AS FILED WITH THE SECURITES AND EXCHANGE COMMISSION ON
MARCH 25, 1998
COMMISSION FILE NO. 1-5471
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e) (2))
[X] 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)
N/A
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6 (i) (1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
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(4) Date Filed:
<PAGE>
[LOGO] 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 Tuesday, May 5, 1998, 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 act on a proposal to approve the Global Marine 1998
Stock Option and Incentive Plan, including performance
measures to be used for certain performance-based
compensation under section 162(m) of the Internal Revenue
Code.
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 or postponement
thereof.
Stockholders of record of the Company's Common Stock at the
close of business on March 13, 1998 will be entitled to vote as set
forth in the accompanying Proxy Statement at the meeting and any
postponement or adjournment thereof.
ALEXANDER A. KREZEL
Corporate Secretary
Houston, Texas
March 27, 1998
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.
<PAGE>
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 5, 1998, and any adjournment or
postponement 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 27, 1998.
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 approve the Global Marine 1998
Stock Option and Incentive Plan, including performance measures to
be used for certain performance-based compensation, and (iii) a
proposal to ratify the Board of Directors' appointment of Coopers
& Lybrand L.L.P. as independent certified public accountants for
the Company and its subsidiaries for fiscal year 1998.
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 approve the Global Marine 1998 Stock Option and
Incentive Plan, including performance measures to be used for
certain performance-based compensation, and FOR the proposal to
ratify the Board of Directors' appointment of Coopers & Lybrand
L.L.P. as independent auditors for fiscal year 1998. 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 Corporate 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
Corporate Secretary of the Company at the Company's principal
executive offices, 777 North Eldridge Parkway, Houston, Texas
77079.
The close of business on March 13, 1998, 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 13, 1998, there were issued and
outstanding 172,688,994 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 13, 1998, 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
<PAGE>
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.
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.
Abstentions on the proposal to approve the Global Marine 1998 Stock
Option and Incentive Plan, including performance measures to be
used for certain performance-based compensation, or the proposal to
ratify the appointment of independent auditors will have the effect
of a negative vote because approval of each proposal requires the
affirmative vote of a majority of the shares represented in person
or by proxy and entitled to vote at the meeting. 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) on
any proposal will have no effect on the outcome of the proposal.
The Company's Annual Report for the year ended December 31,
1997, which includes, among other things, the Company's audited
consolidated balance sheets at December 31, 1997 and 1996,
respectively, and audited consolidated statements of income and
cash flows for the three years ended December 31, 1997, 1996 and
1995, respectively, has been mailed to stockholders of record as of
March 13, 1998.
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 facsimile. 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.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Listed below are the only persons who, to the knowledge of the
Company, may be deemed to be beneficial owners, as of March 13,
1998, of more than 5% of the Company's Common Stock.
NAME AND ADDRESS SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS(1)
Merrill Lynch Growth Fund 16,300,201(2) 9.44 %
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Stanley F. Druckenmiller 9,016,993(3) 5.22 %
888 Seventh Avenue
33rd Floor
New York, New York 10106
__________________
(1) The percentages are based on the number of issued and
outstanding shares of Common Stock at March 13, 1998.
(2) The number of shares indicated is based on Amendment No. 1 to
a statement on Schedule 13G, dated January 30, 1998, which was
filed jointly by Princeton Services, Inc. ("PSI"), Merrill
Lynch Asset Management, L.P. (d/b/a) Merrill Lynch Asset
Management ("MLAM"), and Merrill Lynch Growth Fund (the
"Fund"). PSI is a parent holding company and is a corporate
managing general partner of MLAM. MLAM is an investment
advisor registered under Section 203 of the Investment
Advisers Act of 1940. The Fund is an investment company
registered under Section 8 of the Investment Company Act of
1940. PSI disclaims beneficial ownership of the shares.
(3) The number of shares indicated is based on a Schedule 13G,
dated March 6, 1998, which was filed jointly by Soros Fund
Management LLC ("SFM"), George Soros, Stanley F. Druckenmiller
and Duquesne Capital Management, L.L.C. ("DCM"). SFM serves
as principal investment manager of Quantum Partners LDC
("Quantum") and has investment discretion over portfolio
investments held for the account of Quantum. Mr. Soros is the
Chairman of SFM. Mr. Druckenmiller is the Lead Portfolio
Manager and a member of the management committee of SFM. Mr.
Druckenmiller also owns a 75% interest in and is the sole
managing member of DCM, an investment advisory firm that
serves as a discretionary investment advisor to a limited
number of institutional clients. SFM, Mr. Soros and Mr.
Druckenmiller may be deemed the beneficial owners of 7,410,000
shares held directly for the account of Quantum and 156,933
shares held by Quantum under the investment discretion of
Cambridge Investments Ltd. Mr. Druckenmiller may also be
deemed the beneficial owner of 1,450,000 shares held for the
account of clients of DCM.
<PAGE>
The following table sets forth, as of March 13, 1998, 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, such persons
and all other current executive officers, based on information
provided by such persons.
SHARES
BENEFICIALLY PERCENT
NAME OWNED (A) OF CLASS (b)
Donald B. Brown 21,653(c) -
Edward J. Campbell 34,059(c) -
Thomas W. Cason 17,500(c) -
John M. Galvin 29,033(c) -
Gary L. Kott 429,249(d) -
C. Russell Luigs 1,791,138(d)(e) 1.03%
Jon A. Marshall 294,721(d)(e) -
Jerry C. Martin 197,402(d) -
Edward R. Muller 5,700(c) -
Paul J. Powers 16,000(c) -
John G. Ryan 506,796(d) -
Ben G. Streetman 0 -
Douglas K. Vrooman 143,625(d) -
All of the above and other
executive officers as a
group (17 persons) 3,960,832(c)(d)(e) 2.26%
_______________________
(a) Each person has sole voting and investment power with respect
to the shares listed, unless otherwise indicated.
(b) As of March 13, 1998, no director or executive officer other
than Mr. Luigs owned more than one percent of the Common Stock
outstanding.
(c) Includes shares that may be acquired within sixty days of
March 13, 1998, through the exercise of non-employee director
stock options, as follows: Mr. Brown, 7,500; Mr. Campbell,
19,500; Mr. Cason, 14,500; Mr. Galvin, 26,500; Mr. Muller,
5,000; Mr. Powers, 14,500; and the group, 87,500.
(d) Includes shares that may be acquired within sixty days of
March 13, 1998, through the exercise of employee stock
options, as follows: Mr. Kott, 252,596; Mr. Luigs, 1,426,667;
Mr. Marshall, 238,705; Mr. Martin, 32,596; Mr. Ryan, 221,971;
Mr. Vrooman, 98,125; and the group, 2,334,368.
(e) Includes shares attributable to accounts under the Company's
401(k) Savings Incentive Plan at March 13, 1998, as follows:
Mr. Luigs, 30,069; Mr. Marshall, 976; and for the group,
31,045.
ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of ten
directors divided into three classes serving staggered terms of
three years each. Six of the Company's current directors are
serving in two classes with terms that continue beyond the 1998
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 1998 Annual Meeting of Stockholders, and
all of these directors are nominees for reelection at this meeting.
These nominees are C. Russell Luigs, Edward R. Muller, Paul J.
Powers and John G. Ryan. Each of the four directors to be elected
at the 1998 Annual Meeting of Stockholders will serve a term of
three years to expire at the 2001 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.
<PAGE>
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 1998 Annual Meeting for the election of
Messrs. Luigs, Muller, Powers and Ryan. 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 1998 Annual Meeting of Stockholders, including
their business experience during the past five years, appears
below.
NOMINEES - FOR TERMS OF OFFICE
EXPIRING AT THE 2001 ANNUAL MEETING OF STOCKHOLDERS
C. Russell Luigs, 64, is Chairman of the Board and Chief
Executive Officer of the Company. He also served as President of
the Company from 1977 to May 1997. Mr. Luigs was first elected a
director of the Company in 1977.
Edward R. Muller, 46, has been President and Chief Executive
Officer of Edison Mission Energy Company, a wholly-owned subsidiary
of Edison International (formerly SCEcorp), since 1993. Edison
Mission Energy Company is engaged in developing, owning and
operating independent power production facilities worldwide. Mr.
Muller was a Vice President, the General Counsel and the Secretary
of Whittaker Corporation, a diversified company, from 1985 to 1993.
From 1989 to 1992 he was also Whittaker's Chief Administrative
Officer. From 1992 to 1993, he was also Whittaker's Chief
Financial Officer. From 1991 to 1993, Mr. Muller was also Vice
President, General Counsel and Secretary of BioWhittaker, Inc., a
biotechnology firm. He is also a Director of Whittaker Corp. and
of Oasis Residential, Inc. Mr. Muller was elected a director of
the Company in February 1997.
Paul J. Powers, 63, has been Chairman of the Board and Chief
Executive Officer of Commercial Intertech Corp. since 1987 and
Chairman of the Board of CUNO Incorporated since 1996. Commercial
Intertech is a multi-national manufacturer of hydraulic systems,
Astron pre-engineered buildings and metal products. CUNO is a
worldwide producer of fluid purification systems. Mr. Powers is
also a director of First Energy Corp. and Twin Disc, Inc. Mr.
Powers was elected a director of the Company in 1995.
John G. Ryan, 45, who joined the Company in 1982, has been
President and Chief Operating Officer since May 1997. Previously,
Mr. Ryan was Chairman and Chief Executive Officer of Global Marine
Drilling Company, the Company's domestic dayrate drilling
subsidiary, as well as the Company's Corporate Secretary, since
1993, prior to which he was the Company's Senior Vice President,
General Counsel and Secretary. He was elected a director of the
Company in November 1997. As previously reported, Mr. Ryan is
presently on medical leave from his duties as the Company's
President and Chief Operating Officer.
The members of the Board of Directors who are not subject to
election at the 1998 Annual Meeting are as follows.
<PAGE>
CONTINUING DIRECTORS - WITH TERMS OF OFFICE
EXPIRING AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
Edward J. Campbell, 70, was President of J. I. Case Company,
at the time a wholly-owned subsidiary of Tenneco Inc., from 1992
until his retirement in 1994. 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 also a director of Zurn Industries, Inc., Titan
International, Inc. and the American Bureau of Shipping (ABS) Group
of Companies. Mr. Campbell was first elected a director of the
Company in 1981.
John M. Galvin, 65, 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 Corp., CUNO Incorporated, and Oasis
Residential, Inc. Mr. Galvin was first elected a director of the
Company in 1979.
Ben G. Streetman, 58, is Dean of the College of Engineering
and a Professor of Electrical and Computer Engineering at The
University of Texas at Austin. Dr. Streetman is also a director of
National Instruments, Inc. He was elected a director of the
Company in August 1997.
CONTINUING DIRECTORS - WITH TERMS OF OFFICE
EXPIRING AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS
Donald B. Brown, 71, is an investor and a consultant to the
energy exploration and development industry. He was first elected
a director of the Company in 1982.
Thomas W. Cason, 55, owns and manages an equipment business,
primarily related to the agricultural industry. Mr. Cason served
as interim President and Chief Operating Officer of Key Tronic
Corporation during 1994 and 1995, and continues to be associated
with Hiller Key Tronic Partners, L.P., which has been managing Key
Tronic's turnaround. Key Tronic is the world's largest independent
producer of computer keyboards and other input devices. Mr. Cason
previously held various management positions with Baker Hughes
Incorporated, including senior executive positions with Baker
Hughes' Drilling Group, serving most recently as Senior Vice
President and Chief Financial Officer of Baker Hughes. He was
elected a director of the Company in 1995.
Jerry C. Martin, 65, served as the Company's Senior Vice
President and Chief Financial Officer from 1985 until his
retirement in June 1997. Prior to 1985, he held various positions
with Global Marine Drilling Company, the Company's domestic dayrate
drilling subsidiary. Mr. Martin was first elected a director of
the Company in 1993.
BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors has five standing committees.
During 1997, the Board of Directors held six meetings. Further
information concerning the Board's standing committees appears
below.
EXECUTIVE COMMITTEE - The Company's Executive Committee
consists of five directors: Edward J. Campbell, Chairman, Thomas W.
Cason, John M. Galvin, C. Russell Luigs and Paul J. Powers. 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 1997.
<PAGE>
AUDIT COMMITTEE - The Company's Audit Committee consists of
four non-employee directors: Thomas W. Cason, Chairman, Edward J.
Campbell, Jerry C. Martin and Ben G. Streetman. 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 1997, the
Audit Committee held four meetings.
COMPENSATION COMMITTEE - The Company's Compensation Committee
consists of four non-employee directors: John M. Galvin, Chairman,
Donald B. Brown, Edward R. Muller and Paul J. Powers. 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 1997.
FINANCE COMMITTEE - The Company's Finance Committee consists
of four non-employee directors: Paul J. Powers, Chairman, Thomas W.
Cason, John M. Galvin and Jerry C. Martin. 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 1997, the Finance Committee held four meetings.
NOMINATING COMMITTEE - The Company's Nominating Committee
consists of four non-employee directors: Donald B. Brown,
Chairman, Edward J. Campbell, Edward R. Muller and Ben G.
Streetman. The Nominating Committee, which held four meetings
during 1997, 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 1999
election of directors should be submitted in writing to the
Corporate Secretary of the Company at 777 North Eldridge Parkway,
Houston, Texas 77079.
During 1997, each director of the Company 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 $7,000 per
quarter for their services as directors. They also receive $1,000
plus expenses for each regular Board meeting or Annual Management
Conference attended and $500 plus expenses for each meeting of any
committee of the Board attended, in each case whether participation
is in person or by telephone. For each special Board meeting, non-
employee directors receive $1,500 for each meeting attended in
person or $1,000 for each meeting attended by telephone. Directors
who are employees of the Company do not receive directors' fees.
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, Martin and Ryan
<PAGE>
are eligible non-employee directors. The earliest Mr. Martin could
become eligible to participate is May 1999.
On the date he first achieves eligibility, a director receives
an initial 10,000-share option and he automatically receives an
additional 3,000-share option on the adjournment date of each
subsequent annual meeting of stockholders in each subsequent year
in which he remains eligible. Each such option has an exercise
price equal to the Common Stock's fair market value per share at
the date the option is granted. Under the plan Mr. Muller
automatically received an initial option grant at a per share
exercise price of $20.75 when he joined the board in February 1997
and Dr. Streetman automatically received an initial option grant at
a per share exercise price of $28.75 when he joined the board in
August 1997, in each case for 10,000 shares of Common Stock. Upon
adjournment of the annual meeting in May 1997, Messrs. Brown,
Campbell, Cason, Galvin, and Powers 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 $19.875. Under the plan,
new options may be granted with respect to the shares covered by
options that have expired unexercised.
In general, each option becomes exercisable for fifty percent
of the shares covered thereby on the first anniversary of the date
of grant and for the remaining fifty percent on the second
anniversary of the date of grant. Options are transferable in
limited circumstances to family members and pursuant to certain
domestic relations orders and by will or the laws of descent and
distribution. The right to exercise all options remaining
unexercised under the plan shall accelerate, so that such options
will become immediately exercisable, upon a "change in control," as
defined in the plan.
Non-employee directors are participants in the Retirement Plan
for Outside Directors. The Company believes 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. The Board of Directors may at any time amend, suspend or
terminate the plan. However, a participant's accrued rights under
the plan may not be adversely affected by any such amendment,
suspension or termination without the participant's consent.
The Company has funded its obligations under the Retirement
Plan for Outside Directors by contributing to a trust established
for the plan. All of the Company's current directors except
Messrs. Luigs and Ryan, who are employees of the Company, are
participants in the Retirement Plan for Outside Directors. Each
participant other than Messrs. Cason, Martin, Muller and Powers and
Dr. Streetman had five full years of credited service as of
December 31, 1997, for purposes of determining the vested benefit
under the plan. Messrs. Cason and Powers have two full years of
credited service as of December 31, 1997, and Messrs. Martin and
Muller and Dr. Streetman do not have any full years of credited
service as of December 31, 1997, for purposes of determining the
vested benefit.
<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 the Company's
Chief Executive Officer and its other four most highly compensated
executive officers during 1997:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compensation
Annual Compensation Awards Payouts
Securities
Name and Underlying LTIP All Other
Principal Position Year Salary Bonus(1) Options(2) Payouts(3) Compensation(4)
($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
C. Russell Luigs, 1997 $522,171 $525,000 75,000 $2,493,750 $12,475
Chairman of the Board 1996 $500,000 $250,000 90,000 $1,556,250 $11,818
and Chief Executive Officer 1995 $498,333 $200,000 200,000 $ 0 $11,178
John G. Ryan, 1997 $314,496 $200,000 57,500 $1,246,875 $ 5,109
President and Chief 1996 $286,708 $125,000 65,000 $ 726,250 $ 4,746
Operating Officer 1995 $270,652 $ 85,000 120,000 $ 0 $ 4,620
Jon A. Marshall, 1997 $261,856 $160,000 35,000 $ 623,438 $ 4,914
President, Global Marine 1996 $234,167 $100,000 45,000 $ 518,750 $ 4,521
Drilling Company 1995 $222,917 $ 75,000 90,000 $ 0 $ 4,377
Gary L. Kott, 1997 $255,720 $115,000 30,000 $ 623,438 $ 7,827
Senior Vice President and 1996 $240,000 $100,000 40,000 $ 415,000 $ 7,083
Chief Financial Officer 1995 $239,417 $ 65,000 80,000 $ 0 $ 6,606
Douglas K. Vrooman(5) 1997 $169,167 $105,000 12,500 $ 0 $ 5,631
President, Applied Drilling
Technology Inc.
</TABLE>
(1) Excluding Mr. Vrooman, bonuses based on service during each
year were awarded in the following year and executive officers
could elect between payment in cash or such shares of Common
Stock. The dollar amounts included 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. Mr. Vrooman
received a quarterly cash bonus based on the performance of
Applied Drilling Technology Inc. for each quarter of 1997.
(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 "LTIP Payouts" for 1996 and 1997
consist of amounts earned under long-term incentive awards
granted in 1994 and 1995 and paid in 1997 and 1998,
respectively, the payment amounts being based on Company
performance during the periods 1994 through 1996 and 1995
through 1997. Such amounts were paid in shares of the
Company's Common Stock, and the dollar amounts included in the
table are the stock's fair market value (average of high and
low market prices) on the date payment was approved by the
Compensation Committee of the Company's Board of Directors.
(4) The amounts indicated under "All Other Compensation" for 1997
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, $3,975; Mr. Ryan,
$3,975; Mr. Marshall, $3,975; Mr. Kott, $3,975; and Mr.
Vrooman, $3,975); plus (b) insurance premiums paid by the
Company with respect to term life insurance for the benefit of
the named executive officers (Mr. Luigs, $8,500; Mr. Ryan,
$1,134; Mr. Marshall, $939; Mr. Kott, $3,852; and Mr. Vrooman,
$1,656).
(5) Mr. Vrooman has been employed by a subsidiary of the Company
during each of the last three years but was not appointed an
executive officer until 1997.
<PAGE>
EMPLOYMENT AGREEMENTS AND SEVERANCE AND CHANGE-IN-CONTROL
ARRANGEMENTS
In February 1995, the Company entered into an employment
agreement with Mr. Luigs that terminates in April 1998. The
agreement specifies a minimum annual base salary of $500,000. In
the event Mr. Luigs is removed from his position as Chief Executive
Officer during the term of the agreement 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 of his employment agreement, or his
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.
Ryan, Marshall, Kott, and Vrooman.
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
exercisable, 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 outstanding options under the Company's 1990 Non-
Employee Director Stock Option Plan and the vesting of retirement
benefits under the Company's Retirement Plan for Outside Directors
can accelerate upon the occurrence 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 1997. 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 using the fair market value of the Company's Common
Stock on February 11, 1997, the date on which the majority of
<PAGE>
options were granted. 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 1997
Individual Grants
Potential Realizable Value at Assumed Annual
Rates of Stock Price Appreciation for Option
Term(2)
Number of
Shares Percent
Under- of Total Exercise
lying Options or Base
Options Granted to Price
Granted(1) Employees ($ per Expira- 0% 5% 10%
Name (#) in 1997 share tion Date ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
C. R. Luigs 75,000 7.78% $20.75 2-11-2007 $ 0 $ 978,717 $ 2,480,262
J. G. Ryan 32,500 3.37% $20.75 2-11-2007 $ 0 $ 424,111 $ 1,074,780
25,000 2.59% $19.875 5-06-2007 $ 0 $ 312,482 $ 791,891
J. A. Marshall 25,000 2.59% $20.75 2-11-2007 $ 0 $ 326,239 $ 826,754
10,000 1.04% $19.875 5-06-2007 $ 0 $ 124,993 $ 316,756
G. L. Kott 20,000 2.08% $20.75 2-11-2007 $ 0 $ 260,991 $ 661,403
10,000 1.04% $19.875 5-06-2007 $ 0 $ 124,993 $ 316,756
D. K. Vrooman 12,500 1.30% $20.75 2-11-2007 $ 0 $ 163,210 $ 413,377
All Stockholders(3) N/A N/A $20.75 N/A $ 0 $2,219,649,585 $5,625,027,848
</TABLE>
(1) All options granted to the named officers were granted on
February 11 and May 6, 1997, at exercise prices equal to the
average of the high and low per share market prices of the
Company's Common Stock on the date of grant. Each option
granted during 1997 is exercisable for 25% of the aggregate
number of shares subject to the option one year after grant,
50% two years after grant, 75% three years after grant and
100% four years after grant. The right to exercise
unexercised options is subject to acceleration in certain
circumstances as described under "Employment Agreements and
Severance and Change-in-Control Arrangements," above, and upon
death, disability and certain non-cause terminations of
employment. 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. To date there have been no
such adjustments or reductions. Certain options are
transferable in limited circumstances to family members and
pursuant to certain domestic relations orders. Options are
not otherwise transferable except 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 170,093,780 shares of the Company's Common Stock
outstanding on February 11, 1997, using the $20.75 average of
the stock's high and low market prices on that date as the
base price.
<PAGE>
OPTION EXERCISES AND YEAR-END VALUES
The following table shows option exercises by the named
executive officers during 1997, as well as the number of shares
underlying all exercisable and non-exercisable stock options held
by the named executive officers as of December 31, 1997. Also
reported are the year-end values for their unexercised "in-the-
money" options, which represent the positive spread between the
exercise price of any such options and the year-end market price of
the Common Stock.
<TABLE>
AGGREGATED OPTION EXERCISES IN 1997
AND YEAR-END OPTION VALUES
<CAPTION>
Number of
Sharesf Number of Securities
Underlying Underlying Unexercised Value of Unexercised In-the-
Options Value Options at Year-End Money Options at Year-End
Exercised Realized(1) (#) ($)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
C. R. Luigs 0 $ 0 1,385,417 142,500 $30,070,923 $1,337,585
J. G. Ryan 311,571 $7,259,417 191,346 106,250 $ 3,797,150 $1,001,138
J. A. Marshall 0 $ 0 218,705 68,750 $ 4,621,059 $ 667,621
G. L. Kott 100,895 $2,316,916 310,772 60,000 $ 6,343,264 $ 590,003
D. K. Vrooman 41,500 $ 584,750 88,750 31,250 $ 1,766,215 $ 338,478
</TABLE>
(1) The value realized reflects the spread between the exercise
price of such options and the sale price of the shares of
common stock received upon exercise if such shares were sold
in an exercise/sell transaction or the spread between the
exercise price of such options and the fair market value of
the shares of common stock received upon exercise if such
shares were held following exercise.
LONG-TERM INCENTIVE AWARDS
The following table provides details regarding long-term
incentive awards granted to the named executive officers in 1997,
which are discussed in the Report of the Compensation Committee of
the Board of Directors on Executive Compensation in this Proxy
Statement. The table includes the number of shares underlying each
award, the time period until payout of the award, and the number of
shares of the estimated payout. Awards are dependent on the
performance of the Company for the three-year period ending
December 31, 1999, as measured by the following performance
criteria: cumulative earnings before interest, taxes, depreciation
and amortization; earnings per share in 1999; and stock price
growth. Shares of the Company's Common Stock underlie each award
and are allocated among the performance criteria. Twenty-five
percent of the award allocated to each criterion will be earned
only if a pre-established threshold level of performance is
achieved. After reaching the threshold, the amount of the award
increases up to the full amount of the award allocated to that
criterion if a pre-established target level of performance is
achieved.
<PAGE>
<TABLE>
1997 LONG-TERM INCENTIVE AWARDS
<CAPTION>
Estimated Future Payouts
Under
Non-Stock Price-Based Plans(1)
Number of Shares Performance or
Units or Other Period Target/
Other Rights Until Maturation Threshold Maximum
Name (#) or Payout (#) (#)
<S> <C> <C> <C> <C>
C. R. Luigs 25,000 3 Years 6,250 25,000
J. G. Ryan 12,500 3 Years 3,125 12,500
J. A. Marshall 9,250 3 Years 2,312 9,250
G. L. Kott 6,250 3 Years 1,562 6,250
D. K. Vrooman 0 - - -
</TABLE>
(1) Expressed in terms of numbers of shares of the Company's
Common Stock and ignores fractional shares. Estimated future
payout amounts assume threshold or target levels of
performance are achieved under all performance criteria.
Although twenty percent of each award is based on stock price
growth, the shares underlying that portion of each award are
included in the columns for estimated future payouts under
non-stock price-based plans in order to report total estimated
future payouts under the plan.
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), including
both benefits payable under the Company's qualified defined benefit
pension plan (the Retirement Plan for Employees) and benefits
payable under the Company's nonqualified supplemental defined
benefit pension plans (the Benefit Equalization Retirement Plan and
the Executive Supplemental Retirement Plan), which cover the five
executive officers named in the Summary Compensation Table (except
that Mr. Vrooman is not a participant in the Executive Supplemental
Retirement Plan). The nonqualified supplemental plans provide
benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan
benefits. The estimated benefits shown are based on remuneration
covered by the plans and years of service with the Company and its
subsidiaries.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Years of Service
Remuneration 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$ 200,000 $100,000 $100,000 $100,000 $112,284 $132,284
$ 300,000 $150,000 $150,000 $150,000 $172,284 $202,284
$ 400,000 $200,000 $200,000 $200,000 $232,284 $272,284
$ 500,000 $250,000 $250,000 $250,000 $292,284 $342,284
$ 600,000 $300,000 $300,000 $300,000 $352,284 $412,284
$ 700,000 $350,000 $350,000 $350,000 $412,284 $482,284
$ 800,000 $400,000 $400,000 $400,000 $472,284 $552,284
$ 900,000 $450,000 $450,000 $450,000 $532,284 $622,284
$1,000,000 $500,000 $500,000 $500,000 $592,284 $692,284
$1,100,000 $550,000 $550,000 $550,000 $652,284 $762,284
$1,200,000 $600,000 $600,000 $600,000 $712,284 $832,284
$1,300,000 $650,000 $650,000 $650,000 $772,284 $902,284
</TABLE>
<PAGE>
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" and "Bonus" 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 thirty-six month 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 Company has contributed a portion of its anticipated obligation
under the nonqualified supplemental plans to trusts established for
those plans. The trusts are so-called "rabbi trusts," the assets
of which are available to pay claims of Company creditors in the
event of the Company's insolvency or bankruptcy.
The full years of credited service as of December 31, 1997 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, 20 years; Mr. Ryan, 15 years;
Mr. Marshall, 18 years; Mr. Kott, 19 years; and Mr. Vrooman, 3
years. Mr. Luigs has declined participation in the Benefit
Equalization Retirement Plan and has waived all rights to receive
benefits under such plan. Messrs. Luigs, Ryan, Marshall and Kott
each have the maximum of 15 full years of employment under the
Executive Supplemental Retirement Plan as of December 31, 1997 for
purposes of determining the benefit under that plan. Mr. Vrooman
is not a participant in the Executive Supplemental Retirement Plan.
The Pension Plan Table assumes that years of service for a
particular individual are the same under all plans and that thirty-
six month 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 oversight and
administration of:
1) the Company's compensation policies and programs,
and
2) specific salary, incentive, stock option and long
term incentive awards to senior executive
officers, including the Chief Executive Officer
and the other four officers named in the Summary
Compensation Table.
<PAGE>
COMPENSATION POLICIES AND PROGRAMS
The Compensation Committee's goals are to develop and
maintain compensation programs that preserve and enhance
shareholder value. 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,
stock performance relative to the peer group, and
earnings performance;
* Rewards effective, efficient ongoing management
of Company operations through annual incentives
tied to operating, financial and/or strategic
goals established each year; and
* Provides the ability to attract and retain the
quality of executives needed, by providing
compensation levels competitive for the drilling
industry.
The Company's executive compensation program includes
base salary, annual management incentive awards, and stock
option and other long-term incentive awards, each of which
is tied to individual performance, but none of which is
determined by any specific formula or weighing of factors
in the case of any individual. The Committee intends to
make awards and take actions under these programs
considering the overall costs and benefits to the Company.
Specifically, the Committee intends to consider the costs
and benefits of preserving potential tax deductibility of
executive pay under Section 162(m) of the Internal Revenue
Code in making awards to senior executives. The Committee
is advised periodically by a nationally recognized,
independent executive compensation consulting firm on
competitive salary levels, bonus practices, and stock
programs of leading drilling contractors.
In evaluating competitive compensation levels of
senior executives, the Committee uses a peer group
comprised of the same companies used for comparison in the
Cumulative Total Shareholder Return graph, consisting of
ENSCO International Incorporated, Nabors Industries, Inc.,
Noble Drilling Corporation, Parker Drilling Company, R &
B Falcon Corporation, Rowan Companies, Inc., and
Transocean Offshore Inc. The Committee reviews the
compensation of the five highest paid executives in the
Company and in each of the peer group companies. The
Committee also reviews a "Total Compensation Analysis"
prepared by its compensation consulting firm, which
includes salaries and annual bonuses earned by each
executive, the estimated value of recent option grants
(using the "Black-Scholes" value of recent grants), plus
values earned from other recent long-term incentive
awards. An analysis of 1997 proxy statements of the
Company and the peer group companies indicated that Global
Marine's total compensation levels in 1996 were less than
the competitive median for the five highest paid
executives as a group, and the Chief Executive Officer's
total compensation was less than 85% of the average total
compensation for the Chief Executive Officer provided by
other peer group companies.
ANNUAL COMPENSATION
BASE SALARY: The Compensation Committee reviews the
performance of each senior executive officer individually
with the Chief Executive Officer and, considering the
Chief Executive Officer's recommendation, determines an
<PAGE>
appropriate salary level for each officer, giving primary
weight to Company performance and industry conditions. 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.
ANNUAL MANAGEMENT INCENTIVE AWARDS: The Compensation
Committee has designed an Annual Management Incentive
Award Plan to reward executives and managers, other than
a group of eight senior executive officers that includes
the five named in the Summary Compensation Table. The
total amount available for such bonus awards is based on
the Company's performance in relation to goals established
at the outset of each year. For 1997, the total amount
was based on consolidated pretax profit; 5% of
consolidated pretax profit in excess of a $180 million
threshold was reserved for the Plan, subject to a limit of
50% of annual base salary as the maximum payout to any one
participant. For 1997, the consolidated pretax profit
exceeded $180 million, so incentive awards were granted.
The individual performance of the 167 eligible employees
was considered in allocating the awards.
The Compensation Committee also granted incentive
bonus awards to those senior officers other than Mr.
Vrooman who are not covered by the Plan. In allocating
individual incentive bonus awards to these senior
executive officers in respect of 1997 service, the
Compensation Committee considered both Company performance
(discussed below under "Compensation of the Chief
Executive Officer") and each officer's contributions to
that performance, and considered the accomplishments of
each senior executive officer in his area of
responsibility. Mr. Vrooman received incentive bonuses
under a plan designed to reward executives and managers in
the Company's drilling management and oil and gas
divisions, the largest such division being Applied
Drilling Technology Inc., for which he serves as
President. The total amount available for such awards is
based on the performance of the Company's drilling
management divisions in relation to goals established at
the outset of each year. For 1997, the total amount was
based on pretax profit of the drilling management
division; 5% of pretax profit of the drilling management
divisions was reserved for this plan. For 1997, pretax
profit of the drilling management divisions allowed
payment of bonuses to 85 individuals, including Mr.
Vrooman. The individual performance of the eligible
employees was considered in allocating the awards.
Based on these reviews, and with consideration given
to competitive peer group total compensation levels,
incentive bonus awards to senior officers, were approved
by the Committee.
LONG-TERM COMPENSATION
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 competitive practices,
continuing progress of the Company, and individual
performance. All stock option awards shown in the Summary
Compensation Table for the past three years were made with
option exercise prices equal to the fair market value of
the underlying stock at the time of grant so that holders
benefit from such options only when and to the extent the
stock price increases after the option grant.
<PAGE>
In February 1997, the Committee noted the following
improvements in operating results for 1996 as compared to
1995: revenue increased 45% to $681 million, operating
income increased 133% to $141 million, and, excluding a
non-cash tax credit in 1996, net income per share
increased from $.30 to $.66. Based on this overall
continuing progress, the Compensation Committee approved
annual stock option grants to executive officers and other
key employees, including the five named in the Summary
Compensation Table. The 1997 option awards were made to
139 employees and covered approximately 580,000 shares of
underlying common stock. The performance of individual
executive officers and other key employees was considered
in allocating 1997 stock option grants, which were
recommended by the Chief Executive Officer and approved by
the Committee.
LONG-TERM INCENTIVE AWARDS: In 1994, after reviewing
a comprehensive analysis of stock plans utilized by peer
group companies, which was provided to the Committee by
the Company's independent compensation consultant, the
Compensation Committee determined that, in order to
provide competitive compensation and to motivate senior
executives towards effective long-term strategic
management of the Company's assets and operations, the
Company should utilize long-term incentive awards more
directly tied to performance for its senior executive
officers. Accordingly, beginning in May 1994, the
Committee approved grants of long-term incentive awards
under the Company's 1989 Stock Option and Incentive Plan
based on Company performance for three-year periods. In
February 1997, the Committee approved grants of long-term
incentive awards based on Company performance for the
three-year period ending December 31, 1999. The total
amount of these awards and their allocation among six
senior executive officers including those named in the
Summary Compensation Table other than Mr. Vrooman were
based on the same considerations discussed above with
respect to stock option grants. In February 1998, the
Committee certified that the goals established for the
long-term incentive awards granted in 1995 had been
exceeded and, accordingly, the full target amount under
these grants was paid out in February 1998. The long-term
incentive awards granted in 1995 and paid out in February
1998 do not qualify as "performance-based compensation"
under Section 162(m) of the Internal Revenue Code and,
therefore, to the extent compensation to any of the
officers named in the Summary Compensation Table exceeds
$1 million, it is not deductible.
The long-term incentive awards granted in 1997 are
dependent on Company performance for the three-year period
ending December 31, 1999, as measured by three long-term
performance criteria: cumulative earnings before
interest, taxes, depreciation and amortization; earnings
per share in 1999; and stock price growth. Shares of the
Company's common stock underlie each award and are
allocated among the three criteria: 40% to cumulative
earnings, 40% to 1999 earnings per share, and 20% to stock
price growth. No portion of the amount allocated to a
criterion will be earned unless a pre-established
"threshold" level of performance is achieved. When the
threshold level of performance has been achieved, 25% of
the shares allocated to that criteria are earned, and the
amount of the award for that criterion increases up to
that criterion's full allocated amount if the
pre-established "target" level of performance is achieved.
The full amount of the award will be earned only if target
level performance is achieved for all three performance
criteria.
<PAGE>
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, incentive bonus awards, stock option awards
and performance-based long-term incentive awards as deemed
appropriate in each officer's situation. The reasons for
the Committee's decisions regarding the Chief Executive
Officer's 1997 compensation are described below.
In February 1997 the Compensation Committee
determined that Mr. Luigs' salary should be increased
$25,000 (5%) from $500,000 to $525,000 based on Mr. Luigs
contribution to the Company's substantial improvements in
1996 operating results as compared to 1995, which are
discussed above under "Stock Options." The Committee also
approved annual stock option grants to employees,
including an option grant to Mr. Luigs covering 75,000
shares. The Committee approved this award based on its
review of competitive stock option grant levels of peer
group companies, as well as the Company's performance for
1996 as compared to 1995. Finally, the Committee approved
the grant of performance-based long-term incentive awards
in 1997 for six senior executive officers, including those
named in the Summary Compensation Table other than Mr.
Vrooman, as discussed above under "Long-Term Incentive
Awards." Mr. Luigs was given the opportunity to earn up
to a maximum of 25,000 shares of the Company's common
stock over the three-year performance cycle ending
December 31, 1999, if all long-term performance targets
are achieved.
1997 COMPANY PERFORMANCE AND CHIEF EXECUTIVE OFFICER
BONUS: In February 1998, the Committee noted the
following improvements in the Company's operating results
for 1997 as compared to 1996: revenue increased 57% to
$1,067 million, operating income increased 117% to $305
million, and, excluding non-recurring tax credits in 1996
and 1997 and an extraordinary loss on debt extinguishment
in 1997, net income increased 145% to $270 million and net
income per share increased from $.66 to $1.58. The
Committee also noted that the Company's stock far
outperformed both the index of peer group companies and
the S&P 500 Index. The Committee determined that the
Chief Executive Officer made significant contributions to
these results. Based on these results and considering the
Chief Executive Officer's role in achieving them, the
Compensation Committee approved an incentive bonus award
for Mr. Luigs of $525,000. In addition, the Committee
certified that each of the three criteria for the long-
term incentive awards granted in 1995 had been exceeded
and approved the full target level payout under these
awards to six senior executive officers, including those
named in the Summary Compensation Table other than Mr.
Vrooman. Mr. Luigs received 100,000 shares of the
Company's common stock as payment under his 1995 long-term
incentive award.
John M. Galvin, Chairman Donald B. Brown
Lynn L. Leigh Edward R. Muller
Paul J. Powers
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
Messrs. Brown, Galvin, Muller and Powers served as
Members of the Company's Compensation Committee during all
or part of 1997. Lynn L. Leigh, who retired from the
Company's Board of Directors in May 1997, also served as
a member of the Company's Compensation Committee during
part of 1997. No 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 1997 or any
prior year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires that the Company's executive officers and
directors, and persons who beneficially own more than ten
percent of the Company's Common Stock, file initial
reports of ownership and reports of changes in ownership
of the Company's equity securities with the Securities and
Exchange Commission and the New York Stock Exchange.
Executive officers, directors and greater than ten percent
beneficial owners are required by Securities and Exchange
Commission regulations to furnish the Company with copies
of all Section 16(a) reports they file. Based solely on
a review of such reports furnished to the Company and
written representations that no report on Form 5 was
required for 1997, the Company believes that no director,
officer or beneficial owner of more than ten percent of
the Common Stock failed to file a report on a timely basis
during 1997, except that one report was filed late by
David A. Herasimchuk, an officer, regarding two cash
purchases of Company stock upon the exercise of employee
stock options in transactions exempt from Section 16(b) of
the Securities Exchange Act of 1934.
<PAGE>
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 1992 through the end of
1997, 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:
ENSCO International Incorporated; Nabors Industries, Inc.;
Noble Drilling Corporation; Parker Drilling Company; R &
B Falcon Corporation (formerly Reading & Bates
Corporation); Rowan Companies, Inc.; and Transocean
Offshore Inc. 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 December 31, 1992 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
December 31, 1992, divided by such per share price at
December 31, 1992. The Company has not declared any
dividends during the period covered by the graph.
<TABLE>
<CAPTION>
COMPARISON OF 1993-97 CUMULATIVE TOTAL RETURN*
AMONG GLOBAL MARINE INC., S&P 500 INDEX & INDUSTRY INDEX
12/92 12/93 12/94 12/95 12/96 12/97
<S> <C> <C> <C> <C> <C> <C>
Global Marine Inc. $100 $194 $171 $412 $971 $1,156
S&P 500 Index $100 $110 $112 $153 $189 $ 252
Industry Index $100 $145 $122 $228 $429 $ 638
* Assumes $100 invested on December 31, 1992 in Global Marine Inc. stock,
S&P 500 Index and an Industry Index of peer companies. S&P 500 and
Industry indices reflect month-end dividend reinvestment and annual
reweighting.
</TABLE>
<PAGE>
PROPOSAL TO APPROVE GLOBAL MARINE 1998 STOCK OPTION AND
INCENTIVE PLAN, INCLUDING PERFORMANCE MEASURES TO BE USED
FOR CERTAIN PERFORMANCE-BASED COMPENSATION
Effective as of February 10, 1998, the Board of
Directors adopted the Global Marine 1998 Stock Option and
Incentive Plan (the "Plan"), subject to stockholder
approval. The Board of Directors believes the Plan will
be important in securing for the Company and its
stockholders the benefits arising from ownership of its
Common Stock by employees, consultants and other persons
providing key services to the Company and its subsidiaries
and affiliates. The Plan constitutes an important part of
the compensation program for such persons, providing them
with an opportunity to acquire a proprietary interest in
the Company and giving them an additional incentive to use
their best efforts for the Company's long-term success.
The following description of the Plan is a summary of
certain provisions and is qualified in its entirety by
reference to the Plan, which is attached to this Proxy
Statement as Exhibit A.
As of March 13, 1998, eight persons held awards
granted under the Plan, subject to approval of the Plan by
the Company's stockholders. If the new Plan is approved
by the stockholders, no new grants will be made under the
existing Global Marine Inc. 1989 Stock Option and
Incentive Plan (the "1989 Plan") after February 10, 1998,
but certain shares authorized under the 1989 Plan will be
available under the new Plan as outlined below.
The last reported sales price for the Company's
Common Stock as reported on the New York Stock Exchange
Composite Transaction Tape on March 13, 1998, was $22 per
share.
SUMMARY OF THE PLAN. The Plan is administered by a
Committee of two or more members of the Company's Board of
Directors who are not employees of the Company or a
"Related Company" (the "Committee"). The term "Related
Company" means any subsidiary of the Company and any other
business venture in which the Company has a significant
interest as determined in the discretion of the Committee.
The Plan provides for various types of benefits ("Awards")
to be granted to participants. Under the Plan, options to
purchase shares of the Company's Common Stock and stock
appreciation rights with fixed or variable exercise prices
may be granted, but exercise prices can be no less than
the stock's fair market value on the date of grant. In
addition, the Plan permits grants of shares of Common
Stock or of rights to receive shares of Common Stock, or
their cash equivalent or a combination of both, including
restricted, unrestricted, performance and phantom stock,
on such terms as the Committee may determine. The Plan
also provides for cash bonus awards based on objective
performance goals preestablished by the Committee.
Options and stock appreciation rights must have fixed
terms no longer than 10 years, restricted stock must be
either performance-based with a one-year minimum or
restricted for at least three years, outright unrestricted
stock grants must be in lieu of salary or bonus, and
events that accelerate vesting of Stock Awards (as
hereinafter defined) are limited to death, disability,
retirement or other non-cause terminations of employment,
or change-of-control. Plan shares can be used as the form
of payment for any other compensation payable by the
Company.
The Plan provides for a maximum of 7,500,000 shares
of the Company's Common Stock as to which Awards may be
granted (the "Basic Authorization"), plus (i) shares, if
any, available under the existing Plan, of which there
were none at March 13, 1998, or forfeited under the 1989
Plan or new Plan, (ii) shares delivered as payment or
delivered or withheld for taxes under the 1989 Plan or new
Plan, and (iii) shares delivered in substitution for
shares issuable under plans of other companies acquired by
the Company or a Related Company.
The Committee selects the participants and determines
the number and type of Awards to be granted to each
participant. Participants who may be granted awards under
<PAGE>
the Plan include any employee of the Company or a Related
Company, any consultant or other person providing key
services to the Company or a Related Company, and any
person to whom an offer of employment has been made by the
Company or a Related Company. However, no member of the
Board of Directors shall be eligible unless he or she is
also an employee of the Company or a Related Company.
Awards may be granted as alternatives to or in replacement
of (a) awards outstanding under the Plan or any other plan
or arrangement of the Company or a Related Company, or (b)
awards outstanding under a plan or arrangement of a
business or entity all or part of which is acquired by the
Company or a Related Company. The Committee may permit or
require the deferral of any Award payment, subject to such
rules and procedures as it may establish, and in addition
may include provisions in Awards for the payment or
crediting of interest or dividend equivalents, including
converting such credits into deferred Common Stock
equivalents.
The Committee determines, in connection with each
option, the exercise price, whether that price is payable
in cash or shares of the Company's Common Stock or by the
proceeds of a sale assisted by a broker or other third
party, the terms and conditions of exercise, whether the
option will qualify as an incentive stock option (an
"Incentive Stock Option") under the Internal Revenue Code
of 1986, as amended ("Code"), or a non-qualified stock
option (a "Non-Qualified Stock Option"), restrictions on
transfer of the option, and other provisions not
inconsistent with the Plan. No more than 6,000,000 shares
of common stock are available under the Plan for Incentive
Stock Options, subject to increase, on a pro-rata basis,
in the event of an approved increase in the Basic
Authorization.
The Committee is authorized to grant stock
appreciation rights ("SARs") to Plan participants. Every
SAR entitles the participant, upon exercise of the SAR, to
receive in cash or Common Stock a value equal to the
excess of the market value of a specified number of shares
of Common Stock at the time of exercise, over the exercise
price established by the Committee. There are no
currently outstanding SARs, and the Company has no plans
to grant SARs in the future.
In addition, the Plan authorizes the Committee to
grant stock awards consisting of shares of Common Stock or
of a right to receive shares of Common Stock, or their
cash equivalent or a combination of both, in the future
("Stock Awards"), and cash bonuses payable solely on
account of the attainment of one or more objective
performance goals that have been preestablished by the
Committee ("Cash Awards"). Stock Awards and Cash Awards
may be subject to such terms and conditions, restrictions
and contingencies, not inconsistent with the Plan, as may
be determined by the Committee. Among other things, Stock
Awards can be, and cash bonuses that qualify as Cash
Awards under the Plan must be, conditioned upon the
achievement of single or multiple performance goals. The
performance goals may be cumulative, annual or end-of-
performance period goals, may be relative to a peer group
or based on increases or changes relative to stated
values, and may be based on any one or more of the
following measures: (a) earnings before interest, taxes,
depreciation and amortization; (b) earnings per share; (c)
stock price growth; (d) net income (before or after
taxes); (e) cash flow; and (f) total shareholder return.
No more than 2,000,000 shares are issuable under the Plan
for Stock Awards, and the maximum cash payment that can be
made to any one individual pursuant to any Cash Award
during any calendar year is $2,000,000.
Cash Awards, as well as the above-mentioned
performance measures for Stock Awards and Cash Awards, are
included in the Plan to enable the Committee to satisfy
certain requirements under section 162(m) of the Code.
The Committee can satisfy such requirements by, among
other things, including provisions in Stock Awards and
cash bonuses that will make them payable solely on account
of the attainment of one or more preestablished, objective
performance goals based on performance measures that have
been approved by the Company's stockholders. Although the
Committee does not have to include such provisions in
Stock Awards or cash bonuses, the inclusion of such
<PAGE>
provisions and compliance with certain other requirements
of section 162(m) would enable the Company to take a tax
deduction for such compensation that it might not
otherwise be able to take.
In the event of a corporate transaction involving the
Company (including without limitation any stock divided,
stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination or exchange of shares),
the Committee may adjust Awards to preserve the benefits
or potential benefits of the Awards. Action by the
Committee may include adjustment of: (i) the number and
kind of shares which may be issued or delivered under the
Plan; (ii) the number and kind of shares subject to
outstanding Awards; and (iii) the exercise price of
outstanding options and SARs; as well as any other
adjustments that the Committee determines to be equitable.
For purposes of satisfying the requirements under
section 162(m) of the Code, the Plan provides that during
any ten consecutive calendar years no participant may be
granted Awards covering, in the aggregate, more than 20%
of the Basic Authorization, which, for example, would
currently result in a limit of 1,500,000 shares. Under
section 162(m) the maximum number of shares available to
any employee under the Plan will be reduced by the number
of shares subject to options awarded to the employee that
expire.
Based on the provisions of the Plan and assuming that
stockholders approve the Plan, the Company expects that
all options and SARs and all Stock Awards and Cash Awards
under the Plan will qualify as performance-based
compensation under section 162(m).
The Plan is not limited in duration; provided,
however, that to the extent required by the Code no
Incentive Stock Options may be granted under the Plan more
than ten years after its approval. The Board of Directors
may at any time amend, suspend or terminate the Plan, but
in doing so cannot adversely affect any outstanding Award
without the grantee's written consent or, in the absence
of stockholder approval, increase the number of shares
available under the Plan, change the minimum option or SAR
price required by the Plan, or increase the maximum limits
on Stock Awards, Incentive Stock Options, or the amounts
of Awards that can be granted to any one individual under
the Plan.
AWARDS GRANTED UNDER THE PLAN. Subject to
stockholder approval of the Plan, the Committee granted
options and long-term incentive awards under the Plan in
February 1998 to eight senior executive officers,
including the five named in the Summary Compensation
Table. If the Plan is not approved by stockholders at the
1998 annual meeting, these options and long-term incentive
awards will be void and without effect. The following
table shows the options and long-term incentive awards
granted under the new Plan in February 1998 to the
Company's Chief Executive Officer, the other four most
highly compensated executive officers, and all current
executive officers as a group. No employee or director
who is not an executive officer has been granted awards
yet under the new Plan.
<TABLE>
<CAPTION>
AWARDS GRANTED UNDER
1998 STOCK OPTION AND INCENTIVE PLAN
SECURITIES UNDERLYING LONG-TERM
NAME OPTIONS(1) INCENTIVE AWARDS(2)
<S> <C> <C>
C. R. Luigs 150,000 75,000
J. G. Ryan 75,000 50,000
J. A. Marshall 50,000 30,000
G. L. Kott 45,000 25,000
D. K. Vrooman 35,000 20,000
All current executive officers as
a group (9 persons) 440,000 240,000
____________
</TABLE>
(1) Number of shares of the Company's Common Stock.
(2) Maximum number of shares subject to award.
<PAGE>
All options granted to the named officers were
granted on February 10, 1998, at an exercise price equal
to the grant date fair market value of a share of the
Common Stock underlying the options. Each option has a
ten-year term and is exercisable for 25% of the aggregate
number of shares subject to the option one year after
grant, 50% two years after grant, 75% three years after
grant, and 100% four years after grant. The right to
exercise unexercised options is subject to acceleration in
certain circumstances as described under "Employment
Agreements and Severance and Change-in-Control
Arrangements."
The number of shares that can be earned under the
long-term incentive awards granted in 1998 is dependent on
Company performance for the three-year period ending
December 31, 2000, under three long-term performance
criteria: cumulative earnings before interest, taxes,
depreciation and amortization ("EBITDA"); earnings per
share in 2000; and stock price growth. The shares that
can be earned are allocated among the performance criteria
as follows: 40% to cumulative EBITDA; 40% to 2000 earnings
per share; and 20% to stock price growth. Twenty-five
percent of the award allocated to each criterion will be
earned only if a pre-established "threshold" level of
performance is achieved. After reaching the threshold,
the amount of the award increases up to the full amount of
the award allocated to that criterion if a pre-established
"target" level of performance is achieved. The maximum
amount of the award will be earned only if target level
performance is achieved for all three performance
criteria.
FEDERAL INCOME TAX CONSEQUENCES. The following
is a summary of the general rules of present federal
income tax law relating to the tax treatment of Incentive
Stock Options, Non-Qualified Stock Options, SARs, Stock
Awards and Cash Awards under the Plan. The discussion is
general in nature and does not take into account a number
of considerations which may apply based on the
circumstances of a particular participant under the Plan.
OPTIONS. Some of the options issuable under the
Plan may constitute "Incentive Stock Options" within the
meaning of section 422 of the Code, while other options
granted under the Plan will be Non-Qualified Stock
Options. The Code provides for tax treatment of stock
options qualifying as Incentive Stock Options which may be
more favorable to employees than the tax treatment
accorded Non-Qualified Stock Options. Generally, upon the
exercise of an Incentive Stock Option, the optionee will
recognize no income for U.S. federal income tax purposes.
However, the difference between the exercise price of the
Incentive Stock Option and the fair market value of the
stock at the time of exercise is an item of tax adjustment
that may require payment of an alternative minimum tax.
On the sale of shares acquired by exercise of an Incentive
Stock Option (assuming that the sale does not occur within
two years of the date of grant of the option or within one
year from the date of exercise), any gain will be taxed to
the optionee as mid-term or long-term capital gain,
depending on the actual holding period from the exercise
date. In contrast, upon the exercise of a Non-Qualified
Option, the optionee recognizes taxable income (subject to
withholding) in an amount equal to the difference between
the fair market value of the shares on the date of
exercise and the exercise price. Upon any sale of such
shares by the optionee, any difference between the sale
price and the fair market value of the shares on the date
of exercise of the Non-Qualified Option will be treated
generally as capital gain or loss. No deduction is
available to the Company upon the grant or exercise of an
Incentive Stock Option (although a deduction may be
available if the employee sells the shares acquired upon
exercise before the applicable holding period expires),
whereas upon exercise of a Non-Qualified Stock Option, the
Company is entitled to a deduction in an amount equal to
the income recognized by the employee. Except in the case
of the death or disability of an optionee, an optionee has
three months after termination of employment in which to
exercise an Incentive Stock Option and retain favorable
tax treatment at exercise. An option exercised more than
three months after an optionee's termination of employment
other than upon death or disability of an optionee cannot
qualify for the tax treatment accorded Incentive Stock
Options. Such option would be treated as a Non-Qualified
Stock Option instead.
<PAGE>
STOCK APPRECIATION RIGHTS. The amount of any cash
or the fair market value of any stock received by the
holder upon the exercise of SARs under the Plan will be
subject to ordinary income tax in the year of receipt, and
the Company will be entitled to a deduction for such
amount.
STOCK AWARDS. A grant of shares of Common Stock
or a cash equivalent that is subject to no vesting
restrictions will result in taxable income for federal
income tax purposes to the recipient at the time of grant
in an amount equal to the fair market value of the shares
or the amount of cash awarded. The Company would be
entitled to a corresponding deduction at that time for the
amount included in the recipient's income.
Generally, a grant of shares of Common Stock under
the Plan subject to vesting and transfer restrictions will
not result in taxable income to the recipient for federal
income tax purposes or a tax deduction to the Company in
the year of the grant. The value of the shares will
generally be taxable to the recipient as compensation
income in the years in which the restrictions on the
shares lapse. Such value will be the fair market value of
the shares on the dates the restrictions terminate. Any
recipient, however, may elect pursuant to Code section
83(b) to treat the fair market value of the shares on the
date of such grant as compensation income in the year of
the grant of restricted shares, provided the recipient
makes the election pursuant to Code section 83(b) within
30 days after the date of the grant. In any case, the
Company will receive a deduction for federal income tax
purposes corresponding in amount to the amount of
compensation included in the recipient's income in the
year in which that amount is so included.
CASH AWARDS. Cash Awards are taxable income to
the recipient for federal income tax purposes at the time
of payment. The recipient will have compensation income
equal to the amount of cash paid, and the Company will
have a corresponding deduction for federal income tax
purposes.
OTHER. In general, a federal income tax deduction
is allowed to the Company in an amount equal to the
ordinary income recognized by a participant with respect
to Awards under the Plan, provided that such amount
constitutes an ordinary and necessary business expense of
the Company, that such amount is reasonable, and that the
qualified performance-based compensation requirements of
section 162(m) of the Code are satisfied.
A participant's tax basis in shares purchased
under the Plan is equal to the sum of the price paid for
the shares, if any, and the amount of ordinary income
recognized by the participant on the transfer of the
shares. The participant's holding period for the shares
begins just after the transfer of the shares. If a
participant sells shares, any difference between the
amount realized in the sale and the participant's tax
basis in the shares is taxed as long-term, mid-term or
short-term capital gain or loss (provided the shares are
held as a capital asset on the date of sale), depending on
the participant's holding period for the shares.
REQUISITE VOTE. The affirmative vote of the
majority of the shares of Common Stock present or
represented and entitled to vote at the Annual Meeting is
required for approval of the Plan and the performance
measures to be used for certain performance-based
compensation. If such a vote is not obtained, the Plan
and the Awards previously granted thereunder will be void
and without effect. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" APPROVAL OF THE PLAN AND THE PERFORMANCE
MEASURES TO BE USED FOR CERTAIN PERFORMANCE-BASED
COMPENSATION, AND DULY EXECUTED PROXIES WILL BE VOTED FOR
APPROVAL UNLESS OTHERWISE INDICATED THEREON.
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Coopers &
Lybrand L.L.P. as independent certified public accountants
for the Company and its subsidiaries for fiscal year 1998.
It is intended that such appointment be submitted to the
stockholders for ratification at the 1998 Annual Meeting
of Stockholders. Coopers & Lybrand L.L.P. 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, 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 and
entitled to vote at the meeting in person or by proxy.
It is expected that representatives of Coopers &
Lybrand L.L.P. 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 1999 and otherwise eligible must be received at the
Company's principal executive offices no later than
November 27, 1998. They may be addressed to the Corporate
Secretary of the Company at 777 North Eldridge Parkway,
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 and any
adjournments or postponements thereof, the proxies will be
voted as to such matters in accordance with the best
judgment of the proxy holders.
GLOBAL MARINE INC.
By ALEXANDER A. KREZEL
Corporate Secretary
Houston, Texas
March 27, 1998
<PAGE>
EXHIBIT A
GLOBAL MARINE
1998 STOCK OPTION AND INCENTIVE PLAN
____________________________
SECTION 1 - GENERAL
1.1 PURPOSE. The Global Marine 1998 Stock Option
and Incentive Plan (the "Plan") has been established by
Global Marine Inc. (the "Company") to (i) attract and
retain persons eligible to participate in the Plan, (ii)
motivate Participants by means of appropriate incentives
to achieve long-range goals, (iii) provide incentive
compensation opportunities using the Company's common
stock or cash that are competitive with those of other
similar companies, and (iv) further identify Participants'
interests with those of the Company's other stockholders
through compensation that is based on the Company's common
stock, thereby promoting the long-term financial interest
of the Company and the Related Companies, including growth
in value of the Company's equity and enhancement of long-
term stockholder return.
1.2 PARTICIPATION. Subject to the terms and
conditions of the Plan, the Committee shall determine and
designate from time to time, from among the Eligible
Individuals, those persons who will be granted one or more
Awards under the Plan and thereby become "Participants" in
the Plan. At the discretion of the Committee, a
Participant may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be
granted to a Participant. Awards may be granted as
alternatives to or in replacement of (a) awards
outstanding under the Plan or any other plan or
arrangement of the Company or a Related Company, or (b)
awards outstanding under a plan or arrangement of a
business or entity all or part of which is acquired by the
Company or a Related Company.
1.3 OPERATION AND ADMINISTRATION. The operation
and administration of the Plan, including the Awards made
under the Plan, shall be subject to the provisions of
Section 6 (relating to operation and administration).
1.4 CONSTRUCTION AND DEFINITIONS. Where the
context admits, words in any gender shall include any
other gender, words in the singular shall include the
plural and the plural shall include the singular.
Capitalized terms in the Plan shall be defined as set
forth in the Plan, including the definition provisions of
Section 2.
SECTION 2 - DEFINED TERMS
For purposes of the Plan, the terms listed below
shall be defined as follows:
(a) 1989 PLAN. The term "1989 Plan" has the meaning
ascribed to it in paragraph (a) of subsection 6.2.
(b) AGREEMENT. The term "Agreement" has the meaning
ascribed to it in subsection 6.10.
<PAGE>
(c) AWARD. The term "Award" means any award or benefit
granted to any Participant under the Plan, including
without limitation the grant of Options, SARs, Stock
Awards, and Cash Awards.
(d) BOARD. The term "Board" means the Board of
Directors of the Company.
(e) CASH AWARD. The term "Cash Award" has the meaning
ascribed to it in subsection 5.1.
(f) CODE. The term "Code" means the Internal Revenue
Code of 1986, as amended. A reference to any
provision of the Code shall include reference to any
successor provision of the Code.
(g) COMMITTEE. The term "Committee" has the meaning
ascribed to it in subsection 7.1.
(h) COMPANY. The term "Company" has the meaning
ascribed to it in subsection 1.1.
(i) EFFECTIVE DATE. The term "Effective Date" has the
meaning ascribed to it in subsection 6.1.
(j) ELIGIBLE INDIVIDUAL. The term "Eligible
Individual" shall mean any employee of the Company
or a Related Company, any consultant or other person
providing key services to the Company or a Related
Company, and any person to whom an offer of
employment has been made by the Company or a Related
Company; provided, however, that any member of the
Board shall not be an Eligible Individual unless he
is also an employee of the Company or a Related
Company.
(k) EXERCISE PRICE. The term "Exercise Price" has the
meaning ascribed to it in subsection 3.2.
(l) FAIR MARKET VALUE. For purposes of determining the
"Fair Market Value" of a share of Stock, the
following rules shall apply:
(i) If the Stock is at the time listed or admitted
to trading on any stock exchange, then the "Fair
Market Value" shall be the mean between the lowest
and highest reported sale prices of the Stock on the
date in question on the principal exchange on which
the Stock is then listed or admitted to trading. If
no reported sale of Stock takes place on the date in
question on the principal exchange, then the
reported closing asked price of the Stock on such
date on the principal exchange shall be
determinative of "Fair Market Value."
(ii) If the Stock is not at the time listed or
admitted to trading on a stock exchange, the "Fair
Market Value" shall be the mean between the lowest
reported bid price and highest reported asked price
of the Stock on the date in question in the over-
the-counter market, as such prices are reported in a
publication of general circulation selected by the
Committee and regularly reporting the market price
of the Stock in such market.
(iii) If the Stock is not listed or admitted to
trading on any stock exchange or traded in the over-
the-counter market, the "Fair Market Value" shall be
as determined in good faith by the Committee.
(m) INCENTIVE STOCK OPTION. The term "Incentive Stock
Option" has the meaning ascribed to it in paragraph
(a) of subsection 3.1.
<PAGE>
(n) NON-QUALIFIED STOCK OPTION. The term "Non-
Qualified Stock Option" has the meaning ascribed to
it in paragraph (a) of subsection 3.1.
(o) OPTION. The term "Option" has the meaning ascribed
to it in paragraph (a) of subsection 3.1.
(p) PARTICIPANT. The term "Participant" has the
meaning ascribed to it in subsection 1.2.
(q) PLAN. The term "Plan" has the meaning ascribed to
it in subsection 1.1.
(r) PRICING DATE. The term "Pricing Date" has the
meaning ascribed to it in subsection 3.2.
(s) RELATED COMPANY. The term "Related Company" means
any subsidiary of the Company and any other business
venture in which the Company has a significant
interest as determined in the discretion of the
Committee.
(t) SAR. The term "SAR" has the meaning ascribed to it
in paragraph (b) of subsection 3.1.
(u) STOCK. The term "Stock" means shares of common
stock of the Company.
(v) STOCK AWARD. The term "Stock Award" has the
meaning ascribed to it in subsection 4.1.
SECTION 3 - OPTIONS AND SARS
3.1 DEFINITIONS.
(a) The grant of an "Option" entitles the Participant to
purchase shares of Stock at an Exercise Price
established by the Committee. Options granted under
this Section 3 may be either Incentive Stock Options
or Non-Qualified Stock Options, as determined in the
discretion of the Committee. An "Incentive Stock
Option" is an Option that is intended to satisfy the
requirements applicable to an "incentive stock
option" as described in section 422(b) of the Code
and shall comply with, among other things, the
requirements of subsections 3.2, 3.3 and 6.1 of the
Plan. A "Non-Qualified Stock Option" is an Option
that is not intended to be an "incentive stock
option" as that term is described in section 422(b)
of the Code.
(b) A stock appreciation right (an "SAR") entitles the
Participant to receive, in cash or Stock (as
determined in accordance with subsection 3.5), value
equal to all or a portion of the excess of: (i) the
Fair Market Value of a specified number of shares of
Stock at the time of exercise; over (ii) an Exercise
Price established by the Committee.
3.2 EXERCISE PRICE. The "Exercise Price" of each
Option and SAR granted under this Section 3 shall be
established by the Committee or shall be determined by a
method established by the Committee; provided, however,
that the Exercise Price shall not be less than the Fair
Market Value of a share of Stock as of the Pricing Date.
For purposes of the preceding sentence, the "Pricing Date"
shall be the date on which the Option or SAR is granted,
except that the Committee may provide that: (a) the
Pricing Date is the date on which the recipient is hired
or promoted (or similar event), if the grant of the Option
or SAR occurs not more than 90 days after the date of such
hiring, promotion or other event; and (b) if an Option or
SAR is granted in tandem with or in substitution for an
outstanding Award, the Pricing Date is the date of grant
of such outstanding Award.
<PAGE>
3.3 EXERCISE. Each Option and each SAR shall be
exercisable in accordance with such terms and conditions
and during such periods as may be established by the
Committee; provided, however, that (a) each Option and
each SAR shall be exercisable only during a fixed period
of time ending no later than ten years from the date such
Option or SAR is granted, and (b) to the extent required
by the Code, the aggregate Fair Market Value of the shares
of Stock with respect to which Incentive Stock Options
granted to any individual Participant are exercisable for
the first time during any calendar year shall not exceed
$100,000, valued at the date or dates the Options are
granted, and any grant of an Option designated as an
Incentive Stock Option that is in excess of such limit
required by the Code shall be treated as a Non-Qualified
Stock Option.
3.4 PAYMENT OF OPTION EXERCISE PRICE. The payment
of the Exercise Price of an Option granted under this
Section 3 shall be subject to the following:
(a) Subject to the following provisions of this
subsection 3.4, the full Exercise Price for shares
of Stock purchased upon the exercise of any Option
shall be paid at the time of such exercise except
that, in the case of an exercise arrangement
approved by the Committee and described in paragraph
(c) of this subsection 3.4, payment may be made as
soon as practicable after the exercise.
(b) The Exercise Price shall be payable in cash or by
tendering shares of Stock (by either actual delivery
of shares or by attestation, with such shares being
valued at Fair Market Value as of the day of
exercise), excluding any shares deemed unacceptable
for any reason by the Committee, or in any
combination thereof, as determined by the Committee.
(c) The Committee may permit a Participant to elect to
pay the Exercise Price upon the exercise of an
Option by authorizing a third party to sell some or
all of the shares of Stock acquired upon exercise of
an Option and remit to the Company a sufficient
portion of the sale proceeds to pay the entire
Exercise Price and any tax withholding resulting
from such exercise.
3.5 SETTLEMENT OF AWARD. Distribution following
exercise of an Option or SAR, and shares of Stock
distributed pursuant to such exercise, shall be subject to
such conditions, restrictions and contingencies as the
Committee may establish. Settlement of SARs may be made
in shares of Stock valued at their Fair Market Value at
the time of exercise, in cash, or in any combination
thereof, as determined in the discretion of the Committee.
The Committee may in its discretion impose such
conditions, restrictions and contingencies with respect to
shares of Stock acquired pursuant to the exercise of an
Option or an SAR as the Committee determines to be
desirable.
SECTION 4 - OTHER STOCK AWARDS
4.1 DEFINITION. A "Stock Award" is a grant of
shares of Stock or of a right to receive shares of Stock,
or their cash equivalent or a combination of both, in the
future.
4.2 RESTRICTIONS ON STOCK AWARDS. Each Stock Award
shall be subject to such terms and conditions,
restrictions and contingencies, if any, as the Committee
shall determine. Restrictions and contingencies limiting
the right to receive shares of Stock, or their cash
equivalent or a combination of both, in the future
pursuant to a Stock Award shall limit such right for a
minimum of three years from the date such Stock Award is
granted or be based on the achievement of single or
multiple performance goals over a period ending at least
one year from the date such Stock Award is granted. Such
restrictions and/or contingencies may terminate or be
subject to termination before the passage of the period of
<PAGE>
time designated and/or the achievement of such performance
goals only in the event of the death, disability, or
retirement from or other non-cause termination of
employment with the Company or a Related Company of the
holder of such Stock Award, or in the event of a change of
control, as defined in the terms of such Stock Award, of
the Company or a Related Company. The performance goals
may be cumulative, annual or end-of-performance period
goals, may be relative to a peer group or based on
increases or changes relative to stated values, and may be
based on any one or more of the following measures: (a)
earnings before interest, taxes, depreciation and
amortization; (b) earnings per share; (c) stock price
growth; (d) net income (before or after taxes); (e) cash
flow; and (f) total shareholder return. Any unrestricted
grant of shares of Stock pursuant to a Stock Award shall
be made only in lieu of salary or bonus that otherwise
would be payable by the Company or a Related Company.
SECTION 5 - CASH AWARDS
5.1 DEFINITION. A "Cash Award" is a cash bonus
paid solely on account of the attainment of one or more
objective performance goals that have been preestablished
by the Committee.
5.2 RESTRICTIONS ON CASH AWARDS. Each Cash Award
shall be subject to such terms and conditions,
restrictions and contingencies, if any, as the Committee
shall determine. Restrictions and contingencies limiting
the right to receive a cash payment pursuant to a Cash
Award shall be based on the achievement of single or
multiple performance goals over a period of time
determined by the Committee. The performance goals may be
cumulative, annual or end-of-period performance goals, may
be relative to a peer group or based on increases or
changes relative to stated values, and may be based on any
one or more of the following measures: (a) earnings before
interest, taxes, depreciation and amortization; (b)
earnings per share; (c) stock price growth; (d) net income
(before or after taxes); (e) cash flow; and (f) total
shareholder return. The maximum cash payment to be made
to any one individual pursuant to any Cash Award during
any calendar year shall not exceed $2,000,000.
SECTION 6 - OPERATION AND ADMINISTRATION
6.1 EFFECTIVE DATE AND DURATION. Subject to its
approval by the stockholders of the Company at the
Company's 1998 annual meeting of stockholders, the Plan
shall be effective as of February 10, 1998 (the "Effective
Date"); provided, however, that, to the extent Awards are
made under the Plan prior to its approval by stockholders,
they shall be contingent on approval of the Plan by the
stockholders of the Company. The Plan shall be unlimited
in duration and, in the event of Plan termination, shall
remain in effect as long as any Awards under it are
outstanding; provided, however, that, to the extent
required by the Code, no Incentive Stock Options may be
granted under the plan on a date that is more than ten
years from the date the Plan is approved by stockholders.
6.2 SHARES SUBJECT TO PLAN
(a) (i) Subject to the following provisions of this
subsection 6.2, the maximum number of shares of
Stock that may be delivered to Participants and
their beneficiaries under the Plan shall be equal to
the sum of: (I) 7,500,000 shares of Stock; (II) any
shares of Stock available for future awards under
the Global Marine Inc. 1989 Stock Option and
Incentive Plan (the "1989 Plan") as of the Effective
Date; and (III) any shares of Stock represented by
awards granted under the 1989 Plan that are
forfeited, expire or are canceled without delivery
of shares of Stock or which result in the forfeiture
of shares of Stock back to the Company.
<PAGE>
(ii) Any shares of Stock granted under the Plan that
are forfeited because of the failure to meet an
Award contingency or condition shall again be
available for delivery pursuant to new Awards
granted under the Plan. To the extent any shares of
Stock covered by an Award are not delivered to a
Participant or beneficiary because the Award is
forfeited or canceled, or the shares of Stock are
not delivered because the Award is settled in cash,
such shares shall not be deemed to have been
delivered for purposes of determining the maximum
number of shares of Stock available for delivery
under the Plan.
(iii) If the Exercise Price or other purchase price
of any stock option or other award granted under the
Plan or the 1989 Plan is satisfied by tendering
shares of Stock to the Company by either actual
delivery or by attestation, or if the tax
withholding obligation resulting from the settlement
of any such option or other award is satisfied by
tendering or withholding shares of Stock, only the
number of shares of Stock issued net of the shares
of Stock tendered or withheld shall be deemed
delivered for purposes of determining the maximum
number of shares of Stock available for delivery
under the Plan.
(iv) Shares of Stock delivered under the Plan in
settlement, assumption or substitution of
outstanding awards or obligations to grant future
awards under the plans or arrangements of another
entity shall not reduce the maximum number of shares
of Stock available for delivery under the Plan, to
the extent that such settlement, assumption or
substitution is a result of the Company or a Related
Company acquiring another entity or an interest in
another entity.
(b)Subject to paragraph (c) of this subsection 6.2, the
following additional maximums are imposed under the
Plan.
(i) The maximum number of shares of Stock that may
be issued pursuant to Options intended to be
Incentive Stock Options shall be 6,000,000 shares.
In the event of an increase in the number of shares
authorized in clause I in the first sentence of
paragraph 6.2(a)(i), said maximum number of shares
will be increased pro rata.
(ii) The maximum number of shares of Stock that may
be issued in conjunction with Awards granted
pursuant to Section 4 (relating to Stock Awards)
shall be 2,000,000 shares.
(iii) The maximum number of shares that may be
covered by Awards granted to any one individual
during any ten consecutive calendar years pursuant
to this Plan shall be 20% of the shares of Stock
authorized in clause I in the first sentence of
paragraph 6.2(a)(i) to be delivered under the Plan.
In the event of an increase in the number of shares
authorized in said clause I, the 20% limitation will
apply to the increased number of shares authorized.
(c)In the event of a corporate transaction involving
the Company (including without limitation any stock
divided, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or
exchange of shares), the Committee may adjust Awards
to preserve the benefits or potential benefits of
the Awards. Action by the Committee may include
adjustment of: (i) the number and kind of shares
which may be issued or delivered under the Plan;
(ii) the number and kind of shares subject to
outstanding Awards; and (iii) the Exercise Price of
outstanding Options and SARs; as well as any other
adjustments that the Committee determines to be
equitable.
6.3. LIMIT ON DISTRIBUTION. Distribution of shares
of Stock or other amounts under the Plan shall be subject
to the following:
<PAGE>
(a) Notwithstanding any other provision of the Plan, the
Company shall have no liability to deliver any
shares of Stock under the Plan or make any other
distribution of benefits under the Plan unless such
delivery or distribution would comply with all
applicable laws (including without limitation the
requirements of the Securities Act of 1933) and the
applicable requirements of any securities exchange
or similar entity.
(b) To the extent that the Plan provides for the
issuance of stock certificates to reflect the
issuance of shares of Stock, the issuance may be
effected on a non-certificated basis to the extent
not prohibited by applicable law or the applicable
rules of any stock exchange.
6.4 TAX WITHHOLDING. Whenever the Company proposes
or is required to distribute Stock under the Plan, the
Company may require the recipient to remit to the Company
or the Company or any Related Company may withhold from
any payments due or becoming due to the recipient an
amount sufficient to satisfy any Federal, state and local
tax withholding requirements prior to the delivery of any
certificate for such shares; provided, however, that, in
the discretion of the Committee, the Company may withhold
from the shares to be delivered shares with a Fair Market
Value sufficient to satisfy all or a portion of such tax
withholding requirements, or the Company may accept
delivery of shares of Stock with a Fair Market Value
sufficient to satisfy all or a portion of such tax
withholding requirement, excluding any shares deemed
unacceptable for any reason by the Committee. Whenever
under the Plan payments are to be made to a Participant or
beneficiary in cash, such payments may be net of an amount
sufficient to satisfy any Federal, state and local tax
withholding requirements. At the discretion of the
Committee, the terms and conditions of any Award may
provide for a cash payment to a Participant equal to any
tax the Participant must pay in connection with the
settlement of the Award and/or the disposition of Stock
received upon settlement of the Award.
6.5 SHARES AS PAYMENT. Subject to the overall
limitation on the number of shares of Stock that may be
delivered under the Plan, the Committee may use available
shares of Stock, valued at their Fair Market Value, as the
form of payment for any compensation, grants or rights
earned or due under any other compensation plans or
arrangements of the Company or a Related Company.
6.6 DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award
may provide the Participant with the right to receive
dividends or dividend equivalent payments with respect to
Stock which may be either paid currently or credited to an
account for the Participant, and may be settled in cash or
Stock as determined by the Committee. Any such
settlements, and any such crediting of dividends or
dividend equivalents or reinvestment in shares of Stock,
may be subject to such conditions, restrictions and
contingencies as the Committee shall establish, including
the reinvestment of such credited amounts in Stock
equivalents.
6.7 PAYMENTS. Awards may be settled through cash
payments, the delivery of shares of Stock, the granting of
replacement Awards, or a combination thereof as the
Committee shall determine. Any Award settlement,
including payment deferrals, may be subject to such
conditions, restrictions and contingencies as the
Committee shall determine. The Committee may permit or
require the deferral of any Award payment, subject to such
rules and procedures as it may establish, which may
include provisions for the payment or crediting of
interest or dividend equivalents, including converting
such credits into deferred Stock equivalents.
6.8 TRANSFERABILITY. Except as otherwise provided
by the Committee, Awards under the Plan are not
transferable except as designated by the Participant by
will or by applicable laws of descent and distribution.
<PAGE>
6.9 FORM AND TIME OF ELECTIONS. Unless otherwise
specified herein, each election required or permitted to
be made by any Participant or other person entitled to
benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing and filed with the
Committee at such times, in such form, and subject to such
restrictions and limitations, not inconsistent with the
terms of the Plan, as the Committee shall require.
6.10 AGREEMENT WITH COMPANY. At the time of an
Award to a Participant under the Plan, the Committee may
require a Participant to enter into an agreement with the
Company (the "Agreement") in a form specified by the
Committee, agreeing to the terms and conditions of the
Plan and to such additional terms and conditions not
inconsistent with the Plan as the Committee may prescribe
in its sole discretion.
6.11 LIMITATION OF IMPLIED RIGHTS.
(a) Neither a Participant nor any other person shall by
reason of the Plan acquire any right in or title to
any assets, funds or property of the Company or any
Related Company whatsoever, including without
limitation any specific funds, assets, or other
property which the Company or any Related Company,
in their sole discretion, may set aside in
anticipation of a liability under the Plan. A
Participant shall have only a contractual right to
the stock or amounts, if any, payable under the
Plan, unsecured by any assets of the Company or any
Related Company. Nothing contained in the Plan
shall constitute a guarantee that the assets of such
companies shall be sufficient to pay any benefits to
any person.
(b) The Plan does not constitute a contract of
employment, and selection as a Participant and/or
the grant or an Award will not give any employee the
right to be retained in the employ of the Company or
any Related Company, the right to receive any future
Award under the Plan, or any right or claim to any
benefit under the Plan, unless such right or claim
has specifically accrued under the terms of the
Plan. Except as otherwise provided in the Plan, no
Award under the Plan shall confer upon the holder
thereof any right as a stockholder of the Company
prior to the date on which the individual fulfills
all conditions for receipt of such right.
6.12 EVIDENCE. Evidence required of anyone under
the Plan may be by certificate, affidavit, document or
other information which the person acting on it considers
pertinent, reliable, and signed, made or presented by the
proper party or parties.
6.13 ACTION BY COMPANY OR RELATED COMPANY. Any
action required or permitted to be taken by the Company or
any Related Company shall be by resolution of its board of
directors, or by action of one or more members of the
board (including a committee of the board) who are duly
authorized to act for the board, or, except to the extent
prohibited by applicable law or applicable rules of any
stock exchange, by a duly authorized officer of the
company.
6.14 SEPARATE FUND. Neither the Company, the Board
or the Committee has any obligation to create a separate
fund for the performance of any cash payment obligation
under the Plan, but any or all of them may, at their own
discretion, create trust funds or similar arrangements for
such purpose.
6.15 LIABILITY FOR CASH PAYMENTS. Each Related
Company shall be liable for payment of cash due under the
Plan with respect to any Participant to the extent that
such benefits are attributable to the services rendered
for that Related Company by the Participant. Any disputes
relating to liability of a Related Company for cash
payments shall be resolved by the Committee.
<PAGE>
6.16 POOLING OF INTERESTS ACCOUNTING. The Committee
may, in its sole and absolute discretion, declare
inoperative anything in this Plan or in the terms,
conditions, restrictions or contingencies pertaining to
any Award, including any outstanding Award, that adversely
affects pooling of interests accounting.
SECTION 7 - COMMITTEE
7.1 ADMINISTRATION. The authority to control and
manage the operation and administration of the Plan shall
be vested in a committee (the "Committee") in accordance
with this Section 7.
7.2 SELECTION AND COMPOSITION OF COMMITTEE. The
Committee shall be selected by the Board and shall consist
of two or more members of the Board who are not employees
of the Company or a Related Company.
7.3 POWERS OF COMMITTEE. The authority to manage
and control the operation and administration of the Plan
shall be vested in the Committee, subject to the
following:
(a) Subject to the Provisions of the Plan, the Committee
will have the authority and discretion to select
from among the Eligible Individuals those persons
who shall receive Awards, to determine the time or
times of receipt, to determine the types of Awards
and the number of shares covered by the Awards, to
establish the terms, conditions, performance
criteria, restrictions, and other provisions of such
Awards, and, subject to the same restrictions
imposed upon the Board by Section 8, to amend,
cancel or suspend Awards. In making such Award
determinations, the Committee may take into account
the nature of services rendered by the individual,
the individual's present and potential contribution
to the Company's success, and such other factors as
the Committee deems relevant.
(b) Subject to the provisions of the Plan, the Committee
will have the authority and discretion to determine
the extent to which Awards under the Plan will be
structured to conform to the requirements applicable
to performance-based compensation as described in
Code section 162(m) and to take such action,
establish such procedures, and impose such
restrictions at the time such Awards are granted as
the Committee determines to be necessary or
appropriate to conform to such requirements.
(c) The Committee will have the authority and discretion
to establish terms and conditions of Awards as the
Committee determines to be necessary or appropriate
to conform to applicable requirements or practices
of jurisdictions outside of the United States.
(d) The Committee will have the authority and discretion
to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the
Plan, to determine the terms and provisions of any
agreements made pursuant to the Plan, and to make
all other determinations that may be necessary or
advisable for the administration of the Plan.
(e) Any interpretation of the Plan by the Committee and
any decision made by it under the Plan is
conclusive, final and binding.
(f) At its discretion, the Committee may terminate or
suspend the granting of Awards under the Plan at any
time or from time to time.
<PAGE>
(g) In controlling and managing the operation and
administration of the Plan, the Committee shall act
by a majority of its then members, by meeting or by
writing filed without a meeting. The Committee
shall maintain and keep adequate records concerning
the Plan and concerning its proceedings and acts in
such form and detail as the Committee may decide.
7.4 DELEGATION BY COMMITTEE. Except to the extent
prohibited by applicable law or the applicable rules of a
stock exchange, the Committee may allocate all or any part
of its responsibilities and powers to any one or more of
its members and may delegate all or any part of its
responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.
7.5 INFORMATION TO BE FURNISHED TO COMMITTEE. The
Company and Related Companies shall furnish the Committee
with such data and information as may be required for it
to discharge its duties. The records of the Company and
Related Companies as to an employee's or Participant's
employment or other provision of services, termination of
employment or cessation of the provision of services,
leave of absence, re-employment and compensation shall be
conclusive on all persons unless determined to be
incorrect. Participants and other persons entitled to
benefits under the Plan must furnish the Committee such
evidence, data or information as the Committee considers
desirable to carry out the terms of the Plan.
7.6 DUPLICATED SIGNATURES. At its discretion, the
Committee may accept a duplicated signature on any
document, whether faxed, photocopied or otherwise
duplicated, which will be effective to the same extent as
an original signature unless there is a showing of fraud
or other wrongdoing, the burden of making such showing
being on the person asserting such fraud or wrongdoing.
SECTION 8 - AMENDMENT AND TERMINATION
The Board may at any time amend, suspend or terminate
the Plan, provided that, subject to subsection 6.2
(relating to certain adjustments to shares), no amendment
or termination may (a) in the absence of written consent
to the change by the affected Participant (or, if the
Participant is not then living, the affected beneficiary),
adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior
to the date such amendment is adopted by the Board, or (b)
in the absence of proper approval by the Company's
stockholders, increase the share limitations set forth in
subsection 6.2 or the cash limitations set forth in
subsection 5.2 or change the minimum Option and SAR
Exercise Prices set forth in subsection 3.2.
<PAGE>
APPENDIX I
[FORM OF PROXY CARD]
GLOBAL MARINE INC.
Proxy Solicited By The Board of Directors
For the Annual Meeting of Stockholders -- May 5, 1998
C. R. Luigs, G. L. Kott, 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 Tuesday, May 5, 1998 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 SPECIFED 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.
(PLEASE VOTE, SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY.)
(contined from other side)
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY ( )
1. Election of the following nominees as directors:
Messrs. Luigs, Muller, Powers and Ryan. The nominees will serve
for a term of three years, as indicated in the proxy statement.
FOR WITHHELD FOR ALL EXCEPT (A line follows)
( ) ( ) ( )
2. Approval of Global Marine Inc. 1998 Stock Option and Incentive Plan,
including performance measures to be used for certain performance
based compensation.
FOR AGAINST ABSTAIN
( ) ( ) ( )
3. Ratification of appointment of Coopers & Lybrand L.L.P.
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 AND ANY POSTPONEMENTS
OR ADJOURNMENTS THEREOF FOR A VOTE OF THE COMMON STOCK.
Sign exactly as your name appears on this proxy card. Joint owners should
each sign personally. If acting as attorney, executor, trustee, or in a
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
<PAGE>
[FORM OF VOTING INSTRUCTION CARD, 401(k) PLAN]
GLOBAL MARINE INC. [401(k) PLAN]
Confidential Voting Directions
For The Annual Meeting of Stockholders -- May 5, 1998
The undersigned hereby directs Fidelity Management Trust Company, 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 13, 1998 and attributable to the undersigned's Plan
account 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 Tuesday, May 5, 1998 at 9:00 a.m., and at any postponement or adjournments
of that meeting, as set forth below, and, in its discretion, to authorize the
voting of said shares upon any other business that may properly come before
the meeting.
THE TRUSTEE WILL AUTHORIZE THE VOTING OF THE SHARES IN THE MANNER SPECIFIED
OR, IF NO CHOICE IS SPECIFIED, WILL AUTHORIZE VOTING THE SHARES FOR THE
ELECTION OF THE NOMINEES NAMED AND FOR EACH OF THE OTHER PROPOSALS
SPECIFIED HEREIN. IF YOUR DIRECTIONS ARE NOT RECEIVED BY APRIL 30, 1998,
THE SHARES ATTRIBUTABLE TO YOUR ACCOUNT WILL NOT BE VOTED.
(PLEASE INDICATE YOUR DIRECTIONS, SIGN AND DATE ON REVERSE SIDE AND RETURN
PROMPTLY.)
(continued from other side)
PLEASE MARK DIRECTIONS IN OVAL IN THE FOLLOWING MANNER USING DARK
INK ONLY ( )
1. Election of the following nominees as directors: Messrs. Luigs,
Muller, Powers and Ryan. The nominees will serve for a term
of three years, as indicated in the proxy statement.
FOR WITHHELD FOR ALL EXCEPT [A line follows]
( ) ( ) ( )
2. Approval of Global Marine 1998 Stock Option and Incentive Plan,
including performance measures to be used for certain performance
based compensation.
FOR AGAINST ABSTAIN
( ) ( ) ( )
3. Ratification of appointment of Coopers & Lybrand L.L.P.
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 PROPERTY COME BEFORE THE MEETING AND ANY
POSTPONEMENTS OR ADJOURNMENTS THEREOF, FOR A VOTE OF THE COMMON STOCK.
Sign exactly as your name appears on this card. If acting as attorney,
executor, trustee, or in a representative capacity, sign name and
indicate title.
Signature Date
PLEASE INDICATE YOUR DIRECTIONS, DATE, AND SIGN EXACTLY AS YOUR NAME
APPEARS ON THIS CARD
PROMPTLY RETURN USING THE ENCLOSED ENVELOPE
