, this Certificate of Incorporation, the
by-laws, any agreement with a national securities exchange, or
otherwise) the affirmative vote of the holders of 75% or more of
the voting power of the then outstanding Voting Stock, voting
together as a single class, shall be required to effect the
amendment, alteration, change or repeal of, or the adoption of
any provisions inconsistent with, this Article NINTH or any
provision hereof.
TENTH: No director of the corporation shall be per-
sonally liable to the corporation or any stockholder for monetary
damages for breach of fiduciary duty as a director, except for
any matter in respect of which such director shall be liable
under Section 174 of Title 8 of the Delaware Code (relating to
the Delaware General Corporation Law) or any amendment thereto or
successor provision thereto or shall be liable by reason that, in
addition to any and all other requirements for such liability,
such director (i) shall have breached the duty of loyalty to the
corporation or its stockholders, (ii) shall not have acted in
good faith regarding actions or omissions or shall have acted or
omitted to act in a manner involving intentional misconduct or a
knowing violation of law, or (iii) shall have derived an improper
personal benefit. Neither the amendment nor repeal of this Arti-
cle TENTH, nor the adoption of any provision of this Certificate
of Incorporation inconsistent with this Article TENTH, shall eli-
minate or reduce the effect of this Article TENTH in respect of
any matter occurring, or any cause of action, suit or claim that,
but for this Article TENTH, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
- - - - -
Upon this Restated Certificate of Incorporation
becoming effective, as contemplated by the Plan, each share of
the corporation's old common stock, $.125 par value per share,
and each share of the $3.50 Cumulative Convertible Preferred
Stock, no par value per share, outstanding immediately prior to
the time that this Restated Certificate of Incorporation becomes
effective, shall, without any further action on the part of the
corporation or of any holder of stock of the corporation, be
cancelled and cease to represent any ownership interest in the
corporation, and new shares of fully paid and nonassessable
Common Stock, no par value per share, of the corporation will be
issued pursuant to the Plan.
This Restated Certificate of Incorporation of Global
Marine Inc. shall become effective at 5:01 p.m. Delaware time,
March 16, 1989, and shall not become effective until such time.
IN WITNESS WHEREOF, said GLOBAL MARINE INC. has caused
this Certificate to be signed by John G. Ryan, its Senior Vice
President, and attested by Alexander A. Krezel, its Assistant
Secretary, this day of March, 1989.
(SEAL) GLOBAL MARINE INC.
By: /s/ John G. Ryan
John G. Ryan
Senior Vice President
ATTEST:
By: /s/ Alexander A. Krezel
Alexander A. Krezel
Assistant Secretary
EXHIBIT 3(i).2
GLOBAL MARINE INC.
CERTIFICATE OF AMENDMENT
of the
RESTATED CERTIFICATE OF INCORPORATION
GLOBAL MARINE INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware, hereby
certificates:
FIRST: The first paragraph of Article FOURTH of the corporation's
Restated Certificate of Incorporation is hereby amended to read as
follows:
"FOURTH: The corporation is authorized to
issue one class of shares of stock to be
designated "Common Stock." The total number
of shares of Common Stock which the
corporation is authorized to issue is Two
Hundred Million shares (200,000,000), $.10 par
value per share."
SECOND: The foregoing amendment to the corporation's Restated
Certificate of Incorporation has been adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
THIRD: The capital of the corporation will not be reduced by this
amendment.
IN WITNESS WHEREOF, the corporation has caused this certificate of
amendment to be signed by John G. Ryan, a Senior Vice President,
and such signature to be attested by Kimberly Hugentobler, an
Assistant Secretary, this 10th day of May, 1990.
/s/ John G. Ryan
Senior Vice President
[SEAL]
Attest:
/s/ Kimberley Hugentobler
Assistant Secretary
EXHIBIT 3(i).3
GLOBAL MARINE INC.
CERTIFICATE OF CORRECTION
of the
RESTATED CERTIFICATE OF INCORPORATION
GLOBAL MARINE INC., a corporation organized and existing under the
General Corporation Law of the Sate of Delaware, DOES HEREBY
CERTIFY:
FIRST: The name of the Corporation is GLOBAL MARINE INC.
SECOND: The corporation filed a Restated Certificate of
Incorporation in the office of the Secretary of State of Delaware
on March 15, 1989 and recorded it in the office of the Recorder of
Deeds of New Castle County on March 22, 1989; and the corporation
filed a Certificate of Amendment of the Restated Certificate of
Incorporation in the office of the Secretary of Sate of Delaware on
May 11, 1990 and recorded it in the office of the Recorder of Deeds
of New Castle County on May 15, 1990.
THIRD: The corporation's Restated Certificate of Incorporation
requires correction as permitted by subsection (f) of Section 103
of the General Corporation Law of the Sate of Delaware.
FOURTH: As a result of a typographical error, the words "Common
Stock, no par value per share," which are incorrect, appear once
in the sentence substituting the paragraph immediately following
Article TENTH of the corporation's Restated Certificate of
Incorporation, instead of the correct words "Common Stock", $.10
par value per share," causing said sentence, on pages 17 and 18 of
the corporation's Restated Certificate of Incorporation, to be
inaccurate and defective.
FIFTH: The sentence constituting the paragraph immediately
following Article TENTH, on pages 17 and 18 of the corporation's
Restated Certificate of Incorporation, is hereby corrected to read
as follows:
"Upon this Restated Certificate of
Incorporation becoming effective, as
contemplated by the Plan, each share of the
corporation's old common stock, $.125 par
value per share, and each share of the $3.50
Cumulative Convertible Preferred Stock, no par
value per share, outstanding immediately prior
to the time that this Restated Certificate of
Incorporation becomes effective, shall,
without any further action on the part of the
corporation or of any holder of stock of the
corporation, be cancelled and cease to
represent any ownership interest in the
corporation, and new shares of fully paid and
nonassessable Common Stock, $.10 par value per
share, of the corporation will be issued
pursuant to the Plan."
IN WITNESS WHEREOF, the corporation has caused this Certificate of
Correction to be signed by John G. Ryan, A Senior Vice President,
and such signature to be attested by Alexander A. Krezel, an
Assistant Secretary, this 18th day of September, 1990.
/s/ John G. Ryan
Senior Vice President
[SEAL]
Attest:
/s/ Alexander A. Krezel
Assistant Secretary
EXHIBIT 3(i).4
GLOBAL MARINE INC.
CERTIFICATE OF AMENDMENT
of the
RESTATED CERTIFICATE OF INCORPORATION
GLOBAL MARINE INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware, hereby
certificates:
FIRST: Article FOURTH of the corporations's Restated Certificate of
Incorporation is hereby amended to read as follows:
FOURTH: The corporation is authorized to issue two
classes of shares of stock to be designated,
respectively, "Common Stock" and "Preferred Stock." The
total number of shares of all classes of stock which the
corporation is authorized to issue is Two Hundred Ten
Million (210,000,000). The total number of shares of
Common Stock is Two Hundred Million (200,000,000), $.10
par value per share, and the total number of shares of
Preferred Stock is Ten Million (10,000,000), $.01 par
value per share.
The powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of
the shares of this corporation's stock are as follows:
1. SERIES OF PREFERRED STOCK. Any authorized but
unissued shares of Preferred Stock may be issued from
time to time in one or more series. All shares of
Preferred Stock shall be of equal rank and shall be
identical, except in respect of the particulars that may
be fixed by the board of directors, or, to the extent
permitted by law, by a duly authorized committee of the
board of directors, pursuant to the authority which is
hereinafter expressly vested in the board of directors
(each reference to the board of directors in this Article
FOURTH including, to the extent permitted by applicable
law and unless the context otherwise requires, any duly
authorized committee of the board of directors). Each
share of a series of Preferred Stock shall be identical
in all respects with other shares of such series, except
as to the date from which dividends thereon shall be
cumulative. Before any shares of Preferred Stock or any
particular series shall be issued, the board of directors
shall fix and determine, and is hereby expressly vested
with authority to fix and determine, in the manner
provided by law, the following provisions of the shares
of such series so far as not inconsistent with the
provisions of this Article FOURTH applicable to all
series of Preferred Stock:
(i) the distinctive designation of such
series and the maximum number of shares which
shall constitute such series;
(ii) the annual rate of dividends payable on
shares of such series, the date or dates from
which dividends shall accumulate, and the
dates for payment thereof;
(iii) the amount or amounts of the
liquidation preference of the shares of such
series;
(iv) whether or not shares of such series
are redeemable at the option of the
corporation, and, if they are, the time or
times when, the manner in which and the price
or prices at which shares of such series shall
be redeemable, and the extent to and the
manner in which shares of such series are
subject to the operation of a purchase,
retirement or sinking fund, if any;
(v) whether or not shares of such series
are convertible into shares of Common Stock,
and, if they are, the time or times when and
the conversion price or rate at which the
shares of such series shall be convertible
into shares of Common Stock, and the
circumstances under which and manner in which
such conversion price or rate is subject to
adjustments;
(vi) whether or not the shares of such
series shall have voting rights, and, if so,
the terms of such voting rights; provided,
however, that such voting rights shall not be
other than one vote per share; and
(vii) any other preferences and relative,
participating, optional, or other special
rights, or qualifications, limitations or
restrictions thereof, as shall not be
inconsistent with the Certificate of
Incorporation, as amended.
2. DIVIDEND PROVISIONS. The holders of the
Preferred Stock of each series shall be entitled to
receive, when, as and if declared by the board of
directors of the corporation out of funds legally
available therefor, cash dividends in such amounts, if
any, as shall be fixed for such series by the board of
directors in the resolution creating such series, payable
quarterly on such dates as shall be fixed by the board of
directors in such resolution, in preference to and in
priority over dividends upon the Common Stock, or any
other class ranking junior as to dividends to the
Preferred Stock, other than dividends payable in Common
Stock or in shares of such junior class. Such dividends
on the Preferred Stock of each series shall accrue on
each share thereof from the date or dates fixed in the
resolution creating such series and shall accrue from day
to day, whether or not earned or declared. Such
dividends shall be cumulative, so that if such dividends
in respect of any previous quarterly dividend period and
for the current quarterly dividend period shall not have
been paid upon or set apart for all shares of Preferred
Stock of each series at the time outstanding, the
deficiency shall be fully paid or set apart for such
shares before any dividends shall be paid upon or set
apart for the shares of Common Stock or any other class
ranking junior as to dividends to the Preferred Stock,
except dividends payable in Common Stock or in shares of
such junior class, and before any cash is expended by the
corporation or any wholly-owned subsidiary of the
corporation for the purchase of any shares of its Common
Stock or any other class ranking junior as to dividends
to the Preferred Stock. No dividends shall be declared
on any series of Preferred Stock in respect of any
quarterly period unless there shall likewise be or have
been declared on all shares of Preferred Stock or each
other series at the time outstanding like dividends in
proportion to the respective annual dividend rates fixed
therefor as hereinbefore provided.
Subject to the preferential dividend rights of the
holders of Preferred Stock, the holders of the Common
Stock shall be entitled to receive, when, as and if
declared by the board of directors of the corporation out
of funds legally available therefor, all other dividends
payable in cash, in property or in shares of Common
Stock.
3. LIQUIDATION PROVISIONS. Upon any dissolution,
liquidation or winding up of the corporation, the holders
of outstanding shares of Preferred Stock of each series
shall be entitled to receive, or to have deposited in
trust for them, out of the assets of the corporation,
whether from capital, surplus or from earnings, before
any distribution of any assets shall be made to the
holders of Common Stock or of any other class ranking
junior upon liquidation to the Preferred Stock, an amount
equal to the liquidation preference fixed for such series
in such events by the board of directors prior to the
issuance of any shares of such series.
If upon any such dissolution, liquidation or winding
up the assets available for distribution to stockholders
shall be insufficient to permit the payment to the
holders of Preferred Stock of all series of the full
preferential amounts aforesaid, then the entire assets of
the corporation to be distributed to stockholders shall
be distributed among the holders of Preferred Stock of
all series in proportion to the involuntary liquidation
preferences established for their respective shares of
Preferred Stock.
In the event of any such dissolution, liquidation or
winding up, subject to the preferential liquidation
rights of the holders of Preferred Stock, the holders of
outstanding shares of Common Stock shall be entitled to
receive, ratably, all remaining assets of the corporation
available for distribution to stockholders.
Neither the consolidation nor merger of the
corporation with or into any other corporation or
corporations, nor the sale of all or substantially all of
its assets, shall be deemed to be a dissolution,
liquidation or winding up within the meaning of this
section captioned "Liquidation Provisions."
4. VOTING RIGHTS. Each holder of shares of Common
Stock issued and outstanding, except where otherwise
provided by law or by this Certificate of Incorporation,
as amended, shall be entitled to one vote, in person or
by proxy, for each share of Common Stock standing in his
name on the books of the corporation. The holders of the
Preferred Stock shall only be entitled to vote upon the
election of directors or upon any questions affecting the
corporation if and to the extent that the holders of any
series of Preferred Stock are granted voting rights fixed
for such series by the board of directors in the
resolution creating such series; provided, however, that
in no event shall a holder of shares of Preferred Stock
issued and outstanding be entitled to other than one
vote, in person or by proxy, for each share of Preferred
Stock standing in his name on the books of the
corporation.
(a) Cumulative Voting. At all elections of
directors of the corporation, each stockholder entitled
to vote shall have as many votes in the election of the
directors to be elected as shall be equal to the number
of votes to which (except for this provision as to
cumulative voting) his shares are entitled multiplied by
the number of directors to be elected, or in the case of
a class vote for directors, the number of votes to which
his shares of any class are entitled multiplied by the
number of directors to be elected by such class, and he
may cast all of such votes for a single director or may
distribute them among the number to be voted for or any
two or more of them as he may see fit, which right when
exercised shall be termed cumulative voting.
(b) No Stockholder Action Without a Meeting. No
action required to be taken or which may be taken at any
annual or special meeting of stockholders of the
corporation may be taken without a meeting and the power
of stockholders to consent in writing to the taking of
any action is specifically denied.
5. No Pre-Emptive Rights. No stockholder of this
corporation shall by reason of his holding shares of any
class have any pre-emptive or preferential right to
purchase or subscribe to any shares of any class of this
corporation, now or hereafter to be authorized, or any
notes, debentures, bonds or other securities convertible
into or carrying options or warrants to purchase shares
of any class, now or hereafter to be authorized, whether
or not the issuance of any such shares, or such notes,
debentures, bonds or other securities, would adversely
affect the dividend or voting rights of such stockholder,
other than such rights, if any, as the board of directors
in its discretion from time to time may grant and at such
price as the board of directors in its discretion may
fix; and the board of directors may issue shares of any
class of this corporation, or any notes, debentures,
bonds, or other securities convertible into or carrying
options or warrants to purchase shares of any class,
without offering any such shares of any class, either in
whole or in part, to the existing stockholders of any
class.
6. Status of Re-acquired Shares of Preferred
Stock. Shares of Preferred Stock which have been retired
through the operation of a purchase, retirement or
sinking fund, whether by redemption, purchase or
otherwise, shall, upon compliance with any applicable
provisions of the General Corporation Law of the State of
Delaware, have the status of authorized and unissued
shares of Preferred Stock, but shall be reissued only as
part of a new series of Preferred Stock to be created by
resolution or resolutions of the board of directors or as
part of any other series of Preferred Stock the terms of
which do not prohibit such reissue, and shall not be
reissued as a part of the series of which they were
originally a part. Shares of Preferred Stock which have
been redeemed or purchased, otherwise than through the
operation of a purchase, retirement or sinking fund, or
which, if convertible or exchangeable, have been
converted into or exchanged for shares of stock of any
other class or classes ranking junior to the Preferred
Stock both as to dividends and upon liquidation, shall,
upon compliance with any applicable provisions of the
General Corporation Law of the State of Delaware, have
the status of authorized and unissued shares of Preferred
Stock and may be reissued as a part of the series of
which they were originally a part (if the terms of such
series do not prohibit such reissue) or as part of a new
series of Preferred Stock to be created by resolution or
resolutions of the board of directors or as part of any
other series of Preferred Stock the terms of which do not
prohibit such reissue.
SECOND: The foregoing amendment to the corporation's Restated
Certificate of Incorporation has been adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
THIRD: The capital of the corporation will not be reduced by this
amendment.
IN WITNESS WHEREOF, the corporation has caused this certificate of
amendment to be signed by John G. Ryan, a Senior Vice President,
and such signature to be attested by Alexander A. Krezel, an
Assistant Secretary, this 8th day of May, 1992.
/s/ John G. Ryan
Senior Vice President
[SEAL]
Attest:
/s/ Alexander A. Krezel
Assistant Secretary
EXHIBIT 3(ii).1
GLOBAL MARINE INC.
BY-LAWS
As Amended Through May 10, 1989
INDEX
ARTICLE I OFFICES PAGE
Section I-1 Principal Office 1
Section I-2 Other Offices 1
ARTICLE II MEETINGS OF STOCKHOLDERS
Section II-1 Place 1
Section II-2 Date, Time, and Purpose of
Annual Meeting 1
Section II-3 Written Notice 1
Section II-4 Stockholder List 1
Section II-5 Special Meeting 2
Section II-6 Notice of Special Meeting 2
Section II-7 Business Transacted at Special
Meeting 2
Section II-8 Quorum 2
Section II-9 Majority Vote 2
Section II-10 The Stockholder Vote 2
ARTICLE III DIRECTORS
Section III-1 Number, Qualification, Election
and Term of Office 2
Section III-2 Location of Board Meeting 3
Section III-3 First Meeting of the Newly Elected
Board 3
Section III-4 Regular Meetings 3
Section III-5 Special Meetings; Telephonic
Meetings Permitted 3
Section III-6 Quorum and Majority Vote 3
Section III-7 Unanimous Written Consent 3
Section III-8 Committees - Formation and Powers 4
Section III-9 Committee Minutes 4
Section III-10 Compensation 4
Section III-11 Indemnification of Directors,
Officers, Employees and Agents 4
Section III-12 Directors Emeritus 7
ARTICLE IV NOTICES AND WAIVERS THEREOF
Section IV-1 Notices 8
Section IV-2 Waiver of Notice 8
ARTICLE V OFFICERS
Section V-1 Election of Officers 8
Section V-2 Time of Election of Principal
Officers 8
Section V-3 Time of Election of Other
Officers 8
Section V-4 Salaries 8
Section V-5 Term of Office, Removal and
Filling of Vacancies 9
Section V-5a The Chairman of the Board 9
Section V-5b Chief Executive Officer 9
Section V-6 The President - Duties 9
Section V-7 The President - Execution of
Documents Requiring a Seal 9
Section V-8 The Vice President 9
Section V-9 The Secretary 9
Section V-10 The Assistant Secretary 9
Section V-11 The Treasurer - Responsibility
for Funds 10
Section V-12 The Treasurer - Other Duties 10
Section V-13 The Assistant Treasurer 10
ARTICLE VI CERTIFICATE OF STOCK
Section VI-1 Right of Stockholder to
Certificate 10
Section VI-2 Facsimile Signature 10
Section VI-3 Lost Certificates 10
Section VI-4 Transfer of Stock 11
Section VI-5 Record Date 11
Section VI-6 Registered Stockholders 11
ARTICLE VII GENERAL PROVISIONS
Section VII-1 Dividends - Declaration and
Payment 12
Section VII-2 Reserve Out of Funds Available
for Dividends 12
Section VII-3 Annual Report 12
Section VII-4 Execution of Documents 12
Section VII-5 Undertakings and Commitments 12
Section VII-6 Checks 12
Section VII-7 Representation of Shares of
Other Corporations 12
Section VII-8 Fiscal Year 13
Section VII-9 Corporate Seal 13
ARTICLE VIII AMENDMENT OF BY-LAWS
Section VIII-1 Amendment 13
GLOBAL MARINE INC.
BY-LAWS
ARTICLE I
OFFICES
Section I-1 Principal Office: The principal office shall be in
the City of Wilmington, County of New Castle, state of Delaware.
Section I-2 Other Offices: The corporation may also have offices
at such other places both within and without the state of
Delaware as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section II-1 Place: All meetings of the stockholders for the
election of directors shall be held at such place, within or
without the state of Delaware, as may be fixed from time to time
by the Board of Directors. Meetings of stockholders for any
other purpose may be held at such time and place, within or
without the state of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
Section II-2 Date, Time, and Purpose of Annual Meeting: The
Annual Meeting of Stockholders shall be held at such date and
time as may be determined by the Board of Directors. In the
event that the Board does not set a date and time, such meeting
shall be held at 11:00 o'clock a.m. on the fourth Wednesday in
May of each year if not a legal holiday, and if a legal holiday,
then at the same time on the next business day following. At
such annual meeting the stockholders shall elect a Board of
Directors, and shall transact such other business as may properly
be brought before the meeting.
Section II-3 Written Notice: Written notice of the annual
meeting shall be given to each stockholder entitled to vote
thereat at least ten days before the date of the meeting.
Section II-4 Stockholder List: The officer who has charge of the
stock ledger of the corporation shall prepare and make at least
ten days before every election of directors, a complete list of
the stockholders entitled to vote at said election, arranged in
alphabetical order, showing the address of and the number of
shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours,
for a period of at least ten days prior to the election, either
at a place within the city, town or village where the election is
to be held, and which place shall be specified in the notice of
the meeting, or, if not specified, at the place where said
meeting is to be held, and the list shall be produced and kept at
the time and place of election during the whole time thereof, and
subject to the inspection of any stockholder who may be present.
Section II-5 Special Meeting: Special meetings of the
stockholders may only be called at any time by a majority of the
directors then in office or the President, or by the holders of
at least 25% of the issued and outstanding common stock of the
corporation as provided in the Certificate of Incorporation.
Section II-6 Notice of Special Meeting: Written notice of a
special meeting of stockholders, stating the time, place and
object thereof, shall be given to each stockholder entitled to
vote thereat, at least five days before the date fixed for the
meeting.
Section II-7 Business Transacted at Special Meeting: Business
transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice.
Section II-8 Quorum: The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business
except as otherwise provided by statute or by the Certificate of
Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at
the meeting as originally notified.
Section II-9 Majority Vote: When a quorum is present at any
meeting, the vote of the holders of a majority of the stock
having voting power present in person or represented by proxy
shall decide any question brought before such meeting, unless the
question is one upon which by express provision of the statutes
or of the Certificate of Incorporation, a different vote is
required in which case such express provision shall govern and
control the decision of such question. In any election at a
meeting when a quorum is present, the individual or individuals
elected shall be the nominee or nominees, equal in number to the
position or positions to be filled, who receives or receive a
plurality of the votes cast.
Section II-10 The Stockholder Vote: Each stockholder shall at
every meeting of the stockholders be entitled to one vote in
person or by proxy for each share of the capital stock having
voting power held by such stockholder, but no proxy shall be
voted on after three years from its date, unless the proxy
provides for a longer period. At all elections of directors of
the corporation each stockholder having voting power shall be
entitled to exercise the right of cumulative voting as provided
in the Certificate of Incorporation.
ARTICLE III
DIRECTORS
Section III-1 Number, Qualification, Election and Term of Office:
The exact number of directors, within the limits stated in the
Certificate of Incorporation, shall be determined by resolution
or resolutions passed by a majority of the whole Board of
Directors. If it is proposed to reduce the authorized number of
directors below five (5), the vote of stockholders holding more
than eighty percent (80%) of the voting power shall be necessary
for such reduction. No person shall serve as a director of this
corporation who at the time of his or her election has reached
his or her 70th birthday unless such person was elected as a
director at the annual meeting of holders of common stock of this
corporation held on May 18, 1979, in which case such person shall
be entitled to serve as a director without regard to any
limitation of age. Directors need not be stockholders.
Section III-2 Location of Board Meeting: The Board of Directors
of the corporation may hold meetings, both regular and special,
either within or without the state of Delaware.
Section III-3 First Meeting of the Newly Elected Board: The
first meeting of each newly elected Board of Directors shall be
held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting
shall be necessary to the newly elected directors in order to
legally constitute the meeting, provided a quorum shall be
present. In the event of the failure of the stockholders to fix
the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at
the time and place so fixed by the stockholders, the meeting may
be held at such time and place as shall have been determined for
the next regular meeting by the previous Board of Directors or as
shall be determined by the President, which time and place shall
be specified in a notice given as hereinafter provided for
meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section III-4 Regular Meetings: Regular meetings of the Board of
Directors may be held without notice at such time and at such
place as shall from time to time be determined by the Board.
Section III-5 Special Meetings; Telephonic Meetings Permitted:
Special meetings of the Board may be called by the President on
reasonable notice to each director, either personally, by
telephone, by mail or by telegram; special meetings shall be
called by the President or Secretary in like manner and on like
notice on the written request of two directors. Unless otherwise
restricted by the Certificate of Incorporation or these By-laws,
members of the Board of Directors, or any committee designated by
the Board, may participate in a meeting of the Board or of such
committee, as the case may be, by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section III-6 Quorum and Majority Vote: At any meeting of the
Board or of any committee of the Board, one-third of the
directors holding office or one-third of the members constituting
such committee, as the case may be, shall constitute a quorum for
the transaction of business, provided however that a quorum for
the transaction of business at any meeting of a committee of the
Board shall not be less than two members. The act of a majority
of the directors or members present at any meeting at which there
is a quorum shall be the act of the Board of Directors or such
committee, as the case may be, except as may be otherwise
specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be present at any meeting
of the Board of Directors or of any committee of the Board, the
directors or members present thereat may adjourn the meeting from
time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section III-7 Unanimous Written Consent: Unless otherwise
restricted by the Certificate of Incorporation or these By-laws,
any action required or permitted to be taken at a meeting of the
Board of Directors or of any committee thereof may be taken
without a meeting, if a written consent thereto is signed by all
members of the Board or of such committee as the case may be, and
such written consent or consents are filed with the minutes of
proceedings of the Board or committee.
Section III-8 Committees - Formation and Powers: The Board of
Directors may, by resolution passed by a majority of the whole
Board, designate one or more committees, each committee to
consist of two or more of the directors of the corporation,
which, to the extent provided in the resolution, shall have and
may exercise the powers of the Board of Directors in the
management of the business and affairs of the corporation and may
authorize the seal of the corporation to be affixed to all papers
which may require it. Such committee or committees shall have
such name or names as may be determined from time to time by
resolution adopted by the Board of Directors.
Section III-9 Committee Minutes: Each committee shall keep
regular minutes of its meeting and report the same to the Board
of Directors when required.
Section III-10 Compensation: The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director.
No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
Section III-11 Indemnification of Directors, Officers, Employees
and Agents: (a)(i) The corporation, to the full extent
permitted, and in the manner required by the laws of the state of
Delaware, as in effect at the time of the adoption of this
revised Section III-11 or as such laws may be amended from time
to time, shall indemnify any person who was or is made a party to
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (including any appeal
thereof), whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that such person is or was a
director or officer of the corporation, or, if at a time when he
was a director or officer of the corporation, is or was serving
at the request of the corporation as a director, officer,
partner, trustee, fiduciary, employee or agent (a "Subsidiary
Officer") of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise (an "Affiliated
Entity"), against expenses (including attorneys' fees), costs,
judgments, fines, penalties and amounts paid in settlement
actually and reasonably incurred by such person in connection
with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or
not opposed to the best interest of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful; provided,
however, that the corporation shall not be obligated to indemnify
against any amount paid in settlement unless the corporation has
consented to such settlement, which consent shall not be
unreasonably withheld. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not, of itself,
create a presumption that the person did not act in good faith
and in a manner which such person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, that such person
had reasonable cause to believe that his conduct was unlawful.
Notwithstanding anything to the contrary in the foregoing
provisions of this subparagraph (i) and except for any action,
suit or proceeding brought on behalf of a person to enforce the
right to indemnification hereunder or otherwise, a person shall
not be entitled, as a matter of right, to indemnification
pursuant to this subparagraph (i) against costs or expenses
incurred in connection with any action, suit or proceeding
commenced by such person against any person who is or was a
director, officer, fiduciary, employee or agent of the
corporation or a Subsidiary Officer of an Affiliated Entity, but
such indemnification may be provided by the corporation in any
specific case as permitted by paragraph (f) of this Section III-
11.
(ii) The corporation may indemnify any employee or agent of
the corporation in the manner and to the extent that it shall
indemnify any director or officer under this paragraph (a),
including indemnity in respect of service at the request of the
corporation as a Subsidiary Officer of an Affiliated Entity.
(b)(i) The corporation, to the full extent permitted, and
in the manner required by the laws of the state of Delaware, as
in effect at the time of the adoption of this Section III-11 or
as such laws may be amended from time to time, shall indemnify
any person who was or is made a party to or is threatened to be
made a party to any threatened, pending or completed action or
suit (including any appeal thereof) brought in the right of the
corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director or officer of the
corporation, or, if at a time when he was a director or officer
of the corporation, is or was serving at the request of the
corporation as a Subsidiary Officer of an Affiliated Entity,
against expenses (including attorneys' fees) and costs actually
and reasonably incurred by such person in connection with such
action or suit if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the
corporation unless, and except to the extent that, the Court of
Chancery of the state of Delaware or the court in which such
judgment was rendered shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses and costs as the Court of
Chancery of the state of Delaware or such other court shall deem
proper. Notwithstanding anything to the contrary in the
foregoing provisions of this subparagraph (b)(i), a person shall
not be entitled, as a matter of right, to indemnification
pursuant to this subparagraph (b)(i) against costs and expenses
incurred in connection with any action or suit in the right of
the corporation commenced by such person, but such
indemnification may be provided by the corporation in any
specific case as permitted by paragraph (f) of this Section III-
11.
(ii) The corporation may indemnify any employee or agent of
the corporation in the manner and to the extent that it shall
indemnify any director or officer under this paragraph (b),
including indemnity in respect of service at the request of the
corporation as a Subsidiary Officer of an Affiliated Entity.
(c) Any indemnification under paragraph (a) or (b) of this
Section III-11 (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper under the circumstances because such
person has met the applicable standard of conduct set forth in
paragraph (a) or (b) of this Section III-11. Such determination
shall be made (i) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to the
action, suit or proceeding in respect of which indemnification is
sought or by majority vote of the members of a committee of the
Board of Directors composed of at least three members each of
whom is not a party to such action, suit or proceeding, or (ii)
if such a quorum is not obtainable and/or such a committee is not
established or obtainable, or, even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel
in a written opinion, or (iii) by the stockholders. In the event
a request for indemnification is made by any person referred to
in subparagraph (i) of paragraph (a) or subparagraph (i) of
paragraph (b), the corporation shall cause such determination to
be made not later than 60 days after such request is made.
(d)(i) Notwithstanding the other provisions of this Section
III-11, to the extent that a director, officer, employee or agent
of the corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in
paragraph (a) or (b) of this Section III-11, or in defense of any
claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) and costs actually
and reasonably incurred by such person in connection therewith.
(ii) To the extent any person who is or was a director or
officer of the corporation has served or prepared to serve as a
witness in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, or in any
investigation by the corporation or the Board of Directors
thereof or a committee thereof or by any securities exchange on
which securities of the corporation are or were listed or any
national securities association, by reason of his services as a
director or officer of the corporation or, if at a time when he
was a director or officer of the corporation, is or was serving
at the request of the corporation as a Subsidiary Officer of an
Affiliated Entity, the corporation shall indemnify such person
against expenses (including attorneys' fees) and costs actually
and reasonably incurred by such person in connection therewith
within 30 days after the receipt by the corporation from such
person of a statement requesting such indemnification, averring
such service and reasonably evidencing such expenses and costs.
The corporation may indemnify any employee or agent of the
corporation to the same extent it is required to indemnify any
director or officer of the corporation pursuant to the foregoing
sentence of this paragraph.
(e)(i) Expenses and costs incurred by any person referred
to in subparagraph (i) of paragraph (a) or subparagraph (i) of
paragraph (b) of this Section III-11 in defending a civil,
criminal, administrative or investigative action, suit or
proceeding shall be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such person to repay such
amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the corporation as authorized
by this Section III-11.
(ii) Expenses and costs incurred by any person referred to
in subparagraph (ii) of paragraph (a) or subparagraph (ii) of
paragraph (b) of this Section III-11 in defending a civil,
criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding as authorized by
the Board of Directors, a committee thereof or an officer of the
corporation or a committee thereof authorized to so act by the
Board of Directors upon receipt of an undertaking by or on behalf
of such person to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the corporation as authorized by this Section III-11.
(f) The provision of indemnification to or the advancement
of expenses and costs to any person under this Section III-11, or
the entitlement of any person to indemnification or advancement
of expenses and costs under this Section III-11, shall not limit
or restrict in any way the power of the corporation to indemnify
or advance expenses and costs to such person in any other way
permitted by law or be deemed exclusive of any right to which any
person seeking indemnification or advancement of expenses and
costs may be entitled under any law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in such person's capacity as an officer, director,
employee or agent of the corporation and as to action in any
other capacity while holding any such position.
(g) The indemnification provided or permitted under this
Section III-11 shall apply in respect of any expense, costs,
judgment, fine, penalty or amount paid in settlement, whether or
not the claim or cause of action in respect thereof accrued or
arose before or after the effective date of this revised Section
III-11. The right of any person who is or was a director,
officer, employee or agent of the corporation to indemnification
and advance payment of expenses and costs under this Section III-
11 shall continue after he shall have ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, distributees, executors, administrators and other legal
representatives of such person.
(h) This Section III-11 shall be deemed to create a binding
obligation on the part of the corporation to its current and
former officers and directors and their heirs, distributees,
executors, administrators and other legal representatives, and
each director or officer in acting in such capacity shall be
entitled to rely on the provisions of this Section III-11,
without giving notice thereof to the corporation.
(i) The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request
of the corporation as a Subsidiary Officer of any Affiliated
Entity, against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of
such person's status as such, whether or not the corporation
would have the power to indemnify such person against such
liability under the provisions of this Section III-11 or
applicable law.
(j)(i) For purposes of this Section III-11, references to
"the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its corporate existence had continued, would
have been permitted under applicable law to indemnify its
directors, officers, employees or agents, so that any person who
is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of
such constituent corporation as a Subsidiary Officer of any
Affiliated Entity, shall stand in the same position under the
provisions of this Section III-11 with respect to the resulting
or surviving corporation as such person would have with respect
to such constituent corporation if its separate existence had
continued.
(ii) For purposes of this Section III-11, references to
"fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; references to "serving at
the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted
in good faith and in a manner such person reasonably believed to
be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner
"not opposed to the best interest of the corporation" as referred
to in this Section III-11.
Section III-12 Directors Emeritus: The Board of Directors may,
from time to time, elect one or more Directors Emeritus, each of
whom shall serve until the first meeting of the Board next
following the annual meeting of stockholders or until his earlier
resignation or removal by the Board. Directors Emeritus shall
serve as advisors and consultants to the Board of Directors,
shall be invited to attend all meetings of the Board and may
participate in all discussions occurring during such meetings.
Directors Emeritus shall not be privileged to vote on matters
brought before the Board and shall not be counted for the purpose
of determining whether a quorum of the Board is present.
ARTICLE IV
NOTICES AND WAIVERS THEREOF
Section IV-1 Notices: Whenever under the provisions of these By-
laws, notice is required to be given to any stockholder,
director, or officer, such notice, unless otherwise provided, may
be given personally, or it may be given in writing by depositing
the same in the post office or letterbox in a postpaid sealed
envelope, or it may be telegraphed, addressed to such
stockholder, director, or officer, at such address as appears on
the books of the corporation, or in default of other address, to
such stockholder, director, or officer at the general post office
in the City of Wilmington, County of New Castle, Delaware, and
such notice shall be deemed to be given at the time when the same
shall be thus mailed or telegraphed.
Section IV-2 Waiver of Notice: Whenever any notice whatever is
required to be given by law, or under the provisions of the
Certificate of Incorporation, or of these By-laws, a waiver
thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein,
shall be deemed equivalent to receipt of such required notice.
ARTICLE V
OFFICERS
Section V-1 Election of Officers: The officers of the
corporation shall be chosen by the Board of Directors, and shall
be a Chairman of the Board, a President, a Vice President, a
Secretary and a Treasurer. The Board of Directors may also
choose additional vice presidents, and one or more assistant
secretaries and/or assistant treasurers, and one or more such
other officers, with such other titles, as the Board may deem
necessary or desirable. Two or more offices may be held by the
same person, except that where the offices of president and
secretary are held by the same person, such person shall not hold
any other office. The Board of Directors shall designate either
the Chairman of the Board or the President to be the Chief
Executive Officer of the corporation.
Section V-2 Time of Election of Principal Officers: The Board of
Directors at its first meeting after each annual meeting of
stockholders shall choose a Chairman of the Board, a President,
one or more Vice Presidents, a Secretary and a Treasurer; the
Chairman of the Board shall be a member of the Board; none of the
other officers need be a member of the Board.
Section V-3 Time of Election of Other Officers: The Board of
Directors may appoint such other officers and agents as it shall
deem necessary who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be
determined from time to time by the Board.
Section V-4 Salaries: The salaries of the Chairman of the Board
and the President shall be fixed by the Board of Directors. The
salaries of other officers shall be fixed by the Chief Executive
Officer subject to review by the Board of Directors.
Section V-5 Term of Office, Removal and Filling of Vacancies:
The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or
appointed by the Board of Directors may be removed at any time by
the affirmative vote of a majority of the Board of Directors.
Any vacancy occurring in any office of the corporation shall be
filled by the Board of Directors.
Section V-5a The Chairman of the Board: The Chairman of the
Board shall preside at all meetings of the Board of Directors,
and shall exercise and perform such other powers and duties as
may be from time to time assigned to him by the Board of
Directors or prescribed by the By-laws.
Section V-5b Chief Executive Officer: The Board shall designate
either the Chairman of the Board or the President to be the Chief
Executive Officer of this corporation; the Chief Executive
Officer shall see that all orders and resolutions of the Board of
Directors are carried into effect, and shall exercise or perform
such other powers and duties as may be from time to time assigned
to him by the Board of Directors or prescribed by the By-laws.
Section V-6 The President - Duties: The President shall have
general and active management of the business of the corporation
subject to the direction and control of the Board of Directors,
and if the President is not the Chief Executive Officer, subject
also to the direction and control of the Chief Executive Officer.
The President shall assume the duties and responsibilities of the
Chairman of the Board in the absence of the Chairman of the
Board, or if there shall be no person occupying that office.
Section V-7 The President - Execution of Documents Requiring a
Seal: He shall execute bonds, mortgages, and the contracts
requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other
officer or agent of the corporation.
Section V-8 The Vice President: The Vice President, or if there
shall be more than one, the Vice Presidents in the order
determined by the Board of Directors, shall in the absence or
disability of the President, perform the duties and exercise the
powers of the President and shall perform such other duties and
have such other powers as the Board of Directors may from time to
time prescribe.
Section V-9 The Secretary: The Secretary shall attend all
meetings of the Board of Directors and all meetings of the
stockholders and record all the proceedings of the meetings of
the corporation and of the Board of Directors in a book to be
kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and special
meetings of the Board of Directors, and shall perform other such
duties as may be prescribed by the Board of Directors or
President, under whose supervision he shall be. He shall keep in
safe custody the seal of the corporation, and when authorized by
the Board of Directors, affix the same to any instrument
requiring it.
Section V-10 The Assistant Secretary: The Assistant Secretary,
or if there be more than one, the Assistant Secretaries in the
order determined by the Board of Directors, shall, in the absence
or disability of the Secretary, perform the duties and exercise
the powers of the Secretary and shall perform such other duties
and have such other powers as the Board of Directors may from
time to time prescribe.
Section V-11 The Treasurer - Responsibility for Funds: The
Treasurer shall have custody of and be responsible for all the
monies and funds of the company. He shall deposit or cause to be
deposited all company monies, funds and other valuables in the
name and to the credit of the company in such banks or other
financial institutions as in his judgment is proper or as shall
be directed by the Board, Chairman of the Board or the President,
and shall disburse the funds of the company which have been duly
approved for disbursement. He shall enter regularly in the books
of the company to be kept by him for the purpose of full and
accurate accounts of all monies received and paid out by him on
account of the company.
Section V-12 The Treasurer - Other Duties: The Treasurer shall
have such other powers and perform such other duties as may from
time to time be prescribed by the Board, the Chairman of the
Board, the President or the By-laws, and he shall in general,
subject to control of the Board, the Chairman of the Board and
the President, perform all the duties usually incident to the
office of treasurer of a corporation.
Section V-13 The Assistant Treasurer: Each Assistant Treasurer
shall assist the Treasurer and, in the absence or disability of
the Treasurer, any Assistant Treasurer may perform the duties of
the Treasurer unless and until the contrary is expressed by the
Board, and shall perform such other duties as may be prescribed
by the Board or the Treasurer.
ARTICLE VI
CERTIFICATE OF STOCK
Section VI-1 Right of Stockholder to Certificate: Every holder
of stock in the corporation shall be entitled to have a
certificate, signed by, or in the name of the corporation by, the
President or a Vice President and the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares owned by him in the
corporation.
Section VI-2 Facsimile Signature: Where a certificate is signed
(1) by a transfer agent other than the corporation or its
employee or (2) by a registrar other than the corporation or its
employee, the signature of any such President, Vice President,
Treasurer, Assistant Treasurer, Secretary or Assistant Secretary
may be by facsimile. In case any officer or officers who have
signed, or whose facsimile signature or signatures have been used
on any such certificate or certificates shall cease to be such
officer or officers of the corporation, whether because of death,
resignation or otherwise, before such certificate or certificates
have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and
be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile
signature or signatures have been used thereon had not ceased to
be such officer or officers of the corporation.
Section VI-3 Lost Certificates: The Board of Directors may
direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the
corporation alleged to have been lost or destroyed, upon the
making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to
give the corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost or destroyed.
Section VI-4 Transfer of Stock: Upon surrender to the
corporation or the transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it
shall be the duty of the corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section VI-5 Record Date: (a) In order that the corporation may
determine the stock-holders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, the Board
of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall
not be more than sixty nor less than ten days before the date of
such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at
the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting
is held. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto.
(c) In each case when a record date has been duly fixed,
such stockholders and only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to
notice of and to vote at the meeting of stockholders and any
adjournment thereof, or to receive payment of the dividend or
other distribution, or to receive the allotment of rights, or to
exercise the rights or participate in the other action, as the
case may be, notwithstanding any transfer of any stock on the
books of the corporation after such record date is fixed.
Section VI-6 Registered Stockholders: The corporation shall be
entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by
the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section VII-1 Dividends - Declaration and Payment: Dividends
upon the capital stock of the corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special
meeting pursuant to law. Dividends may be paid in cash, in
property, or in shares of the capital stock of the corporation,
subject to the provisions of the Certificate of Incorporation.
Section VII-2 Reserve Out of Funds Available for Dividends:
Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums
as the directors from time to time in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or
for equalizing dividends, or for repairing and maintaining any
property of the corporation, or for such other purpose as the
directors think conducive to the interest of the corporation, and
the directors may modify or abolish any such reserve in the
manner in which it was created.
Section VII-3 Annual Report: The Board of Directors shall cause
an annual report to be sent to the stockholders, not later than
three months after the close of the fiscal year, but at least
fifteen days in advance of the annual meeting of stockholders,
such report to include a balance sheet as of such closing date
and a statement of income and profit and loss for the year ended
on such closing date.
Section VII-4 Execution of Documents: Unless otherwise
authorized or prescribed by the Board of Directors, all
contracts, leases, deeds, deeds of trust, mortgages, bonds,
indentures, endorsements, assignments, powers of attorney to
transfer stock or for other purposes, and other documents and
instruments of whatever kind shall be executed for and on behalf
of the corporation by the President, a Vice President, or the
Treasurer, or by any such officer and the Secretary or an
Assistant Secretary, who shall have authority to affix the
corporate seal to the same.
The Board of Directors also may authorize any other officer or
officers, or agent or agents, to execute any contract, document
or instrument of whatever kind for and on behalf of the
corporation and such authority may be general or be confined to
specific instances.
Section VII-5 Undertakings and Commitments: No undertaking,
commitment, contract, instrument or document shall be binding
upon the corporation unless previously authorized or subsequently
ratified by the Board of Directors or executed by an officer or
officers or an agent or agents of the corporation acting under
powers conferred by the Board of Directors or by these By-laws.
Section VII-6 Checks: All checks, notes and other obligations
for collection, deposit or transfer, and all checks and drafts
for disbursement from company funds, and all bills of exchange
and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be endorsed or signed
by such officer or officers, agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors.
Section VII-7 Representation of Shares of Other Corporations:
Shares standing in the name of the corporation may be voted or
represented and all rights incident thereto may be exercised on
behalf of the corporation by the President, a Vice President, the
Secretary or the Treasurer, or by such other officers as to whom
the Board of Directors may from time to time confer like powers.
Section VII-8 Fiscal Year: The fiscal year of the corporation
shall end the thirty-first day of December in each year.
Section VII-9 Corporate Seal: The corporate seal shall have
inscribed thereon the name of the corporation, the year of its
organization and the words "Corporate Seal, Delaware." The seal
may be used by causing it or a facsimile thereof to be impressed
or affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENT OF BY-LAWS
Section VIII-1 Amendment: These By-laws may be altered or
repealed at any meeting of the stockholders or of the Board of
Directors.
EXHIBIT 4.6
RELEASE OF VESSEL FROM LIEN OF MORTGAGE
Wilmington Trust Company, Trustee, as mortgagee (the
"Mortgagee"), with reference to that First Preferred Fleet
Mortgage dated December 23, 1992, made and executed by Global
Marine Deepwater Drilling, Inc., a Delaware corporation (the
"Mortgagor"), covering a fleet of three Rigs to secure payment to
the Mortgagee of the total principal amount of US$225,000,000,
which First Preferred Fleet Mortgage was filed in the office of
the Officer in Charge, Marine Documentation, United States Coast
Guard, Port of Houston, Texas on December 23, 1992 at 9:10 a.m.
and recorded in Book PM 267, Instrument 10 on December 23, 1992
at 12:40 p.m. does hereby release one rig, being the whole of the
drillship named the GLOMAR ATLANTIC, O.N. 595738, and no other
Rig from the Mortgage.
IN WITNESS WHEREOF, the Mortgagee has caused this release to
be executed this 27day of January, 1993.
WILMINGTON TRUST COMPANY
Trustee, as Mortgagee
By: /s/ David A. Vanaskey, Jr.
Its: Financial Services Officer
STATE OF DELAWARE
COUNTY OF New Castle
This Release was acknowledged before me on January 27, 1993 by
David A. Vanaskey, Jr. as Financial Services Officer of
Wilmington Trust Company, Trustee, on behalf of whom said Release
was executed.
/s/ Vernessa E. Robinson
Signature of notarial officer
[Seal]
My commission expires October 12, 1996
Received for record February 3, 1993, 3:30 o'clock (A.M.)
(P.M.), and recorded in Preferred Mortgage Book No. 268,
Instrument No. 198.
EXHIBIT 4.8
RELEASE OF VESSEL FROM LIEN OF
FIRST PRIORITY NAVAL FLEET MORTGAGE
THIS RELEASE OF VESSEL FROM LIEN OF FIRST PRIORITY NAVAL
FLEET MORTGAGE is made by WILMINGTON TRUST COMPANY, a banking
corporation organized under the laws of the State of Delaware, in
its capacity as indenture trustee for the benefit of the holders
of the Notes (as such term is defined in the below-defined
Mortgage) (in such capacity, the "Mortgagee") pursuant to that
certain Indenture dated as of December 23, 1992 by Global Marine
Inc. to the Mortgagee (the "Indenture"), with respect to that
certain First Priority Naval Fleet Mortgage dated March 17, 1993
by Global Marine Nautilus Inc. (the "Mortgagor"), as "Owner", to
the Mortgagee, as "Mortgagee" (said First Priority Naval Fleet
Mortgage, as more particularly described in Recital A below,
being referred to herein as the "Mortgage").
RECITALS:
A. Reference is made to the following information:
1. Name of Mortgagor: Global Marine Nautilus Inc.
2. Name of Mortgagee: Wilmington Trust Company, in its
capacity as trustee pursuant to the
Indenture
3. Amount of Mortgage: US$225,000,000, and interest,
expenses and fees as provided and
referred to in the Notes (as
defined in the Mortgage) and the
performance of mortgage covenants
4. Description of First Priority Naval Fleet Mortgage
Mortgage: dated March 17, 1993 by the
Mortgagor to the Mortgagee,
preliminarily registered in the
Public Registry Office of the
Republic of Panama, Commercial
Section, at Microjacket N-016716,
Roll 39115, Image 0083 on March 23,
1993.
B. The Mortgage is a fleet mortgage, covering two Rigs:
(i) the jackup drilling rig GLOMAR LABRADOR I, Provisional
Patente de Navegacion No. 22378-NY, and (ii) the jackup drilling
rig GLOMAR MORAY FIRTH I, Provisional Patente de Navegacion No.
22379-NY.
C. The Mortgagee wishes to release the GLOMAR MORAY FIRTH
I, and no other Rig, from the Mortgage.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Mortgagee does hereby release one (1) Rig, being the whole of the
jackup drilling rig named the GLOMAR MORAY FIRTH I, Provisional
Patente de Navegacion No. 22379-NY (together with the
appurtenances thereto comprising said Rig), and no other Rig,
from the Mortgage.
IN WITNESS WHEREOF, the Mortgagee has executed this Release
of Vessel From Lien of First Priority Fleet Mortgage on this 8th
day of September, 1993.
WILMINGTON TRUST COMPANY,
in its capacity as indenture trustee
pursuant to the Indenture
By:/s/ David A. Vanaskey, Jr.
Name: David A. Vanaskey, Jr.
Title: Senior Financial Services
Officer
ACKNOWLEDGMENT
I, the undersigned, NOTARY PUBLIC, duly authorized, admitted
and sworn residing and practicing in New Castley Company DO
HEREBY CERTIFY THAT the signature which appears at the foot of
the above written RELEASE OF VESSEL FROM LIEN OF FIRST PRIORITY
NAVAL FLEET MORTGAGE is the authentic signature of the said David
A. Vanaskey, Jr. of WILMINGTON TRUST COMPANY, a banking
corporation, organized under the laws of the State of Delaware
(in its capacity as Trustee pursuant to an Indenture between said
Trustee and Global Marine Inc. (acting on behalf of holders of
certain Senior Secured Notes issued by Global Marine Inc.
pursuant to said Indenture)), who has produced sufficient proof
of his/her power to execute the said RELEASE OF VESSEL FROM LIEN
OF FIRST PRIORITY NAVAL FLEET MORTGAGE as Attorney-in-Fact of
WILMINGTON TRUST COMPANY.
IN TESTIMONY whereof I have
hereunto subscribed my name and
affixed my seal of office this 8
day of September, 1993.
/s/ Vernessa E. Robinson
Notary Public
EXHIBIT 4.9
SUPPLEMENT NO. 1 TO
FIRST PRIORITY NAVAL FLEET MORTGAGE
THIS SUPPLEMENT NO. 1 TO FIRST PRIORITY NAVAL FLEET MORTGAGE
(this "Supplement") is entered into as of this 8th day of
September, 1993, by and between WILMINGTON TRUST COMPANY, a
banking corporation organized under the laws of the State of
Delaware, in its capacity as indenture trustee for the benefit of
the holders of the Notes (as such term is defined in the below-
defined Mortgage) (in such capacity, the "Mortgagee") pursuant to
that certain Indenture dated as of December 23, 1992 by Global
Marine Inc. to the Mortgagee (the "Indenture"), and GLOBAL MARINE
NAUTILUS INC., a Delaware corporation (the "Owner").
RECITALS:
A. Reference is made to that certain First Priority Naval
Fleet Mortgage dated March 17, 1993 by the Owner to the
Mortgagee, preliminarily registered in the Public Registry Office
of the Republic of Panama, Commercial Section, at Microjacket
N-016716, Roll 39115, Image 0083 on March 23, 1993 (said First
Priority Naval Fleet Mortgage being referred to herein as the
"Original Mortgage"). Capitalized terms used herein and not
otherwise defined have the meanings provided therefor in the
Original Mortgage, as the same is amended and supplemented by
this Supplement (the "Mortgage").
B. The Mortgage originally covered the following two
Panamanian-flag drilling rigs:
Provisional
Name Patente No.
GLOMAR LABRADOR I 22378-NY
GLOMAR MORAY FIRTH I 22379-NY
C. Concurrently with the preliminary recordation of this
Supplement, the GLOMAR MORAY FIRTH I was released from the lien
of the Original Mortgage, pursuant to a certain Release of Vessel
from Lien of First Priority Naval Fleet Mortgage dated September
8, 1993, preliminarily registered in the Public Registry Office
of the Republic of Panama, Commercial Section, at Microjacket N-
016716, Roll 39859, Image 0034 on September 10, 1993.
D. The Owner is the owner of the following three
Panamanian-flag drilling rigs: (i) TRANSOCEAN No. 5, of 4,298.84
gross tons and 4,298.84 net tons or thereabouts and 74.1 meters
in length and 61.11 meters in width and 7.71 meters in depth,
(ii) GLOMAR ADRIATIC VI (formerly named TRANSOCEAN No. 6), of
4,298.84 gross tons and 4,298.84 net tons or thereabouts and
74.10 meters in length and 61.11 meters in width and 7.71 meters
in depth, and (iii) GLOMAR ADRIATIC VII (formerly named
TRANSOCEAN No. 7), of 4,507.39 gross tons and 4,507.00 net tons
or thereabouts and 74.10 meters in length and 61.11 meters in
width and 7.71 meters in depth (such three rigs, as more
particularly described in Recital E below and in Section 2 hereof
being hereinafter collectively referred to as the "New Rigs").
E. Each of the New Rigs has been duly preliminarily
documented in the name of the Owner under the laws of the
Republic of Panama, as evidenced by: (i) as to TRANSOCEAN No. 5,
Provisional Patente of Navigation No. 8991-PEXT-4, dated
September 10, 1993, bearing instructional call letters of HO-
3188, (ii) as to GLOMAR ADRIATIC VI, Provisional Patente of
Navigation No. 9921-PEXT-6, dated September 10, 1993, bearing
instructional call letters of 3EJD8, and (iii) as to GLOMAR
ADRIATIC VII, Provisional Patente of Navigation No. 11305-PEXT-4,
dated September 10, 1993, bearing instructional call letters of
HO-5265.
F. The Mortgagee and the Owner have agreed in the Mortgage
and the Indenture that the Owner shall mortgage to the Mortgagee
rigs acquired in substitution for Rigs released from the lien of
the Mortgage, and the Mortgagee and the Owner wish to amend and
supplement the Original Mortgage, on the terms and conditions
hereof, in order to make the New Rigs subject to the lien of the
Mortgage.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Mortgagee and the Owner hereby agree as follows:
1. New Rigs Subject to Mortgage. The Original Mortgage is
supplemented to reflect that each of the New Rigs (a) constitutes
a "Rig" under the Mortgage, (b) is subject to the lien, terms and
conditions of the Mortgage, and (c) is to be held by the
Mortgagee subject to the agreements and conditions contained in
the Mortgage. The definitions in the Original Mortgage of the
terms "Rigs" and "Rig" are hereby amended to reflect that such
terms refer to the GLOMAR LABRADOR I and the New Rigs, together
with the related equipment and appurtenances described in the
Granting Clause of the Mortgage.
2. Granting Clause. To secure the payment and performance
of the Notes, and all other amounts due and to become due under
the Indenture and the Mortgage and to secure the performance and
observance of and compliance with the terms and conditions in the
Mortgage and in the Notes and the Indenture contained, the Owner
has granted, conveyed, mortgaged, pledged, confirmed, assigned,
transferred and set over, and by these presents does grant,
convey, mortgage, pledge, confirm, assign, transfer and set over
unto the Mortgagee, the whole of the following rigs duly
documented in the name of the Owner under the laws of the
Republic of Panama and described as follows:
Provisional
Rig Type Name Patente No. Home Port
Jackup TRANSOCEAN No. 5 8991-PEXT-4 Panama City, Panama
Jackup GLOMAR ADRIATIC VI 9921-PEXT-6 Panama City, Panama
Jackup GLOMAR ADRIATIC VII 11305-PEXT-4 Panama City, Panama
together in each case with (and including in its definition) all
its engines, boilers, machinery, masts, boats, anchors, spars,
fillings, spare parts, cables, chains, rigging, tackle, gear,
apparel, furniture, capstans, fittings, outfit, tools, drilling
equipment (including without limitation top drive, derricks,
drilling masts, rotary cables, substructures, draw works,
engines, pumps, pumping equipment, blowout prevention equipment,
drill pipe and drill bits) and other equipment, and all other
appurtenances thereto now or at any time hereafter appertaining
or belonging thereto, and whether onboard or not onboard, and
also any and all additions, improvements and replacements
hereafter made in and to each such rig or in and to its equipment
and appurtenances as aforesaid, but excluding any third party
equipment onboard such rig.
TO HAVE AND TO HOLD, all and singular, the above mortgaged
and described property unto the Mortgagee, its successors and
assigns, to its and its successors' and assigns' own use, benefit
and behoof forever, upon the terms set forth herein.
The foregoing Granting Clause is subject to the two provisos
to the Granting Clause contained in the Mortgage.
3. Amendment to Mortgage's Granting Clause. The Granting
Clause of the Original Mortgage is hereby amended by deleting the
list therein of the Rigs (which follows the colon therein) in its
entirety and inserting the following in lieu thereof:
Provisional
"Rig Type Name Patente No. Home Port
jackup GLOMAR LABRADOR I 22378-NY Panama City, Panama
jackup TRANSOCEAN No. 5 8991-PEXT-4 Panama City, Panama
jackup GLOMAR ADRIATIC VI 9921-PEXT-6 Panama City, Panama
jackup GLOMAR ADRIATIC VII 11305-PEXT-4 PanamaCity,
Panama".
4. Notice of Mortgage. The Owner shall comply with and
satisfy all of the provisions of the laws of the Republic of
Panama to establish and perfect after the execution and delivery
of this Supplement, and thereafter to maintain, the Mortgage as a
first priority naval fleet mortgage thereunder upon the Rigs.
The Owner shall place and retain properly certified copies of the
Mortgage and this Supplement onboard each Rig with its papers and
cause such certified copies to be exhibited to all persons having
business with any Rig which might give rise to any lien thereon.
A notice, reading as follows, printed in plain type of such size
that the paragraph of reading matter shall cover a space not less
than six (6) inches wide by nine (9) inches high, and framed,
shall, within a reasonable time after the recordation of this
Supplement, be placed and kept prominently exhibited on each Rig:
NOTICE OF
"FIRST PRIORITY NAVAL FLEET MORTGAGE
This Rig is owned by GLOBAL MARINE NAUTILUS
INC., and is covered by a First Priority
Naval Fleet Mortgage, as amended and
supplemented by Supplement No. 1 thereto, in
favor of WILMINGTON TRUST COMPANY, as Trustee
for certain lenders, as mortgagee, under
authority of Chapter V, Title IV of Book of
Second Code of Commerce, as amended, and
other pertinent legislation of the Republic
of Panama. Under the terms of said Mortgage,
neither GLOBAL MARINE NAUTILUS INC., any
charterer, the master or agent of this Rig,
nor any other person has any right, power or
authority to create, incur or permit to be
placed or imposed upon this Rig any other
lien whatsoever other than liens for wages of
a stevedore, or for wages of the crew of this
Rig, for general average, or for salvage,
including contract salvage, or, to the extent
subordinate to the lien of said Mortgage,
other liens incident to current operations or
for repairs, and certain other liens
permitted by the Mortgage."
On demand of the Mortgagee, and at the Owner's sole expense,
the Owner shall furnish to the Mortgagee from time to time such
proof as the Mortgagee may reasonably request with respect to the
foregoing provisions of this Section 4, and will do, execute,
acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such other and further assurances and
documents and take such further action as in the reasonable
opinion of the Mortgagee may be required more effectively to
subject each Rig to the lien of the Mortgage or more effectively
to subject each Rig to the performance of the provisions of the
Mortgage or to enable the Mortgage continuously to enjoy all the
status and benefits of a first priority naval fleet mortgage.
5. Information Regarding Mortgagee and Owner. The names,
surnames and civil status, occupation and domicile of the
Mortgagee and Owner are as follows:
Mortgagee:
Name: Wilmington Trust Company
Civil Status: Banking corporation organized under
the laws of the State of Delaware
Occupation: Financial Institution
Domicile: 1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Attn: Corporate Trust Administration
Telephone: (302) 651-1828
Telefax: 302-651-8882
Owner:
Name: Global Marine Nautilus Inc.
Civil Status: Corporation organized and existing
under the laws of the State of
Delaware
Occupation: Shipowner
Domicile: 777 North Eldridge Road
Houston, Texas 77079
Attn: Chief Financial Officer
Telephone: (713) 596-5100
Telefax: 713-596-5196
6. Acceptance by Mortgagee. The Mortgagee hereby accepts
all of the terms and conditions set forth in this Supplement.
7. Power of Attorney. The Mortgagee and the Owner declare
that they hereby confer a special power of attorney on David de
C. Robles, or any of the members of the firm of De Castro &
Robles, lawyers of Panama, Republic of Panama empowering each of
them individually to take all necessary steps to file and
register this Supplement in the appropriate registries in the
Republic of Panama.
8. Continuation of Covenants and Agreements. All of the
covenants and agreements on the part of the Owner which are set
forth in, and all of the rights, privileges, powers and
immunities of the Mortgagee which are provided for in, the
Mortgage shall continue to be and shall remain in full force and
effect.
9. Supplement to Mortgage. This Supplement is executed as
and shall constitute an instrument supplemental to the Original
Mortgage and shall be construed with and as a part of the
Original Mortgage.
10. Full Force and Effect. Except as modified and
expressly amended by this Supplement, the Original Mortgage is in
all respects ratified and confirmed and all the terms, provisions
and conditions thereof remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
11. Counterparts. This Supplement may be executed in any
number of counterparts, and each of such counterparts shall for
all purposes be deemed to be an original hereof.
IN WITNESS WHEREOF, the parties have executed and delivered
this Supplement on the date and year first above written.
GLOBAL MARINE NAUTILUS INC.
Owner
By:/s/ James L. McCulloch
Name: James L. McCulloch
Title: Vice President
WILMINGTON TRUST COMPANY,
in its capacity as indenture trustee
pursuant to the Indenture,
Mortgagee
By:/s/ David A. Vanaskey, Jr.
Name: David A. Vanaskey, Jr.
Title: Senior Financial Services
Officer
ACKNOWLEDGMENT
I, the undersigned, NOTARY PUBLIC, duly authorized, admitted
and sworn residing and practicing in New York County DO HEREBY
CERTIFY THAT the signature which appears at the foot of the above
written SUPPLEMENT NO. 1 TO FIRST PRIORITY NAVAL FLEET MORTGAGE
is the authentic signature of the said James L. McCulloch of
GLOBAL MARINE NAUTILUS INC., a Delaware corporation, who has
produced sufficient proof of his/her power to execute the said
SUPPLEMENT NO. 1 TO FIRST PRIORITY NAVAL FLEET MORTGAGE as
Attorney-in-Fact of GLOBAL MARINE NAUTILUS INC.
IN TESTIMONY whereof I have
hereunto subscribed my name
and affixed my seal of office
this 9th day of September, 1993.
/s/ Yvonne R. Turner
Notary Public
<PAGE>
ACKNOWLEDGMENT
I, the undersigned, NOTARY PUBLIC, duly authorized, admitted
and sworn residing and practicing in
DO HEREBY CERTIFY THAT the signature which appears at the foot of
the above written SUPPLEMENT NO. 1 TO FIRST PRIORITY NAVAL FLEET
MORTGAGE is the authentic signature of the said
of WILMINGTON TRUST COMPANY, a banking
corporation, organized under the laws of the State of Delaware
(in its capacity as Trustee pursuant to an Indenture between said
Trustee and Global Marine Inc. (acting on behalf of holders of
certain Senior Secured Notes issued by Global Marine Inc.
pursuant to said Indenture)), who has produced sufficient proof
of his/her power to execute the said SUPPLEMENT NO. 1 TO FIRST
PRIORITY NAVAL FLEET MORTGAGE as Attorney-in-Fact of WILMINGTON
TRUST COMPANY.
IN TESTIMONY whereof I have
hereunto subscribed my name
and affixed my seal of office
this 8th day of September, 1993.
Notary Public
EXHIBIT 4.10
ASSUMPTION AGREEMENT AND SUPPLEMENT NO. 2
TO
FIRST PRIORITY NAVAL FLEET MORTGAGE
between
GLOBAL MARINE DRILLING COMPANY,
Assuming Mortgagor,
and
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
in its capacity as indenture trustee for the benefit
of the holders of the Notes pursuant to that certain
Indenture dated as of Decembe r 23, 1992
with Global Marine Inc.,
Mortgagee
Dated: December 16, 1993
ASSUMPTION AGREEMENT
AND
SUPPLEMENT NO. 2
TO
FIRST PRIORITY NAVAL FLEET MORTGAGE
THIS ASSUMPTION AGREEMENT AND SUPPLEMENT NO. 2 TO FIRST
PRIORITY NAVAL FLEET MORTGAGE (this "Supplement No. 2") is made
this 16 day of December, 1993 between GLOBAL MARINE DRILLING
COMPANY, a California corporation (the "Assuming Mortgagor"),
whose address is 777 North Eldridge Road, Houston, Texas 77079,
and WILMINGTON TRUST COMPANY, a banking corporation organized
under the laws of the State of Delaware, whose address is 1100
North Market Street, Rodney Square North, Wilmington, Delaware
19890, Attention: Corporate Trust Administration, not in its
individual capacity but solely in its capacity as indenture
trustee for the benefit of the holders of the Notes (as such term
is defined in the below-defined Mortgage) (in such latter
capacity, the "Mortgagee") pursuant to that certain Indenture
dated as of December 23, 1992 by Global Marine Inc., the
corporate parent of the Assuming Mortgagor, to the Mortgagee (the
"Indenture"), with respect to following facts and circumstances:
RECITALS:
A. Reference is made to that certain First Priority Naval
Fleet Mortgage dated March 17, 1993 by Global Marine Nautilus
Inc. (the "Original Mortgagor") to the Mortgagee, registered as
described below (the "Original Mortgage").
B. The Original Mortgage originally covered the following
two (2) Panamanian-flag drilling rigs:
Provisional
Name Patente No.
GLOMAR LABRADOR I 22378-NY
GLOMAR MORAY FIRTH I 22379-NY
C. The Original Mortgage was provisionally registered on
March 23, 1993, and was definitively registered on June 25, 1993
in the Public Registry Office of the Republic of Panama,
Commercial Section, at (i) with respect to GLOMAR LABRADOR I,
Microjacket N-016715, Roll 39115, Image 0032, and (ii) with
respect to GLOMAR MORAY FIRTH I, Microjacket N-016716, Roll
39115, Image 0083.
D. Pursuant to that certain Release of Vessel from Lien of
First Priority Naval Fleet Mortgage dated September 8, 1993,
provisionally registered on September 10, 1993, and definitively
registered on December 14, 1993 in the Public Registry Office of
the Republic of Panama, Commercial Section, at Microjacket N-
016716, Roll 40764, Image 0074 (the "Release"), GLOMAR MORAY
FIRTH I was released from the lien of the Original Mortgage.
E. Pursuant to that certain Supplement No. 1 to First
Priority Naval Fleet Mortgage dated September 8, 1993, registered
as described below ("Supplement No. 1"), the Original Mortgage
was amended and supplemented to make the following three (3)
Panamanian-flag drilling rigs subject to the lien, terms and
conditions of the Original Mortgage:
Provisional
Name Patente No.
TRANSOCEAN No. 5 8991-PEXT-4
GLOMAR ADRIATIC VI 9921-PEXT-6
GLOMAR ADRIATIC VII 11305-PEXT-4
F. Supplement No. 1 was provisionally registered on
September 10, 1993, and was definitively registered on December
14, 1993 in the Public Registry Office of the Republic of Panama,
Commercial Section, at (i) with respect to TRANSOCEAN No. 5,
Microjacket N-009282, Roll 40765, Image 0133, (ii) with respect
to GLOMAR ADRIATIC VI, Microjacket N-009187, Roll 40765, Image
0150, and (iii) with respect to GLOMAR ADRIATIC VII, Microjacket
N-009342, Roll 40765, Image 0167.
G. The four (4) drilling rigs subject to the lien, terms
and conditions of the Original Mortgage, as previously amended
(i.e., GLOMAR LABRADOR I, TRANSOCEAN No. 5, GLOMAR ADRIATIC VI
and GLOMAR ADRIATIC VII), together in each case with the related
equipment and appurtenances described in the Granting Clause of
the Original Mortgage, as previously amended, are hereinafter
collectively referred to as the "Rigs".
H. The Original Mortgage, as amended and supplemented by
the Release, Supplement No. 1 and this Supplement No. 2, and as
the same may hereafter be amended or supplemented, is hereinafter
referred to as the "Mortgage". Capitalized terms used herein and
not otherwise defined have the meanings ascribed to them in the
Mortgage.
I. Effective December 15, 1993, the Original Mortgagor was
merged with and into the Assuming Mortgagor in accordance with
the laws of the State of California, with the Assuming Mortgagor
being the surviving corporation, whereupon the Assuming Mortgagor
succeeded by operation of law to all of the Original Mortgagor's
(i) right, title and interest in and to the Rigs and (ii) rights
and obligations under the Original Mortgage, as amended and
supplemented by the Release and Supplement No. 1.
J. Concurrently with the provisional registration of this
Supplement No. 2, each of the Rigs has been duly documented in
the name of the Assuming Mortgagor under the laws of the Republic
of Panama, with each Rig's home port at Panama City, Panama, as
evidenced by: (a) as to GLOMAR LABRADOR I, Provisional Patente
of Navigation No. 22378-PEXT-1, dated February 10, 1997, bearing
instruction call letters of HP7215, (b) as to TRANSOCEAN No. 5,
Provisional Patente of Navigation No.
8991-PEXT-5, dated February 11, 1994, bearing instructional call
letters of HO-3188, (c) as to GLOMAR ADRIATIC VI, Provisional
Patente of Navigation No. 9921-PEXT-7, dated February 10, 1994,
bearing instructional call letters of 3EJD8, and (d) as to GLOMAR
ADRIATIC VII, Provisional Patente of Navigation No. 11305-PEXT-5,
dated February 11, 1994, bearing instructional call letters of
HO-5265.
K. The Assuming Mortgagor wishes to confirm its succession
by operation of law as mortgagor in respect of, and in
furtherance thereof expressly to assume, all of the Original
Mortgagor's obligations under the Original Mortgage, as amended
and supplemented by the Release and Supplement No. 1.
L. This instrument is made for the purpose of confirming,
affirming, reaffirming, continuing and restating the first lien
on the Rigs in favor of the Mortgagee, securing the payment and
performance of the Notes and all other amounts due and to become
due under the Indenture and the Mortgage (collectively, the
"Indebtedness"), and the performance and observance of and
compliance with the terms and conditions in the Mortgage, the
Notes and the Indenture contained.
M. The outstanding principal amount of the Indebtedness
secured by the Mortgage on the date hereof is US$225,000,000.
N. The execution and delivery of this instrument has been
duly authorized, and all conditions and requirements necessary to
make this instrument a valid and binding agreement, to effect the
assumption of the Original Mortgage, as amended and supplemented
by the Release and Supplement No. 1, as provided herein, and to
confirm, affirm, reaffirm, restate and continue the Mortgage as a
valid, binding and legal first priority naval fleet mortgage
securing the payment and performance of the Indebtedness and the
performance and observance of and compliance with the terms and
conditions in the Mortgage, the Notes and the Indenture
contained, have been duly performed and complied with.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
Section 1. The Assuming Mortgagor hereby acknowledges and
confirms that, by virtue of the merger of the Original Mortgagor
with and into the Assuming Mortgagor, the Assuming Mortgagor has
succeeded to all of the Original Mortgagor's interests, rights,
privileges and obligations under the Original Mortgage, as
amended and supplemented by the Release and Supplement No. 1. In
furtherance of said succession, the Assuming Mortgagor hereby (a)
assumes, and agrees to perform, the whole (100%) of the Original
Mortgagor's obligations under the Original Mortgage, as amended
and supplemented by the Release and Supplement No. 1, and (b)
otherwise agrees to perform and comply with each and every
obligation of the "Owner" under the Mortgage.
Section 2. To continue the interest of the Mortgagee in the
Rigs under the Mortgage, and in order to secure the payment and
performance of the Indebtedness and the performance and
observance of and compliance with the terms and conditions in the
Mortgage, the Notes and the Indenture contained, the Assuming
Mortgagor has granted, conveyed, mortgaged, pledged, confirmed,
assigned, transferred and set over, and by these presents does
grant, convey, mortgage, pledge, confirm, assign, transfer and
set over, unto the Mortgagee, the whole (100%) of the Rigs, which
have been duly documented in the name of the Assuming Mortgagor
under the laws of the Republic of Panama, having their home port
at Panama City, Panama.
TO HAVE AND TO HOLD, all and singular, the above mortgaged
and described property unto the Mortgagee, its successors and
assigns, to its and its successors' and assigns' own use, benefit
and behoof forever, upon the terms set forth in the Mortgage
(subject to the two provisos to the Granting Clause contained in
the Mortgage).
Section 3 The Granting Clause of the Original Mortgage, as
previously amended, is hereby further amended by deleting the
list therein of the Rigs (which follows the colon therein) in its
entirety and inserting the following in lieu thereof:
Provisional
"Rig Type Name Patente No. Home Port
Jackup GLOMAR LABRADOR I 22378-PEXT-1 Panama City, Panama
Jackup TRANSOCEAN No. 5 8991-PEXT-5 Panama City, Panama
Jackup GLOMAR ADRIATIC VI 9921-PEXT-7 Panama City, Panama
Jackup GLOMAR ADRIATIC VII 11305-PEXT-5 Panama City, Panama"
Section 4. All references in the Mortgage to the Original
Mortgagor as "Owner" shall hereafter be deemed references to the
Assuming Mortgagor.
Section 5. The Assuming Mortgagor shall comply with and
satisfy all of the provisions of the laws of the Republic of
Panama to maintain the Mortgage as a first priority naval fleet
mortgage upon the Rigs. The Assuming Mortgagor shall place and
retain properly certified copies of the Mortgage (including this
Supplement No. 2) on board each Rig with her papers and cause
such certified copies to be exhibited to all persons having
business with any Rig which might give rise to any lien thereon.
A notice, reading as follows, printed in plain type of such size
that the paragraph of reading matter shall cover a space not less
than six (6) inches wide by nine (9) inches high, and framed,
shall, within a reasonable time after the recordation of this
Supplement No. 2, be placed and kept prominently exhibited on
each Rig:
"NOTICE OF
FIRST PRIORITY NAVAL FLEET MORTGAGE
This Rig is owned by GLOBAL MARINE DRILLING
COMPANY, and is covered by a First Priority
Naval Fleet Mortgage, as amended and
supplemented by Supplement No. 1 and
Assumption Agreement and Supplement No. 2
thereto, in favor of WILMINGTON TRUST
COMPANY, as Trustee for certain lenders, as
mortgagee, under authority of Chapter V,
Title IV of Book of Second Code of Commerce,
as amended, and other pertinent legislation
of the Republic of Panama. Under the terms
of said Mortgage, neither GLOBAL MARINE
DRILLING COMPANY, any charterer, the master
or agent of this Rig nor any other person has
any right, power or authority to create,
incur or permit to be placed or imposed upon
this Rig any other lien whatsoever other than
liens for wages of a stevedore, or for wages
of the crew of this Rig, for general average,
or for salvage, including contract salvage,
or, to the extent subordinate to the lien of
said Mortgage, other liens incident to
current operations or for repairs, and
certain other liens permitted by the
Mortgage."
On demand of the Mortgagee, and at the Assuming Mortgagor's
sole expense, the Assuming Mortgagor shall furnish to the
Mortgagee from time to time such proof as the Mortgagee may
reasonably request with respect to the foregoing provisions of
this Section 5, and will do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, such
other and further assurances and documents and take such further
action as in the reasonable opinion of the Mortgagee may be
required more effectively to subject each Rig to the lien of the
Mortgage or more effectively to subject each Rig to the
performance of the provisions of the Mortgage or to enable the
Mortgage continuously to enjoy all the status and benefits of a
first priority naval fleet mortgage.
Section 6. The names, surnames and civil status, occupation
and domicile of the Mortgagee and the Assuming Mortgagor are as
follows:
Mortgagee:
Name: Wilmington Trust Company
Civil Status: Banking corporation organized under
the laws of the State of Delaware
Occupation: Financial Institution
Domicile: 1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Attn: Corporate Trust Administration
Telephone: (302) 651-1828
Telefax: 302-651-8882
Assuming Mortgagor:
Name: Global Marine Drilling Company
Civil Status: Corporation organized and existing
under the laws of the State of
California
Occupation: Shipowner
Domicile: 777 North Eldridge Road
Houston, Texas 77079
Attn: Chief Financial Officer
Telephone: (713) 596-5100
Telefax: 713-596-5196
Section 7. The Mortgagee hereby accepts all of the terms
and conditions set forth in this Supplement No. 2.
Section 8. The Mortgagee and the Assuming Mortgagor declare
that they hereby confer a special power of attorney on David de
C. Robles, or any of the members of the firm of De Castro &
Robles, lawyers of Panama, Republic of Panama empowering each of
them individually to take all necessary steps to file and
register this Supplement No. 2 in the appropriate registries in
the Republic of Panama.
Section 9. All of the covenants and agreements on the part
of the "Owner" which are set forth in, and all of the rights,
privileges, powers and immunities of the Mortgagee which are
provided for in, the Mortgage shall continue to be and shall
remain in full force and effect.
Section 10. This Supplement No. 2 is executed as and shall
constitute an instrument supplemental to the Original Mortgage,
as amended and supplemented by the Release and Supplement No. 1,
and shall be construed as a part of the Mortgage.
Section 11. Except as modified and expressly amended by
this Supplement No. 2, the Mortgage is in all respects ratified
and confirmed and all the terms, provisions and conditions
thereof remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
Section 12. This instrument may be executed in any number
of counterparts, and each of such counterparts shall for all
purposes be deemed to be an original hereof.
IN WITNESS WHEREOF, the parties have executed and delivered
this instrument on the date and year first above written.
GLOBAL MARINE DRILLING COMPANY
Assuming Mortgagor
By:/s/ James L. McCulloch
Name: James L. McCulloch
Title: Vice President
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely in its capacity as trustee
pursuant to the Indenture,
Mortgagee
By: /s/ Donald G. MacKelcan
Name: Donald D. MacKelcan
Title: Financial Services Officer
ACKNOWLEDGMENT
I, the undersigned, NOTARY PUBLIC, duly authorized, admitted
and sworn residing and practicing in Harris County, State of
Texas DO HEREBY CERTIFY THAT the signature which appears at the
foot of the above-written ASSUMPTION AGREEMENT AND SUPPLEMENT NO.
2 TO FIRST PRIORITY NAVAL FLEET MORTGAGE is the authentic
signature of the said James L. McCulloch, Vice President of
GLOBAL MARINE DRILLING COMPANY, a California corporation, who has
produced sufficient proof of his/her power to execute the said
ASSUMPTION AGREEMENT AND SUPPLEMENT NO. 2 TO FIRST PRIORITY NAVAL
FLEET MORTGAGE as Attorney-in-Fact of GLOBAL MARINE DRILLING
COMPANY.
IN TESTIMONY whereof I have
hereunto subscribed my name and
affixed my seal of office this
16 day of December, 1993.
/s/ Joanne E. Snyder
Notary Public
ACKNOWLEDGMENT
I, the undersigned, NOTARY PUBLIC, duly authorized, admitted
and sworn residing and practicing in Donald G. MacKelcan DO
HEREBY CERTIFY THAT the signature which appears at the foot of
the above-written ASSUMPTION AGREEMENT AND SUPPLEMENT NO. 2 TO
FIRST PRIORITY NAVAL FLEET MORTGAGE is the authentic signature of
the said Financial Services Officer of WILMINGTON TRUST COMPANY,
a banking corporation, organized under the laws of the State of
Delaware (in its capacity as Trustee pursuant to an Indenture
between said Trustee and Global Marine Inc. (acting on behalf of
holders of certain Senior Secured Notes issued by Global Marine
Inc. pursuant to said Indenture)), who has produced sufficient
proof of his/her power to execute the said ASSUMPTION AGREEMENT
AND SUPPLEMENT NO. 2 TO FIRST PRIORITY NAVAL FLEET MORTGAGE as
Attorney-in-Fact of WILMINGTON TRUST COMPANY.
IN TESTIMONY whereof I have
hereunto subscribed my name and
affixed my seal of office this
16 day of December, 1993.
/s/ Sonja F. Allen
Notary Public
EXHIBIT 10.7
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of this 13th day of December 1993
BETWEEN
Aban Loyd Chiles Offshore Limited, a company organized and existing
under the laws of India, with its offices at Sakthi Towers, 766
Anna Salai, Madras 600 002 India (hereinafter referred to as
"Seller")
AND
GLOBAL MARINE INC., a company organized and existing under the laws
of Delaware, U.S.A., and having its registered office at 777 N.
Eldridge, Houston, Texas 77079 (hereinafter referred to as "Buyer")
Seller and Buyer are sometimes referred to herein collectively as
"Parties" and individually as "Party".
WITNESSETH:
WHEREAS:
Seller is or will become the owner of the jackup drilling unit
known as the Uxmal, together with all her equipment, spare parts
and inventory more fully described in Exhibit A attached hereto and
made a part hereof and desires to sell the Rig to Buyer, and Buyer
desires to purchase the Rig from Seller, in accordance with the
terms and conditions of this Agreement ("Agreement");
NOW THEREFORE, in consideration of the mutual covenants in this
Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties
hereto agree as follows:
ARTICLE 1 - SALE AND DEPOSIT
1.1 Seller agrees to sell to Buyer and Buyer agrees to purchase,
all right, title and interest in the Rig, and all her
equipment and appurtenances, including but not limited to, all
equipment which is on order for the Rig, her engines, boilers,
machinery, masts, rigging, derricks, drawworks, blow-out
preventers, boats, cables, chains, tackle, fittings, tools,
pumps, gear, apparel, furniture, equipment, jacking gears,
spare parts ashore or onboard, and all other appurtenances
thereto, appertaining or belonging, and whether installed by
Seller or others (exclusive of leased items), and whether
onboard, onshore or in transit, all as more fully described in
Exhibit A hereto, and also any and all additions,
improvements, renewals and replacements at any time from the
date of this Agreement until the Closing Date (as defined in
Article 4 below) made in or to the Rig, or any part thereof,
or in or to her equipment and appurtenances aforesaid (herein
collectively referred to as the "Rig").
1.2 In consideration of Buyer entering into this Agreement,
Seller, to the extent they are available to Seller, hereby
sells and assigns to Buyer all of its respective right, title
and interest in any drawings, records, manuals, plans, designs
and other documents pertaining specifically to the Rig or
relating to its construction, and warranties or guarantees
relating to the Rig (hereinafter collectively referred to as
"Other Property and Warranties"), such sale and assignment to
be effective upon the Closing Date hereof. Seller to use its
best efforts to obtain same. Seller shall deliver such
documents to Buyer concurrent with the delivery of the Rig to
Buyer's offices in Houston, Texas, or other location
designated by Buyer.
1.3 Subject to the approval of ONGC and the Managers of the Rig,
after this Agreement is signed and deposit lodged, the Buyer
shall have the right to place a crew of two (2) on board the
Rig prior to delivery to inspect the Rig and to observe and
monitor the preparation and mobilization of the Rig. Such
crew shall be at the sole risk and liability of the Buyer and
the Seller will not undertake any liability with respect to
such crew or its activities. In connection therewith Buyer
shall indemnify and hold harmless Seller and the Manager of
the Rig from and against any and all claims by any party
arising out of illness, death or injury to Buyer's crew while
onboard the Rig or in transit to or from the Rig,
notwithstanding the negligence or fault of Seller, its
employees, servants or agents. The negligence or fault
referred to herein shall include sole and/or concurrent
negligence, either active or passive, and shall include any
liability based on any theory of strict liability or defect of
premise or appurtenances.
1.4 As a security for the fulfilment of this Agreement, the Buyer
shall pay a deposit of 10% (ten percent) of the cash portion
of the Purchase Price set forth in Section 2.1 within three
(3) banking days from the date of execution of this Purchase
and Sale Agreement. This amount shall be deposited with
Hambros Bank in London, England and held by them in a joint
account in the names of the Seller and the Buyer.
Interest, if any, to be credited to the Buyer. Any fee charged for
holding such deposit shall be borne equally by the Seller and the
Buyer.
ARTICLE 2 - PURCHASE PRICE
2.1 In consideration of the due performance of Sections 1.1 and
1.2 above, Buyer shall pay to the Seller or order the
following, (hereinafter referred to as "Purchase Price") which
payment shall be made in the manner set forth below.
Said Purchase Price shall consist of:
(a) The sum of Thirteen Million Five Hundred Thousand U.S.
Dollars (US$13,500,000); plus
(b) A non-interest bearing, limited-recourse, contingent cash
flow note in the amount of Five Hundred Thousand U.S.
Dollars (US$500,000) under which Seller shall be entitled
to receive 50% of the net cash flow from the Rig when it
is working until such time as Seller has received a total
of US$500,000.
In the event Buyer sells the Rig prior to paying to Seller the
full amount due under the note set forth in (b) above, the
full unpaid balance shall immediately be due and payable.
2.2 The cash portion of the Purchase Price, less the Deposit which
shall be simultaneously released to Seller (with the interest
earned payable to Buyer), shall be paid by the Buyer on the
Closing Date either by an Irrevocable Bank Payment Letter
issued by a London bank, a cashier's check or by wire transfer
in immediately available funds, as mutually agreed prior to
Closing, to a bank account as Seller may designate in writing
at least five (5) London working days prior to Closing Date.
2.3 All payments under this Agreement shall be made in U.S.
Dollars.
ARTICLE 3 - CONDITIONS PRECEDENT
3.1 The performance of this Agreement is subject to fulfilment of
the following conditions precedent within the time stated
herein:
(a) acceptance of the Rig by Buyer or its nominee on the
Closing Date following confirmation that the Rig is in
the same condition on delivery as it was when inspected
by Buyer on November 10-13, 1993, normal wear and tear
excepted.
(b) approval by the Buyer's and Seller's Board of Directors
of the terms and conditions of this Agreement by close of
business in Houston, Texas on 14 December 1993, certified
copies of which are to be delivered to the other Party
prior to the Closing Date;
(c) approval from the requisite governmental authorities (if
required) of the transfer of ownership of the Rig to
Buyer by the Closing Date. A copy of such approval shall
be delivered by Seller to Buyer prior to the Closing
Date.
3.2 Seller and Buyer shall each use all reasonable good faith
efforts to procure the fulfilment of the conditions precedent
under Section 3.1 above.
3.3 Seller agrees to do all things required on its part to obtain
the governmental approvals referred to in Section 3.1 (c)
above, if required, including providing any information,
making any certifications, and complying with any
requirements, restrictions, covenants or conditions imposed in
conjunction with such approval. Any delay in receiving such
approval, unless such delay is caused by reasons within
control of Buyer, shall not enable the Seller to cancel this
Agreement in accordance with Section 9.3.
ARTICLE 4 - CLOSING DATE
4.1 The transactions described in this Article 4 shall take place
on a mutually agreeable date no earlier than 20 February 1994,
or if later, the final closing date under the Memorandum of
Agreement dated 25 April 1993 between Aban Loyd Chiles
Offshore Limited and Winchoe Offshore S.A. but not later than
31 March 1994, inclusive, but in any event no later than 15
April 1994 (hereinafter referred to as "Closing Date") at a
mutually agreeable location. Notwithstanding anything in this
Agreement to the contrary, if the Rig is not delivered by 15
April 1994 Buyer may elect to terminate this Agreement without
further obligation to Seller and any Deposit paid by Buyer
shall be returned with interest earned.
4.2 Subject to the due performance of the other provisions of this
Agreement, Seller and Buyer hereby agree that the following
transactions shall be performed simultaneously on or before
the Closing Date:
(a) Buyer shall either deliver said Irrevocable Bank Payment
Letter, a cashier's check or transfer the cash portion of
the Purchase Price to Seller by wire transfer to the bank
account indicated in Section 2.2 above;
(b) Buyer shall also deliver to Seller the note referred to
in Section 2.1 above;
(c) Seller shall transfer title to the Rig to Buyer by
signing and delivering the Bill of Sale and Buyer shall
sign and deliver to Seller a Protocol of Delivery and
Acceptance in the form of Exhibits B and C respectively
attached to and made a part of this Agreement. Such Bill
of Sale shall be notarized and legalized by the
Panamanian Consulate;
(d) Seller shall deliver to Buyer all documents relating to
the use and operation of the Rig as more fully described
in Exhibit D attached hereto;
(e) Seller shall hand over to Buyer original Powers of
Attorney, duly notarized authorizing the signatory to
sign the closing documents to bind the Seller;
(f) Buyer shall hand over to Seller original Powers of
Attorney, duly notarized authorizing the signatory to
sign the closing documents to bind the Buyer;
(g) Seller shall deliver to Buyer at least 10 days but not
more than 15 days before the Closing Date, a certificate
issued by the Panamanian authorities dated 10 to 15 days
before Closing Date stating that the Rig is free and
clear from all recorded encumbrances or liens, save for
the endorsements of the interest of the Export Credit
Guarantee Department of the U.K. government ("ECGD") as
First Mortgagee and Second Mortgagee, which interest
shall be released prior to the Closing Date;
(h) Within a reasonable time after the Closing Date, Buyer
shall change the name of the Rig and remove therefrom all
insignias and logos and other references to Seller;
(i) Seller shall provide to Buyer evidence satisfactory to
Buyer, in Buyer's sole discretion, that the Rig is free
and clear of all encumbrances and maritime liens
whatsoever on the Closing Date.
(j) Seller shall provide to Buyer an assignment from Omega
International Corporation, in a form satisfactory to
Buyer, of the indemnities from ONGC with regard to custom
duties, fees and charges under the Omega/ONGC drilling
contract - Such assignment shall be coupled with a formal
Power of Attorney to Buyer issued by Omega International
Corporation appointing Buyer as their Attorney-In-Fact
for purposes of enforcing such indemnities.
ARTICLE 5 - DELIVERY, RISK, TITLE, BUNKERS, STORES AND SPARES
5.1 The Rig with everything belonging to her shall be at the
Seller's risk and expense, including spud can damage, until
the Rig is delivered to the Buyer. In the event that the Rig
shall have suffered any damage prior to the date of Delivery
in respect of which recoveries may be made under the insurance
for the Rig and Buyer has nonetheless elected to proceed with
the purchase of the Rig as provided in Section 7.2, the Seller
shall make claims on the insurances in respect of such damage
and shall account to the Buyer in respect of any recoveries
that may arise. Seller hereby appoints Buyer as their
Attorney-In-Fact for purposes of pursuing all insurance claims
under this Section 5.1 and agrees to provide to Buyer a formal
Power of Attorney evidencing this appoint upon request by
Buyer. Upon the delivery of the Bill of Sale to Buyer, and
acceptance of the Rig by Buyer, all risk, rights, title and
interest in the Rig shall be transferred to Buyer and title to
the Rig shall pass to Buyer upon delivery.
5.2 Seller will deliver the Rig to Buyer in Dubai or other
mutually agreed port, provided Buyer agrees to pay the
additional charges, on the Closing Date safely jacked up at
the delivery location. Such Rig shall be delivered in the
same condition as it was at the date of inspection by Buyer,
fair wear and tear excepted. Seller shall give the Buyer at
least 30 days, 15 days and 7 days notice prior to the delivery
date, which shall be definitely confirmed by Seller 5 London
banking days before the delivery date, which shall be between
05 January 1994 and 31 March 1994.
5.3 Seller shall deliver the Rig to Buyer with all provisions
(broached or unbroached), remaining fuel and unused oils and
unused stores. Library, forms, manuals, etc. for use on
Seller's other rigs generally, shall be excluded from the sale
without compensation.
5.4 Seller is required to continue to replace, in the normal
course of business, spare parts which are taken out of spares
and used as replacements prior to delivery, and the replaced
parts shall be property of Buyer.
ARTICLE 6 - LIABILITIES PRE AND POST CLOSING DATE
6.1 Except as provided in Section 1.3 hereof, Seller shall be
responsible for and shall defend, indemnify and hold harmless
the Buyer against all liability, expenses and costs for any
cause of action accrued prior to the Closing Date, (including
by way of illustration and not by way of limitation, personal
injury, property damage, contractual disputes, environmental
claims, claims by any governmental or regulatory body and
specifically including Indian customs duties) arising out of
or relating to the Rig or to Seller's business activities with
respect to the operation or ownership of the Rig. Nothing
contained in this Section 6.1 shall be construed to relieve
Buyer of its obligations under Section 1.3 above.
6.2 Subject to Section 6.1 above, Buyer shall be responsible for
and shall defend, indemnify and hold harmless the Seller
against all liability, expenses and costs for any cause of
action accrued after the Closing Date, (including by way of
illustration and not by way of limitation, personal injury,
property damage, contractual disputes, environmental claims,
claims by any governmental or regulatory body but specifically
excluding Indian customs duties) arising solely out of or
relating to Buyer's business activities with respect to the
operation or ownership of the Rig.
6.3 Any financial commitments or liability to pay money in respect
of the Rig arising prior to Closing Date, (even if only
payable after Closing Date), shall be borne by the Seller.
ARTICLE 7 - TOTAL/CONSTRUCTIVE TOTAL/PARTIAL LOSS
7.1 If the Rig becomes a total or constructive total loss (as
determined by a surveyor to be mutually agreed, or in the
event of failure to agree, appointed by the underwriters of
the Rig) before Closing Date, this Agreement shall immediately
become null and void and neither Seller nor Buyer shall have
any further obligation or liability with respect to the other,
except that the Deposit shall be returned to Buyer with
interest earned.
7.2 If the Rig suffers partial loss or damage the cost of repair
of which would exceed US$500,000, before delivery of Title on
the Closing Date so that delivery cannot be made in accordance
with Section 5.2 above, Buyer may elect to terminate this
Agreement without further obligation or liability to the
Seller and the Deposit shall be returned to Buyer with
interest earned or Buyer may at its option elect to proceed
with the sale and then proceed with the repairs for Seller's
account. If, however, the shipyard where the repair work is
intended to be carried out estimates the repair can be
completed on or before the Closing Date, and Buyer elects to
proceed with this transaction, Seller shall repair such damage
at Seller's cost as expeditiously as possible, and Buyer shall
purchase and accept the Rig so repaired, subject to inspection
and approval of the repairs in Buyer's sole discretion,
provided that the Closing Date shall be postponed until all
repairs have been completed. If the shipyard estimates that
repairs cannot be completed on or before the Closing Date,
Buyer shall within five (5) days after receiving the estimate,
determine independently, and notify the Seller, whether Buyer
elects either to terminate this Agreement or to carry on with
the sale. If Buyer elects not to proceed then this Agreement
shall terminate with immediate effect and neither Seller nor
Buyer shall have any further obligation or liability to the
other, except that the Deposit shall be returned to Buyer with
interest earned. If Buyer elects to proceed with the sale
then Seller will proceed with the repairs to the Rig if Buyer
has not elected to do so as provided above. In such event the
Closing Date shall be postponed until the repairs have been
completed. Buyer shall be entitled at its cost to observe and
require additional inspection of any and all repairs made to
the Rig while in the shipyard and/or prior to the Closing
Date.
ARTICLE 8 - WARRANTIES AND UNDERTAKINGS
8.1 Seller warrants and undertakes (which warranties and
undertaking shall survive the delivery of the Rig):
(a) Seller is or will be the legal and beneficial owner of
the Rig on the Closing Date.
(b) Seller will convey to Buyer good title to the Rig on the
Closing Date, and on delivery of the Rig to Buyer, the
Rig will be free from all encumbrances, including but not
limited to statutory and maritime liens, pledges,
mortgages or other debt or security interest or
restrictions on transfer. Should any claims which have
been incurred prior to the time of Delivery be made
against the Rig, the Seller hereby undertakes to
indemnify the Buyer against all consequences of such
claims, including any taxes and/or customs duties owed to
Indian authorities and/or ONGC.
To secure its obligations under this Agreement, Seller
hereby assigns to Buyer all rights, title and interest in
and to all representations, indemnities and undertakings
given by the "Sellers" under the provisions of that
certain Memorandum of Agreement dated 25 April 1993
between Winchoe Offshore S.A. and Aban Loyd Chiles
Offshore Limited with respect to the vessel "Uxmal" as
subsequently modified and amended. In addition, Seller
shall provide to Buyer written consent and acknowledgment
from Winchoe Offshore S.A. of such assignment on or
before the Closing Date. Further Seller hereby appoints
Buyer as its Attorney- In-Fact for purposes of enforcing
such rights, title and interest and agrees to provide to
Buyer a formal Power of Attorney evidencing this
appointment upon request by Buyer.
(c) The Rig shall, on the Closing Date, be delivered in the
same condition as when she was inspected by Buyer on
November 10-13, 1993.
(d) The operations of the Rig shall, prior to the Closing
Date, be conducted in accordance with law, good oil field
practice and the requirements of any applicable drilling
contract.
(e) That the ONGC drilling contract applicable to the Rig has
terminated prior to the Closing Date.
(f) That the management agreement and all other similar
agreements with respect to the Rig have terminated or
been cancelled prior to the Closing Date.
(g) Seller is duly incorporated and validly existing under
the laws of its country of incorporation and has taken
all necessary corporate action to and has full legal
right, power and authority to enter into this Agreement
and to perform the obligations herein contained and all
necessary consents have been or will be obtained prior to
the date of delivery.
8.2 Buyer warrants that it is duly incorporated and validly
existing under the laws of its country of incorporation and
has taken all necessary corporate action to and has full legal
right, power and authority to enter into this Agreement and to
perform the obligations herein contained.
ARTICLE 9 - DEFAULTS
9.1 Should the deposit not be paid as aforesaid, the Seller has
the right to cancel this Agreement, and shall be entitled to
claim compensation for their direct losses.
Should the Purchase Money not be paid as aforesaid, the
Seller's sole and exclusive remedy is to cancel this
Agreement, in which case the amount deposited and all interest
earned, if any, shall be forfeited to the Seller and the
Seller shall have no further claim against the Buyer.
9.2 If the Seller is unable to execute a legal transfer or to
deliver the Rig with everything belonging to her in the manner
and within the conditions and time specified in Articles 4, 5
and 8, Buyer may elect to cancel this Agreement in which case
the Deposit in full shall be returned to the Buyer together
with interest earned. Except for failure to deliver the Rig
due to damage, as provided in Section 7.2, in addition, Seller
shall pay to Buyer an amount equal to the Deposit set forth in
Section 1.4 as liquidated damages. Thereafter Buyer shall
have no further claim against the Seller.
9.3 Except as provided in Section 3.3 above, in the event any of
the Conditions Precedent have not been satisfied within the
time specified in this Agreement, either party shall have the
right to terminate this Agreement, in which event neither
party shall have any further obligation or liability to the
other and any monies paid by Buyer shall be returned.
ARTICLE 10 - BROKER COMMISSION
The brokerage fee of US$158,000 shall be paid by SELLER to
Normarine Offshore Consultants A/S to a bank account to be
nominated by Normarine Offshore Consultants A/S immediately upon
the delivery and acceptance of the Rig and receipt by Seller of
payment of the Purchase Price pursuant to the terms of this
Agreement.
ARTICLE 11 - TAXES
11.1 All fees, dues, notarial and/or consular and/or othercharges
or expenses connected with the registration of the Rig under
Buyer's flag shall be for Buyer's account.
11.2 All fees, dues, notarial and/or consular and/or other charges
or expenses connected with the Seller's transfer of interest
shall be for Seller's account.
11.3 All other taxes, fees and expenses (including any sales taxes,
stamp taxes, VAT or other similar taxes) relating to the sale
of the Rig shall be for Seller's account.
ARTICLE 12 - CONFIDENTIALITY
12.1 Each Party shall consult with the other prior to making its
initial public announcement concerning this transaction.
ARTICLE 13 - FURTHER ASSURANCE
Each of the Parties shall do and execute or procure to be done and
executed all further necessary acts, deeds, documents and things
within their power to give effect to this Agreement.
ARTICLE 14 - AMENDMENTS, VARIATIONS AND WAIVER
14.1 No amendment or variation of this Agreement shall be valid
unless it is in writing and signed by or on behalf of each of
the Parties.
14.2 No failure to exercise or delay in exercising or enforcing any
right or remedy under this Agreement shall constitute a waiver
thereof and no single or partial exercise or enforcement of
any right or remedy under this Agreement shall preclude or
restrict the further exercise or enforcement of any such right
or remedy.
ARTICLE 15 - ARBITRATION
15.1 If any dispute should arise in connection with the
interpretation and fulfilment of this Agreement, the same
shall be decided by arbitration in the city of London pursuant
to the London Maritime Arbitration Association Rules of
Commercial Arbitration and shall be referred to a single
arbitrator to be appointed by the Parties hereto. If the
Parties cannot agree upon the appointment of the single
arbitrator, the dispute shall be settled by three arbitrators,
each Party appointing one arbitrator, the third being
appointed by the London Maritime Arbitration Association. If
either of the appointed arbitrators refuses or is incapable of
acting, the Party who appointed him shall appoint a new
arbitrator in his place.
15.2 If one Party fails to appoint an arbitrator, either originally
or by way of substitution, within two weeks after the other
Party having appointed his arbitrator, and has sent the Party
making default notice by telex or telefax to make the
appointment, the London Maritime Arbitration Association,
after application from the Party having appointed his
arbitrator shall appoint an arbitrator on behalf of the Party
making default.
15.3 The award rendered by the arbitrators shall be final and
binding upon the Parties and may if necessary be enforced by
a court or other competent authority in the same manner as a
judgment of a court of law.
15.4 Arbitration shall be in the English language.
15.5 This Agreement shall be governed and interpreted in accordance
with the laws of England.
ARTICLE 16 - NOTICES
16.1 Unless otherwise specifically stated herein, any notices
required or permitted to be given herein shall be given in
writing, delivered personally or sent by mail postage prepaid
or by telex or facsimile to the Party to receive such notice
at:
To Buyer: Global Marine Inc.
777 N. Eldridge Road
Houston, Texas 77079, U.S.A.
Attention: Mr. John G. Ryan
Telex: 77-5415
Facsimile: (713) 496-0895
To Seller: Aban Loyd Chiles Offshore Limited
Sakthi Towers
766 Anna Salai
Madras 600 002, India
Attention: Mr. M.A. Abraham
Telex: 041-7695
Facsimile: (91)(44) 825-5748
16.2 Any notice shall be effective upon receipt and shall be given
in the English language.
16.3 A Party may change its notice information by giving notice of
the change to the other Party in writing.
ARTICLE 17 - GENERAL
17.1 Neither Party shall assign this Agreement without the prior
written consent of the other Party; except that either Seller
or Buyer shall be entitled to assign this Purchase and Sale
Agreement and all rights and obligations thereunder to any of
their wholly owned subsidiaries at any time prior to the
Closing Date, provided that the assignor shall remain
primarily responsible for the due performance of this
Agreement.
17.2 The Rig will have been working offshore India prior to
delivery to Buyer. Seller shall take all precautions to
properly document the departure of the Rig from India so as
not to jeopardize, prevent, hinder or interfere with Buyer's
right to take the Rig back to India if Buyer so elects.
17.3 If any term, provision or condition of this Agreement is
determined to be invalid or unenforceable such invalidity or
unenforceability shall have no effect on the validity or
enforceability of the remaining terms, provisions or
conditions, which shall be valid and enforceable as if the
invalid and unenforceable terms, provisions or conditions
never existed.
IN WITNESS WHEREOF the Parties have executed this Agreement by
their duly authorised representatives on the day and year first
above written.
BUYER: SELLER:
GLOBAL MARINE INC. ABAN LOYD CHILES OFFSHORE
LIMITED
By: /s/ By:
Vice President Managing Director
AMENDMENT NO. 1
TO THE PURCHASE AND SALE AGREEMENT
DATED AS OF DECEMBER 13, 1993
THIS AGREEMENT is made as of the 10th day of February, 1994
BETWEEN
(1) Aban Loyd Chiles Offshore Limited, a company organised and
existing under the laws of India, with its offices at Sakthi
Towers, 766 Anna Salai, Madras 600 002 India (hereinafter
referred to as "Seller"); and
(2) Global Marine Inc., a company organised and existing under the
laws of Delaware, U.S.A., and having its registered office at
777 N. Eldridge Road., Houston, Texas 77079 (hereinafter
referred to as "Buyer")
WITNESSETH WHEREAS
1. Seller and Buyer entered into a Purchase and Sale Agreement as
of December 13, 1993, the terms and conditions of which
provided for the Seller to sell and the Buyer to buy the
jackup drilling unit known as the Uxmal;
2. The Purchase and Sale Agreement provided for an inspection to
be conducted immediately prior to the closing to establish:
(a) the condition of the spud cans which were not capable of
being inspected during the period November 10-13, 1993;
and
(b) that the rig is being delivered with all items provided
for in Exhibit A to the Purchase and Sale Agreement;
3. The parties acknowledge that it is not practical to conduct
such a pre-delivery inspection of the Uxmal and wish to
provide a procedure for such inspection and resulting price
adjustment, if any; and
4. Other minor modifications to the Purchase and Sale Agreement
are desired by the parties.
NOW THEREFORE, in consideration of the mutual covenants in the
Purchase and Sale Agreement and this Amendment No 1 and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto agree to amend the
Purchase and Sale Agreement in respect of the Uxmal and dated as of
December 13, 1993, as follows:
1. Article 4.1 is deleted in its entirety and is hereby amended
to read:
"The transactions described in this Article 4 shall take place
on 10 February 1994 in London. Notwithstanding anything in
this agreement to the contrary, if the rig is not delivered by
15 April 1994 Buyer may elect to terminate this Agreement
without further obligation to Seller and any deposit paid by
Buyer shall be returned with interest earned".
2. Article 4.2(g) is deleted in its entirety.
3. Article 4.2(j) is deleted in its entirety.
4. Article 5.2 is amended to provide that the rig shall be
delivered in Sharjah. The last sentence of this article is
deleted in its entirety.
5. Article 8.1(b) is hereby amended to delete the requirement
that Seller provide to Buyer written consent and
acknowledgement from Winchoe Offshore S.A.
6. Article 13 is amended to add the following:
"Seller agrees to use its best efforts to obtain the
permission of the Central Government or Reserve Bank of India,
if such permission is necessary to make any payment to Buyer,
whether in accordance with any warranty, representation,
undertaking or indemnity or otherwise under the Purchase and
Sale Agreement".
IN WITNESS WHEREOF the parties have executed this Amendment No. 1
by their duly authorised representatives as of the day and year
first above written.
BUYER: SELLER:
GLOBAL MARINE INC. ABAN LOYD CHILES OFFSHORE LIMITED
By: /s/ By:
Vice President Director
EXHIBIT 10.8
PURCHASE AND SALE AGREEMENT
(SUPPLEMENTARY)
THIS AGREEMENT is made as of this 13th day of December, 1993.
BETWEEN
Aban Loyd Chiles Offshore Limited, a company organised and existing
under the laws of India, with its offices at Sakthi Towers, 766
Anna Salai, Madras-600 002 India (hereinafter referred to as
"Seller")
AND
GLOBAL MARINE INC., a Company organised and existing under the laws
of Delaware, U.S.A. and having its principal offices at 777 N.
Eldridge, Houston, Texas 77079 (hereinafter referred to as "Buyer")
Seller and Buyer are sometimes referred to herein collectively as
"Parties" and individually as "Party".
WITNESSETH:
WHEREAS:
1. The Parties have entered into a Purchase and Sale Agreement
(The Agreement) in regard to the jackup Drilling unit known as
"UXMAL", all in accordance with the terms and conditions
detailed in The Agreement, in respect of the cash portion of
the consideration.
2. The Parties have agreed to embody separately certain
additional terms and conditions in a Supplemental Agreement to
be read in conjunction with The Agreement, of which it shall
form an integral part, to reflect the total quantum of
purchase price payable by the Buyer in consideration of taking
possession and acquiring the above mentioned drilling unit.
NOW THEREFORE, the Parties hereto agree as follows:
ARTICLE 1 - INTRODUCTORY
1.1 The definitions and provisions of The Agreement will hold good
as the basic agreed terms and conditions of Purchase and Sale,
and shall not in any way be deemed to be diminished or reduced
or superseded by the additional terms stated hereinafter.
ARTICLE 2 - PURCHASE PRICE
2.1 On the closing date, as defined in "Article 4" of The
Agreement, and in addition to the cash portion of the Purchase
Price (reference Section 2.1(a) and 2.1(b) of The Agreement),
the Buyer shall transfer and deliver to the Seller or its
nominee or assignee (each a "Transferee"), also as a portion
of the said Purchase Price, 450,000 (four hundred and fifty
thousand) shares of Global Marine Inc. common stock $.10 par
value per share, subject to adjustment in accordance with
Section 3.1 hereof (said shares to be delivered on the closing
date, together with any additional shares to be delivered as
a result of any subsequent adjustment under Section 3.1, being
hereinafter referred to as "Shares").
2.2 It is understood and agreed that all Shares delivered pursuant
to Section 2.1 or Section 3.1 will not, at the time of such
delivery, have been regulated under the Securities Act of
1933, as amended (the "Securities Act"), and will therefore be
subject to certain restrictions on transferability and sale
thereof, and that, pending registration as provided in Section
2.4 hereof, the certificates representing the Shares will bear
a legend stating that such Shares have not been registered and
setting forth or referring to such restrictions. Whenever a
registration statement under the Securities Act is effective
with respect to any Shares, the Buyer will take any and all
actions reasonably requested by any holder thereof to effect
the replacement of legended certificates representing such
registered Shares by certificates without such legends.
2.3 The Seller will, or will cause each Transferee, if other than
the Seller, to execute and deliver to the Buyer, at the time
of delivery to each Transferee of any Shares that have not
then been registered under the Securities Act, an investment
letter covering such Shares in the form attached hereto as
Exhibit A.
2.4 As soon as practicable following each delivery of Shares
pursuant to Section 2.1 or Section 3.1, the Buyer shall cause
the delivered Shares to be listed on the New York Stock
Exchange, provided that the applicable listing requirements
are satisfied. In addition, after delivery of all Shares
required to be delivered by Buyer to Seller (or any other
Transferee) hereunder, including the additional shares of
Global Marine Inc. common stock to be delivered pursuant to
Section 3.1, if any, the Buyer will cause to be filed with the
Securities and Exchange Commission a registration statement
under the Securities Act, on an appropriate form as the Buyer
shall select, covering the delivered Shares; provided,
however, that the Buyer shall not be required to file any such
registration statement during any period of time when the
Buyer is in possession of material information that it deems
advisable not to disclose in a registration statement. The
Buyer will use all reasonable efforts to cause such
registration statement to become effective as soon as
practicable following such filing and to keep such
registration statement continuously effective for a period of
3 (three) years following the date on which it becomes
effective or until all Shares included therein have been sold,
if earlier (subject, however, to the provisions of Section 2.6
hereof). the Buyer shall bear all costs and expenses of
listing and registration and of maintaining such listing and
registration.
2.5 The Seller will, or will cause each Transferee, if other than
the Seller, to provide the Buyer with such information with
respect to Shares to be registered, the plans for the proposed
disposition thereof, and such other information as shall, in
the opinion of counsel for the Buyer, be necessary to enable
the Buyer to include in the registration statement all
material facts required to be disclosed with respect to the
Transferee. The Buyer may require, as a condition to
registering any Shares, that the Buyer shall have received an
undertaking reasonably satisfactory to it from each
prospective seller of such Shares or any underwriter
participating in the offering or sale of such Shares to
indemnify and hold harmless the Buyer, each of its directors,
each of its officers who signs the registration statement, and
any persons who control the Buyer within the meaning of either
the Securities Act or the Securities Exchange Act of 1934, as
amended, but only with reference to information relating to
such seller or underwriter furnished to the Buyer by the
seller or underwriter to whom such information relates
specifically for use in the preparation of the registration
statement. This indemnity will be in addition to any other
liability that such seller or underwriter may otherwise have.
2.6 Each holder of any Shares will be deemed to agree by its
acquisition of such Shares that, upon receipt of any notice
from the Buyer of the occurrence of any event causing the
prospectus constituting a part of the registration statement
covering any Shares to contain an untrue statement of a
material fact or to omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading, such holder will forthwith discontinue
any and all use of such prospectus and disposition of Shares
pursuant to such registration statement until the Buyer has
had a reasonable opportunity to supplement or amend such
prospectus and has delivered copies of the supplemented or
amended prospectus to such holder, which the Buyer hereby
undertakes to do.
ARTICLE 3 - ADJUSTMENT IN ALLOTMENT OF SHARES TO SELLER TOWARDS
COST OF REPAIRS
3.1 The Seller hereby agrees that the repair costs which may arise
on account of any partial loss or damage, and which shall have
to be borne by the Seller as provided in Article 7 of The
Agreement, shall be adjusted in the number of Shares to be
delivered and registered by the Buyer in the name of the
Seller or Seller's nominee or assignee as a part of the
Purchase Price. For the purpose of this adjustment, each
Share shall be determined to have an agreed price of 4 (Four)
U.S. Dollars.
The repair costs to be borne by Seller under The Agreement
shall be estimated at the time of closing and the number of
Shares issued at that time shall take into account such
estimated costs. Once the actual repair costs are determined
additional Shares shall be issued or Seller shall return the
share certificate(s) for cancellation of a portion of those
previously issued, as the case may be.
3.2 In the event the repair costs are such that the costs cannot
be adjusted to the full extent in the number of Shares to be
delivered to the Seller at the above agreed price for each
Share, the Seller agrees to pay to the Buyer the balance of
repair costs in excess of the Share portion of the Purchase
Price, out of the cash portion of the Purchase Price.
ARTICLE 4 - INCORPORATION OF PROVISIONS BY REFERENCE
Unless the context of this Supplementary Agreement requires
otherwise, all of the terms, conditions and provisions of The
Agreement are deemed to form a part of this Agreement.
ARTICLE 5 - GENERAL
5.1 This Agreement represents the Supplementary terms and
conditions to The Agreement dated as of the 13th day of
December 1993, and shall be deemed to have come into effect
concurrently and simultaneously with The Agreement, and the
Agreement, together with this Supplementary Agreement
represents the entire Agreement between the parties and
supersedes any prior correspondence, representations or
statements, whether written or oral on this subject.
5.2 Neither party shall assign this Supplementary Agreement
without the prior written consent of the other party; except
that either Seller or Buyer shall be entitled to assign this
Supplementary Agreement, and all rights and obligations
thereunder to any of their wholly owned subsidiaries at any
time prior to the Closing Date, provided that the assignor
shall remain primarily responsible for the due performance of
this Agreement.
IN WITNESS WHEREOF the Parties have executed this Agreement by
their duly authorised representatives on the day and year first
above written
BUYER: SELLER:
GLOBAL MARINE INC. ABAN LOYD CHILES OFFSHORE
LIMITED
By: /s/ By:
Vice President Managing Director
EXHIBIT A
[Date of Delivery of Shares]
Global Marine Inc.
777 N. Eldridge
Houston, Texas 77079
USA
Gentlemen:
The undersigned [Name of Transferee], has acquired this date
[Number of Shares] shares of common stock, $.10 par value per share
(the "Shares"), of Global Marine Inc. ("GMI"). This undersigned
hereby represents, acknowledges and agrees that the Shares are
being acquired by the undersigned in a transaction not involving a
public offering and that the Shares are being acquired by the
undersigned for investment only and not with a view to, or for
resale in connection with, any distribution of the Shares and with
no present intention of distributing any of the Shares, as such
terms are used in the Securities Act of 1933, as amended (the
"Securities Act"), and the rules, regulations and interpretations
of the Securities and Exchange Commission promulgated thereunder.
The shares are being acquired by the undersigned for its own
account. The undersigned is not acting on behalf of any other
person, and no other person has any beneficial interest in the
Shares.
The undersigned understands that the offering of the Shares has not
been registered under the Securities Act or qualified under the
securities laws of any state. The undersigned also understands
that the Shares are "restricted shares" under the Securities Act
which may be sold only in an offering registered under the
Securities Act or in an offering exempt from the registration
requirements of the Securities Act. The undersigned acknowledges
that neither GMI nor any other person acting on behalf of GMI or in
connection with the acquisition of the Shares by the undersigned
has represented or implied, whether through act or omission, that
any such exemption from registration is or may be available.
The undersigned agrees and acknowledges that (1) it has reviewed
full information concerning the assets, liabilities, financial
condition and operations of GMI; (2) it is not relying upon any
representation or warranty by GMI with respect to such matters; and
(3) it does not desire any further information concerning such
matters. In addition, the undersigned agrees to assume the
obligations of a "Transferee" set forth in Sections 2.4, 2.5 and
2.6 of that certain Purchase and Sale Agreement (Supplementary)
made December 13, 1993, by and between Global Marine Inc. and Aban
Loyd Chiles Offshore Limited, a copy of which is annexed hereto.
[NAME OF TRANSFEREE]
By: /s/
[Name and Title of Authorised Officer]
AMENDMENT NO. 1
TO THE PURCHASE AND SALE AGREEMENT (SUPPLEMENTARY)
DATED AS OF DECEMBER 13, 1993
THIS AGREEMENT is made as of the 10th day of February, 1994
BETWEEN
(1) Aban Loyd Chiles Offshore Limited, a company organised and
existing under the laws of India, with its offices at Sakthi
Towers, 766 Anna Salai, Madras 600 002 India (hereinafter
referred to as "Seller"); and
(2) Global Marine Inc., a company organised and existing under the
laws of Delaware, USA, and having its registered office at 777
N. Eldridge Rd., Houston, Texas 77079 (hereinafter referred to
as "Buyer").
WITNESSETH
1. Seller and Buyer entered into a Purchase and Sale Agreement
and a Purchase and Sale Agreement (Supplementary), both dated
as of December 13, 1993, the terms and conditions of which,
when read together, comprise the agreement of Seller to sell
and the Buyer to buy the jackup drilling unit known as the
Uxmal; and
2. The Purchase and Sale Agreement provided for an inspection to
be conducted immediately prior to the closing to establish:
(a) the condition of the spud cans which were not capable of
being inspected during the period November 10-13, 1993;
(b) that the rig is being delivered with all items provided
for in Exhibit A to the Purchase and Sale Agreement.
Any deficiencies noted in the above inspection were to result
in an adjustment of the number of shares of Global Marine
common stock to be delivered to Seller in accordance with the
Purchase and Sale Agreement (Supplementary); and
3. The parties acknowledged that it was not practical to conduct
such a pre-delivery inspection of the Uxmal and amended the
Purchase and Sale Agreement to provide for post delivery
inspection and now desire to amend the Purchase and Sale
Agreement (Supplementary) to provide for a later delivery of
the stock portion of the purchase price.
NOW THEREFORE, in consideration of the mutual covenants in the
Purchase and Sale Agreement, Purchase and Sale Agreement
(Supplementary), this Amendment No. 1 and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree to amend the Purchase and
Sale Agreement (Supplementary) in respect of the Uxmal and dated as
of December 13, 1993, as follows:
1. Articles 2.1 through 2.6, inclusive, are deleted in their
entirety and new Articles 2.1 through 2.4 will be substituted
therefor as follows:-
2.1 On June 30, 1994, and in addition to the cash portion of
the Purchase Price (reference Section 2.1(a) and 2.1(b)
of The Agreement), the Buyer shall transfer and deliver
to the Seller or its nominee or assignee (each a
"Transferee"), also as a portion of said Purchase Price,
450,000 (four hundred fifty thousand) shares of Global
Marine Inc. common stock, $.10 par value per share,
subject to adjustment in accordance with Section 3.1
hereof (said shares to be delivered on June 30, 1994,
being hereinafter referred to as "Shares").
2.2 It is understood and agreed that all Shares delivered
pursuant to Section 2.1 or Section 3.1 will, at the time
of such delivery, have been registered under the
Securities Act of 1993, as amended (the "Securities Act")
on an appropriate registration statement form as the
Buyer shall select, and have been authorised for listing
on the New York Stock Exchange, provided that the
applicable registration and listing requirements are
satisfied. The Buyer's obligations to register and list
Shares hereunder are contingent upon the Seller having
informed the Buyer in writing no later than April 29,
1994, as to whether the Shares are to be delivered to a
nominee or assignee and, if so, as to the identity of
such nominee or assignee, and upon the Seller otherwise
having complied with the provisions hereof. The Buyer
will use all reasonable efforts to cause such
registration to become effective and such listing to be
approved on or before June 30, 1994, and to keep such
registration statement and such listing continuously
effective until June 30, 1997, or until Shares included
therein have been sold by each Transferee, if earlier
(subject, however, to the provisions of Section 2.4
hereof). The Buyer shall bear all costs and expenses of
listing and registration and of maintaining such listing
and registration.
2.3 The Seller will, or will cause each Transferee, if other
than the Seller, to provide the Buyer with such
information with respect to Shares to be registered, the
plans for the proposed disposition thereof, and such
other information as shall, in the opinion of counsel for
the Buyer, be necessary to enable the Buyer to include in
the registration statement all material facts required to
be disclosed with respect to the Transferee. The Buyer
may require, as a condition to registering any Shares,
that the Buyer shall have received an undertaking
reasonably satisfactory to it from each prospective
seller of such Shares or any underwriter participating in
the offering or sale of such Shares to indemnify and hold
harmless the Buyer, each of its directors, each of its
officers who signs the registration statement, and any
persons who control the Buyer within the meaning of
either the Securities Act or the Securities Exchange Act
of 1934, as amended, but only with reference to
information relating to such seller or underwriter
furnished to the Buyer by the seller or underwriter to
whom such information relates specifically for use in the
preparation of the registration statement. This
indemnity will be in addition to any other liability that
such seller or underwriter may otherwise have.
2.4 Each holder of any Shares will be deemed to agree by its
acquisition of such Shares that, upon receipt of any
notice from the Buyer of the occurrence of any event
causing the prospectus constituting a part of the
registration statement covering any Shares to contain an
untrue statement of a material fact or to omit to state
any material fact required to be stated therein or
necessary to make the statements therein not misleading,
such holder will forthwith discontinue any and all use of
such prospectus and disposition of Shares pursuant to
such registration statement until the Buyer has had a
reasonable opportunity to supplement or amend such
prospectus and has delivered copies of the supplemented
or amended prospectus to such holder, which the Buyer
hereby undertakes to do.
2. Article 3.1 is hereby deleted in its entirety and amended to
read as follows:
"No later than 28 February representatives of the Buyer and
Seller shall conduct a joint inspection to establish the
following:
(a) the condition of the spud cans and the cost of repairs,
if any; and
(b) that all items provided for in Exhibit A to the Purchase
and Sale Agreement were delivered with the rig and the
cost of equipment deficiencies, if any.
In the event that the representatives of Seller and Buyer are
unable to agree on the extent of the damage or the equipment
deficiencies, or the cost thereof, a Surveyor from Matthews
Daniel Company shall be appointed to make such a
determination. Survey costs shall be borne equally by Seller
and Buyer. Article 5.1 of the Purchase and Sale Agreement is
hereby deemed amended to comport with the provisions of this
article, if necessary.
The Seller hereby agrees that the amount agreed by the
representatives of Seller and Buyer or determined by the
Matthews Daniel Surveyor, all as provided for herein, and
which shall have to be borne by Seller, shall result in an
adjustment in the number of Shares to be delivered to and
registered by the Buyer in the name of Seller or Seller's
nominee or assignee in accordance with Article 2.1 of the
Purchase and Sale Agreement (Supplementary). For the purpose
of this adjustment, each Shares shall be deemed to have an
agreed price of 4 (four) US Dollars."
IN WITNESS WHEREOF the parties have executed this Amendment No 1 by
their duly authorised representatives as of the day and year first
above written.
BUYER SELLER
GLOBAL MARINE INC. ABAN LOYD CHILES OFFSHORE LIMITED
By: /s/ By:
Vice President Director
EXHIBIT 10.9
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of this 13th day of December 1993.
BETWEEN
Aban Loyd Chiles Offshore Limited, a company organized and existing
under the laws of India, with its offices at Sakthi Towers, 766
Anna Salai, Madras 600 002 India (hereinafter referred to as
"Seller")
AND
GLOBAL MARINE INC., a company organized and existing under the laws
of Delaware, U.S.A., and having its registered office at 777 N.
Eldridge, Houston, Texas 77079 (hereinafter referred to as "Buyer")
Seller and Buyer are sometimes referred to herein collectively as
"Parties" and individually as "Party".
WITNESSETH:
WHEREAS:
Seller is or will become the owner of the jackup drilling unit
known as the Chichen Itza, together with all her equipment, spare
parts and inventory more fully described in Exhibit A attached
hereto and made a part hereof and desires to sell the Rig to Buyer,
and Buyer desires to purchase the Rig from Seller, in accordance
with the terms and conditions of this Agreement ("Agreement");
NOW THEREFORE, in consideration of the mutual covenants in this
Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties
hereto agree as follows:
ARTICLE 1 - SALE AND DEPOSIT
1.1 Seller agrees to sell to Buyer and Buyer agrees to
purchase, all right, title and interest in the Rig, and all
her equipment and appurtenances, including but not limited to,
all equipment which is on order for the Rig, her engines,
boilers, machinery, masts, rigging, derricks, drawworks,
blow-out preventers, boats, cables, chains, tackle, fittings,
tools, pumps, gear, apparel, furniture, equipment, jacking
gears, spare parts ashore or onboard, and all other
appurtenances thereto, appertaining or belonging, and whether
installed by Seller or others (exclusive of leased items), and
whether onboard, onshore or in transit, all as more fully
described in Exhibit A hereto, and also any and all additions,
improvements, renewals and replacements at any time from the
date of this Agreement until the Closing Date (as defined in
Article 4 below) made in or to the Rig, or any part thereof,
or in or to her equipment and appurtenances aforesaid (herein
collectively referred to as the "Rig").
1.2 In consideration of Buyer entering into this Agreement,
Seller, to the extent they are available to Seller, hereby
sells and assigns to Buyer all of its respective right, title
and interest in any drawings, records, manuals, plans, designs
and other documents pertaining specifically to the Rig or
relating to its construction, and warranties or guarantees
relating to the Rig (hereinafter collectively referred to as
"Other Property and Warranties"), such sale and assignment to
be effective upon the Closing Date hereof. Seller to use its
best efforts to obtain same. Seller shall deliver such
documents to Buyer concurrent with the delivery of the Rig to
Buyer's offices in Houston, Texas, or other location
designated by Buyer.
1.3 Subject to the approval of ONGC and the Managers of the
Rig, after this Agreement is signed and deposit lodged, the
Buyer shall have the right to place a crew of two (2) on board
the Rig prior to delivery to inspect the Rig and to observe
and monitor the preparation and mobilization of the Rig. Such
crew shall be at the sole risk and liability of the Buyer and
the Seller will not undertake any liability with respect to
such crew or its activities. In connection therewith Buyer
shall indemnify and hold harmless Seller and the Manager of
the Rig from and against any and all claims by any party
arising out of illness, death or injury to Buyer's crew while
onboard the Rig or in transit to or from the Rig,
notwithstanding the negligence or fault of Seller, its
employees, servants or agents. The negligence or fault
referred to herein shall include sole and/or concurrent
negligence, either active or passive, and shall include any
liability based on any theory of strict liability or defect of
premise or appurtenances.
1.4 As a security for the fulfilment of this Agreement, the Buyer
shall pay a deposit of 10% (ten percent) of the cash portion
of the Purchase Price set forth in Section 2. 1 within three
(3) banking days from the date of execution of this Purchase
and Sale Agreement. This
amount shall be deposited with Hambros Bank in London, England
and held by them in a joint account in the names of the Seller
and the Buyer. Interest, if any, to be credited to the Buyer.
Any fee charged for holding such deposit shall be borne
equally by the Seller and the Buyer.
ARTICLE 2 - PURCHASE PRICE
2.1 In consideration of the due performance of Sections 1.1 and
1.2 above, Buyer shall pay to the Seller or order the
following, (hereinafter referred to as "Purchase Price") which
payment shall be made in the manner set forth below.
Said Purchase Price shall consist of:
(a) The sum of Twelve Million Five Hundred Thousand U.S.
Dollars (US$12,500,000); plus
(b) A non-interest bearing, limited-recourse, contingent cash
flow note in the amount of Five Hundred Thousand U.S.
Dollars (US$500,000) under which Seller shall be entitled
to receive 50% of the net cash flow from the Rig when it
is working until such time as Seller has received a total
of US$500,000.
In the event Buyer sells the Rig prior to paying to Seller the
full amount due under the note set forth in (b) above, the
full unpaid balance shall immediately be due and payable.
2.2 The cash portion of the Purchase Price, less the Deposit which
shall be simultaneously released to Seller (with the interest
earned payable to Buyer), shall be paid by the Buyer on the
Closing Date either by an Irrevocable Bank Payment Letter
issued by a London bank, a cashier's check or by wire transfer
in immediately available funds, as mutually agreed prior to
Closing, to a bank account as Seller may designate in writing
at least five (5) London working days prior to Closing Date.
2.3 All payments under this Agreement shall be made in U.S.
Dollars.
ARTICLE 3 - CONDITIONS PRECEDENT
3.1 The performance of this Agreement is subject to fulfilment of
the following conditions precedent within the time stated
herein:
(a) acceptance of the Rig by Buyer or its nominee on the
Closing Date following confirmation that the Rig is in
the same condition on delivery as it was when inspected
by Buyer on November 10-13, 1993, normal wear and tear
excepted.
(b) approval by the Buyer's and Seller's Board of Directors
of the terms and conditions of this Agreement by close of
business in Houston, Texas on 14 December 1993, certified
copies of which are to be delivered to the other Party
prior to the Closing Date;
(c) approval from the requisite governmental authorities (if
required) of the transfer of ownership of the Rig to
Buyer by the Closing Date. A copy of such approval shall
be delivered by Seller to Buyer prior to the Closing
Date.
3.2 Seller and Buyer shall each use all reasonable good faith
efforts to procure the fulfilment of the conditions precedent
under Section 3.1 above.
3.3 Seller agrees to do all things required on its part to obtain
the governmental approvals referred to in Section 3.1 (c)
above, if required, including providing any information,
making any certifications, and complying with any
requirements, restrictions, covenants or conditions imposed in
conjunction with such approval. Any delay in receiving such
approval, unless such delay is caused by reasons within
control of Buyer, shall not enable the Seller to cancel this
Agreement in accordance with Section 9.3.
ARTICLE 4 - CLOSING DATE
4.1 The transactions described in this Article 4 shall take place
on a mutually agreeable date no earlier than 20 February 1994,
or if later, the final closing date under the Memorandum of
Agreement dated 25 April 1993 between Aban Loyd Chiles
Offshore Limited and Patrian Offshore S.A. but no later than
31 March 1994, inclusive, but in any event no later than 15
April 1994 (hereinafter referred to as "Closing Date") at a
mutually agreeable location. Notwithstanding anything in this
Agreement to the contrary, if the Rig is not delivered by 15
April 1994 Buyer may elect to terminate this Agreement without
further obligation to Seller and any Deposit paid by Buyer
shall be returned with interest earned.
4.2 Subject to the due performance of the other provisions of this
Agreement, Seller and Buyer hereby agree that the following
transactions shall be performed simultaneously on or before
the Closing Date:
(a) Buyer shall either deliver said Irrevocable Bank Payment
Letter, a cashier's check or transfer the cash portion of
the Purchase Price to Seller by wire transfer to the bank
account indicated in Section 2.2 above;
(b) Buyer shall also deliver to Seller the note referred to
in Section 2.1 above;
(c) Seller shall transfer title to the Rig to Buyer by
signing and delivering the Bill of Sale and Buyer shall
sign and deliver to Seller a Protocol of Delivery and
Acceptance in the form of Exhibits B and C respectively
attached to and made a part of this Agreement. Such Bill
of Sale shall be notarized and legalized by the
Panamanian Consulate;
(d) Seller shall deliver to Buyer all documents relating to
the use and operation of the Rig as more fully described
in Exhibit D attached hereto;
(e) Seller shall hand over to Buyer original Powers of
Attorney, duly notarized authorizing the signatory to
sign the closing documents to bind the Seller;
(f) Buyer shall hand over to Seller original Powers of
Attorney, duly notarized authorizing the signatory to
sign the closing documents to bind the Buyer;
(g) Seller shall deliver to Buyer at least 10 days but not
more than 15 days before the Closing Date, a certificate
issued by the Panamanian authorities dated 10 to 15 days
before Closing Date, stating that the Rig is free and
clear from all recorded encumbrances or liens, save for
the endorsements of the interest of the Export Credit
Guarantee Department of the U.K. government ("ECGD") as
First Mortgagee and Second Mortgagee, which interest
shall be released prior to the Closing Date;
(h) Within a reasonable time after the Closing Date, Buyer
shall change the name of the Rig and remove therefrom all
insignias and logos and other references to Seller;
(i) Seller shall provide to Buyer evidence satisfactory to
Buyer, in Buyer's sole discretion, that the Rig is free
and clear of all encumbrances and maritime liens
whatsoever on the Closing Date.
(j) Seller shall provide to Buyer an assignment from Omega
International Corporation in a form satisfactory to
Buyer, of the indemnities from ONGC with regard to
customs duties, fees and charges under the Omega/ONGC
drilling contract. Such assignment shall be coupled with
a formal Power of Attorney to Buyer issued by Omega
International Corporation appointing Buyer as their
Attorney-In-Fact for purposes of enforcing such
indemnities.
ARTICLE 5 - DELIVERY, RISK, TITLE, BUNKERS, STORES AND SPARES
5.1 The Rig with everything belonging to her shall be at the
Seller's risk and expense, including spud can damage, until
the Rig is delivered to the Buyer. In the event that the Rig
shall have suffered any damage prior to the date of Delivery
in respect of which recoveries may be made under the insurance
for the Rig and Buyer has nonetheless elected to proceed with
the purchase of the Rig as provided in Section 7.2, the Seller
shall make claims on the insurances in respect of such damage
and shall account to the Buyer in respect of any recoveries
that may arise. Seller hereby appoints Buyer as their
Attorney-In-Fact for purposes of pursuing all insurance claims
under this Section 5.1 and agrees to provide to Buyer a formal
Power of Attorney evidencing this appoint upon request by
Buyer. Upon the delivery of the Bill of Sale to Buyer, and
acceptance of the Rig by Buyer, all risk, rights, title and
interest in the Rig shall be transferred to Buyer and title to
the Rig shall pass to Buyer upon delivery.
5.2 Seller will deliver the Rig to Buyer in Dubai or other
mutually agreed port, provided Buyer agrees to pay the
additional charges, on the Closing Date safely jacked up at
the delivery location. Such Rig shall be delivered in the
same condition as it was at the date of inspection by Buyer,
fair wear and tear excepted. Seller shall give the Buyer at
least 30 days, 15 days and 7 days notice prior to the delivery
date, which shall be definitely confirmed by Seller 5 London
banking days before the delivery date, which shall be between
05 January 1994 and 31 March 1994.
5.3 Seller shall deliver the Rig to Buyer with all provisions
(broached or unbroached), remaining fuel and unused oils and
unused stores. Library, forms, manuals, etc. for use on
Seller's other rigs generally, shall be excluded from the sale
without compensation.
5.4 Seller is required to continue to replace, in the normal
course of business, spare parts which are taken out of spares
and used as replacements prior to delivery, and the replaced
parts shall be property of Buyer.
ARTICLE 6 - LIABILITIES PRE AND POST CLOSING DATE
6.1 Except as provided in Section 1.3 hereof, Seller shall be
responsible for and shall defend, indemnify and hold harmless
the Buyer against all liability, expenses and costs for any
cause of action accrued prior to the Closing Date, (including
by way of illustration and not by way of limitation, personal
injury, property damage, contractual disputes, environmental
claims, claims by any governmental or regulatory body and
specifically including Indian customs duties) arising out of
or relating to the Rig or to Seller's business activities with
respect to the operation or ownership of the Rig. Nothing
contained in this Section 6.1 shall be construed to relieve
Buyer of its obligations under Section 1.3 above.
6.2 Subject to Section 6.1 above, Buyer shall be responsible for
and shall defend, indemnify and hold harmless the Seller
against all liability, expenses and costs for any cause of
action accrued after the Closing Date, (including by way of
illustration and not by way of limitation, personal injury,
property damage, contractual disputes, environmental claims,
claims by any governmental or regulatory body but specifically
excluding Indian customs duties) arising solely out of or
relating to Buyer's business activities with respect to the
operation or ownership of the Rig.
6.3 Any financial commitments or liability to pay money in respect
of the Rig arising prior to Closing Date, (even if only
payable after Closing Date), shall be borne by the Seller.
ARTICLE 7 - TOTAL/CONSTRUCTIVE TOTAL/PARTIAL LOSS
7.1 If the Rig becomes a total or constructive total loss (as
determined by a surveyor to be mutually agreed, or in the
event of failure to agree, appointed by the underwriters of
the Rig) before Closing Date, this Agreement shall immediately
become null and void and neither Seller nor Buyer shall have
any further obligation or liability with respect to the other,
except that the Deposit shall be returned to Buyer with
interest earned.
7.2 If the Rig suffers partial loss or damage the cost of repair
of which would exceed US$500,000, before delivery of the Title
on the Closing Date so that delivery cannot be made in
accordance with Section 5.2 above, Buyer may elect to
terminate this Agreement without further obligation or
liability to the Seller and the Deposit shall be returned to
Buyer with interest earned or Buyer may at its option elect to
proceed with the sale and then proceed with the repairs for
Seller's account. If, however, the shipyard where the repair
work is intended to be carried out estimates the repair can be
completed on or before the Closing Date, and Buyer elects to
proceed with this transaction, Seller shall repair such damage
at Seller's cost as expeditiously as possible, and Buyer shall
purchase and accept the Rig so repaired, subject to inspection
and approval of the repairs in Buyer's sole discretion,
provided that the Closing Date shall be postponed until all
repairs have been completed. If the shipyard estimates that
repairs cannot be completed on or before the Closing Date,
Buyer shall within five (5) days after receiving the estimate,
determine independently, and notify the Seller, whether Buyer
elects either to terminate this Agreement or to carry on with
the sale. If Buyer elects not to proceed then this Agreement
shall terminate with immediate effect and neither Seller nor
Buyer shall have any further obligation or liability to the
other, except that the Deposit shall be returned to Buyer with
interest earned. If Buyer elects to proceed with the sale
then Seller will proceed with the repairs to the Rig if Buyer
has not elected to do so as provided above. In such event the
Closing Date shall be postponed until the repairs have been
completed. Buyer shall be entitled at its cost to observe and
require additional inspection of any and all repairs made to
the Rig while in the shipyard and/or prior to the Closing
Date.
ARTICLE 8 - WARRANTIES AND UNDERTAKINGS
8.1 Seller warrants and undertakes (which warranties and
undertaking shall survive the delivery of the Rig):
(a) Seller is or will be the legal and beneficial owner of
the Rig on the Closing Date.
(b) Seller will convey to Buyer good title to the Rig on the
Closing Date, and on delivery of the Rig to Buyer, the
Rig will be free from all encumbrances, including but not
limited to statutory and maritime liens, pledges,
mortgages or other debt or security interest or
restrictions on transfer. Should any claims which have
been incurred prior to the time of Delivery be made
against the Rig, the Seller hereby undertakes to
indemnify the Buyer against all consequences of such
claims, including any taxes and/or customs duties owed to
Indian authorities and/or ONGC.
To secure its obligations under this Agreement, Seller
hereby assigns to Buyer all rights, title and interest in
and to all representations, indemnities and undertakings
given by the "Sellers " under the provisions of that
certain Memorandum of Agreement dated 25 April 1993
between Patrian Offshore S.A. and Aban Loyd Chiles
Offshore Limited with respect to the vessel "Chichen
Itza" as subsequently modified and amended. In addition,
Seller shall provide to Buyer written consent and
acknowledgment from Patrian Offshore S.A. of such
assignment on or before the Closing Date. Further Seller
hereby appoints Buyer as its Attorney-In-Fact for
purposes of enforcing such rights, title and interest and
agrees to provide to Buyer a formal Power of Attorney
evidencing this appointment upon request by Buyer.
(c) The Rig shall, on the Closing Date, be delivered in the
same condition as when she was inspected by Buyer on
November 10-13, 1993.
(d) The operations of the Rig shall, prior to the Closing
Date, be conducted in accordance with law, good oil field
practice and the requirements of any applicable drilling
contract.
(e) That the ONGC drilling contract applicable to the Rig has
terminated prior to the Closing Date.
(f) That the management agreement and all other similar
agreements with respect to the Rig have terminated or
been cancelled prior to the Closing Date.
(g) Seller is duly incorporated and validly existing under
the laws of its country of incorporation and has taken
all necessary corporate action to and has full legal
right, power and authority to enter into this Agreement
and to perform the obligations herein contained and all
necessary consents have been or will be obtained prior to
the date of delivery.
8.2 Buyer warrants that it is duly incorporated and validly
existing under the laws of its country of incorporation and
has taken all necessary corporate action to and has full legal
right, power and authority to enter into this Agreement and to
perform the obligations herein contained.
ARTICLE 9 - DEFAULTS
9.1 Should the deposit not be paid as aforesaid, the Seller has
the right to cancel this Agreement, and shall be entitled to
claim compensation for their direct losses.
Should the Purchase Money not be paid as aforesaid, the
Seller's sole and exclusive remedy is to cancel this
Agreement, in which case the amount deposited and all interest
earned, if any, shall be forfeited to the Seller and the
Seller shall have no further claim against the Buyer.
9.2 If the Seller is unable to execute a legal transfer or to
deliver the Rig with everything belonging to her in the manner
and within the conditions and time specified in Articles 4, 5
and 8, Buyer may elect to cancel this Agreement in which case
the Deposit in full shall be returned to the Buyer together
with interest earned. Except for failure to deliver the Rig
due to damage, as provided in Section 7.2, in addition, Seller
shall pay to Buyer an amount equal to the Deposit set forth in
Section 1.4 as liquidated damages. Thereafter Buyer shall
have no further claim against the Seller.
9.3 Except as provided in Section 3.3 above, in the event any of
the Conditions Precedent have not been satisfied within the
time specified in this Agreement, either party shall have the
right to terminate this Agreement, in which event neither
party shall have any further obligation or liability to the
other and any monies paid by Buyer shall be returned.
ARTICLE 10 - BROKER COMMISSION
The brokerage fee of US$148,000 shall be paid by SELLER to
Normarine Offshore Consultants A/S to a bank account to be
nominated by Normarine Offshore Consultants A/S immediately upon
the delivery and acceptance of the Rig and receipt by Seller of
payment of the Purchase Price pursuant to the terms of this
Agreement.
ARTICLE 11 - TAXES
11.1 All fees, dues, notarial and/or consular and/or other charges
or expenses connected with the registration of the Rig under
Buyer's flag shall be for Buyer's account.
11.2 All fees, dues, notarial and/or consular and/or other charges
or expenses connected with the Seller's transfer of interest
shall be for Seller's account.
11.3 All other taxes, fees and expenses (including any sales taxes,
stamp taxes, VAT or other similar taxes) relating to the sale
of the Rig shall be for Seller's account.
ARTICLE 12 - CONFIDENTIALITY
12.1 Each Party shall consult with the other prior to making its
initial public announcement concerning this transaction.
ARTICLE 13 - FURTHER ASSURANCE
Each of the Parties shall do and execute or procure to be done and
executed all further necessary acts, deeds, documents and things
within their power to give effect to this Agreement.
ARTICLE 14 - AMENDMENTS, VARIATIONS AND WAIVER
14.1 No amendment or variation of this Agreement shall be valid
unless it is in writing and signed by or on behalf of each of
the Parties.
14.2 No failure to exercise or delay in exercising or enforcing any
right or remedy under this Agreement shall constitute a waiver
thereof and no single or partial exercise or enforcement of
any right or remedy under this Agreement shall preclude or
restrict the further exercise or enforcement of any such right
or remedy.
ARTICLE 15 - ARBITRATION
15.1 If any dispute should arise in connection with the
interpretation and fulfilment of this Agreement, the same
shall be decided by arbitration in the city of London pursuant
to the London Maritime Arbitration Association Rules of
Commercial Arbitration and shall be referred to a single
arbitrator to be appointed by the Parties hereto. If the
Parties cannot agree upon the appointment of the single
arbitrator, the dispute shall be settled by three arbitrators,
each Party appointing one arbitrator, the third being
appointed by the London Maritime Arbitration Association. If
either of the appointed arbitrators refuses or is incapable of
acting, the Party who appointed him shall appoint a new
arbitrator in his place.
15.2 If one Party fails to appoint an arbitrator, either originally
or by way of substitution, within two weeks after the other
Party having appointed his arbitrator, and has sent the Party
making default notice by telex or telefax to make the
appointment,the London Maritime Arbitration Association, after
application from the Party having appointed his arbitrator
shall appoint an arbitrator on behalf of the Party making
default.
15.3 The award rendered by the arbitrators shall be final and
binding upon the Parties and may if necessary be enforced by
a court or other competent authority in the same manner as a
judgment of a court of law.
15.4 Arbitration shall be in the English language.
15.5 This Agreement shall be governed and interpreted in accordance
with the laws of England.
ARTICLE 16 - NOTICES
16.1 Unless otherwise specifically stated herein, any notices
required or permitted to be given herein shall be given in
writing, delivered personally or sent by mail postage prepaid
or by telex or facsimile to the Party to receive such notice
at:
To Buyer: Global Marine Inc.
777 N. Eldridge Road
Houston, Texas 77079, U.S.A.
Attention: Mr. John G. Ryan
Telex: 77-5415
Facsimile: (713) 496-0895
To Seller: Aban Loyd Chiles Offshore Limited
Sakthi Towers
766 Anna Salai
Madras 600 002, India
Attention: Mr. M.A. Abraham
Telex: 041-7695
Facsimile: (91)(44) 825-5748
16.2 Any notice shall be effective upon receipt and shall be given
in the English language.
16.3 A Party may change its notice information by giving notice of
the change to the other Party in writing.
ARTICLE 17 - GENERAL
17.1 Neither Party shall assign this Agreement without the prior
written consent of the other Party; except that either Seller
or Buyer shall be entitled to assign this Purchase and Sale
Agreement and all rights and obligations thereunder to any of
their wholly owned subsidiaries at any time prior to the
Closing Date, provided that the assignor shall remain
primarily responsible for the due performance of this
Agreement.
17.2 The Rig will have been working offshore India prior to
delivery to Buyer. Seller shall take all precautions to
properly document the departure of the Rig from India so as
not to jeopardize, prevent, hinder or interfere with Buyer's
right to take the Rig back to India if Buyer so elects.
17.3 If any term, provision or condition of this Agreement is
determined to be invalid or unenforceable such invalidity or
unenforceability shall have no effect on the validity or
enforceability of the remaining terms, provisions or
conditions, which shall be valid and enforceable as if the
invalid and unenforceable terms, provisions or conditions
never existed.
IN WITNESS WHEREOF the Parties have executed this Agreement by
their duly authorised representatives on the day and year first
above written.
BUYER: SELLER:
GLOBAL MARINE INC.
By: /s/ By:
Vice President Managing Director
AMENDMENT NO. 1
TO THE PURCHASE AND SALE AGREEMENT
DATED AS OF DECEMBER 13, 1993
THIS AGREEMENT is made as of the 11th day of February, 1994
BETWEEN
(1) Aban Loyd Chiles Offshore Limited, a company organised and
existing under the laws of India, with its offices at Sakthi
Towers, 766 Anna Salai, Madras 600 002 India (hereinafter
referred to as "Seller"); and
(2) Global Marine Inc., a company organised and existing under the
laws of Delaware, U.S.A., and having its registered office at
777 N. Eldridge Road., Houston, Texas 77079 (hereinafter
referred to as "Buyer")
WITNESSETH WHEREAS
1. Seller and Buyer entered into a Purchase and Sale Agreement as
of December 13, 1993, the terms and conditions of which
provided for the Seller to sell and the Buyer to buy the
jackup drilling unit known as the Chichen Itza;
2. The Purchase and Sale Agreement provided for an inspection to
be conducted immediately prior to the closing to establish:
(a) the condition of the spud cans which were not capable of
being inspected during the period November 10-13, 1993;
and
(b) that the rig is being delivered with all items provided
for in Exhibit A to the Purchase and Sale Agreement;
3. The parties acknowledge that it is not practical to conduct
such a pre-delivery inspection of the Chichen Itza and wish to
provide a procedure for such inspection and resulting price
adjustment, if any; and
4. Other minor modifications to the Purchase and Sale Agreement
are desired by the parties.
NOW THEREFORE, in consideration of the mutual covenants in the
Purchase and Sale Agreement and this Amendment No 1 and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto agree to amend the
Purchase and Sale Agreement in respect of the Chichen Itza and
dated as of December 13, 1993, as follows:
1. Article 4.1 is deleted in its entirety and is hereby amended
to read:
"The transactions described in this Article 4 shall take place
on 11 February 1994 in London. Notwithstanding anything in
this agreement to the contrary, if the rig is not delivered by
15 April 1994 Buyer may elect to terminate this Agreement
without further obligation to
Seller and any deposit paid by Buyer shall be returned with
interest earned".
2. Article 4.2(g) is deleted in its entirety.
3. Article 4.2(j) is deleted in its entirety.
4. Article 5.2 is amended to provide that the rig shall be
delivered in Sharjah. The last sentence of this article is
deleted in its entirety.
5. Article 8.1(b) is hereby amended to delete the requirement
that Seller provide to Buyer written consent and
acknowledgement from Patrian Offshore S.A.
6. Article 13 is amended to add the following:
"Seller agrees to use its best efforts to obtain the
permission of the Central Government or Reserve Bank of India,
if such permission is necessary to make any payment to Buyer,
whether in accordance with any warranty, representation,
undertaking or indemnity or otherwise under the Purchase and
Sale Agreement".
IN WITNESS WHEREOF the parties have executed this Amendment No. 1
by their duly authorised representatives as of the day and year
first above written.
BUYER: SELLER:
GLOBAL MARINE INC. ABAN LOYD CHILES OFFSHORE
LIMITED
By: /s/ By:
Vice President Director
EXHIBIT 10.10
PURCHASE AND SALE AGREEMENT
(SUPPLEMENTARY)
THIS AGREEMENT is made as of this 13th day of December 1993.
BETWEEN
Aban Loyd Chiles Offshore Limited, a company organized and existing
under the laws of India, with its offices at Sakthi Towers, (766
Anna Salai, Madras-600 002 India (hereinafter referred to as
"Seller")
AND
GLOBAL MARINE INC., a Company organized and existing under the laws
of Delaware, U.S.A. and having its principal offices at 777N.
Eldridge, Houston, Texas 77079 (hereinafter referred to as "Buyer")
Seller and Buyer are sometimes referred to herein collectively as
"Parties" and individually as "Party".
WITNESSETH:
WHEREAS:
1. The Parties have entered into a Purchase and Sale Agreement
(the "Agreement") in regard to the jackup Drilling unit known
as "CHICHEN ITZA", all in accordance with the terms and
conditions detailed in the Agreement, in respect of the cash
portion of the consideration.
2. The Parties have agreed to embody separately certain
additional terms and conditions in a Supplementary Agreement
to be read in conjunction with the Agreement, of which it
shall form an integral part, to reflect the total quantum of
purchase price payable by the Buyer in consideration of taking
possession and acquiring the above mentioned drilling unit.
NOW THEREFORE, the Parties hereto agree as follows:-
ARTICLE 1 - INTRODUCTORY
1.1 The definitions and provisions of the Agreement will hold good
as the basic agreed terms and conditions of Purchase and Sale
and shall not in any way be deemed to be diminished or reduced
or superseded by the additional terms stated hereinafter.
ARTICLE 2 - PURCHASE PRICE
2.1 On the closing date, as defined in "Article 4" of The
Agreement, and in addition to the cash portion of the Purchase
Price (reference Section 2.1(a) and 2.1(b) of the Agreement),
the Buyer shall transfer and deliver to the Seller or its
nominee or assignee (each a "Transferee"), also as a portion
of said Purchase Price, 450,000 (four hundred fifty thousand)
shares of Global Marine Inc. common stock, $.10 par value per
share, subject to adjustment in accordance with Section 3.1
hereof (said shares to be delivered on the closing date,
together with any additional shares to be delivered as a
result of any subsequent adjustment under Section 3.1, being
hereinafter referred to as "Shares").
2.2 It is understood and agreed that all Shares delivered pursuant
to Section 2.1 or Section 3.1 will not, at the time of such
delivery, have been registered under the Securities Act of
1933, as amended (the "Securities Act"), and will therefore be
subject to certain restrictions on transferability and sale
subject to certain restrictions on transferability and sale
thereof, and that, pending registration as provided in Section
2.4 hereof, the certificates representing the Shares will bear
a legend stating that such Shares have not been registered and
setting forth or referring to such restrictions. Whenever a
registration statement under the Securities Act is effective
with respect to any Shares, the Buyer will take any and all
actions reasonably requested by any holder thereof to effect
the replacement of legended certificates representing such
registered Shares by certificates without such legends.
2.3 The Seller will, or will cause each Transferee, if other than
the Seller, to execute and deliver to the Buyer, at the time
of delivery to each Transferee of any Shares that have not
then been registered under the Securities act, an investment
letter covering such Shares in the form attached hereto as
Exhibit A.
2.4 As soon as practicable following each delivery of Shares
pursuant to Section 2.1 or Section 3.1, the Buyer shall cause
the delivered Shares to be listed on the New York Stock
Exchange, provided that the applicable listing requirements
are satisfied. In addition, after delivery of all Shares
required to be delivered by Buyer to Seller (or any other
Transferee) hereunder, including the additional shares of
Global Marine Inc. common stock to be delivered pursuant to
Section 3.1, if any, the Buyer will cause to be filed with the
Securities and Exchange Commission a registration statement
under the Securities Act, on an appropriate form as the Buyer
shall select, covering the delivered Shares; provided,
however, that the Buyer shall not be required to file any such
registration statement during any period of time when the
Buyer is in possession of material information that it deems
advisable not to disclose in a registration statement. The
Buyer will use all reasonable efforts to cause such
registration statement to become effective as soon as
practicable following such filing and to keep such
registration statement continuously effective for a period of
3 (three) years following the date on which it becomes
effective or until all Shares included therein have been sold,
if earlier (subject, however, to the provisions of Section 2.6
hereof). The Buyer shall bear all costs and expenses of
listing and registration and of maintaining such listing and
registration.
2.5 The Seller will, or will cause each Transferee, if other than
the Seller, to provide the Buyer with such information with
respect to shares to be registered, the plans for the proposed
disposition thereof, and such other information as shall, in
the opinion of counsel of the Buyer, be necessary to enable
the Buyer to include in the registration statement all
material facts required to be disclosed with respect to the
Transferee. The Buyer may require, as a condition to
registering any Shares, that the Buyer shall have received an
undertaking reasonably satisfactory to it from each
prospective seller of such shares or any underwriter
participating in the offering or sale of such Shares to
indemnify and hold armless the Buyer, each of its directors,
each of its officers who signs the registration statement, and
any persons who control the Buyer within the meaning of either
the Securities Act or the Securities Exchange Act of 1934, as
amended, but only with reference to information relating to
such seller or underwriter to whom such information relates
specifically for use in the preparation of the registration
statement. This indemnity will be in addition to any other
liability that such seller or underwriter may otherwise have.
2.6 Each holder of any Shares will be deemed to agree by its
acquisition of such Shares that, upon receipt of any notice
from the Buyer of the occurrence of any event causing the
prospectus constituting a part of the registration statement
covering any Shares to contain an untrue statement of a
material fact or to omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading, such holder will forthwith discontinue
any and all use of such prospectus and disposition of Shares
pursuant to such registration statement until the Buyer has
had a reasonable opportunity to supplement or amend such
prospectus and has delivered copies of the supplemented or
amended prospectus to such holder, which the Buyer hereby
undertakes to do.
ARTICLE 3 - ADJUSTMENT IN ALLOTMENT OF SHARES TO SELLER TOWARDS
COST OF REPAIRS
3.1 The Seller hereby agrees that the repair costs which may arise
on account of any partial loss or damage, and which shall have
to be borne by the Seller as provided in Article 7 of the
Agreement, shall be adjusted in the number of Shares to be
delivered and registered by the Buyer in the name of the
Seller or Seller's nominee or assignee as a part of the
Purchase Price. For the purpose of this adjustment, each
Share shall be determined to have an agreed price of 4 (four)
U.S. Dollars.
The Repair costs to be borne by Seller Under the Agreement
shall be estimated at the time of closing and the number of
Shares issued at that time shall take into account such
estimated costs. Once the actual repair costs are determined
additional Shares shall be issued or Seller shall return the
share certificate(s) for cancellation of a portion of those
previously issued, as the case may be.
3.2 In the event the repair costs are such that the costs cannot
be adjusted to the full extent in the number of Shares to be
delivered to the Seller at the above agreed price for each
Share, the Seller agrees to pay to the Buyer the balance of
repair costs in excess of the Share portion of the Purchase
Price, out of the cash portion of the Purchase Price.
ARTICLE 4 - INCORPORATION OF PROVISIONS BY REFERENCE
Unless the context of this Supplementary Agreement requires
otherwise, all of the terms, conditions and provision of the
Agreement are deemed to form a part of this agreement.
ARTICLE 5 - GENERAL
5.1 This Agreement represents the Supplementary terms and
conditions to the Agreement dated as of the 13th day of
December 1993, and shall be deemed to have come into effect
concurrently and simultaneously with the Agreement, and the
Agreement, together with this Supplementary Agreement
represents the entire agreement between the parties and
supersedes any prior correspondence, representations or
statements =, whether written or oral on this subject.
5.2 Neither party shall assign this Supplementary Agreement
without the prior written consent of the other party; except
that either Seller or Buyer shall be entitled to assign this
Supplementary Agreement, and all rights and obligations
thereunder to any of their wholly owned subsidiaries at any
time prior to the Closing Date, provided that the assignor
shall remain primarily responsible for the due performance of
this Agreement.
IN WITNESS WHEREOF the Parties have executed this Agreement by
their duly authorised representatives on the day and year first
above written.
BUYER: SELLER:
GLOBAL MARINE INC. ABAN LOYD CHILES OFFSHORE LIMITED
By: /s/ By:
Vice President Managing Director
EXHIBIT A
[Date of Delivery of Shares]
Global Marine Inc.
777 N. Eldridge
Houston, Texas 77079
U.S.A.
Gentlemen:
The undersigned, [Name of Transferee], has acquired this date
[Number of Shares] shares of common stock, $10. par value per share
(the "Shares"), of Global Marine Inc. ("GMI"). The undersigned
hereby represents, acknowledges and agrees that the Shares are
being acquired by the undersigned in a transaction not involving a
public offering and that the Shares are being acquired by the
undersigned for investment only and not with a view to, or for
resale in connection with, any distribution of the Shares and with
no present intention of distributing any of the Shares, as such
terms are used in Securities Act of 1933, as amended (the
"Securities Act"), and the rules, regulations and interpretations
of the Securities and Exchange Commission promulgated thereunder.
The shares are being acquired by the undersigned for its own
account. The undersigned is not acting on behalf of any other
person, and no other person has any beneficial interest in the
Shares.
The undersigned understands that the offering of the Shares has not
been registered under the Securities Act or qualified under the
securities laws of any state. The undersigned also understands
that the Shares are "restricted shares" under the Securities Act
which may be sold only in an offering registered under the
Securities Act or in an offering exempt from the registration
requirements of the Securities Act. The undersigned acknowledges
that neither GMI nor any other person acting on behalf of GMI or in
connection with the acquisition of the Shares by the undersigned
has presented or implied, whether through act or omission, that any
such exemption from registration is or may be available.
The undersigned agrees and acknowledges that (1) it has reviewed
full information concerning the assets, liabilities, financial
condition and operations of GMI; (2) it is not relying upon any
representation or warranty by GMI with respect to such matters; and
(3) it does not desire any further information concerning such
matters. In addition, the undersigned agrees to assume the
obligations of a "Transferee" set forth in Sections 2.4, 2.5 and
2.6 of that certain Purchase and Sale Agreement (Supplementary)
made December 13, 1993, by and between Global Marine Inc. and Aban
Loyd Chiles Offshore Limited, a copy of which is annexed hereto.
[NAME OF TRANSFEREE]
By: /s/
[Name and Title of Authorised Officer]
AMENDMENT NO. 1
TO THE PURCHASE AND SALE AGREEMENT (SUPPLEMENTARY)
DATED AS OF DECEMBER 13,1993
THIS AGREEMENT is made as of the 11th day of February, 1994
BETWEEN
(1) Aban Loyd Chiles Offshore Limited, a company organised and
existing under the laws of India, with its offices at Sakthi
Towers, 766 Anna Salai, Madras 600 002 India (hereinafter
referred to as "Seller"); and
(2) Global Marine Inc., a company organised and existing under the
laws of Delaware, USA, and having its registered office at 777
N. Eldridge Rd., Houston, Texas 77079 (hereinafter referred to
as "Buyer").
WITNESSETH
1. Seller and Buyer entered into a Purchase and Sale Agreement
and a Purchase and Sale Agreement (Supplementary), both dated
as of December 13, 1993, the terms and conditions of which,
when read together, comprise the agreement of Seller to sell
and the Buyer to buy the jackup drilling unit known as the
Chichen Itza; and
2. The Purchase and Sale Agreement provided for an inspection to
be conducted immediately prior to the closing to establish:
(a) the condition of the spud cans which were not capable of
being inspected during the period November 10-13, 1993;
(b) that the rig is being delivered with all items provided
for in Exhibit A to the Purchase and Sale Agreement.
Any deficiencies noted in the above inspection were to result
in an adjustment of the number of shares of Global Marine
common stock to be delivered to Seller in accordance with the
Purchase and Sale Agreement (Supplementary); and
3. The parties acknowledged that it was not practical to conduct
such a pre-delivery inspection of the Chichen Itza and amended
the Purchase and Sale Agreement to provide for post delivery
inspection and now desire to amend the Purchase and Sale
Agreement (Supplementary) to provide for a later delivery of
the stock portion of the purchase price.
NOW THEREFORE, in consideration of the mutual covenants in the
Purchase and Sale Agreement, Purchase and Sale Agreement
(Supplementary), this Amendment No. 1 and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree to amend the Purchase and
Sale Agreement (Supplementary) in respect of the Chichen Itza and
dated as of December 13, 1993, as follows:
1. Articles 2.1 through 2.6, inclusive, are deleted in their
entirety and new Articles 2.1 through 2.4 will be substituted
therefor as follows:-
2.1 On June 30, 1994, and in addition to the cash portion of
the Purchase Price (reference Section 2.1(a) and 2.1(b)
of The Agreement), the Buyer shall transfer and deliver
to the Seller or its nominee or assignee (each a
"Transferee"), also as a portion of said Purchase Price,
450,000 (four hundred fifty thousand) shares of Global
Marine Inc. common stock, $.10 par value per share,
subject to adjustment in accordance with Section 3.1
hereof (said shares to be delivered on June 30, 1994,
being hereinafter referred to as "Shares").
2.2 It is understood and agreed that all Shares delivered
pursuant to Section 2.1 or Section 3.1 will, at the time
of such delivery, have been registered under the
Securities Act of 1993, as amended (the "Securities Act")
on an appropriate registration statement form as the
Buyer shall select, and have been authorised for listing
on the New York Stock Exchange, provided that the
applicable registration and listing requirements are
satisfied. The Buyer's obligations to register and list
Shares hereunder are contingent upon the Seller having
informed the Buyer in writing no later than April 29,
1994, as to whether the Shares are to be delivered to a
nominee or assignee and, if so, as to the identity of
such nominee or assignee, and upon the Seller otherwise
having complied with the provisions hereof. The Buyer
will use all reasonable efforts to cause such
registration to become effective and such listing to be
approved on or before June 30, 1994, and to keep such
registration statement and such listing continuously
effective until June 30, 1997, or until Shares included
therein have been sold by each Transferee, if earlier
(subject, however, to the provisions of Section 2.4
hereof). The Buyer shall bear all costs and expenses of
listing and registration and of maintaining such listing
and registration.
2.3 The Seller will, or will cause each Transferee, if other
than the Seller, to provide the Buyer with such
information with respect to Shares to be registered, the
plans for the proposed disposition thereof, and such
other information as shall, in the opinion of counsel for
the Buyer, be necessary to enable the Buyer to include in
the registration statement all material facts required to
be disclosed with respect to the Transferee. The Buyer
may require, as a condition to registering any Shares,
that the Buyer shall have received an undertaking
reasonably satisfactory to it from each prospective
seller of such Shares or any underwriter participating in
the offering or sale of such Shares to indemnify and hold
harmless the Buyer, each of its directors, each of its
officers who signs the registration statement, and any
persons who control the Buyer within the meaning of
either the Securities Act or the Securities Exchange Act
of 1934, as amended, but only with reference to
information relating to such seller or underwriter
furnished to the Buyer by the seller or underwriter to
whom such information relates specifically for use in the
preparation of the registration statement. This
indemnity will be in addition to any other liability that
such seller or underwriter may otherwise have.
2.4 Each holder of any Shares will be deemed to agree by its
acquisition of such Shares that, upon receipt of any
notice from the Buyer of the occurrence of any event
causing the prospectus constituting a part of the
registration statement covering any Shares to contain an
untrue statement of a material fact or to omit to state
any material fact required to be stated therein or
necessary to make the statements therein not misleading,
such holder will forthwith discontinue any and all use of
such prospectus and disposition of Shares pursuant to
such registration statement until the Buyer has had a
reasonable opportunity to supplement or amend such
prospectus and has delivered copies of the supplemented
or amended prospectus to such holder, which the Buyer
hereby undertakes to do.
2. Article 3.1 is hereby deleted in its entirety and amended to
read as follows:
"No later than 31 March 1994 representatives of the Buyer and
Seller shall conduct a joint inspection to establish the
following:
(a) the condition of the spud cans and the cost of repairs,
if any; and
(b) that all items provided for in Exhibit A to the Purchase
and Sale Agreement were delivered with the rig and the
cost of equipment deficiencies, if any.
In the event that the representatives of Seller and Buyer are
unable to agree on the extent of the damage or the equipment
deficiencies, or the cost thereof, a Surveyor from Matthews
Daniel Company shall be appointed to make such a
determination. Survey costs shall be borne equally by Seller
and Buyer. Article 5.1 of the Purchase and Sale Agreement is
hereby deemed amended to comport with the provisions of this
article, if necessary.
The Seller hereby agrees that the amount agreed by the
representatives of Seller and Buyer or determined by the
Matthews Daniel Surveyor, all as provided for herein, and
which shall have to be borne by Seller, shall result in an
adjustment in the number of Shares to be delivered to and
registered by the Buyer in the name of Seller or Seller's
nominee or assignee in accordance with Article 2.1 of the
Purchase and Sale Agreement (Supplementary). For the purpose
of this adjustment, each Shares shall be deemed to have an
agreed price of 4 (four) US Dollars."
IN WITNESS WHEREOF the parties have executed this Amendment No 1 by
their duly authorised representatives as of the day and year first
above written.
BUYER SELLER
GLOBAL MARINE INC ABAN LOYD CHILES OFFSHORE LIMITED
By: /s/ By:
Vice President Director
EXHIBIT 10.19
GLOBAL MARINE INC.
1989 STOCK OPTION AND INCENTIVE PLAN
Third Amendment
The Global Marine Inc. 1989 Stock Option and Incentive Plan,
as heretofore amended by the First Amendment and the Second
Amendment thereto (the "Plan"), is hereby further amended as
follows, effective upon approval of this Amendment by the
stockholders of Global Marine Inc. at said company's 1993 Annual
Meeting of Stockholders or any adjournment thereof:
1. The first sentence of Section 2 of the Plan is hereby
amended in its entirety to read as follows:
"An aggregate of seventeen million seven hundred fifty
thousand (17,750,000) shares of common stock may be
issued upon exercises of options or stock appreciation
rights, or upon purchases at such incentive prices, or
both."
2. Terms used in this Amendment and not defined herein are
used herein as they are defined in the Plan. References in the
Plan to "this Plan" (and indirect references such as "hereof" and
"herein") are amended to refer to the Plan as amended by this
Amendment.
3. Except as expressly amended hereby, the Plan shall remain
in full force and effect.
EXHIBIT 10.21
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is David H. Herasimchuk.
(c) The number of shares of the Company's Common Stock
offered hereby is 4680.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 4680 shares:
/s/ David A. Herasimchuk
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is Thomas R. Johnson.
(c) The number of shares of the Company's Common Stock
offered hereby is 5460.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 5460 shares:
/s/ Thomas R. Johnson
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is Gary L. Kott.
(c) The number of shares of the Company's Common Stock
offered hereby is 5460.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 5460 shares:
/s/ Gary L. Kott
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is Charles R. Luigs.
(c) The number of shares of the Company's Common Stock
offered hereby is 13352.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 13352 shares:
/s/ Charles R. Luigs
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is Jon A. Marshall.
(c) The number of shares of the Company's Common Stock
offered hereby is 7023.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 7023 shares:
/s/ Jon A. Marshall
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is Jerry C. Martin.
(c) The number of shares of the Company's Common Stock
offered hereby is 9149.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 9149 shares:
/s/ Jerry C. Martin
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is James L. McCulloch.
(c) The number of shares of the Company's Common Stock
offered hereby is 4680.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 4680 shares:
/s/ James L. McCulloch
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is John G. Ryan.
(c) The number of shares of the Company's Common Stock
offered hereby is 9570.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 9570 shares:
/s/ John G. Ryan
(Offeree)
GLOBAL MARINE INC.
INCENTIVE STOCK SALE AGREEMENT
(1989 Stock Option and Incentive Plan)
GLOBAL MARINE INC. (the "Company"), desiring to afford an
opportunity to the offeree identified as such below (the "Offeree")
to purchase shares of the Company's common stock, $.10 par value
per share (the "Common Stock") at an incentive purchase price below
the market price at the time of sale as compensation for the
Offeree's services as an employee of the Company or of one or more
of its subsidiaries, hereby makes an offer to sell to the Offeree,
under the Company's 1989 Stock Option and Incentive Plan, the
number of shares of such Common Stock specified below, at the price
specified below, subject to and upon the terms and conditions set
forth below (the "Offer").
1. Specification of Date, Offeree, Number of Shares, Purchase
Price and Term.
(a) The date of the Offer is February 8, 1994.
(b) The Offeree is Robert E. Sleet.
(c) The number of shares of the Company's Common Stock
offered hereby is 4680.
(d) The purchase price of the Common Stock offered hereby is
$.10 per share.
(e) The term of the Offer shall expire at the close of
business at the Company's principal executive office in
Houston, Texas, on February 9, 1994; from and after that
time, if the Offer has not been accepted before that time
as provided in this Agreement, neither the Offeree nor
the Company shall have any rights or obligations under
this Agreement.
2. Method of Acceptance and Purchase. The Offeree may accept the
Offer by executing a copy of this Agreement in the acceptance
space provided below and delivering said executed copy or a
facsimile thereof during the term of the Offer to the
Secretary of the Company at the Company's principal executive
office in Houston, Texas. Such acceptance shall be completed
to indicate the number of shares being purchased. Payment of
the purchase price for such number of shares will be effected
by means of immediate payroll deduction. Promptly after
receipt of such acceptance, the Company shall, subject to the
other terms and conditions of this Agreement, issue a
certificate for such number of shares to the Offeree.
3. Wage Withholding and Employment Taxes. The Company and the
Offeree understand and agree that, (i) with respect to shares
of the Common Stock purchased under this Agreement that are
not subject to a substantial risk of forfeiture (or, if
subject to a substantial risk of forfeiture, with respect to
which a timely election under Section 83 of the Internal
Revenue Code has been filed), the Offeree will recognize
ordinary income for tax purposes to the extent of any excess
of the fair market value of such shares at the time they are
transferred to the Offeree over the price paid for the shares,
(ii) with respect to shares of the Common Stock purchased
under this Agreement that are subject to a substantial risk of
forfeiture and with respect to which a timely Section 83
election is not filed, then, upon lapse of the restrictions
which impose a substantial risk of forfeiture, the Offeree
will recognize ordinary income for tax purposes to the extent
of any excess of the fair market value of such shares at such
time over the price paid for the shares, and (iii) any such
ordinary income recognized by the Offeree will be subject to
both wage withholding and employment taxes. The Offeree
agrees that his employer may effect any such withholding
and/or deduct any such taxes from any cash compensation that
the Company or any one or more of its subsidiaries may pay the
Offeree.
4. Restrictions on Share Transfer by Certain Offerees. Until six
months have elapsed after the date of the Offer, the Offeree
may not transfer the shares in a transaction that would
constitute a "sale" under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act") if the Offeree is
(a) a director of Global Marine Inc., (b) an "officer" of
Global Marine Inc. as such term is defined for purposes of the
rules of the Securities and Exchange Commission under
Section 16 of the Exchange Act, or (c) a beneficial owner of
more than ten percent of the issued and outstanding Common
Stock. Furthermore, the Offeree understands and acknowledges
that, if he is an Offeree described in (a), (b) or (c) in the
preceding sentence, his transfer of any other shares of the
Common Stock in a "sale" transaction during the six-month
period mentioned above could be matched with his purchase of
shares of the Common Stock under this Agreement and subject
him to liability under Section 16 of the Exchange Act.
5. Non-Transferable. The Offer may not be transferred and may be
accepted only by the Offeree.
6. Limitation. The Offeree shall be entitled to the privileges
of stock ownership in respect of shares subject to the Offer
only when such shares have been issued and delivered to him as
fully paid shares upon purchase of Common Stock in accordance
with this Agreement.
7. Requirements of Law and of Stock Exchanges. The issuance of
shares upon acceptance of the Offer shall be subject to
compliance with all of the applicable requirements of law with
respect to the issuance and sale of such shares. In addition,
the Company shall not be required to issue or deliver any
certificate or certificates upon acceptance of the Offer prior
to the admission of such shares to listing on notice of
issuance on any stock exchange on which shares of the same
class are then listed. In the event the Company's legal
counsel shall advise it that registration under the Securities
Act of 1933 of the shares as to which the Offer is accepted is
required prior to issuance thereof, the Company shall not be
required to issue or deliver such shares unless and until such
legal counsel shall advise that such registration has been
completed or is not required.
8. Global Marine Inc. 1989 Stock Option and Incentive Plan. The
Offer and any acceptance and purchase under this Agreement are
made under and are subject to, and the Company and the Offeree
agree to be bound by, all of the terms and conditions of the
Company's 1989 Stock Option and Incentive Plan as the same
shall have been amended from time to time in accordance with
the terms thereof, provided that no such amendment shall
deprive the Offeree, without his consent, of the Offer or any
rights hereunder. Pursuant to said Plan, the Board of
Directors of the Company or its Committee established for such
purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the
administration of the Plan as it shall deem proper. A copy of
the Plan in its present form is available for inspection
during business hours by the Offeree at the Company's
principal office.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf as of the date of the Offer stated above.
GLOBAL MARINE INC.
By: /s/ Jerry C. Martin
ACCEPTED for 4680 shares:
/s/ Robert E. Sleet
(Offeree)
EXHIBIT 10.30
GLOBAL MARINE INC.
1994 MANAGEMENT INCENTIVE AWARD PLAN
PURPOSE
The purpose of the 1994 Management Incentive Award Plan is to
provide incentive awards for employees of Global Marine Inc.,
Global Marine Corporate Services Inc., Global Marine Drilling
Company and Intermarine Services Inc. in grade levels 34 through 44
in respect of service during 1994. Senior executives who report
directly to the Chief Executive Officer of Global Marine Inc. are
excluded from participation in this plan.
PLAN
One company-wide incentive pool will be established in 1994 for
Global Marine Inc., Global Marine Corporate Services Inc., Global
Marine Drilling Company and Intermarine Services Inc. The pool
will be equal to 6% of the amount by which the Company's 1994
operating cash contribution exceeds $48 million; provided, however,
that the 1994 pool shall be limited to a maximum of $2.5 million.
Consideration for individual awards under this plan will be given
to employees in salary grade levels 34 through 44. In cases of
unusual merit, consideration will be given to employees below those
grade levels when recommended by the Subsidiary Presidents or the
relevant Corporate Vice President and when approved by the Chief
Executive Officer. No individual will be eligible for an award of
more than 35% of annual base salary.
Subject to approval by the Board of Directors of Global Marine
Inc., at its discretion, incentive awards under this plan will be
paid as soon as practicable after the company's 1994 results are
final and may be paid in cash or, at the discretion of the
Compensation Committee or the Board of Directors of Global Marine
Inc., in shares of common stock of Global Marine Inc. or in any
combination of cash and such shares; provided, however, that common
stock will not be used to pay an incentive award under this plan to
any director of Global Marine Inc., any beneficial owner of more
than ten percent of the issued and outstanding common stock of
Global Marine Inc., or any "officer" of Global Marine Inc. as such
term is defined for purposes of the rules of the Securities and
Exchange Commission under Section 16 of the Securities Exchange Act
of 1934. The aggregate market value of the shares, if any, used to
pay incentive awards under this plan shall be no greater than the
aggregate amount of cash that otherwise would have been paid in
lieu of said shares pursuant to the terms of this plan, the market
value per share being the average of the high and low prices for
Global Marine Inc. common stock as quoted on the New York Stock
Exchange Composite Transactions for the day the incentive awards
are determined.
Incentive awards will consider individual performance of the
employee.
Establishment of the annual incentive award pool shall not create
or imply a promise or any other obligation of Global Marine Inc. or
any of its subsidiaries, or a right of any individual employee or
of the collective employees of Global Marine Inc. or its
subsidiaries. The plan shall terminate upon the grant of awards
under the plan or a resolution of the Board of Directors of Global
Marine Inc. terminating the plan. The establishment of this plan
or the grant of awards hereunder does not create or imply a promise
or any other obligation to establish the same or a similar plan for
any other year or to continue to grant such awards in the future.
RESPONSIBILITY AND AUTHORITY
The President and the Senior Vice President and Chief Financial
Officer of Global Marine Inc. shall take all such actions, do all
such things, make all such payments and sign and deliver all such
documents and instruments as either or both of them may at any time
or from time to time deem necessary or desirable in order to
implement this plan.
<TABLE>
<CAPTION>
EXHIBIT 11.1
GLOBAL MARINE INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(Dollars in millions, except per share amounts)
1993 1992 1991
Shares for primary and fully diluted computations:
<S> <C> <C> <C>
Weighted average shares of common stock outstanding 151,984,669 114,634,930 109,156,271
Shares issuable on assumed exercise of stock options - 1,703,048 -
Weighted average shares for primary earnings per share 151,984,669 116,337,978 109,156,271
Incremental shares issuable on assumed exercise of stock
options and warrants to reflect maximum dilutive effect (1):
Options 3,269,447 124,744 2,404,011
Warrants - - 3,881,028
Weighted average shares for fully
diluted earnings per share 155,254,116 116,462,722 115,441,310
Earnings for primary and
fully diluted computations:
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting principles $ (26.5) $ 27.5 $ 1.0
Extraordinary gain on extinguishment of debt - 28.3 -
Cumulative effect of change in accounting
for income taxes - 3.3 -
Cumulative effect of change in accounting for
postretirement health care and life insurance
benefits - (1.9) -
Net income (loss) $ (26.5) $ 57.2 $ 1.0
Primary earnings (loss) per share:
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting principles $ (0.17) $ 0.24 $ 0.01
Extraordinary gain on extinguishment of debt - 0.24 -
Cumulative effect of change in accounting
for income taxes - 0.03 -
Cumulative effect of change in accounting for
postretirement health care and life insurance
benefits - (0.02) -
Primary net income (loss) per common share $ (0.17) $ 0.49 $ 0.01
Fully diluted net income (loss) per share:
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting principles $ (0.17) $ 0.24 $ 0.01
Extraordinary gain on extinguishment of debt - 0.24 -
Cumulative effect of change in accounting
for income taxes - 0.03 -
Cumulative effect of change in accounting for
postretirement health care and life insurance
benefits - (0.02) -
Fully diluted net income (loss) per common share $ (0.17) $ 0.49 $ 0.01
(1) Shares issuable upon the assumed exercise of stock options are included in
the calculation of fully diluted net loss per common share in accordance
with Regulation S-K, Item 601(b)(11), although for 1993 their inclusion is
contrary to paragraph 40 of APB Opinion No. 15 because their inclusion
produces an antidilutive result.
</TABLE>
EXHIBIT 21.1
GLOBAL MARINE INC. AND SUBSIDIARIES
as of February 22, 1994
STATE OR OTHER PERCENT OF VOTING
JURISDICTION STOCK OWNED BY
NAME OF COMPANY INCORPORATION IMMEDIATE PARENT
Global Marine Inc. Delaware -
Applied Drilling
Technology Inc. Texas 100%
Arctic Systems Ltd. Canada 100%
Challenger Minerals Inc. California 100%
WO Offshore, Inc. Texas 50%
Global Marine Adriatic Inc. Delaware 100%
Global Marine Arctic Ltd. Canada 100%
Global Marine B.V. The Netherlands 100%
Global Marine Baltic Inc. Delaware 100%
Global Marine Bismarck
Sea Inc. Delaware 100%
Global Marine Capital
Investments Inc. Delaware 100%
Global Marine Corporate
Services Inc. California 100%
Global Marine Deepwater
Drilling Inc. Delaware 100%
Global Marine Australia Inc. Delaware 100%
Global Marine West Africa Inc. Delaware 100%
Petdrill, Inc. Delaware 100%
Global Marine Drilling B.V. The Netherlands 100%
Global Marine Drilling Company California 100%
Global Marine Caribbean, Inc. California 100%
Global Marine Development Inc. California 100%
Global Marine do Brasil
Perfuracoes Brazil 50% (1)
Global Marine Drilling Services California 100%
Global Dolphin Drilling
Company Private Limited India 40%
Global Marine Europa Limited Bermuda 100%
Global Marine Drilling
Malaysia) Sdn. Bhd. Malaysia 100%
Global Marine North Sea Inc. Delaware 100%
Global Marine Oil & Gas Company Delaware 100%
Global Marine U.K. Limited Scotland 100%
Global Offshore Drilling Ltd. Nigeria 60%
GMI International Finance N.V. Netherlands Antilles 100%
Intermarine Services Inc. (2) Texas 100%
Marican Offshore Drilling
Services, Inc. Canada 100%
Reliable Insurance Group Limited Bermuda 100%
(1) The remaining 50% of the voting stock is owned directly by
Global Marine Inc.
(2) Does business in Louisiana under the name Intermarine
Services, Inc. of Texas.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference of our reports dated
February 11, 1994 on our audits of the consolidated financial
statements and financial statement schedules of Global Marine
Inc. and subsidiaries, as of December 31, 1993 and 1992, and for
the years ended December 31, 1993, 1992 and 1991, which reports
are included in this Annual Report on Form 10-K, into (i) the
prospectus constituting part of the Company's Registration
Statements on Form S-8 (Registration Nos. 33-32088, 33-40961 and
33-63326), respectively, for the Global Marine Inc. 1989 Stock
Option and Incentive Plan, (ii) the prospectus constituting part
of the Company's Registration Statement on Form S-8 (Registration
No. 33-40266) for the Global Marine Savings Incentive Plan, (iii)
the prospectus constituting part of the Company's Registration
Statement on Form S-8 (Registration No. 33-40961) for the Global
Marine Inc. 1990 Non-Employee Director Stock Option Plan, and
(iv) the prospectus constituting part of the Company's
Registration Statement on Form S-8 (Registration No. 33-52203)
for the Global Marine Inc. 1993 Management Incentive Award Plan.
/s/ Coopers & Lybrand
Houston, Texas
February 28, 1994
EXHIBIT 23.2
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent (a) to the inclusion in the Annual Report
on Form 10-K of Global Marine Inc. for the year ended December
31, 1993, of our report, dated February 7, 1994, on our estimates
of proved oil and gas reserves for the year ended December 31,
1993, our four reports, each dated January 29, 1993, on our
estimates of proved oil and gas reserves for the year ended
December 31, 1992, and our three reports, each dated January 29,
1992, on our estimates of proved oil and gas reserves for the
year ended December 31, 1991, which reports are included in said
Annual Report on Form 10-K as Exhibits 99.1, 99.2 and 99.3
thereto, and (b) to the incorporation by reference of our said
reports into (i) the prospectus constituting part of the
Company's Registration Statements on Form S-8 (Registration Nos.
33-32088, 33-40961 and 33-63326), respectively, for the Global
Marine Inc. 1989 Stock Option and Incentive Plan, (ii) the
prospectus constituting part of the Company's Registration
Statement on Form S-8 (Registration No. 33-40266) for the Global
Marine Savings Incentive Plan, (iii) the prospectus constituting
part of the Company's Registration Statement on Form S-8
(Registration No. 33-40961) for the Global Marine Inc. 1990 Non-
Employee Director Stock Option Plan, and (iv) the prospectus
constituting part of the Company's Registration Statement on Form
S-8 (Registration No. 33-52203) for the Global Marine Inc. 1993
Management Incentive Award Plan. This consent is given provided
that all references to Ryder Scott Company Petroleum Engineers
remain unchanged from those contained in the Annual Report on
Form 10-K of Global Marine Inc. for the year ended December 31,
1993.
/s/ Ryder Scott Company
Petroleum Engineers
Ryder Scott Company
Petroleum Engineers
Houston, Texas
February 28, 1994
EXHIBIT 27.1
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from
the consolidated balance sheet of Global Marine Inc. and
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of operations for each of the three years
in the period ended December 31, 1993, and is qualified in its
entirety by reference to such financial statements.
<TABLE>
<CAPTION>
Item Item December 31, December 31,
Number Description 1993 1992
(in millions)
<C> <S> <C> <C>
5-02(1) Cash and cash items $31.2 $ 23.3
5-02(2) Marketable securities 20.2 10.3
5-02(3)(a)(1) Notes and accounts receivable - trade 59.1 47.5
5-02(4) Allowances for doubtful accounts (1.2) (1.2)
5-02(6) Inventory - -
5-02(9) Total current assets 144.4 91.3
5-02(13) Property, plant and equipment 478.1 471.3
5-02(14) Accumulated depreciation 163.5 153.3
5-02(18) Total assets 492.9 479.9
5-02(21) Total current liabilities 37.2 60.6
5-02(22) Bonds, mortgages and similar debt 225.0 225.0
5-02(28) Preferred stock - mandatory redemption - -
5-02(29) Preferred stock - no mandatory redemption - -
5-02(30) Common stock 16.3 14.0
5-02(31) Other stockholders' equity 189.1 140.5
5-02(32) Total liabilities and stockholders' equity 492.9 479.9
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
(in millions, except per share data)
<C> <S> <C> <C> <C>
5-03(b)1(a) Net sales of tangible products $ 11.6 $ 19.3 $ 28.1
5-03(b)1 Total revenues 269.0 260.3 315.2
5-03(b)2(a) Cost of tangible goods sold 6.3 16.1 19.0
5-03(b)2 Total costs and expenses applicable
to sales and revenues 252.2 242.4 252.6
5-03(b)3 Other costs and expenses - - -
5-03(b)5 Provision for doubtful accounts and notes - - -
5-03(b)(8) Interest and amortization of debt discount 32.1 43.6 49.9
5-03(b)(10) Income before taxes and other items (26.2) 30.6 3.5
5-03(b)(11) Income tax expense 0.3 3.1 2.5
5-03(b)(14) Income/loss continuing operations (26.5) 27.5 1.0
5-03(b)(15) Discontinued operations - - -
5-03(b)(17) Extraordinary items - 28.3 -
5-03(b)(18) Cumulative effect - changes in
accounting principles - 1.4 -
5-03(b)(19) Net income or loss (26.5) 57.2 1.0
5-03(b)(20) Earnings per share - primary (0.17) 0.49 0.01
5-03(b)(20) Earnings per share - fully diluted (0.17) 0.49 0.01
</TABLE>
February 7, 1994
Challenger Minerals Inc.
10777 Westheimer, Suite 700
Houston, Texas 77042
Gentlemen:
At your request, we have prepared an estimate of the reserves,
future production and income attributable to the major leasehold
interests of Challenger Minerals Inc. (Challenger) as of December
31, 1993. The subject properties are located in the state of
Texas, and offshore Louisiana and Texas. The remainder of
Challenger's properties, comprising a relatively small percent of
the total value of Challenger's reserves, were grouped as
miscellaneous properties and shown as Table 19 of this report. The
income data have been estimated using the Securities and Exchange
Commission (SEC) guidelines for future cost and price parameters.
The estimated reserve quantities and future income quantities
presented in this report are related to hydrocarbon prices.
December 31, 1993 hydrocarbon prices were used in the preparation
of this report as required by SEC guidelines; however, actual
future prices may vary significantly from December 31, 1993 prices.
Therefore, quantities of reserves actually recovered and quantities
of income actually received may differ significantly from the
estimated quantities presented in this report. The summary level
results of this study are shown below.
SEC PARAMETERS
Estimated Net Reserve and Income Data
Certain Leasehold Interests of
Challenger Minerals Inc.
As of December 31, 1993
<TABLE>
<CAPTION>
Proved
Developed Total
Producing Non-Producing Proved
<S> <C> <C> <C>
Net Remaining Reserves
Oil/Condensate - Barrels 253,609 113,934 367,543
Gas - MMCF 5,228 5,360 10,588
Income Data
Future Gross Revenue $15,432,521 $14,418,185 $29,850,706
Deductions 4,894,291 4,400,064 9,294,355
Future Net Income (FNI) 10,538,230 $10,018,121 $20,556,351
Discounted FNI @ 10% $ 9,797,889 $ 6,536,661 $16,334,550
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Probable
Developed Total
Producing Non-Producing Undeveloped Probable
<S> <C> <C> <C> <C> <C>
Net Remaining Reserves
Oil/Condensate - Barrels 1,890 29,095 76,615 107,600
Gas - MMCF 772 2,484 1,958 5,214
Income Data
Future Gross Revenue $1,839,880 $6,426,632 $5,830,701 $14,097,213
Deductions 32,997 456,963 2,087,226 2,577,186
Future Net Income (FNI) $1,806,883 $5,969,669 $3,743,475 $11,520,027
Discounted FNI @ 10% $1,464,214 $2,714,149 $2,061,261 $ 6,239,624
</TABLE>
<TABLE>
<CAPTION>
Possible
Undeveloped
<S> <C>
Net Remaining Reserves
Oil/Condensate - Barrels 120,394
Gas - MMCF 5,513
Income Data
Future Gross Revenue $15,132,574
Deductions 2,841,476
Future Net Income (FNI) $12,291,098
Discounted FNI @ 10% $ 4,809,467
</TABLE>
Liquid hydrocarbons are expressed in standard 42 gallon
barrels. All gas volumes are sales gas expressed in millions of
cubic feet (MMCF) at the official temperature and pressure bases of
the areas where the gas reserves are located.
We have included probable and possible reserves and income in
this report at the request of Challenger. These data are for
Challenger's information only and should not be included in reports
to the SEC according to the SEC guidelines.
The proved developed non-producing reserves included herein
are comprised of the behind pipe category. The probable developed
reserves included herein are comprised of probable additional
producing and behind pipe categories. The various producing status
categories are defined under the tab "Reserve Definitions and
Pricing Assumptions" in this report.
The future gross revenue is after the deduction of production
taxes. The deductions are comprised of the normal direct costs of
operating the wells, ad valorem taxes, recompletion costs,
development costs and certain abandonment costs net of salvage.
The future net income is before the deduction of state and federal
income taxes and general administrative overhead, and has not been
adjusted for outstanding loans which may exist nor does it include
any adjustment for cash on hand or undistributed income. No
attempt has been made to quantify or otherwise account for any
accumulated gas production imbalances that may exist. Gas reserves
account for approximately 84.8 percent and liquid hydrocarbon
reserves account for the remaining 15.2 percent of total future
gross revenue from proved reserves.
The discounted future net income shown above was calculated
using a discount rate of 10 percent per annum compounded annually.
Future net income was discounted at four other discount rates,
which were also compounded annually. These results are shown on
each estimated projection of future production and income presented
in a later section of this report and in summary form below.
<TABLE>
<CAPTION>
Discounted Future Net Income
as of December 31, 1993
Discount Rate Total Total Total
Percent Proved Probable Possible
<C> <C> <C> <C>
12 $15,731,278 $5,654,019 $4,121,289
15 $14,928,506 $4,933,087 $3,321,628
20 $13,808,851 $4,031,661 $2,402,450
30 $12,139,936 $2,890,112 $1,385,568
</TABLE>
The results shown above are presented for your information and
should not be construed as our estimate of fair market value.
RESERVES INCLUDED IN THIS REPORT
The proved reserves included herein conform to the definition
as set forth in the Securities and Exchange Commission's Regulation
S-X Part 210.4-10 (a) as clarified by subsequent Commission Staff
Accounting Bulletins. The probable reserves and possible reserves
included herein conform to definitions of probable and possible
reserves approved by the Society of Petroleum Engineers and the
society of Petroleum Evaluation Engineers. Our definitions of
proved, probable, and possible reserves are included under the tab
"Reserve Definitions and pricing Assumptions" in this report.
The probable reserves are less certain to be recovered than
the proved reserves and reserves classified as possible are less
certain to be recovered than those in the probable category. The
reserves and income quantities attributable to the different
reserve classifications that are included herein have not been
adjusted to reflect the varying degrees of risk associated with
them and thus are not comparable.
ESTIMATES OF RESERVES
In general, the reserves included herein were estimated by
performance methods or the volumetric method; however, other
methods were used in certain cases where characteristics of the
data indicated such other methods were more appropriate in our
opinion. The reserves estimated by the performance method utilized
extrapolations of various historical in those cases where such data
were definitive in our opinion. Reserves were estimated by the
volumetric method in those cases where there were inadequate
historical performance data to establish a definitive trend or
where the use of production performance data as a basis for the
reserve estimates was considered to be inappropriate.
The reserves included in this report are estimates only and
should not be construed as being exact quantities. They may or may
not be actually recovered, and if recovered, the revenues therefrom
and the actual costs related thereto could be more or less than the
estimated amounts. Moreover, estimates of reserves may increase or
decrease as a result of future operations.
FUTURE PRODUCTION RATES
Initial production rates are based on the current producing
rates for those wells now on production. Test data and other
related information were used to estimate the anticipated initial
production rates for those wells or locations which are not
currently producing. If no production decline trend has been
established, future production rates were held constant, or
adjusted for the effects of curtailment where appropriate, until a
decline in ability to produce was anticipated. An estimated rate
of decline was then applied to depletion of the reserves. If a
decline trend has been established, this trend was used as the
basis for estimating future production rates. For reserves not yet
on production, sales were estimated to commence at an anticipated
date furnished by Challenger.
In general, we estimate that future gas production rates will
continue to be the same as the average rate for the latest
available 12 months of actual production until such time that the
well or wells are incapable of producing at this rate. The well or
wells were then projected to decline at their decreasing delivery
capacity rate. Our general policy on estimates of future gas
production rates is adjusted when necessary to reflect actual gas
marketing conditions in specific cases.
The future production rates from wells now on production may
be more or less than estimated because of changes in market demand
or allowables set by regulatory bodies. Wells or locations which
are not currently producing may start producing earlier or later
than anticipated in our estimates of their future production rates.
HYDROCARBON PRICES
Challenger furnished us with prices in effect at December 31,
1993 and these prices were held constant throughout the remaining
life of the reserves. In accordance with Securities and Exchange
Commission guidelines, changes in liquid and gas prices subsequent
to December 31, 1993 were not taken into account in this report.
Future prices used in this report are discussed in more detail
under the tab "Reserve Definitions and Pricing Assumptions" in this
report.
COSTS
Operating costs for the leases and wells in this report are
based on the operating expense reports of Challenger and include
only those costs directly applicable to the leases or wells. When
applicable, the operating costs include a portion of general and
administrative costs allocated directly to the leases and wells
under terms of operating agreements. Development costs were
furnished to us by Challenger and are based on authorizations for
expenditure for the proposed work or actual costs for similar
projects. The current operating and development costs were held
constant throughout the life of the properties. For properties
located onshore, this study does not consider the salvage value of
the lease equipment or the abandonment cost since both are
relatively insignificant and tend to offset each other. The
estimated net cost of abandonment after salvage was considered for
offshore properties where abandonment costs net of salvage are
significant. The estimates of the offshore net abandonment costs
furnished by Challenger were accepted without independent
verification. No deduction was made for indirect costs such as
general administration and overhead expenses, loan repayments,
interest expenses and exploration and development prepayments
which are not charged directly to the leases or wells.
GENERAL
Table A presents a line summary of proved reserve and income
data for each of the subject properties which are ranked according
to their future net income discounted at 10 percent per year.
Table B presents a one line summary of gross and net reserves and
income data for each of the subject properties. Table C presents
a one line summary of initial basic data for each of the subject
properties. Tables 1 through 113 present our estimated projection
of production and income by years beginning January 1, 1994 by
state, field, and lease or well.
While it may reasonably be anticipated that the future prices
received for the sale of production and the operating costs and
other costs relating to such production may also increase or
decrease from existing levels, such changes were, in accordance
with rules adopted by the SEC, omitted from consideration in making
this evaluation.
The estimates of reserves presented herein were based upon a
detailed study of the properties in which Challenger owns an
interest; however, we have not made any field examination of the
properties. No consideration was given in this report to potential
environmental liabilities which may exist nor were any costs
included for potential liability to restore and clean up damages,
if any, caused by past operating practices. Challenger has
informed us that they have furnished us all of the accounts,
records, geological and engineering data, and reports and other
data required for this investigation. The ownership interests,
prices, and other factual data furnished by Challenger were
accepted without independent verification. The estimates presented
in this report are based on data available through December 1993.
Neither we nor any of our employees have any interest in the
subject properties and neither the employment to make this study
nor the compensation is contingent on our estimates of reserves and
future income for the subject properties.
This report was prepared for the exclusive use of Challenger.
The data, work papers, and maps used in the preparation of this
report are available for examination by authorized parties in our
offices. Please contact us if we can be of further service.
Very truly yours,
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Joe P. Allen, P.E.
Senior Vice President
JPA/sw
