AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 2, 1994
Commission File No. 1-5471
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(X) Filed by the registrant
Filed by a party other than the registrant
Check the appropriate box:
(X) Preliminary proxy statement
Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
GLOBAL MARINE INC.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
(X) $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2).
$500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
( ) Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid: N/A
(2) Form, schedule or registration statement no: N/A
(3) Filing party: N/A
(4) date filed: N/A
[PRELIMINARY COPY - NOTICE OF MEETING AND
PROXY STATEMENT]
GLOBAL MARINE INC.
NOTICE OF MEETING
The Annual Meeting of Stockholders of Global Marine Inc. will
be held in the Texas Ballroom, Houston Marriott Westside Hotel,
13210 Katy Freeway, Houston, Texas on Thursday, May 12, 1994 at
9:00 a.m. for the following purposes:
1. To elect four directors, each to serve for a term of
three years.
2. To consider and act upon a proposal to amend Article
FOURTH of the Company's Restated Certificate of
Incorporation to increase the number of authorized shares
of the Company's Common Stock.
3. To ratify the appointment of independent certified public
accountants for the Company and its subsidiaries.
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Stockholders of record of the Company's Common Stock at the
close of business on March 18, 1994 will be entitled to vote as set
forth in the accompanying Proxy Statement at the meeting and any
adjournment thereof.
JOHN G. RYAN
Secretary
Houston, Texas
March 31, 1994
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING,
WHETHER OR NOT YOU ARE ABLE TO ATTEND PERSONALLY. ACCORDINGLY, YOU
ARE REQUESTED TO SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY IN
THE ENVELOPE PROVIDED.
PROXY STATEMENT
This proxy statement is being furnished to the stockholders of
Global Marine Inc. in connection with the solicitation of proxies
by the Company's Board of Directors for use at the Annual Meeting
of Stockholders to be held on May 12, 1994 and any adjournment
thereof. The approximate date on which this proxy statement and
the form of proxy are first being sent or given to stockholders of
the Company is March 31, 1994.
At the Annual Meeting, the holders of shares of common stock,
par value $.10 per share, of the Company (the "Common Stock") will
be asked to consider and vote upon (i) the election of four persons
to serve on the Board of Directors of the Company, each for a
three-year term, (ii) a proposal to amend the Company's Restated
Certificate of Incorporation to increase by 100,000,000 the number
of authorized shares of the Company's common stock, and (iii) a
proposal to ratify the Board of Directors' appointment of Coopers
& Lybrand as independent certified public accountants for the
Company and its subsidiaries for fiscal year 1994.
All shares of Common Stock represented at the Annual Meeting
by properly executed proxies received prior to or at the Annual
Meeting, and not revoked, will be voted at the Annual Meeting in
accordance with the instructions indicated on such proxies. If no
instructions are indicated with respect to any shares for which
properly executed proxies have been received, such proxies will be
voted FOR the Board of Directors' nominees for directors, FOR the
proposal to amend the Company's Restated Certificate of
Incorporation, and FOR the proposal to ratify the Board of
Directors' appointment of Coopers & Lybrand as independent auditors
for fiscal year 1994. If any other matters are properly presented
at the Annual Meeting for action, the persons named in the proxies
and acting thereunder will have discretion to vote on such matters
in accordance with their best judgment as to the best interests of
the Company. The Board of Directors of the Company does not know
of any other matters to be brought before the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is voted. Proxies
may be revoked by any of the following actions: (i) filing with
the Secretary of the Company, at or before the Annual Meeting, but
in any event prior to the vote on the matter as to which revocation
is sought, a written notice of revocation bearing a later date than
the proxy; (ii) duly executing and submitting a subsequent proxy
relating to the Annual Meeting; or (iii) voting in person at the
Annual Meeting (although attendance at the Annual Meeting will not,
in and of itself, constitute a revocation of a proxy). Any written
notice revoking a proxy should be sent to the Secretary of the
Company at the Company's principal executive offices, 777 North
Eldridge Road, Houston, Texas 77079.
The close of business on March 18, 1994 is the date fixed by
the Board of Directors for the determination of stockholders of
record entitled to notice of and to vote at the Annual Meeting and
any adjournment thereof. On March 18, 1994, there were issued and
outstanding shares of Common Stock, constituting the
only class of stock outstanding. The holders of a majority of the
outstanding shares of Common Stock as of March 18, 1994, present in
person or represented by proxy, will constitute a quorum at the
Annual Meeting.
Each share of Common Stock is entitled to one vote at the
Annual Meeting with respect to each matter to be voted upon except
the election of directors. In the election of directors, the
holders of Common Stock are entitled to cumulate their votes, with
each share having a number of votes equal to the number of
directors to be elected, which votes may be cast for one candidate
or distributed among two or more candidates. The individuals named
in the accompanying proxy will have discretionary authority to
cumulate votes among candidates. A stockholder giving and not
rescinding the accompanying proxy will not have the ability to
direct that his votes be cumulated. However, authorization of the
individuals named as proxies to cumulate votes, at their
discretion, is solicited.
With regard to the election of directors, votes may be cast in
favor of or withheld; votes that are withheld will be excluded
entirely from the vote and will not be counted in favor of or
against any nominee. Abstentions may be specified on all proposals
(but not on the election of directors) and will be counted as
present for purposes of the item on which the abstention is noted.
Since the amendment of the Company's Restated Certificate of
Incorporation requires the approval of a majority of the
outstanding shares, abstentions will have the effect of a negative
vote. Abstentions on the proposal to ratify the appointment of
independent auditors will have the same effect because approval
requires the affirmative vote of a majority of the shares
represented in person or by proxy at the meeting. Under the rules
of the New York Stock Exchange, Inc., brokers who hold shares in
street name for customers have the authority to vote on certain
items when they have not received instructions from beneficial
owners. Brokers that do not receive instructions are entitled to
vote on the election of directors, the proposal to amend the
Company's Restated Certificate of Incorporation, and the proposal
to ratify the appointment of independent auditors. Under
applicable law of the state of Delaware, which is the Company's
state of incorporation, a broker non-vote (i.e., the shares are
voted by the broker on at least one matter but not on the matter in
question) will have no effect on the outcome of the election of
directors but will have the same effect as a vote against the two
proposals. Also under Delaware law, for quorum purposes, the total
votes received, including abstentions, would be counted in
determining the number of shares present at the meeting, and broker
non-votes would not be relevant because, by definition, those
shares would have been voted on at least one matter and therefore
would be counted for quorum purposes.
The Company's Annual Report for the year ended December 31,
1993, which includes, among other things, the Company's audited
consolidated balance sheets at December 31, 1993 and 1992,
respectively, and audited consolidated statements of income and
changes in financial position for the three years ended
December 31, 1993, 1992 and 1991, respectively, has been mailed to
stockholders of record as of March 18, 1994.
The cost of this solicitation will be borne by the Company.
It is expected that the solicitation of proxies will be primarily
by mail, telephone and telegraph. The Company has arranged for
Georgeson & Company Inc., Wall Street Plaza, New York, New York
10005 to solicit proxies in such manner at a cost of $7,500, plus
out-of-pocket expenses. Proxies may also be solicited personally
by directors, officers, and other regular employees of the Company
in the ordinary course of business and at nominal cost. Proxy
materials will be provided for distribution through brokers,
custodians, and other nominees or fiduciaries to beneficial owners
of the Common Stock. The Company expects to reimburse such parties
for their reasonable out-of-pocket expenses incurred in connection
therewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Listed below are the only persons who, to the knowledge of the
Company, owned beneficially, as of March 18, 1994, more than 5% of
the Company's Common Stock.
Name and Address Shares Percent
of Beneficial Owner Beneficially Owned of
Class
FMR Corp. 18,738,000 %
82 Devonshire Street
Boston, Massachusetts 02109
Merrill Lynch & Co., Inc. 13,010,961 %
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281
The percentages in the above table are based on the number of
issued and outstanding shares of Common Stock at March 18, 1994.
The numbers of shares are based on statements on Schedule 13G filed
with the Securities and Exchange Commission by FMR Corp. and
Merrill Lynch, dated February 11, 1994 and February 14, 1994,
respectively. To the knowledge of the Company at March 18, 1994,
there are no other persons who own beneficially more than 5% of the
Company's Common Stock (including stock issuable pursuant to stock
options).
The following table sets forth, as of March 18, 1994, the
beneficial ownership of the Company's Common Stock by each director
and nominee, the Chief Executive Officer and the four other most
highly compensated executive officers and, as a group, of such
persons and all other current executive officers, from information
provided by such persons.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Name Owned (a) of Class(b)
<S> <C> <C>
Patrick M. Ahern (c) -
Donald B. Brown (c) -
Edward J. Campbell (c) -
Peter T. Flawn (c) -
John M. Galvin (c) -
Gary L. Kott (d) -
Lynn L. Leigh (c) -
C. Russell Luigs (d) -
Jon A. Marshall (d) -
Jerry C. Martin (d) -
John G. Ryan (d) -
Sidney A. Shuman (c) -
William R. Thomas (c) -
William C. Walker (c) -
All of the above and other
executive officers as a
group (18 persons) (c)(d) %
(a) Each person has sole voting and investment power with respect
to the shares listed, unless otherwise indicated.
(b) As of March 18, 1994, no director or executive officer owned
more than one percent of the Common Stock outstanding.
(c) Includes shares that may be acquired within sixty days of March
18, 1994 through the exercise of non-employee director stock
options, as follows: shares each for Messrs. Ahern, Brown,
Campbell, Flawn, Galvin, Leigh, Shuman, Thomas and Walker, and
for the group.
(d) Includes shares that may be acquired within sixty days of March
18, 1994 through the exercise of employee stock options, as
follows: Mr. Kott, ; Mr. Luigs, ; Mr. Marshall, ; Mr.
Martin, ; Mr. Ryan, ; and the group, .
</TABLE>
ELECTION OF DIRECTORS
The Company's Board of Directors consists of eleven directors
divided into three classes serving staggered terms of three years
each. Seven of the Company's current directors are serving in two
classes with terms that continue beyond the 1994 Annual Meeting of
Stockholders, and they are not subject to election at this meeting.
Four directors serve in a class with terms that expire at the 1994
meeting, and they are nominees for reelection at this meeting.
These nominees are Edward J. Campbell, Peter T. Flawn, John M.
Galvin and Lynn L. Leigh. Each of the four directors to be elected
at the 1994 Annual Meeting of Stockholders will serve a term of
three years to expire at the 1997 Annual Meeting of Stockholders or
until his successor is elected and qualifies. The candidates, up
to the number of directors to be elected, receiving the highest
number of votes cast by holders of the Common Stock, in person or
by proxy, will be elected.
It is intended that the proxies received from holders of the
Company's Common Stock, in the absence of contrary instructions,
will be voted at the 1994 Annual Meeting for the election of
Messrs. Campbell, Flawn, Galvin and Leigh. Although the Company
does not contemplate that any of the nominees will be unable to
serve, decline to serve, or otherwise be unavailable as a nominee
at the time of the Annual Meeting, in such event the proxies will
be voted in accordance with the authority granted in the proxies
for such other candidate or candidates as may be nominated by the
Board of Directors.
Further information concerning the nominees for election as
directors at the 1994 Annual Meeting of Stockholders, including
their business experience during the past five years, appears
below.
Nominees - For Terms of Office
Expiring at the 1997 Annual Meeting of Stockholders
Edward J. Campbell, 66, has been President of J. I. Case
Company, a wholly-owned subsidiary of Tenneco Inc., since
January 1992. J. I. Case is a manufacturer of farm and
construction equipment. From 1979 through 1991, Mr. Campbell was
President and Chief Executive Officer of Newport News Shipbuilding
& Dry Dock Co., also a wholly-owned subsidiary of Tenneco Inc. He
is a director of Zurn Industries, Inc. Mr. Campbell was first
elected a director of the Company in 1981.
Peter T. Flawn, 68, has been prominent in the field of geology
for many years as an academician, author and consultant, and he is
a former president of the University of Texas at Austin. He is
also a director of Harte-Hanks Communications, Inc.; Input/Output,
Inc.; Radian Corp.; and Tenneco Inc. Dr. Flawn was first elected
a director of the Company in 1989.
John M. Galvin, 61, has been a private investor and consultant
since his retirement in 1992 as Vice Chairman, a director and Chief
Financial Officer of The Irvine Company, a major, private real
estate development and investment company. He is a director of
Commercial Intertech Inc. and of Oasis Residential, Inc., and an
advisory director of Alexander Proudfoot, Plc. Mr. Galvin was
first elected a director of the Company in 1979.
Lynn L. Leigh, 68, has been Senior Vice President of National
Oilwell, a manufacturer and international supplier of oilfield
equipment and services, since October 1993, prior to which he had
been President and Chief Executive Officer of Hydril Company, a
manufacturer of high performance products for petroleum drilling
and production, since 1991. From 1988 to 1991, Mr. Leigh was a
consultant to the oil and gas industry. Mr. Leigh was first
elected a director of the Company in 1981.
The members of the Board of Directors who are not subject to
election at the 1994 Annual Meeting are as follows.
Continuing Directors - With Terms of Office
Expiring at the 1996 Annual Meeting of Stockholders
Donald B. Brown, 67, is an investor and a consultant to the
energy exploration and development industry. He was first elected
a director of the Company in 1982.
Jerry C. Martin, 61, has been the Company's Senior Vice
President and Chief Financial Officer since 1985. Prior to 1985,
he held various positions with Global Marine Drilling Company, the
Company's major operating subsidiary. Mr. Martin was first elected
a director of the Comany in 1993.
Sidney A. Shuman, 81, is a retired Corporate Vice President
and director of Baker International Corporation. Mr. Shuman was
first elected a director of the Company in 1977.
Continuing Directors - With Terms of Office
Expiring at the 1995 Annual Meeting of Stockholders
Patrick M. Ahern, 53, is a private investor, and he is a
partner in Ahern and Partners, L.P., a private investment and
advisory partnership. He was first elected a director of the
Company in 1987.
C. Russell Luigs, 60, is Chairman of the Board, President and
Chief Executive Officer of the Company. Mr. Luigs was first
elected a director of the Company in 1977.
William R. Thomas, 73, is the Company's retired Senior Vice
President, Finance. He is also a director of Bank of the West and
AeroVironment Inc. Mr. Thomas was first elected a director of the
Company in 1978.
William C. Walker, 70, is an independent management consultant
and a retired President of Mid-Continent Supply Company, a major
provider of oilfield equipment and services worldwide. He was also
with Loffland Brothers Company, an oil and gas drilling contractor,
for more than 20 years, eventually serving as President. Mr.
Walker is a director of Aztec Manufacturing Company and of DI
Industries, Inc. He was first elected a director of the Company
in 1986.
BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors has eleven members, and the
Board has five standing committees. During 1993, the Board of
Directors held eight meetings. Further information concerning the
Board's standing committees appears below.
Executive Committee - The Company's Executive Committee
consists of five directors: John M. Galvin, Chairman, Edward J.
Campbell, Lynn L. Leigh, C. Russell Luigs and William C. Walker.
The Executive Committee has the authority to exercise all the
powers of the Board which may be delegated legally to it by the
Board in the management and direction of the business and affairs
of the Company. The Executive Committee did not meet during 1993.
Audit Committee - The Company's Audit Committee consists of
four directors: Lynn L. Leigh, Chairman, Donald B. Brown, Sidney A
Shuman and William C. Walker. None of these directors is an
employee of the Company. Audit Committee meetings are attended by
members of the Committee, the Company's independent auditors and
the head of the Company's internal audit staff. In addition, the
Audit Committee meets privately with the Company's independent
auditors at least once a year. The Committee recommends the firm
of independent auditors for each fiscal year, approves the nature
of the professional services provided by the independent auditors
prior to performance of such services, and reviews the independence
of the auditors. The Committee also reviews the scope of work and
the reported results of the Company's internal auditors and confers
with management from time to time on financial reporting and
internal control matters. During 1993, the Audit Committee held
four meetings.
Compensation Committee - The Company's Compensation Committee
consists of four outside directors: Patrick M. Ahern, Chairman,
Donald B. Brown, Edward J. Campbell and John M. Galvin. The
Compensation Committee makes recommendations to the Board regarding
remuneration arrangements for senior management and directors,
adoption of compensation plans in which officers and directors are
eligible to participate and the grant of stock options or other
benefits under any such plans. The Compensation Committee held
four meetings during 1993.
Finance Committee - The Company's Finance Committee consists
of five non-employee directors: Edward J. Campbell, Chairman,
Patrick M. Ahern, Peter T. Flawn, John M. Galvin and William R.
Thomas. The Committee reviews the Company's annual financial plan,
makes recommendations to the Board of Directors regarding material
capital expenditures, acquisitions and financings contemplated by
the Company and advises with respect to the Company's external
financial relationships. During 1993, the Finance Committee held
four meetings.
Nominating Committee - The Company's Nominating Committee
consists of five outside directors: William C. Walker, Chairman,
Peter T. Flawn, Lynn L. Leigh, Sidney A. Shuman and William R.
Thomas. The Nominating Committee, which held four meetings during
1993, recommends to the Board of Directors those persons it
believes should be nominees for election as directors. In this
connection, the Committee considers the performance of incumbent
directors in determining whether they should be nominated to stand
for reelection. The Committee will consider qualified nominees
recommended by stockholders. Any such recommendation for the 1995
election of directors should be submitted in writing to the
Secretary of the Company at 777 North Eldridge Road, Houston, Texas
77079.
During 1993, each director of the Company except Mr. Ahern
attended at least 75% of the meetings of the Board and committees
of the Board on which he served.
DIRECTOR COMPENSATION
Directors of Global Marine Inc. who are not employees of the
Company or any of its subsidiaries receive a retainer of $5,000 per
quarter for their services as directors. They also receive $900
plus expenses for each regular Board meeting attended, $1,500 plus
expenses for each special meeting of the Board attended, and $250
plus expenses for each meeting of any committee of the Board
attended, in each case other than telephonic meetings. Directors
who are employees of the Company do not receive directors' fees.
Non-employee directors are participants in the Retirement Plan
for Outside Directors. The Company believes that this plan enables
it to attract and retain outside directors, who render necessary
and important services. Under the Retirement Plan for Outside
Directors, each participant vests in an annual retirement benefit
equal to a percentage of the highest annual basic retainer fee for
directors in effect at any time during the one-year period
preceding the termination of his Board service. The percentage,
which is based on the participant's full years of service as an
outside director during all periods on and after August 1, 1989, is
20% after one year of service up to 100% after five years of
service. A participant becomes 100% vested upon termination of
service due to death or disability, and each participant then
serving as an outside director becomes 100% vested upon a "change
of control," which is defined as any acquisition of more than fifty
percent of the voting power of the Company's stock by any entity or
by any group acting in concert. A participant may begin receiving
his vested benefit upon his termination of service due to
disability or, if later, upon the later of his attainment of age 65
or his termination of service as a director. The benefit is
payable to the participant or his beneficiary over a period, up to
a maximum of 15 years, equal to the period the participant served
as an outside director, provided that a beneficiary, or a director
who terminates his service due to disability or within one year
following a change of control, may receive the benefit in a lump
sum.
All of the Company's current directors except Messrs. Luigs
and Martin, who are employees of the Company, are participants in
the Retirement Plan for Outside Directors. Each participant had
four full years of credited service as of December 31, 1993 for
purposes of determining the vested benefit under the plan.
Under the Company's 1990 Non-Employee Director Stock Option
Plan, options to purchase shares of the Company's Common Stock are
granted to directors who, as of the date of grant, are not
employees of the Company or any of its subsidiaries and have not
been such employees for any part of the preceding fiscal year. At
present, all of the directors except Messrs. Luigs and Martin are
eligible non-employee directors. Option grants to non-employee
directors are in addition to and not in lieu of the other
compensation for their services as directors described elsewhere in
this proxy statement.
Each person who becomes eligible to receive a grant under the
plan receives an initial 10,000 share grant on the date he first
achieves such eligibility. Each person who receives an initial
10,000 share option grant and remains eligible automatically
receives an additional grant of options to purchase 3,000 shares on
the adjournment date of each subsequent annual meeting of
stockholders beginning with the first annual meeting following the
calendar year of the initial grant. During 1993, the nine non-
employee directors each automatically received a grant of options
under the plan to purchase 3,000 shares of Common Stock at the per
share exercise price of $3.8125. Upon the expiration of
unexercised options granted under the plan, new options may be
granted with respect to the shares covered by such expired options.
The exercise price for each share of Common Stock subject to
an option granted under the plan is the fair market value per share
at the date the option is granted and must be at least equal to the
par value of the stock. Each option becomes exercisable for fifty
percent of the shares covered thereby after one year from the date
of grant and for the remaining fifty percent two years from the
date of grant. Options expire ten years from the date of grant;
provided, however, that if a participant's service as a non-
employee director terminates by reason of disability, death, the
failure of the Board to nominate him for re-election other than for
cause, or his ineligibility for re-election pursuant to the
Company's by-laws, any options that are then exercisable may only
be exercised for up to one year after the date of the disability,
death or termination. If his service terminates because he decides
not to stand for re-election, his options may only be exercised for
up to three months after the termination, and, if his service
terminates for any other reason, including for cause as defined in
the plan, his options may be exercised for up to five business days
after the termination. Options are non-transferable otherwise than
by will or the laws of descent and distribution.
Option prices and the number and kinds of shares covered by
the Non-Employee Director Stock Option Plan and by options under
the plan are subject to adjustments in the event of a merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares, or other like changes in the Company's capital
structure. In addition, the right to exercise all options
remaining unexercised under the plan shall accelerate, so that such
options will become immediately exercisable, upon (i) any
acquisition of more than fifty percent of the voting power of the
Company's stock by any person or persons acting as a group for
purposes of acquiring such stock, (ii) the occurrence of a change
in the membership of the Board of Directors during any consecutive
two-year period, excluding changes due to death or disability, so
that individuals who constitute the Board at the beginning of such
period cease to constitute a majority of the Board, (iii) the
shares subject to options becoming subject to delisting by the New
York Stock Exchange or a successor exchange in respect of the
number of publicly held shares or the number of stockholders
holding one hundred shares or more, (iv) approval by the Board of
Directors of the sale of all or substantially all of the Company's
assets, or (v) approval by the Board of any merger, consolidation,
issuance of securities or purchase of assets which would result in
an event described in (i), (ii) or (iii) above. However, the
Board's Compensation Committee, as constituted prior to any such
occurrence, may, upon such occurrence, in general determine that
the options shall terminate and that the holders thereof shall be
paid cash in an amount equal to the difference between the option
exercise price and the fair market value of the stock before the
occurrence.
The 1990 Non-Employee Director Stock Option Plan is
administered by the Compensation Committee of the Board of
Directors, which consists of non-employee members of the Board.
However, the Committee's administrative functions are ministerial
in view of the plan's explicit provisions, including those relating
to eligibility for option grants and predetermination of the
timing, amounts and exercise prices of such grants.
The termination date of the plan is May 8, 2001. The Board of
Directors may at any time amend, suspend or terminate the plan, but
options granted before any termination or suspension may continue
to be exercised according to their terms. Rights and obligations
under any option granted pursuant to the plan may not be adversely
affected by any amendment without the consent of the option holder.
In addition, no amendment may be made without the approval of the
Company's stockholders that will increase the total number of
shares available for options under the plan, change the manner of
determining the option exercise price, increase the ten-year
maximum term of the options, modify the plan's eligibility
provisions, or materially increase the benefits accruing to
participants, unless such stockholder approval is not required in
order for options granted under the plan to continue to be exempt
from the operation of Section 16(b) of the Securities Exchange Act
of 1934.
During 1993, one of the Company's directors, Donald B. Brown,
who was retained by the Company as a consultant with respect to the
operations of the Company's wholly-owned subsidiary, Challenger
Minerals Inc., received a total of $3,000 for consulting services,
plus expenses.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning
compensation for services in all capacities to the Company and its
subsidiaries during each of the last three years of those persons
who were the Company's Chief Executive Officer and its other four
most highly compensated executive officers during 1993:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compen-
sation
Annual Compensation - Awards
All
Other
Name and Compen-
Principal Position Year Salary Bonus Options(2) sation(3)
($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
C. Russell Luigs, 1993 $463,750 $ 80,000 200,000 $9,665
Chairman of the Board, 1992 $448,750 $100,000 250,000 $8,515
President and Chief 1991 $433,333 $ 60,000 140,000 $4,486
Executive Officer
Jerry C. Martin, 1993 $241,250 $57,000 150,000 $4,607
Senior Vice President 1992 $226,667 $70,000 150,000 $4,443
and Chief Financial 1991 $216,458 $30,000 75,000 $4,282
Officer
John G. Ryan, 1993 $235,000 $59,500 150,000 $5,243
Chairman and Chief 1992 $216,250 $70,000 150,000 $4,874
Executive Officer, Global 1991 $201,458 $30,000 75,000 $4,558
Marine Drilling Company,
and Corporate Secretary
Gary L. Kott, 1993 $229,167 $35,000 100,000 $6,569
President and Chief 1992 $259,167 $30,000 100,000 $6,103
Operating Officer, Global 1991 $268,750 $35,000 80,000 $4,873
Marine Drilling Company
Jon A. Marshall 1993 $184,167 $45,000 100,000 $4,745
President, Applied 1992 $157,685 $43,000 162,500 $4,077
Drilling Technology Inc.
and Challenger Minerals
Inc.(4)
(1) In order to preserve cash and to further encourage stock
ownership by executive officers, bonuses based on service during
the years indicated were paid to executive officers, including the
five named in the table, in shares of the Company's common stock
under the Company's Stock Option and Incentive Plan, net of the
required tax withholdings (with the exception of $3,000 of Mr. Marshall's
1992 bonus, which amount was paid in cash for service rendered during
1992 before Mr. Marshall became an executive officer). Bonuses based on
service during each year were awarded in the following year, and the
dollar amounts indicated in the table in respect of stock are the stock's
fair market values (average of high and low market prices) on the
respective award dates.
(2) Expressed in terms of the numbers of shares of the Company's
Common Stock underlying options granted during the years indicated.
(3) The amounts indicated under "All Other Compensation" for 1993
consist of (a) amounts contributed by the Company to match a
portion of the employees' contributions under the Company's 401(k)
Savings Incentive Plan (Mr. Luigs, $4,607; Mr. Martin, $4,607; Mr.
Ryan, $4,607; Mr. Kott, $4,541; and Mr. Marshall, $4,091), plus (b)
insurance premiums paid by the Company with respect to term life
insurance for the benefit of the named executive officers (Mr.
Luigs, $5,058; Mr. Ryan, $636; Mr. Kott, $2,028; and Mr. Marshall,
$654).
(4) In accordance with the rules on executive compensation
disclosure adopted by the Securities and Exchange Commission, Mr.
Marshall's compensation is not shown for years prior to 1992, which
was the year during which he first became an executive officer.
</TABLE>
EMPLOYMENT AGREEMENTS AND SEVERANCE AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company has an employment agreement with Mr. Luigs that
has an initial term ending in February 1995. It will renew
automatically at that time and every three years thereafter unless
canceled at least six months before any such renewal. The
agreement specifies a minimum annual base salary of $450,000. In
the event Mr. Luigs is removed from his position as Chief Executive
Officer for reasons other than willful and material misconduct
deliberately harmful to the Company, or in the event of a
substantial alteration in the nature of his position, termination
or nonrenewal of his employment agreement, or termination due to
disability, Mr. Luigs would be entitled to salary continuation and
retirement benefit accrual for a period of two years, and he would
be entitled to group insurance continuation until the sooner of two
years or such time as similar benefits are provided through other
employment. Mr. Luigs would also be entitled to the foregoing
benefits upon his termination or resignation within one year
following the acquisition of securities representing, or other
control of, 35% or more of the voting power of the Company by any
person or group of persons working in concert. In the case of a
termination due to disability, the amount of salary to be continued
would be reduced by an amount equal to certain disability benefits.
The Company also has severance agreements with certain key
executive officers. The agreements provide for a severance payment
if employment is terminated by the Company for reasons other than
misconduct harmful to the Company. The payment would also be made
if employment is terminated by the individual within six months
following a reduction in his base salary, a substantial alteration
in the nature of his position, or his office being moved from
Houston, Texas without his consent, or within one year following
the acquisition of 35% or more of the voting power of the Company
by any person or group of persons acting in concert, or in the
event of termination due to disability, in which case the amount
would be reduced by an amount equal to certain disability benefits.
The payment would consist of salary continuation and the
continuation of medical, dental and life insurance benefits for a
period of two years following such termination of employment, based
on the individual's highest base salary and benefits at any time
within the nine months immediately preceding such termination.
Among the executive officers covered by such agreements are Messrs.
Martin, Ryan, Kott, and Marshall.
Outstanding option agreements under the Company's 1989 Stock
Option and Incentive Plan provide that the right to exercise all
options remaining unexercised under such agreements shall
accelerate, so that such options will become immediately
exerciseable, upon any acquisition of more than 50% of the voting
power of the Company's stock by any entity or group acting in
concert for purposes of acquiring such stock. In addition, the
vesting of retirement benefits under the Company's Retirement Plan
for Outside Directors and of outstanding options under the
Company's 1990 Non-Employee Director Stock Option Plan can
accelerate upon the occurrance of certain events in connection with
a change-in-control as outlined in the discussion of those plans
under "Director Compensation, " above.
OPTION GRANTS
The following table provides details regarding the stock
options indicated in the Summary Compensation Table as having been
granted to the named executive officers in 1993. In addition, in
accordance with Securities and Exchange Commission rules, there are
shown hypothetical gains or "option spreads" that could be realized
for the respective options, based on arbitrarily assumed rates of
annual compound stock price appreciation of 0%, 5% and 10% from the
date the options were granted over the full ten-year term of the
options. For comparative purposes, also shown are the total gains
that could be realized over a ten-year period by the Company's
stockholders. No gain to the optionees is possible without an
increase in the stock price which will benefit all stockholders
proportionately.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1993
Individual Grants
Potential Realizable Value at Assumed
Annual Rates of Stock Price
Percent Appreciation for Option Term(2)
Number of total Exercise
of shares Options or Base
Underlying Granted to Price
Name Options Employees ($ per Expiration
Granted(1) in 1993 share) Date 0% 5% 10%
(#) ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
C. R. Luigs 200,000 11.12% $ 3.00 2-9-2003 $ 0 $377,337 $956,245
J. C. Martin 150,000 8.34% $ 3.00 2-9-2003 $ 0 $283,003 $717,184
J. G. Ryan 150,000 8.34% $ 3.00 2-9-2003 $ 0 $283,003 $717,184
G. L. Kott 100,000 5.56% $ 3.00 2-9-2003 $ 0 $188,668 $478,123
J. A. Marshall 100,000 5.56% $ 3.00 2-9-2003 $ 0 $188,668 $478,123
All Stockholders(3) N/A N/A $ 3.00 N/A $ 0 $273,141,161 $692,193,330
(1) All options granted to the named officers were granted at
exercise prices equal to the average of the high and low per
share market prices of the Company's Common Stock, $.10 par
value per share, on the date of grant. All options were
granted on February 9, 1993. Each option granted during 1993
first became exercisable one year after its date of grant as
to 50% of the underlying shares and first becomes exercisable
two years after its date of grant as to the remaining 50%.
The right to exercise unexercised options is subject to
acceleration in certain circumatances as described under
"Employment Agreements and Severance and Change-in-Control
Arrangements," above. The Company's Board of Directors or the
Compensation Committee of the Board may from time to time
adjust or reduce the exercise prices of outstanding options,
provided that the exercise price must be at least equal to the
par value of the underlying stock. Options are non-
transferable other than by will or the laws of descent and
distribution.
(2) These amounts represent certain assumed rates of appreciation
only. Actual gains, if any, on stock option exercises or
stock holdings are dependent on the future performance of the
stock and overall stock market conditions. There can be no
assurance that the amounts reflected in this table will be
achieved.
(3) Based on 144,773,146 shares of the Company's Common Stock
outstanding on February 9, 1993, using the $3.00 average of
the stock's high and low market prices on that date as the
base price.
</TABLE>
OPTION EXERCISES AND YEAR-END VALUES
The following table shows option exercises by the named
executive officers during 1993, as well as the number of shares
underlying all exercisable and non-exercisable stock options held
by the named executive officers as of December 31, 1993. Also
reported are the year-end values for their unexercised "in-the-
money" options, which represent the positive spread between the
exercise price of any such options and the year-end market price of
the Common Stock.
<TABLE>
<CAPTION>
AGGREGATED 1993 OPTION EXERCISES
AND YEAR-END OPTION VALUES
Number of Number of Unexercised Value of Unexercised
Shares Options at Year-End In-the-Money Options at Year-End
Underlying (#) ($)
Options Value
Exercised Realized
Name (#) ($) Exerciseable Unexerciseable Exerciseable Unexerciseable
<S> <C> <C> <C> <C> <C> <C>
C. R. Luigs 0 $0 896,250 325,000 $1,977,734 $488,281
J. C. Martin 50,000 $190,625 365,000 225,000 $638,750 $326,563
J. G. Ryan 0 $0 350,000 225,000 $603,125 $326,563
G. L. Kott 85,000 $300,937 305,000 150,000 $426,875 $218,750
J. A. Marshall 0 $0 129,650 181,250 $196,094 $308,594
</TABLE>
RETIREMENT PLANS
The following table shows the estimated annual pension
benefits payable on a single straight life annuity basis to a
covered participant at normal retirement age (age 65) under the
Company's qualified defined benefit pension plan (the Retirement
Plan for Employees), as well as under its nonqualified supplemental
defined benefit pension plans covering the five executive officers
named in the Summary Compensation Table on page that provide
benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan
benefits (the Benefit Equalization Retirement Plan and the
Executive Supplemental Retirement Plan). The estimated benefits
shown are based on remuneration covered by the plans and years of
service with the Company and its subsidiaries.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of Service
Remuneration 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$150,000 $75,000 $75,000 $75,000 $83,772 $97,734
$200,000 $100,000 $100,000 $100,000 $112,722 $133,358
$250,000 $125,000 $125,000 $125,000 $143,358 $168,358
$300,000 $150,000 $150,000 $150,000 $173,358 $203,358
$350,000 $175,000 $175,000 $175,000 $203,358 $238,358
$400,000 $200,000 $200,000 $200,000 $233,358 $273,358
$450,000 $225,000 $225,000 $225,000 $263,358 $308,358
$500,000 $250,000 $250,000 $250,000 $293,358 $343,358
$550,000 $275,000 $275,000 $275,000 $323,358 $378,358
$600,000 $300,000 $300,000 $300,000 $353,358 $413,358
$650,000 $325,000 $325,000 $325,000 $383,358 $448,358
</TABLE>
Under the Company's pension plans, annual retirement benefits are
based on a participant's average annual compensation (for executive
officers, the amounts shown under "Salary," "Bonuses" and "Other
Annual Compensation" in the Summary Compensation Table) during the
period of five consecutive years in which an employee's
compensation is greatest during the fifteen years prior to such
employee's retirement (in the case of the Retirement Plan for
Employees and the Benefit Equalization Retirement Plan) and during
the three-year period during which an employee's compensation is
greatest (in the case of the Executive Supplemental Retirement
Plan). The benefits shown in the Pension Plan Table reflect an
offset as provided for under the Benefit Equalization Retirement
Plan for Social Security benefits.
The full years of credited service as of December 31, 1993 for
purposes of determining the entitlement to retire with a benefit
under all plans and for purposes of determining the benefit under
the Retirement Plan for Employees and the Benefit Equalization
Retirement Plan for each of the individuals named in the Summary
Compensation Table are: Mr. Luigs, 16 years; Mr. Martin, 14 years;
Mr. Ryan, 11 years; Mr. Kott, 15 years; and Mr. Marshall, 14 years.
The full years of employment under the Executive Supplemental
Retirement Plan as of December 31, 1993 for purposes of determining
the benefit under that plan for individuals named in the Summary
Compensation Table are: Mr. Luigs, 16 years; Mr. Martin, 8 years;
Mr. Ryan, 7 years; Mr. Kott, 15 years; and Mr. Marshall, 1 year.
The Pension Plan Table assumes that years of service for a
particular individual are the same under all plans and that three-
year and five-year average annual compensation are the same.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report concerning the specific factors, criteria and
goals underlying decisions on awards and payments of compensation
to each of the executives named in the Summary Compensation Table
is provided by the Compensation Committee of the Company's Board of
Directors.
REPORT OF
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION
The Compensation Committee, composed entirely of outside
directors, is responsible for making recommendations to the
Board of Directors with regard to:
1) the Company's executive compensation policies and programs,
and
2) specific salary, incentive and stock option awards to
senior executive officers, including the Chief Executive
Officer and the other four officers named in the Summary
Compensation Table.
Compensation Policies and Programs
The Compensation Committee's goals are to develop and maintain
executive compensation programs that preserve and enhance
shareholder value. Over the last decade, the oilfield
services industry has undergone a severe contraction in
activity, with a resultant reduction in equity values and with
many industry participants withdrawing or being eliminated
from the field. Global Marine itself has gone through a
chapter 11 proceeding and, as a result, a significant
restructuring of its assets and liabilities. Since it emerged
from that restructuring process, the focus of the Company's
compensation programs has been to encourage the generation of
cash, the reduction of outstanding debt, and a general
strengthening of the Company's balance sheet. With the
continuation of depressed industry conditions over the last
several years, the Committee believes that these programs are
essential to preserve the viability of the Company and to
assure its positioning for the longer term opportunity to
enhance shareholder value as the overall industry recovers.
The Compensation Committee therefore has designed the
Company's executive compensation program so that it:
* Motivates executives toward effective long-term strategic
management of the Company's assets and operations through
stock programs which focus executives' attention on increasing
shareholder value, as measured by the Company's stock price;
* Rewards effective, efficient ongoing management of Company
operations through annual incentives which are tied to
operating, financial and strategic goals established each
year; and
* Provides the ability to attract and retain the quality of
executives needed, through competitive salary levels.
The Company's executive compensation program includes base
salary, annual management incentive awards, and stock options,
each of which is tied to performance. The Committee intends to
make awards and take actions under these programs considering the
overall cost and benefits to the Company. Specifically, the
Committee intends to take actions required to preserve the tax
deductibility of executive pay under Section 162(m) of the Internal
Revenue Code, and to consider tax deductibility in making future
awards to senior executives. The Committee is advised periodically
by a nationally recognized, independent compensation consultant on
competitive salary levels, bonus practices, and stock programs of
leading drilling contractors.
In evaluating competitive compensation levels, the Committee
uses a peer group comprised of substantially the same
companies used for comparison in the Cumulative Total
Shareholder Return graph, including Energy Service Company,
Nabors Industries, Noble Drilling, Parker Drilling, Reading &
Bates, Rowan Companies, and The Western Company of North
America, plus SONAT Offshore Drilling Inc., which is not
included in the graph because it was not a publicly traded
company during all of 1993. In evaluating competitive pay,
the Committee evaluates salary levels, bonus levels and annual
vesting of restricted stock or discount options for the
highest-paid officers, and it has established a "target" of
matching the industry average in total pay rather than
attempting to match compensation on a component-by-component
basis. An executive compensation analysis by the Company's
independent compensation consultant indicated that Global
Marine's salaries and bonuses were above average, but annual
stock vesting values, as well as total pay, were below the
peer group average for 1992, which is the most recent year for
which peer group data was available.
Base Salary: The Compensation Committee reviews the
performance of each senior executive officer individually with
the Chief Executive Officer and, considering the CEO's
recommendation, determines an appropriate salary level for
each such officer. No specific mathematical formula or
weighting of factors is used in evaluating officer salaries.
The Committee does, however, give primary weight to company
performance and industry conditions, on which basis salaries
of all senior executives were frozen in 1985 and 1986 due to
industry conditions. For a given year, the Company's
achievements that are given the most weight are those that
will benefit the Company's long-term financial performance,
such as the specific 1993 achievements listed below under
"Company Performance" in the discussion of the Chief Executive
Officer's compensation. If overall Company performance
warrants officer salary increases, the performance of each
officer is evaluated, considering primarily business results
in his area of responsibility and his particular contribution
to overall Company performance, but also considering
advancements in the executive's managerial skills. The
Committee notes that salaries of individual officers may be,
and in recent years have been, reduced based on this
evaluation.
Annual Management Incentive Award Program: The Compensation
Committee has designed an Annual Management Incentive Award
Program to reward executives and managers, other than a group
of six senior executive officers that includes the five named
in the Summary Compensation Table. Bonus awards under the
Plan are based on the Company's performance in relation to
goals established at the outset of each year. In recent
years, in view of the industry's depressed condition, goals
have been stated in terms of increases in year-to-year cash
balances, debt reduction, cash flow, and other factors. In
1992, for example, the Management Incentive Award Plan was
based on the sum of cash increases plus debt reductions. For
1993, the Plan was based on operating cash contribution: 6%
of operating cash contribution in excess of a $20 million goal
was reserved for the Plan, subject to an overall maximum of
$2.5 million and an additional limit of 35% of salary as the
maximum payout to any one participant. For 1993, the
operating cash contribution exceeded $20 million, so incentive
compensation was awarded under the 1993 Plan in February 1994.
The individual performance of eligible employees was
considered in allocating the awards, which were recommended by
the Chief Executive Officer to the Compensation Committee and
approved by the Board.
At the same time, the Compensation Committee granted incentive
bonus awards to those senior executive officers who were not
covered by the Plan, such awards approximating the same
percentage of salary as the average percentage under the Plan.
In allocating individual incentive bonus awards to these
senior executive officers in respect of 1993 service, the
Compensation Committee:
(1) reviewed the individual performance of each officer,
giving particular weight to the Company's strategic
achievements discussed below under "Company Performance" and
the officer's contributions to those achievements; and
(2) considered the accomplishments of each senior executive in
his area of responsibility.
Based on these reviews, which did not involve any specific
formula or weighting of factors, and with consideration given
to competitive peer group total compensation levels, which are
discussed above, incentive bonus awards were approved by the
Committee.
Incentive bonus awards may be paid in cash or in shares of
Company stock, or in a combination thereof. Commencing with
the awards for services rendered in 1991, the Company has paid
incentive bonus awards to most recipients, including the five
executive officers named in the Summary Compensation Table, in
shares of the Company's common stock, net of the required tax
withholdings, in order to preserve cash and to further
encourage stock ownership. As with Base Salary, incentive
bonus awards are not guaranteed. No incentive bonus awards
were made to the Company's officers in 1985, 1986, 1987 or
1988 due to the depressed conditions within the offshore
drilling industry generally.
Stock Options: The Compensation Committee believes that stock
options are critical in motivating and rewarding the creation
of long-term shareholder value, and the Committee has
established a policy of awarding stock options each year based
on the continuing progress of the Company as well as on
individual performance. All awards shown in the Summary
Compensation Table for the past three years were made at fair
market value at the time of grant so that holders will benefit
from such options only when, and to the extent, the stock
price increases after the option grant.
In February 1993, the Compensation Committee approved annual
stock option grants to executive officers and other key
employees, including the five named in the Summary
Compensation Table, covering approximately 1.61 million shares
of underlying common stock, which was up from approximately
1.52 million shares covered by the 1992 annual grants. This
slight increase in the total, although not tied to any
formula, was based on improved Company performance, primarily
as measured by the continued strengthening of the Company's
balance sheet in 1992, and on the Committee's recognition of
the role of key employees in implementing decisions that lead
to this strengthening, which had important long-term
implications for the Company. Also considered by the
Committee was the Company's ability to maintain operating
results, as measured by offshore rig utilization in
particular, that continued to compare favorably with the
Company's competitors despite an international offshore
drilling market that was softening at the time.
In 1993, the performance of individual executive officers and
other key employees was considered in allocating annual stock
option grants, which were recommended by the Chief Executive
Officer and approved by the Committee. In allocating
individual 1993 stock option grants to senior executive
officers, the Chief Executive Officer and the Compensation
Committee reviewed and considered essentially the same areas
of individual performance mentioned above with respect to
incentive awards, taking into account the areas of Company
performance discussed above, each individual's contributions
thereto, and specific accomplishments in each individual's
area of responsibility.
Compensation of the Chief Executive Officer
The Compensation Committee assesses the Company's progress and
performance in connection with the compensation of all
executive officers and approves salary adjustments, bonus
awards and stock option awards as deemed appropriate in each
officer's situation. The bases for the Committee's decisions
with regard to the Chief Executive Officer's 1993 compensation
were as follows.
Company Performance: The Committee noted the successful
implementation of several key strategic decisions in 1993 that
will benefit financial performance in future years. First,
the Company formed an alliance with a Norwegian company in
which the Company acquired three 300-foot jackup drilling rigs
in exchange for one heavy-weather jackup rig and cash. The
Company also mobilized seven jackup drilling rigs from the
North Sea and West Africa to the stronger drilling market in
the Gulf of Mexico. In addition, the Company reached an
agreement to acquire two more 300-foot jackup rigs, this
transaction to be completed in early 1994. Although these
strategic moves in some cases penalized 1993 operating results
in order to benefit future years, the Company's 1993 results,
when compared to 1992 results as adjusted to eliminate the
non-recurring 1992 items, improved by $10 million. The
Company's financial condition was also improved in 1993,
primarily through the sale of 17.25 million shares of common
stock, resulting in a decrease in the Company's debt-to-equity
ratio from 1.6 to 1 at December 31, 1992 to 1.1 to 1 at
December 31, 1993, and an increase in the Company's cash by
$20 million during the same period. The Committee determined
that the Chief Executive Officer made significant
contributions to these highly favorable results.
CEO Compensation Adjustments: Based on the Company's
successful results and continuing improvement in 1992, which
are discussed above under "Stock Options," the Compensation
Committee approved a salary increase for Mr. Luigs in February
1993 of $15,000 (or 3.3%), from $450,000 to $465,000, and it
approved annual stock option grants to employees, including an
option grant to Mr. Luigs covering 200,000 shares.
At the same time, the Committee reviewed plans for 1993 and
established goals for the 1993 Management Incentive Award
Plan, with goals stated in terms of operating cash
contribution. In February 1994, based on actual Company
performance during 1993, and considering the Chief Executive's
role in achieving the Company performance described above, the
Compensation Committee approved an incentive bonus award for
Mr. Luigs' 1993's performance of $80,000, or 17.2% of base
salary. This percentage was below the average awards as a
percentage of base salary earned by non-officer participants
under the 1993 Management Incentive Award Plan and was paid in
shares of the Company's Common Stock, net of the required tax
withholdings.
Patrick M. Ahern, Chairman Donald B. Brown, Member
Edward J. Campbell, Member John M. Galvin, Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Ahern, Brown, Campbell, Galvin and Shuman served as
Members of the Company's Compensation Committee during all or
part of 1993.
Mr. Luigs, the Company's Chairman of the Board, President and
Chief Executive Officer, served during part of 1993 on the
board of directors of Hydril Company, which did not have a
compensation committee. Mr. Leigh, who was Hydril's President
and Chief Executive Officer during part of 1993, is a member
of the Company's Board of Directors but does not serve on the
Company's Compensation Committee.
Neither Mr. Luigs nor any other current or former officer or
employee of the Company serves on the Company's Compensation
Committee or served on that committee at any time during 1993
or any prior year.
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following line graph compares the changes in the
cumulative total shareholder returns as of the end of each
calendar year from the end of March 1989 (the month in which
the Company's Common Stock became registered under Section 12
of the Securities Exchange Act of 1934) through the end of
1993, of (i) the Company, (ii) the Standard & Poor's 500 Stock
Index, and (iii) a weighted index of a group of other
companies in the Company's industry. The group of other
companies in the same industry is comprised of: Energy Service
Company, Inc.; Nabors Industries, Inc.; Noble Drilling
Corporation; Parker Drilling Company; Reading & Bates
Corporation; Rowan Companies, Inc.; and The Western Company of
North America. The returns of each component company in the
industry index have been weighted according to the respective
company's stock market capitalization at the beginning of each
measurement period. The percentage change in the cumulative
total shareholder return for a given year for the Company and
each other company represented in the graph equals cumulative
dividends declared from March 31, 1989 through the end of the
calendar year in question (assuming reinvestment of dividends)
plus the difference between such company's per share stock
price at the end of the calendar year and at March 31, 1989,
divided by such per share price at March 31, 1989. The
Company has not declared any dividends during the period
covered by the graph.
[PURSUANT TO ITEM 304(d)(1) OF REGULATION S-T, A PAPER COPY OF
THE PERFORMANCE GRAPH HAS BEEN SUBMITTED UNDER COVER OF FORM
SE.]
PROPOSAL TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has unanimously approved, subject
to approval by the holders of the Company's Common Stock, an
amendment to Article FOURTH of the Company's Restated
Certificate of Incorporation which would increase the number
of authorized shares of the Company's Common Stock, $.10 par
value per share, from 200,000,000 to 300,000,000. As of
December 31, 1993, 162,832,799 shares of Common Stock were
issued, including 330,813 shares not yet distributed for the
settlement of contingent claims under the terms of the
Company's 1989 reorganization, and 37,167,201 shares were
unissued including 15,404,391 shares issuable upon the
exercise of options granted under the Company's stock option
plans, 900,000 shares issuable in partial payment of the
purchase price of two offshore drilling rigs, and 20,862,810
authorized but unissued shares (10.4% of the total number
authorized) that were available for other corporate purposes.
The additional shares of Common Stock, if authorized,
would have the same rights and privileges as the shares of
Common Stock presently outstanding and could be issued in the
future for any proper corporate purpose. The Company's
Restated Certificate of Incorporation provides that shares of
the Common Stock of the Company do not carry pre-emptive
rights.
The Board of Directors believes that the proposed
increase in the number of authorized shares of Common Stock is
advisable in order to make shares available, as needed, to
meet potential equity financing requirements of the Company
and for use in connection with possible acquisitions, stock
dividends, stock distributions and other transactions
involving the use of stock.
Although the Company is always alert to opportunities,
there are no agreements or understandings regarding the
issuance of the proposed additional shares. Furthermore, the
Board of Directors is not proposing the increase in authorized
Common Stock with the intention of discouraging tender offers
or takeover attempts. However, in the event of an unsolicited
tender offer or takeover proposal, the increased number of
shares could give the Board of Directors greater flexibility
to act in the best interests of the Company and its
stockholders. For example, the additional shares could be
used to make a takeover attempt more difficult by using the
shares to make a counter-offer for the shares of the bidder or
by selling shares to dilute the voting strength of the bidder.
As of this date, the Board is unaware of any specific effort
to accumulate the Company's shares or to obtain control of the
Company by means of a merger, tender offer, solicitation in
opposition to management or otherwise. The issuance of
additional shares would also have the effect of diluting the
percentage voting power of existing shareholders and,
depending on the consideration for which the shares were
issued, could dilute earnings per share.
While Delaware law requires stockholder approval to
increase the number of shares of Common Stock the Company is
authorized to issue, stockholder approval of the issuance of
authorized shares is not required and will not be solicited
unless required by the rules of the New York Stock Exchange.
The portion of Article FOURTH proposed to be amended is
set forth as Exhibit A to this Proxy Statement. Approval of
the amendment will require the affirmative vote of a majority
of the outstanding shares of Common Stock. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT, AND
DULY EXECUTED PROXIES WILL BE VOTED FOR APPROVAL UNLESS
OTHERWISE INDICATED THEREON.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand as
independent certified public accountants for the Company and
its subsidiaries for fiscal year 1994. It is intended that
such appointment be submitted to the stockholders for
ratification at the 1994 Annual Meeting of Stockholders.
Coopers & Lybrand has served as the Company's auditors since
the Company's formation and has no investment in the Company
or its subsidiaries.
Although the submission of this matter to the
stockholders is not required by law, the Board of Directors
will reconsider its selection of independent accountants if
this appointment is not ratified by the stockholders.
Ratification will require the affirmative vote of the majority
of the shares of Common Stock represented at the meeting, in
person or by proxy.
It is expected that representatives of Coopers & Lybrand
will be present at the meeting with an opportunity to make a
statement should they desire to do so and to respond to
appropriate questions from stockholders.
STOCKHOLDERS' PROPOSALS
Pursuant to the Securities Exchange Act of 1934, as
amended, and regulations thereunder, individual stockholders
have a limited right to propose for inclusion in the proxy
statement a single proposal for action to be taken at the
Annual Meeting of Stockholders. Proposals intended to be
presented at the Annual Meeting to be held in 1995 must be
received at the Company's principal executive offices no later
than December 1, 1994. They may be addressed to the Secretary
of the Company at 777 North Eldridge Road, Houston, Texas
77079.
OTHER MATTERS
While management has no reason to believe that any other
business will be presented, if any other matters should
properly come before the Annual Meeting the proxies will be
voted as to such matters in accordance with the best judgment
of the proxy holders. The approval of such other matters will
require the affirmative vote of the majority of the shares of
Common Stock represented at the meeting, in person or by
proxy.
GLOBAL MARINE INC.
By JOHN G. RYAN
Secretary
Houston, Texas
March 31, 1994
EXHIBIT A
Proposed Amendment to the Restated Certificate of
Incorporation
In the text which follows, words which have lines through
them would be deleted by the proposed Amendment and italicized
words would be added.
The first paragraph of Article FOURTH would be 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)
Three Hundred Ten Million (310,000,000). The total number of
shares of Common Stock is Two Hundred Million (200,000,000)
Three Hundred Million (300,000,000), $.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."
[PRELIMINARY COPY - FORM OF PROXY CARD, RECORD ACCOUNTS]
GLOBAL MARINE INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS -- MAY 12, 1994
C. R. Luigs, J. C. Martin, and J. G. Ryan, and each or any of
them, with full power of substitution and revocation in each,
are hereby appointed as Proxies authorized to represent the
undersigned, with all powers which the undersigned would
possess if personally present, to vote the Common Stock of the
undersigned at the annual meeting of stockholders of GLOBAL
MARINE INC. to be held at the Houston Marriott Westside Hotel,
13210 Katy Freeway, Houston, Texas on Thursday, May 12, 1994
at 9:00 a.m., and at any postponements or adjournments of that
meeting, as set forth below, and in their discretion upon any
other business that may properly come before the meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED,
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED AND FOR EACH
OF THE OTHER PROPOSALS SPECIFIED HEREIN.
( ) Check here for address change
New Address:
(PLEASE VOTE, SIGN AND DATE ON REVERSE SIDE AND RETURN
PROMPTLY.)
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK
INK ONLY. ( )
1. Election of the following nominees as directors: Messrs.
Campbell, Flawn, Galvin and Leigh. The nominees will serve
for a term of three years, as indicated in the proxy
statement.
FOR WITHHELD FOR all nominees, except vote
all from all withheld from the following
Nominees Nominees nominee(s): (A line follows.)
( ) ( ) ( )
2. Approval of the amendment to the Company's Restated
Certificate of Incorporation to increase authorized Common
Stock from 200,000,000 to 300,000,000 shares.
FOR AGAINST ABSTAIN
( ) ( ) ( )
3. Ratification of appointment of Coopers & Lybrand as
independent certified public accountants for the Company and
its subsidiaries.
FOR AGAINST ABSTAIN
( ) ( ) ( )
4. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting or any adjournment thereof for a vote of the Common
Stock.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS, IF ACTING AS
ATTORNEY, EXECUTOR, TRUSTEE, OR IN REPRESENTATIVE CAPACITY,
SIGN NAME AND INDICATE TITLE.
Signature Date
Signature Date
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
[PRELIMINARY COPY - FORM OF PROXY CARD, STREET NAME ACCOUNTS]
PROXY
GLOBAL MARINE INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- MAY 12, 1994
C. R. Luigs, J. C. Martin and J. G. Ryan, and each or any of
them, with full power of substitution and revocation in each,
are hereby appointed as Proxies authorized to represent the
undersigned, with all powers which the undersigned would
possess if personally present, to vote the Common Stock of the
undersigned at the above Annual Meeting and at any
postponements or adjournments thereof, as set forth below.
Item 1 -- Election of the Following Nominees as Directors:
Messrs. Campbell, Flawn, Galvin and Leigh. The
nominees will serve for a term of three years, as
indicated in the proxy statement.
FOR ALL NOMINEES (except as marked to the
contrary on the line proved at the right ( )
WITHHOLD AUTHORITY to vote for all nominees ( )
WITHHOLD FOR THE FOLLOWING ONLY: (A line follows.)
Item 2 -- Approval of the amendment to the Company's Restated
Certificate of Incorporation to increase authorized
Common Stock from 200,000,000 to 300,000,000
shares.
( ) FOR ( ) AGAINST ( ) ABSTAIN
Item 3 -- Ratification of appointment of Coopers & Lybrand as
independent certified public accountants for the
Company and its subsidiaries.
( ) FOR ( ) AGAINST ( ) ABSTAIN
In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting or
any postponements or adjournments thereof for a vote of the
Common Stock.
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY)
(Continued from other side)
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS
SPECIFIED, WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
NAMED AND FOR EACH OF THE OTHER PROPOSALS SPECIFIED HEREIN.
Signature
Signature
Dated
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE. WHEN SIGNING AS AN ATTORNEY,
EXECUTOR, TRUSTEE, OR IN A REPRESENTATIVE CAPACITY, SIGN NAME
AND INDICATE TITLE.
[PRELIMINARY COPY - FORM OF VOTING INSTRUCTION CARD,
401(K) PLAN ACCOUNTS]
GLOBAL MARINE INC.
[401(k) PLAN]
CONFIDENTIAL VOTING DIRECTIONS FOR THE
ANNUAL MEETING OF STOCKHOLDERS -- MAY 12, 1994
The undersigned hereby directs Chemical Bank, as Trustee under
the Global Marine Savings Incentive Plan, to execute a proxy
or proxies authorizing the voting of all shares of Global
Marine Inc. Common Stock held in the Plan on March 18, 1994
and attributable to the undersigned's Plan account at the
above Annual Meeting and any postponements or adjournments
thereof on the items below and in accordance with the
directions given there.
Item 1 -- Election of the Following Nominees as Directors:
Messrs. Campbell, Flawn, Galvin and Leigh. The
nominees will serve for a term of three years, as
indicated in the proxy statement.
FOR ALL NOMINEES (except as marked to the
contrary on the line provided at the right, ( )
WITHHOLD AUTHORITY to vote for all nominees ( )
WITHHOLD FOR THE FOLLOWING ONLY: (A line follows.)
Item 2 -- Approval of the amendment to the Company's Restated
Certificate of Incorporation to increase authorized
Common Stock from 200,000,000 to 300,000,000
shares.
( ) FOR ( ) AGAINST ( ) ABSTAIN
Item 3 -- Ratification of appointment of Coopers & Lybrand as
independent certified public accountants for the
Company and its subsidiaries.
( ) FOR ( ) AGAINST ( ) ABSTAIN
In its discretion, the Trustee may authorize the voting of
said shares upon such other business as may properly come
before the meeting or any postponements or adjournments
thereof for a vote of the Common Stock.
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY)
(Continued from other side)
THE TRUSTEE WILL VOTE IN THE MANNER SPECIFIED BY THE
UNDERSIGNED OR, IF NO CHOICE IS SPECIFIED, THE SHARES WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES NAMED AND FOR EACH OF
THE OTHER PROPOSALS SPECIFIED HEREIN.
Signature
Dated
PLEASE MARK, DATE, AND SIGN YOUR NAME AS IT APPEARS ABOVE
AND RETURN PROMPTLY TO CHEMICAL BANK IN THE ENCLOSED
ENVELOPE.
