AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 2000
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)
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[X] No fee required.
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0-11.
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Act Rule 0-11 (a) (2) and identify th efiling 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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<PAGE>
[LOGO]
GLOBAL MARINE INC.
777 N. ELDRIDGE PARKWAY
HOUSTON, TEXAS 77079-4493
NOTICE of ANNUAL MEETING of STOCKHOLDERS
THURSDAY, MAY 11, 2000
9:00 a.m. CENTRAL TIME
THE ST. REGIS, HOUSTON
THE BALLROOM
1919 BRIAR OAKS LANE
HOUSTON, TEXAS
You are cordially invited to attend the 2000 Global Marine Inc.
Annual Meeting of Stockholders to:
1. Elect three directors;
2. Approve the Non-Employee Director Restricted Stock Plan;
3. Approve an increase in the authorized shares for the 1998
Stock Option and Incentive Plan;
4. Ratify the appointment of independent accountants; and
5. Transact other business properly brought before the
meeting.
Stockholders of record at the close of business on March 16,
2000, will be entitled to vote. YOUR VOTE IS IMPORTANT. WHETHER
YOU PLAN TO ATTEND OR NOT, I HOPE YOU WILL VOTE AS SOON AS POSSIBLE.
YOU MAY VOTE OVER THE INTERNET, BY TELEPHONE, OR BY MAILING THE
ENCLOSED PROXY CARD. PLEASE REVIEW THE INSTRUCTIONS IN THE PROXY
STATEMENT AND ON YOUR PROXY CARD OR VOTING FORM REGARDING EACH OF
THESE VOTING OPTIONS.
ALEXANDER A. KREZEL
Corporate Secretary
Houston, Texas
March 30, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
Proxies and Voting at the Meeting .. . .. . .. . .. . .. . . 1
Election of Directors . .. . .. . .. . .. . .. . .. . .. . . 2
Board Committees . .. . .. . .. . .. . .. . .. . .. . .. . . 4
Director Compensation . .. . .. . .. . .. . .. . .. . .. . . 5
Security Ownership of Certain Beneficial Owners. .. . .. . . 6
Security Ownership of Directors and Executive Officers.. . . 7
Compensation Committee Report on Executive Compensation. . . 8
Executive Compensation. .. . .. . .. . .. . .. . .. . .. . .12
Summary Compensation Table . .. . .. . .. . .. . .. . .12
Option Grants in 1999 . .. . .. . .. . .. . .. . .. . .13
Aggregated Option Exercises in 1999 and Year-End
Option Values.. . .. . .. . .. . .. . .. . .. . .14
1999 Long-Term Incentive Awards . .. . .. . .. . .. . .14
Pension Plan Table .. . .. . .. . .. . .. . .. . .. . .15
Employment Agreements and Termination Arrangements. . .. . .16
Cumulative Total Shareholder Return. . .. . .. . .. . .. . .17
Approval of Non-Employee Director Restricted Stock Plan. . .18
Approval of Increase in the Number of Authorized Shares
for the 1998 Stock Option and Incentive Plan.. . .. . .20
Ratification of Appointment of Independent Accountants.. . .24
Other Matters .. . .. . .. . .. . .. . .. . .. . .. . .. . .25
Voting Via the Internet or By Telephone.. . .. . .. . .. . .26
Non-Employee Director Restricted Stock Plan .. . .. . .. . .A-1
YOUR VOTE IS IMPORTANT
You can vote any one of three ways: via the Internet, by
telephone, or by mail. Please refer to VOTING VIA THE INTERNET OR
BY TELEPHONE in the proxy statement for further details on voting
via the Internet or by telephone. Please note that there are
separate Internet and telephone voting arrangements depending upon
whether shares are registered in your name or in the name of a bank
or a broker or are held in a Global Marine 401(k) account. To vote
by mail, please sign, date and return the enclosed proxy card in the
envelope provided.
<PAGE>
GLOBAL MARINE INC.
777 N. ELDRIDGE PARKWAY
HOUSTON, TEXAS 77079-4493
______________
PROXY STATEMENT
______________
This proxy statement and the form of proxy are being mailed
beginning approximately on March 30, 2000. Global Marine Inc.'s
Board of Directors is soliciting proxies for use at the Annual
Meeting of Stockholders to be held on May 11, 2000, and any
postponement or adjournment of the meeting.
PROXIES AND VOTING AT THE MEETING
VOTING
Each of your shares 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, you
have the right to cumulate your votes, with each share having a
number of votes equal to the number of directors to be elected. If
you vote in person at the meeting, you may cast votes for one
candidate or distribute votes among two or more candidates. The
individuals named in the accompanying proxy will have discretionary
authority to cumulate votes among candidates. If you give the
accompanying proxy and do not revoke it, you will not have the
ability to direct that your votes be cumulated.
All shares represented at the Annual Meeting by properly
executed proxies will be voted in accordance with the instructions
indicated on the proxies. If no instructions are indicated, the
proxies will be voted FOR the Board of Directors' nominees for
directors, FOR approval of the Non-Employee Director Restricted
Stock Plan, FOR approval of the increase in the number of authorized
shares for the 1998 Stock Option and Incentive Plan, and FOR
approval of the proposal to ratify the Board of Directors'
appointment of PricewaterhouseCoopers LLP as independent auditors
for fiscal year 2000. If any other matters are properly presented
at the Annual Meeting for action, the proxies will have discretion
to vote. The Company has not been notified of and the Board of
Directors does not know of any other matters to be brought before
the Annual Meeting.
QUORUM
At the close of business on March 16, 2000, the record date for
the meeting, there were issued and outstanding 174,889,634 shares of
common stock, all of one class. If at least a majority of the
outstanding shares as of the record date are present in person or by
proxy at the meeting, a quorum will exist.
Abstentions and broker non-votes are counted as present for
establishing a quorum. A broker non-vote occurs when a broker votes
on some matters on the proxy card but not on others, usually because
he does not have the authority to do so. A broker non-vote will
have no effect on the outcome of any proposal. Votes may be cast in
favor of or withheld in the election of directors. Votes withheld
will be excluded from the vote. Abstentions on the proposal to
approve the Non-Employee Director Restricted Stock Plan, the
proposal to approve the increase in the number of authorized shares
for the 1998 Stock Option and Incentive Plan, or the proposal to
ratify the appointment of independent auditors will have the effect
of a negative vote.
<PAGE>
ELECTION OF DIRECTORS
BOARD STRUCTURE
The Company's Board of Directors is divided into three classes.
Stockholders elect one class at each annual meeting to serve a
three-year term. Directors elected at the 2000 Annual Meeting of
Stockholders will serve a term of three years to expire in 2003.
Except as you otherwise specify in your proxy, your proxy will be
voted for the election of the nominees named below. The candidates,
up to the number of directors to be elected, receiving the highest
number of votes cast by stockholders will be elected. If any of the
nominees become unable or otherwise unavailable to serve, 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 and
the other directors appears below.
NOMINEES FOR TERMS EXPIRING IN 2003
Edward A. Blair, 64, was President of BHP Petroleum (Americas),
Inc. from 1994 until his retirement in April 1998. Previously, he
was President of Hamilton Brothers Oil and Gas Limited until its
acquisition by BHP Petroleum in 1991, after which he served as
President of the Europe, Russia, Africa and Middle Eastern Region of
BHP Petroleum. Mr. Blair was elected a director of the Company in
November 1998.
John M. Galvin, 67, 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. and CUNO Incorporated. Mr. Galvin was
first elected a director of the Company in 1979.
Ben G. Streetman, 60, 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. and ZixIT, Inc. He was elected a director of the
Company in 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF MESSRS.
BLAIR AND GALVIN AND DR. STREETMAN.
The members of the Board of Directors who are not subject to
election at the 2000 Annual Meeting are as follows.
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2002
Thomas W. Cason, 57, owns and manages four equipment
dealerships, primarily in support of the agricultural industry. Mr.
Cason served as interim President and Chief Operating Officer of Key
Tronic Corporation during 1994 and 1995, and is a partner in Hiller
Key Tronic Partners, L.P., which has been managing Key Tronic's
turnaround. Mr. Cason previously held various financial and
operating 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 Incorporated. He was first elected a director of the
Company in 1995.
Jerry C. Martin, 67, 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
<PAGE>
Marine Drilling Company, the Company's domestic dayrate drilling
subsidiary. Mr. Martin was first elected a director of the Company
in 1993.
Robert E. Rose, 61, has been the Company's Chairman since May
1999 and its President and Chief Executive Officer since re-joining
the Company in 1998. He began his professional career with Global
Marine in 1964 and left the Company in 1976. Mr. Rose then held
executive positions with other offshore drilling companies,
including more than a decade as President and Chief Executive
Officer of Diamond Offshore Drilling, Inc. and its predecessor,
Diamond M Company. He resigned from Diamond Offshore in April 1998
and served as President and Chief Executive Officer of Cardinal
Services, Inc., an oil services company, before re-joining the
Company. Mr. Rose is also a director of Superior Energy Services,
Inc. He was first elected a director of the Company in May 1998.
John Whitmire, 59, has served since March 1999 as Chairman of
the Board of Directors of CONSOL Energy Inc. and CONSOL Inc., which
are engaged in the production of bituminous coal for the electric
utility industry. Mr. Whitmire was Chairman of the Board and Chief
Executive Officer of Union Texas Petroleum Holdings, Inc. from 1996
until the company was acquired by ARCO in 1998. Prior to joining
Union Texas Petroleum, Mr. Whitmire's career spanned over 30 years
at Phillips Petroleum Company, where he held senior management
positions including Executive Vice President-Exploration and
Production. He was also a member of Phillips' Board of Directors.
Mr. Whitmire is also a director of Thermon Industries. Mr. Whitmire
was elected a director of the Company in February 1999.
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2001
C. Russell Luigs, 66, has been the Chairman of the Executive
Committee of the Company's Board of Directors since May 1999. He
was Chairman of the Board from 1982 until May 1999, and he was the
Company's Chief Executive Officer from the time he joined the
Company in 1977 until May 1998. 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, 48, served as President and Chief Executive
Officer of Edison Mission Energy Company, a wholly-owned subsidiary
of Edison International (formerly SCEcorp), from 1993 until January
2000. Edison Mission Energy Company is engaged in developing,
owning and operating independent power production facilities
worldwide. From mid-1999 until early 2000, Mr. Muller was Deputy
Chairman of the Board of Directors of Contact Energy Ltd., a New
Zealand electric generation company partially owned by Edison
Mission Energy. He was first elected a director of the Company in
1997.
Paul J. Powers, 65, has been Chairman of the Board and Chief
Executive Officer of Commercial Intertech Corp. since 1987, and from
1996 to 1999 he was also Chairman of the Board of CUNO Incorporated.
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 CUNO Incorporated, FirstEnergy Corp. and Twin
Disc, Inc. Mr. Powers was first elected a director of the Company
in 1995.
Carroll W. Suggs, 61, is the Chairman, President, and Chief
Executive Officer of Petroleum Helicopters, Inc. Petroleum
Helicopters provides helicopter transportation services to companies
engaged in the offshore oil and gas industry, to institutions
involved in emergency medical services, and to government agencies.
Mrs. Suggs serves on the boards of Whitney Holding Company and
VARCO International. She was first elected a director of the
Company in February 2000.
<PAGE>
DIRECTOR WITH TERMS EXPIRING IN 2000
Edward J. Campbell, 72, 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. He is also a director of Titan International, Inc.
and the American Bureau of Shipping (ABS) Group of Companies.
Mr. Campbell is retiring from the Company's Board of Directors at
the 2000 Annual Meeting of Stockholders as required by the Company's
By-laws. He has served as a director of the Company since 1981.
BOARD COMMITTEES
During 1999, the Board of Directors held eight meetings. The
Board of Directors has five standing committees. During 1999, each
current director of the Company attended at least 75% of the
meetings of the Board and committees of the Board on which he
served.
AUDIT COMMITTEE - The Audit Committee consists of five non-
employee directors: Thomas W. Cason, Chairman, Edward J. Campbell,
Jerry C. Martin, Ben G. Streetman and Carroll W. Suggs. Members of
the Committee, the Company's independent auditors, and the head of
the Company's internal audit staff attend Committee meetings. 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 1999, the Audit Committee held
five meetings.
COMPENSATION COMMITTEE - The Compensation Committee consists of
five non-employee directors: John M. Galvin, Chairman, Edward A.
Blair, Edward R. Muller, Paul J. Powers, and John Whitmire. The
Compensation Committee recommends to the Board remuneration
arrangements for senior management and directors, the adoption of
compensation plans in which officers and directors are eligible to
participate, and the grant of benefits under compensation plans, and
it approves stock option grants and certain other compensation. The
Compensation Committee held six meetings during 1999. A
Compensation Committee Report on Executive Compensation begins on
page 9 of this Proxy Statement.
EXECUTIVE COMMITTEE - The Executive Committee consists of five
directors: C. Russell Luigs, Chairman, Thomas W. Cason, John M.
Galvin, Robert E. Rose and John Whitmire. 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 1999.
FINANCE COMMITTEE - The Finance Committee consists of five non-
employee directors: Paul J. Powers, Chairman, Edward A. Blair,
Thomas W. Cason, John M. Galvin and Jerry C. Martin. The Committee
reviews the Company's annual financial plan, recommends to the Board
material capital expenditures, acquisitions and financings, and
advises with respect to the Company's external financial
relationships. During 1999, the Finance Committee held four
meetings.
NOMINATING COMMITTEE - The Nominating Committee consists of
five non-employee directors: Edward J. Campbell, Chairman, Edward
R. Muller, Ben G. Streetman, Carroll W. Suggs and John
<PAGE>
Whitmire. The Nominating Committee, which held four meetings during
1999, recommends to the Board nominees for election as directors.
The Committee considers the performance of incumbent directors in
determining whether they should be nominated to stand for
reelection. The Committee also considers qualified nominees
recommended by stockholders. Any recommendation for the 2001
election of directors should be submitted in writing to the
Corporate Secretary of the Company at 777 North Eldridge Parkway,
Houston, Texas 77079-4493.
DIRECTOR COMPENSATION
NON-EMPLOYEE DIRECTOR COMPENSATION
Board members who are not salaried employees receive separate
compensation for Board service. That compensation includes:
Annual Retainer . . . . . . . . . . . . . . $32,000
Annual Retainer (Committee Chairman). . . . . . $ 4,000
Board Attendance Fee (regular meeting). . . . . $ 1,000
Board Attendance Fee (special meeting
attended in person) . . . . . . . . . . . . $ 1,500
Board Attendance Fee (special meeting attended
by phone) . . . . . . . . . . . . . . . . . $ 1,000
Committee Attendance Fee . . . . . . . . . . $ 1,000
Annual Management Conference. . . . . . . . . $ 1,000
Special Assignment Fee . . . . . . . . . . . $ 1,000 per day
Annual Option Grant . . . . . . . . . . . . 3,000 shares
DIRECTOR OPTIONS
Options to purchase shares of common stock are granted to each
director who, as of the date of grant, is not an employee and has
not been an employee for any part of the preceding fiscal year.
Each option grant, vesting in equal installments over two years and
having a ten-year term, has an exercise price equal to the fair
market value of the common stock on the date of grant. At present,
all of the directors except Messrs. Luigs and Rose are eligible non-
employee directors.
A director receives an initial 10,000-share option on the date
he or she first achieves eligibility. He automatically receives an
additional 3,000-share option on the adjournment date of each annual
meeting of stockholders in each subsequent year in which he or she
remains eligible. In May 1999, when he first became eligible to
participate in the plan, Mr. Martin received an initial option grant
for 10,000 shares. Also in May 1999, Messrs. Blair, Campbell,
Cason, Galvin, Muller and Powers and Dr. Streetman each received an
option grant for 3,000 shares. Each option granted in May 1999 has
a per share exercise price of $14.7188. Mrs. Suggs received an
initial option grant for 10,000 shares at a per share exercise price
of $19.4063 when she joined the Board in February 2000.
DIRECTOR RETIREMENT PLAN
Non-employee directors participated in a retirement plan for
outside directors which will terminate in May 2000. Each
participant vested in an annual retirement benefit equal to a
percentage of the highest annual retainer fee in effect at any time
during the one-year period preceding termination of his Board
service. The percentage was 20% after one year of service up to
100% after five years of service. The benefit was 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. All directors except Mrs. Suggs and Messrs. Luigs and
Rose participated in the plan. Credited years of service at
<PAGE>
December 31, 1999, were as follows: Messrs. Campbell and Galvin, 15
years; Messrs. Cason and Powers, 4 years; Messrs. Martin and Muller
and Dr. Streetman, 2 years; Mr. Blair, 1 year; and Mr. Whitmire, 0
years.
The Board of Directors voted to terminate the retirement plan
for outside directors effective May 10, 2000. Upon termination,
participant directors not presently receiving benefits will become
fully vested and will receive a lump sum payment equal to the
present value of the accrued benefit. Participants presently
receiving benefits will continue to receive benefits as if the plan
was not terminated. Termination payments will be made as follows to
the nominees for election as directors at the annual meeting and to
other continuing directors: Mr. Blair, $52,786; Mr. Cason, $137,349;
Mr. Galvin, $315,042; Mr. Martin, $87,260; Mr. Muller, $100,347;
Mr. Powers, $137,349; Dr. Streetman, $87,260; and Mr. Whitmire,
$45,577.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Listed below is the only person who, to the knowledge of the
Company, may be deemed to be a beneficial owner, as of the record
date, of more than 5% of the Company's common stock.
NAME AND ADDRESS SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS(1)
FMR Corp 19,987,010(2) 11.42%
82 Devonshire Street
Boston, Massachusetts 02109
________________
(1) The percentage indicated is based on the number of issued and
outstanding shares of common stock at March 16, 2000.
(2) The number of shares indicated is based on Amendment No. 1 to
a statement on Schedule 13G, dated February 14, 2000, which was
filed jointly by FMR Corp. ("FMR"), Edward C. Johnson 3d and
Abigail P. Johnson. FMR is the parent holding company of
certain investment companies and investment advisory and
management companies, some of which may also be deemed to be
beneficial owners of more than 5% of the Company's common stock
by virtue of their interest in some or all of the same shares
reported as being beneficially owned by FMR. Edward C.
Johnson 3d is Chairman of FMR and Abigail P. Johnson is a
director of FMR. Through their ownership of voting stock in
FMR and the execution of a shareholders' voting agreement,
members of the Johnson family may be deemed to form a
controlling group with respect to FMR.
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of March 16, 2000, the
beneficial ownership of the Company's common stock by each director
and nominee, the executive officers named in the Summary
Compensation Table, 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)
Edward A. Blair 6,500 (c) -
Edward J. Campbell 35,217 (c) -
Thomas W. Cason 23,500 (c) -
John M. Galvin 35,000 (c) -
C. Russell Luigs 2,183,767 (d)(e) 1.24%
Jon A. Marshall 397,014 (d)(e) -
Jerry C. Martin 101,221 (c) -
Edward R. Muller 15,500 (c) -
Paul J. Powers 22,000 (c) -
W. Matt Ralls 59,750 (d) -
Robert E. Rose 284,725 (d) -
Ben G. Streetman 16,500 (c) -
Carroll W. Suggs 500 -
John Whitmire 5,000 (c) -
Marion M. Woolie 156,094 (d)(e) -
All of the above and other
executive officers as a
group (19 persons) 3,920,253 (c)(d)(e) 2.21%
_______________________
(a) Each person has sole voting and investment power with respect to the
shares listed, unless otherwise indicated.
(b) As of March 16, 2000, 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 16,
2000, through the exercise of non-employee director stock options,
as follows: Mr. Blair, 6,500; Mr. Campbell, 7,500; Mr. Cason, 20,500;
Mr. Galvin, 32,500; Mr. Martin, 5,000; Mr. Muller, 14,500; Mr. Powers,
20,500; Dr. Streetman, 14,500; Mr. Whitmire, 5,000; and the group, 126,500.
(d) Includes shares that may be acquired within sixty days of March 16,
2000, through the exercise of employee stock options, as follows: Mr.
Luigs, 1,028,554; Mr. Marshall, 340,305; Mr. Ralls, 59,750; Mr. Rose,
283,225; Mr. Woolie, 93,000; and the group, 2,111,467.
(e) Includes shares attributable to accounts under the Company's 401(k)
Savings Incentive Plan at March 16, 2000, as follows: Mr. Luigs,
32,909; Mr. Marshall, 3,771; Mr. Woolie, 9,112; and the group,
45,792.
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES AND PROGRAMS
The Compensation Committee sets the compensation of the Company's
senior executive officers, including the Chief Executive Officer and the
other named executive officers in the Summary Compensation Table, other
than Mr. Luigs. The Committee's goal is to develop and maintain a
compensation program that motivates and rewards executives for maximizing
stockholder value. The Committee has designed the Company's executive
compensation program so that it:
* Attracts and retains the highest caliber executives;
* Motivates the executives to maximize shareholder value;
* Provides fair and reasonable compensation; and
* Links the level of compensation to performance
The compensation program described in this report does not address the
compensation paid to Mr. Luigs, who is the Chairman of the Executive
Committee of the Board of Directors. As described under "Employment
Agreements and Termination Agreements" in this proxy statement, Mr. Luigs
is employed under an agreement pursuant to which he receives an annual
salary equal to the Company pension benefits and outside director fees
that he could have received if he had retired at May 1, 1999.
The executive compensation program consists of four elements: (1) base
salary, (2) annual incentive awards, (3) stock options, and (4) 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. Under the program, a high proportion of
the compensation of these officers is "at risk," specifically annual
incentive awards, stock options, and long-term incentive awards. Annual
incentive awards permit the Committee to recognize Company and individual
performance. Stock options and long-term incentive awards tie long-term
compensation to stock price appreciation and other measures linked to
stock price appreciation.
The Committee makes awards and takes other actions regarding executive
compensation considering the overall costs and benefits to the Company.
Specifically, the Committee considers the costs and benefits of preserving
potential tax deductibility of executive pay under Section 162(m) of the
Internal Revenue Code in making awards.
The compensation program is structured to provide executives with a
total compensation package that, at expected performance levels, is
competitive with those provided to executives who hold comparable
positions or have similar qualifications at other similarly situated
organizations. A peer group of companies similar to the new offshore
drilling peer group named in the Cumulative Total Shareholder Return
table of this proxy statement was utilized to evaluate the competitiveness
of the Company's compensation. Compensation information of other drilling
companies not included in the new offshore drilling peer group was also
utilized since the competitive market for executive talent is, in many
cases, broader than just the offshore drilling peer group. The Committee
also receives advice regarding compensation levels from an outside
compensation consulting firm.
ANNUAL COMPENSATION
BASE SALARY: The Company's base salary program is designed to provide
base salaries for executives that approximate the 50th percentile (median)
of those provided by other companies in the peer group. The Committee
reviews and adjusts executive base salaries annually considering the
<PAGE>
Chief Executive Officer's recommendation for the executives other than
himself, each executive's performance, the competitiveness of the
executive's current base salary compared to the external market, and
overall industry conditions.
In February 1999, the Committee reviewed the executives' base
salaries. Due to the decline in the industry conditions and the Company's
operating results for 1998 as compared to 1997, the Committee determined
that no increases would be made to the executives' base salaries for 1999.
INCENTIVE AWARDS: Under the Company's 1999 Management Incentive
Award Plan (the "1999 plan"), the Committee grants annual cash incentive
awards that are dependent upon the achievement of previously established
objectives and an evaluation of each individual's contributions to those
achievements. Targeted award levels are intended by the Committee to
approximate the median of the peer group. Annual incentive target awards
are expressed as a percentage of base salary earned during the year and
range from 20% to 60% depending on the participant's salary grade.
Annual incentive award payments can increase to a maximum of two times
the targeted percentage or decrease to zero depending on actual
performance.
The 1999 plan utilized two performance funding pools designed to
deliver a total annual incentive award that is competitive with the market.
One funding pool was based on the achievement of two objective measures:
(1) net income versus budget (37.5% of the total target award) and (2)
return on capital versus a peer group (37.5% of the total target award).
The second funding pool (25% of the total award) was based on the
Committee's subjective evaluation of the Company's performance in the
following areas: safety performance, operating costs, operating margin and
environmental performance.
For the first pool, the Company's actual net income for 1999 was 96.9%
ofbudget, earning 35.2% of the total target award. The Company's return
on capital versus the peer group was below the threshold performance level,
so no portion of the bonus was earned from this measure. Based on the
Committee's evaluation of the subjective measures for the second pool,
43.8% of the total target award was earned. The Committee considered the
fact that the Company reported 30% fewer lost-time incidents in 1999,
resulting in the second lowest rate in Company history and a total
recordable incident rate that was the best in Company history. There were
no major environmental incidents and no fines. Cost control was deemed
very favorable versus forecasts, and operating margins were considered
strong, particularly in the drilling management services division. In
total, the participants in the 1999 plan earned 79% of the plan's total
target award.
LONG-TERM COMPENSATION
The Company grants a combination of stock options and long-term
incentive awards (performance shares) as part of its total long-term
incentive compensation program. The Company's long-term incentive program
is designed to provide awards that, at targeted performance, will
approximate the 75th percentile of the peer group. Below is a
discussion of the two types of long-term incentive awards utilized
by the Committee.
STOCK OPTIONS: The Compensation Committee believes that stock
options are critical in motivating and rewarding the creation of long-term
stockholder value. The Committee has established a policy of awarding
stock options each year based on competitive practices, the continuing
progress of the Company, and individual performance. All stock option
awards are made with option exercise prices equal to the fair market value
of the underlying stock at the time of grant. Holders benefit only when
and to the extent the stock price increases after the option grant.
<PAGE>
In February 1999, the Compensation Committee approved annual stock
option grants to executive officers and other key employees, as recommended
by the Chief Executive Officer. Option awards were made to 182 employees
and officers and covered approximately 2,522,000 shares of underlying
common stock. The Committee considered the performance of the individual
executive officers and other key employees in allocating 1999 stock option
grants.
LONG-TERM INCENTIVE AWARDS: The Committee utilizes long-term
incentive awards (performance shares) directly tied to Company performance,
to provide competitive compensation to senior executives and motivate them
toward effective long-term strategic management of the Company's assets and
operations. The long-term incentive awards are based on Company
performance for a three-year period. The total amount of these awards and
their allocation among senior executive officers is based on competitive
practices, continuing progress of the Company, and individual performance.
Vesting of the long-term incentive awards granted in 1999 depends on
Company performance for the three-year period ending December 31, 2001.
Company performance under the 1999 grants is measured by the following two
long-term performance measures: cumulative earnings before interest, taxes,
depreciation and amortization (EBITDA) versus budget; and cumulative net
income versus budget. Each measure is weighted equally.
A threshold level of performance must be achieved for a performance
measure before any of the performance shares will vest. Seventy-five
percent of the award allocated to a measure vests if a pre-established
"target" performance is achieved for that measure. The amount of the
award that vests for each measure increases up to that measure's full
allocated amount if the pre-established maximum level of performance is
achieved. The exact percentage of the award that vests for a measure is
calculated based on a straight-line interpolation between the threshold
and target levels of performance or between the target and maximum levels
of performance. The full amount of the award will be earned only if the
maximum performance level is achieved for both performance measures.
In February 2000, the Committee certified that the thresholds
established for the long-term incentive awards granted in 1997 for the
performance period ending December 31, 1999, had not been met for any of
the measures and therefore none of the shares were vested. The performance
measures under the 1997 grants were cumulative EBITDA, earnings per share,
and stock price appreciation.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Compensation Committee assesses the Company's progress and
performance in connection with the compensation of the Company's senior
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 compensation of Mr. Rose are described
below.
In February 1999, Mr. Rose was granted 375,000 stock options with an
exercise price of $7.6875 and 75,000 performance shares that will only
vest if specific performance hurdles are achieved by December 31, 2001.
In light of the depressed condition in the offshore drilling industry,
the Committee determined that Mr. Rose's base salary would remain at
$525,000 for 1999. In February 2000, the Committee evaluated the Company's
1999 performance under the annual incentive plans, plus Mr. Rose's
contributions to the Company's success. Based on this evaluation and the
performance
<PAGE>
measures under the plan, the Company awarded him a total bonus of $250,000
or 47.6% of his 1999 base salary. The Committee feels that the total
compensation package provided to Mr. Rose is fair and reasonable
based on the competitive market and his contribution to the Company's
success.
POLICY REGARDING SECTION 162(m) OF THE INTERNAL REVENUE CODE
For compensation in excess of $1 million, Section 162(m) of the
Internal Revenue Code generally limits the ability of the Company to take
a federal income tax deduction for compensation paid to the Chief Executive
Officer or the four most highly compensated executive officers other than
the Chief Executive Officer, except for qualified performance-based
compensation. The Company's 1998 Stock Option & Incentive Plan, under
which stock options and long-term incentive awards are granted, and a
portion of the awards granted under the 1999 Management Incentive
Award Plan are believed to qualify as performance-based compensation under
the Internal Revenue Service rules. While the Compensation Committee will
seek to utilize deductible forms of compensation to the extent practicable,
the Committee does not believe that compensation decisions should be made
solely to maintain the deductibility of compensation for federal income
taxes purposes. In 1999, none of the Company's officers received
compensation that, because of Section 162(m), was not deductible for
federal income tax purposes.
John M. Galvin, Chairman Edward A. Blair
Donald B. Brown Edward R. Muller
Paul J. Powers John Whitmire
<PAGE>
EXECUTIVE COMPENSATION
<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>
Robert E. Rose(5) 1999 $525,000 $250,000 375,000 $ 0 $ 9,600
Chairman, President and Chief 1998 $346,022 $ 0 500,000 $ 0 $ 0
Executive Officer
C. Russell Luigs(6) 1999 $460,474 $ 0 0 $ 0 $18,100
Executive Committee Chairman 1998 $547,917 $ 0 150,000 $ 323,090 $17,354
1997 $522,171 $525,000 75,000 $2,493,750 $12,475
Jon A. Marshall 1999 $325,000 $115,000 180,000 $ 0 $10,821
Executive Vice President and 1998 $310,113 $ 0 100,000 $ 80,773 $ 8,868
Chief Operating Officer 1997 $261,856 $160,000 35,000 $ 623,438 $ 4,914
Marion M. Woolie(7) 1999 $225,000 $ 80,000 105,000 $ 0 $10,976
President, Global Marine 1998 $201,136 $ 0 58,000 $ 0 $ 8,437
Drilling Company
W. Matt Ralls(8) 1999 $223,307 $ 80,000 125,000 $ 0 $12,035
Senior Vice President, Chief 1998 $156,582 $ 0 12,000 $ 0 $ 9,126
Financial Officer 1997 $ 76,578 $ 38,500 45,000 $ 0 $ 588
and Treasurer
</TABLE>
(1) Bonuses based on service during each year were awarded in
the following year. Executive officers could elect between
payment in cash or 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.
(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" consist of
amounts earned under long-term incentive awards granted in
1995, 1996 and1997 and paid in 1998, 1999, and 2000, the
payment amounts being based on Company performance during
the periods 1995 through 1997, 1996 through 1998, and 1997
through 1999. 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.
(4) The amounts indicated under "All Other Compensation" for
1999 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. Rose, $9,600;
Mr. Luigs, $9,600; Mr. Marshall, $9,600; Mr. Woolie,
$9,600; and Mr. Ralls, $9,600); plus (b) insurance premiums
paid by the Company with respect to term life insurance for
the benefit of the named executive officers (Mr. Rose, $0;
Mr. Luigs, $8,500; Mr. Marshall, $1,221; Mr. Woolie,
$1,376; and Mr. Ralls, $2,435).
(5) Mr. Rose was elected President and Chief Executive Officer
on May 5, 1998, and is employed under an agreement with the
Company. See "Employment Agreements and Termination
Arrangements."
(6) Mr. Luigs served as Chairman and Chief Executive Officer
until May 5, 1998. Thereafter, Mr. Luigs, while remaining
a Company employee, continued as Chairman until May 1999
and Chairman of the Executive Committee thereafter. He is
employed under an agreement with the Company. See
"Employment Agreements and Termination Arrangements."
(7) Mr. Woolie has been employed by a subsidiary of the Company
during each of the last three years but was not appointed
an executive officer until 1998.
(8) Mr. Ralls joined the Company in June 1997 as Vice President
and Treasurer. In January 1999 he was elected Senior Vice
President, Chief Financial Officer and Treasurer.
<PAGE>
<TABLE>
OPTION GRANTS IN 1999
<CAPTION>
Individual Grants
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option Term(2)
Number of Percent of
Shares Total Options Exercise or
Underlying Granted to Base Price
Options Employees ($ per Expiration
Name Granted in 1999 share) Date 0% 5% 10%
(#)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
R. E. Rose 375,000 11.94 % $7.6875 2-23-2009 $ 0 $ 1,812,985 $ 4,594,461
C. R. Luigs 0 - - - $ 0 $ 0 $ 0
J. A. Marshall 180,000 5.73 % $7.6875 2-23-2009 $ 0 $ 870,233 $ 2,205,341
M. M. Woolie 105,000 3.34 % $7.6875 2-23-2009 $ 0 $ 507,636 $ 1,286,449
W. M. Ralls 125,000 3.98 % $7.6875 2-23-2009 $ 0 $ 604,328 $ 1,531,487
All
Stockholders(3) N/A N/A $7.6875 N/A $ 0 $ 838,719,924 $2,125,480,961
</TABLE>
(1) All options granted to the named officers were granted on February 23,
1999, at exercise prices equal to the average of the high and low per
share market prices of the common stock on the date of grant. Each option
vests in equal installments over four years. The right to exercise
unexercised options is subject to acceleration in certain circumstances
as described under "Employment Agreements and Termination Arrangements,"
below, and upon death, disability and certain non-cause terminations of
employment. 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 arbitrarily assumed rates of annual
compound stock price appreciation from the date of grant over the full
ten-year term of the option. 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) For comparative purposes, shown are the total gains that could be realized
over a ten-year period by stockholders based on 173,481,811 shares of
common stock outstanding on February 23, 1999, and using the $7.6875
average of the stock's high and low market prices on that date as the base
price.
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN 1999
AND YEAR-END OPTION VALUES
<CAPTION>
Number of Securities
Number of Underlying Unexercised Value of Unexercised In-the-
Shares Options at Year-End Money Options at Year-End(2)
Underlying (#) ($)
Options Value
Exercised Realized(1)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
R. E. Rose 0 $ 0 125,000 750,000 $ 0 $ 3,351,562
C. R. Luigs 442,821 $5,759,881 1,062,596 172,500 $12,511,116 $ 164,531
J. A. Marshall 0 $ 0 283,705 283,750 $ 3,015,435 $ 1,691,016
M. M. Woolie 0 $ 0 55,500 161,500 $ 324,844 $ 956,719
W. M. Ralls 0 $ 0 25,500 156,500 $ 0 $ 1,117,187
</TABLE>
(1) Represents the spread between the exercise price and the sale
price of the shares received upon exercise if such shares were
sold on exercise or the spread between the exercise price and the
fair market value of the shares received if such shares were held
following exercise.
(2) Represents the positive spread between the exercise price and the
year-end closing price of $16.625.
<PAGE>
<TABLE>
1999 LONG-TERM INCENTIVE AWARDS
<CAPTION>
Estimated Future Payouts
Performance Under
or Non-Stock Price-Based Plans(2)
Number of Other Period
Shares, Units Until
or Other Maturation
Name Rights(1) or Payout Threshold Target Maximum
(#) (#) (#) (#)
<S> <C> <C> <C> <C> <C>
R. E. Rose 75,000 3 Years 0 56,250 75,000
C. R. Luigs 0 - - - -
J. A. Marshall 40,000 3 Years 0 30,000 40,000
M. M. Woolie 25,000 3 Years 0 18,750 25,000
W. M. Ralls 25,000 3 Years 0 18,750 25,000
</TABLE>
(1) Awards depend on the performance of the Company for the three-year
period ending December 31, 2001, as measured by the following
performance criteria: cumulative earnings before interest, taxes,
depreciation and amortization; and cumulative net income. Shares
of common stock underlie each award and are allocated among the
performance criteria. No portion of the award for a criterion is
earned until a pre-established threshold level of performance is
surpassed for that criterion. A participant earns seventy-five
percent of the award allocated to a criterion if a pre-established
target level of performance is achieved and one-hundred percent of
the award allocated to a criterion if a pre-established maximum
level of performance is achieved. The exact percentage of the
award achieved for a criterion will be calculated based on
straight-line interpolation between the pre-established threshold
and target levels of performance and between the pre-established
target and maximum levels of performance.
(2) Expressed in terms of numbers of shares of common stock and
ignores fractional shares. Estimated future payout amounts assume
threshold, target or maximum levels of performance are achieved
under all performance criteria.
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of Service
Remuneration 15 20 25 30 35
<C> <C> <C> <C> <C> <C> <C>
$ 200,000 $100,000 $100,000 $100,000 $112,050 $132,050
$ 300,000 $150,000 $150,000 $150,000 $172,050 $202,050
$ 400,000 $200,000 $200,000 $200,000 $232,050 $272,050
$ 500,000 $250,000 $250,000 $250,000 $292,050 $342,050
$ 600,000 $300,000 $300,000 $300,000 $352,050 $412,050
$ 700,000 $350,000 $350,000 $350,000 $412,050 $482,050
$ 800,000 $400,000 $400,000 $400,000 $472,050 $552,050
$ 900,000 $450,000 $450,000 $450,000 $532,050 $622,050
$ 1,000,000 $500,000 $500,000 $500,000 $592,050 $692,050
$ 1,100,000 $550,000 $550,000 $550,000 $652,050 $762,050
$ 1,200,000 $600,000 $600,000 $600,000 $712,050 $832,050
$ 1,300,000 $650,000 $650,000 $650,000 $772,050 $902,050
</TABLE>
Annual retirement benefits are based on a participant's average
annual salary and bonus. Amounts payable pursuant to a nonqualified
b enefit equalization defined benefit plan and a nonqualified
executive supplemental defined benefit plan are included. The
benefits shown are computed based on a single straight life annuity
at normal retirement age and reflect an offset for Social Security
b enefits under the qualified defined benefit pension plan.
The full years of credited service as of December 31, 1999, for
purposes of determining the entitlement to retire with a benefit
under all plans and for purposes of determining the benefit under
the qualified plan and the nonqualified benefit equalization plan
for each of the individuals named in the Summary Compensation Table
are: Mr. Rose, 14 years; Mr. Luigs, 22 years; Mr. Marshall, 20
years; Mr. Woolie, 17 years; and Mr. Ralls, 2 years. Messrs. Luigs,
M arshall and Woolie each have the maximum of 15 full years of
employment under the nonqualified executive supplemental plan as of
December 31, 1998. Mr. Ralls has 2 years of employment under the
plan. Under the terms of Mr. Rose's employment agreement, he will
be credited with three years of employment under the nonqualified
executive supplemental plan for each actual year of service after
May 5, 1998. The Pension Plan Table assumes that years of service
and annual compensation for a particular individual are the same
under all plans.
<PAGE>
EMPLOYMENT AGREEMENTS AND TERMINATION ARRANGEMENTS
EMPLOYMENT AGREEMENTS
On December 16, 1999, the Company entered into an employment
agreement with Mr. Rose that terminates in October 2003. The
agreement specifies a minimum annual base salary of $525,000. If
the Company terminates Mr. Rose without cause, including termination
by Mr. Rose for good reason, as defined in the agreement, he will be
entitled to salary and benefit continuation for the greater of the
remainder of the term of the agreement or 24 months. In addition,
he will be entitled to a lump sum payment equal to the greater of
his actual or target bonuses for the two years prior to termination.
If the Company terminates Mr. Rose without cause, including
termination by Mr. Rose for good reason, in the 36-month period
following a change in control, as defined in the agreement, he will
be entitled to salary and benefit continuation for the greater of
the term of the agreement or three years. In addition, Mr. Rose
will be entitled to a lump sum payment equal to three times the
greater of his highest bonus paid in the previous three years or his
highest target bonus in the previous three years. The agreement
also provides for a gross-up for excise taxes relating to the cash
portion of the severance payment. Upon his termination due to death
or disability, Mr. Rose or his estate will be entitled to a lump sum
payment equal to three times his annual salary.
Under the terms of an employment agreement effective May 6,
1999, and terminating at the annual meeting in 2002, Mr. Luigs is
employed as the Chairman of the Executive Committee at an annual
salary equal to the pension benefits and outside director fees that
he could have received if he had retired at May 1, 1999, which total
$413,145. The agreement also provides that if the agreement is
terminated for reasons other than misconduct harmful to the Company,
Mr. Luigs will be entitled to salary and benefit continuation for
the remainder of the term.
SEVERANCE AGREEMENTS
The Company also has severance agreements with certain key
executive officers. The agreements provide for a severance payment
if the Company terminates employment for reasons other than
misconduct harmful to the Company, the individual terminates for
good reason, as defined in the agreements, or employment terminates
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 and benefit continuation for a period of two years
following such termination of employment. If the individual is
entitled to severance benefits within 36-months following a change
in control, as defined in the agreements, the payment would consist
of salary continuation for a period of three years. In addition,
the payment would include a lump sum payment equal to three times
the highest bonus received in the past three years. The agreements
also provide for a gross-up for excise taxes relating to the cash
portion of the severance payments. Among the executive officers
covered by such agreements are Messrs. Marshall, Woolie and Ralls.
CHANGE IN CONTROL ARRANGEMENTS
The Company's non-employee director stock option plan and
outstanding option agreements under the Company's other stock option
plans provide that the right to exercise all options remaining
unexercised shall accelerate, so that such options will become
immediately exercisable, upon a change in control, as defined in the
plans. In addition, the vesting of retirement benefits under the
Company's retirement plan for outside directors accelerates upon the
occurrence of a change-in-control.
<PAGE>
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following line graph compares the changes in the cumulative
total shareholder returns of (i) the Company, (ii) the Standard &
Poor's 500 Stock Index, (iii) a peer group comprised of a weighted
index of a group of other companies in the Company's industry ("New
Peer Group"), and (iv) the Peer Group of companies selected by the
Company in connection with its 1999 Annual Meeting ("Old Peer
Group"). The New Peer Group is comprised of: Diamond Offshore
Drilling Inc.; ENSCO International Incorporated; Noble Drilling
Corporation; R & B Falcon Corporation; Rowan Companies, Inc.; Santa
Fe International Corp.; and Transocean Sedco Forex Inc. (formerly
Transocean Offshore Inc.). Nabors Industries, Inc. and Parker
Drilling Company, both of which are primarily land drillers, were in
the Old Peer Group but have been replaced by Diamond Offshore
Drilling Inc. and Santa Fe International Corp. to produce a peer
group more reflective of the Company's offshore drilling business.
The graph assumes that $100 was invested on December 31, 1994, in
each of the Company's common stock, the S&P 500, the New Peer Group,
and the Old Peer Group, and that all dividends were reinvested.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
December December December December December December
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Global Marine Inc. $100 $241 $569 $678 $248 $459
S&P 500 Index $100 $138 $169 $226 $290 $351
New Peer Group $100 $196 $367 $560 $215 $370
Old Peer Group $100 $187 $352 $523 $189 $360
</TABLE>
<PAGE>
APPROVAL OF NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PLAN
The Board of Directors has adopted the Global Marine Non-
Employee Director Restricted Stock Plan, subject to stockholder
approval. The following is a description of the plan and the stock
that may be issued thereunder. The language of the Non-Employee
Director Restricted Stock Plan is attached to this Proxy Statement
as Exhibit A. Stockholders should read Exhibit A for the exact
language of the plan.
PURPOSES. The Board of Directors believes the plan will
enable the Company to attract and retain persons of outstanding
competence to serve as its non-employee directors and more closely
align the directors' interests with those of the Company's
stockholders by paying a portion of the non-employee director's
compensation in restricted shares of Company stock.
TERM. The plan will become effective as of the date of its
approval by the stockholders. The plan will be unlimited in
duration. In the event of plan termination, the plan will remain in
effect as long as any awards granted thereunder are outstanding.
AVAILABLE SHARES. An aggregate of 250,000 shares of the
Company's common stock will be available for delivery pursuant to
the plan. The shares may be authorized but unissued shares,
reacquired shares, or both. Any shares awarded under the plan that
are forfeited for any reason will again be available for new awards
under the plan.
PARTICIPATION. Participation in the plan will be limited to
non-employee directors of Global Marine Inc. An employee-director
who retires from employment with the Company and its subsidiaries
will become eligible to participate in and receive awards of
restricted stock under the plan at the time of his or her first re-
election as a non-employee director. At the present time, all of
the directors except Messrs. Luigs and Rose would be eligible to
participate in the plan.
AWARDS. At the end of each calendar quarter, commencing June
30, 2000, each participant who has been an eligible participant in
the plan for at least one month prior to the day of the award will
receive an automatic award of shares of restricted common stock with
an aggregate fair market value of $5,000, valued on the day of the
award.
RESTRICTIONS, REMOVAL OF RESTRICTIONS, AND TERMS AND CONDITIONS
OF AWARDS. Each participant in the plan will have the right to
receive all dividends and other distributions made with respect to
his or her restricted shares and will have the right to vote or
execute proxies with respect to such shares.
Except as noted below, a participant may not sell, assign,
pledge or otherwise transfer a restricted share unless and until all
of the restrictions on that share have been removed pursuant to the
plan. Restricted shares may, however, be transferred to certain
family members, to certain family trusts and partnerships, pursuant
to certain domestic relations orders, and to such other transferees
as may be approved by the Board's Compensation Committee in its sole
and absolute discretion. The Compensation Committee may also
prohibit any transfer of restricted shares with or without cause in
its sole and absolute discretion.
Except in the event of a change in control, as discussed below,
none of the shares of restricted stock awarded under the plan will
become free of restrictions and non-forfeitable until termination of
the participant's service as a director of Global Marine Inc. Such
shares will become free of restrictions and non-forfeitable upon the
participant's termination of service as a director resulting from
(a) his or her death or disability, (b) his or her mandatory
retirement as a director pursuant to the
<PAGE>
Company's by-laws or, if such by-law provisions are inapplicable, his
or her termination of service on or after the last day of the term of
office during which he or she attains age 70, (c) his or her being
removed from office as a director or the failure of the Board to
nominate him or her for re-election, in either case other than for
cause as defined in the plan, or (d) his or her resignation or failure
to stand for re-election with the consent of an 80% vote of the Board or
any failure to be re-elected after being nominated by the Board. Termination
of service as a director for any other reason will result in forfeiture
of the restricted shares.
A change in control of Global Marine Inc., as defined in the
plan, will result in the immediate removal of all restrictions
relating to all of the restricted shares awarded pursuant to the
plan. In any situation involving acceleration of the removal of
restrictions in connection with a change in control, the Company may
elect, by action of its Board of Directors, to repurchase the
affected shares at their fair market value as of the effective day
of the repurchase instead of releasing the shares to the participant
owning the shares.
AMENDMENT OR TERMINATION. The plan may be amended, suspended
or terminated by action of the Board of Directors at any time, but,
except as noted below with respect to certain adjustments to shares,
such action cannot (a) adversely affect a participant's rights under
the plan with respect to awards of restricted stock made prior to
such action without the participant's consent, (b) increase the
aggregate number of shares available for award under the plan
without the approval of the stockholders, or (c) change the plan's
restriction periods for restricted stock without the approval of the
stockholders.
ADJUSTMENTS TO SHARES. In the event of a corporate
transaction involving the Company, the Board of Directors may make
adjustments to preserve the benefits or potential benefits of awards
under the plan. Such transactions involving the Company may
include, without limitation, a stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination, or exchange
of shares. Such adjustments may include adjustment of the number
and kinds of shares which may be issued or delivered under the plan,
adjustment of the number and kind of shares subject to outstanding
awards, and any other adjustments that the Board of Directors
determines to be equitable.
ADMINISTRATION. The plan will be administered by the
Compensation Committee of the Board of Directors.
OTHER. The plan will not impose any obligation on the Company
to continue the services of any participant as a director or any
obligation on any participant to remain a director. In addition,
the Board of Directors may, in its sole and absolute discretion,
declare inoperative anything in the plan or in the restrictions,
terms or conditions pertaining to any award under the plan that
adversely affects pooling of interests accounting.
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 Non-Employee
Director Restricted Stock Plan. If such a vote is not obtained, the
plan will be void and without effect. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" APPROVAL OF THE NON-EMPLOYEE DIRECTOR
RESTRICTED STOCK PLAN.
<PAGE>
APPROVAL OF AMENDMENT TO THE
1998 STOCK OPTION AND INCENTIVE PLAN
In 1998, the Board of Directors adopted and the stockholders
approved the Global Marine 1998 Stock Option and Incentive Plan. As
adopted in 1998, the plan provides for a basic authorization of a
maximum of 7,500,000 shares of the common stock, as to which awards
could be granted under the plan, plus (i) shares, if any, available
under the old 1989 Stock Option and Incentive Plan, of which there
were none, or forfeited under the old plan or the new 1998 Stock
Option and Incentive Plan, (ii) shares delivered as payment or
delivered or withheld for taxes under the old plan or 1998 plan, and
(iii) shares delivered in substitution for shares issuable under
plans of other companies acquired by the Company or a related
company, as defined in the 1998 plan. Since its inception, awards
covering approximately 7,290,926 shares have been granted under the
1998 plan, awards covering approximately 90,935 of these shares have
been cancelled without the delivery of any shares, and, as of March
16, 2000, 196 persons held awards granted under the plan. The last
reported sales price for the Company's common stock as reported on
the New York Stock Exchange Composite Transaction Tape on March 16,
2000, was $22.625 per share.
In February 2000, the Board of directors adopted an amendment
to the 1998 plan, subject to approval by the stockholders at the
2000 Annual Meeting. The proposed amendment would increase the
basic authorization under the 1998 plan by 7,500,000 shares. The
following describes the 1998 plan as amended by the proposed
amendment.
PURPOSE. The Board believes the 1998 plan has been important
in securing for the Company and its stockholders the benefits
arising from ownership of the Company's 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.
ADMINISTRATION. The Compensation Committee of the Board of
Directors, which consists of directors who are not employees of the
Company or a related company, administers the 1998 plan.
PARTICIPATION. The Compensation Committee selects the
participants and determines the number and type of awards to be
granted to each participant under the plan. Participants may
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 is eligible unless he or she is also an
employee of the Company or a related company.
AWARDS. The 1998 plan provides for various types of benefits
to be granted to participants. Under the plan, options to purchase
shares of 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 Compensation
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
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.
<PAGE>
Under the 1998 plan, 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 Compensation 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
common stock or from 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 under the Internal
Revenue Code of 1986, as amended, or 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 presently
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. Therefore, if stockholders approve the
proposed amendment to the plan at the 2000 Annual Meeting, no more
than 12,000,000 shares of common stock would be available for
incentive stock options, subject to like increase in the event of
any further increase in the basic authorization.
The Committee is authorized to grant stock appreciation rights
to plan participants. Every stock appreciation right entitles the
participant, upon exercise of the stock appreciation right, 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 stock appreciation
rights, and the Company has no plans to grant stock appreciation
rights 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, and cash awards payable solely on account of
the attainment of one or more objective performance goals that have
been preestablished by the Committee. 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 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 Internal Revenue 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
<PAGE>
not have to include such provisions in stock awards or cash bonuses,
the inclusion of such provisions and compliance with certain other
requirements of section 162(m) enables 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 of section 162(m),
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 would currently result in
a limit of 1,500,000 shares, but would result in a limit of
3,000,000 shares under the proposed amendment. 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, the Company expects that
all options and stock appreciation rights and all stock awards and
cash awards under the plan will qualify as performance-based
compensation under section 162(m).
TERM. 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 May 5, 1998,
the date of its approval.
AMENDMENT OR TERMINATION. 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 proper stockholder approval, increase
the number of shares available under the plan, change the minimum
option or stock appreciation right 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.
BENEFITS UNDER AWARDS. The following table presents information
regarding the awards granted under the plan, since its inception, to
the Company's Chief Executive Officer and each of the other four
most highly compensated executive officers, all current executive
officers as a group, and all employees who are not executive
officers as a group. No director who is not an executive officer
has been granted awards under the plan.
<TABLE>
<CAPTION>
Value of Stock Long-Term
Stock Options Options Held at Incentive
Granted (1) 3/16/2000 (2) Award Grants (3)
Name (#) ($) (#)
<S> <C> <C> <C>
R. E. Rose 1,114,475 $6,567,172 225,000
C. R. Luigs 150,000 $ 0 75,000
J. A. Marshall 420,000 $3,139,368 110,000
M. M. Woolie 235,000 $1,842,026 50,000
W. M. Ralls 210,000 $2,140,776 50,000
All of the above and
other current
executive officers
as a group
(9 persons) 2,738,475 $18,047,984 660,000
All employees as a
group, excluding all
of the above 3,832,184 $28,946,494 60,267(4)
footnotes on next page
</TABLE>
<PAGE>
______________
(1) Granted for ten-year terms at exercise prices
ranging from $7.6875 to $25.3125, which equal the
per share fair market value of the underlying shares
of the Company's common stock, $.10 par value per
share, on the respective dates of grant.
(2) The value shown is the positive spread between each
option's exercise price and the $22.625 per share
closing price of the underlying common stock on
March 16, 2000, multiplied by the number of options
held at the close of business on March 16, 2000.
(3) Actual payout of each long-term incentive award can
range from zero to the maximum amount shown, based
on Company performance over applicable three-year
periods as measured by applicable performance
criteria.
(4) Grants of long-term incentive awards to persons who
were executive officers at the time of grant but are
not current executive officers. No long-term
incentive awards have been made to employees who
were not executive officers at the time of grant.
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, stock appreciation rights, 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 Internal Revenue 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 capital gain. In contrast, upon the
exercise of a non-qualified option, the optionee recognizes ordinary
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.
STOCK APPRECIATION RIGHTS. The amount of any cash or the
fair market value of any stock received by the holder upon the
exercise of stock appreciation rights under the plan will be subject
to ordinary income tax in the year of receipt.
STOCK AWARDS. A grant of shares of common stock or a cash
equivalent that is subject to no vesting restrictions will result in
ordinary 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.
<PAGE>
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.
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.
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 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 proposed
amendment to the plan. If such a vote is not obtained, the
amendment will be void and without effect. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED AMENDMENT TO THE
1998 STOCK OPTION AND INCENTIVE PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers
LLP as independent certified public accountants for the Company and
its subsidiaries for fiscal year 2000. The Board seeks ratification
of the appointment by the stockholders. PricewaterhouseCoopers LLP
has served as the Company's auditors since the Company's formation
and, by letter dated February 7, 2000, has advised the Company that
it 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. The vote required for ratification is a majority
of the shares represented and voted at the meeting.
Representatives of PricewaterhouseCoopers LLP will be present
at the meeting to make a statement if they desire to do so and to
respond to appropriate questions. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP.
<PAGE>
OTHER MATTERS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Blair, Galvin, Muller, Powers and Whitmire served as
members of the Company's Compensation Committee during all or part
of 1999. Donald B. Brown, who retired from the Company's Board of
Directors in May 1999, also served as a member of the Company's
Compensation Committee during part of 1999. 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 1999 or any prior year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Federal securities laws require the Company's executive
officers and directors, and persons who own more than ten percent of
the Company's common stock, to 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. Based solely on a review of such reports furnished to the
Company and written representations that no report on Form 5 was
required for 1999, 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 1999.
SOLICITATION
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 owners of the
common stock. The Company expects to reimburse such parties for
their reasonable out-of-pocket expenses incurred in connection
therewith.
REVOCATION OF PROXIES
You may revoke your proxy at any time before it is voted by any
of the following actions: (i) notifying the Corporate Secretary in
writing any time before it is voted; (ii) submitting a subsequent
proxy; or (iii) voting in person at the Annual Meeting. 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 at the Company's principal
executive offices, 777 N. Eldridge Parkway, Houston, Texas 77079-
4493.
STOCKHOLDERS' PROPOSALS
The federal securities laws provide stockholders with 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 2001 and otherwise eligible must be directed
to the Corporate Secretary of the Company at 777 N. Eldridge
Parkway, Houston, Texas 77079-4493, and must be received no later
than November 30, 2000.
If a stockholder desires to bring a matter before an annual
meeting or nominate a person to be a director which is not the
subject of a proposal timely submitted for inclusion in the
Company's proxy
<PAGE>
statement, the stockholder must follow the procedures outlined in
the Company's By-laws. The By-laws require timely notice in writing
of the matter, and receipt of the written notice by the Corporate
Secretary not later than the close of business on the 90th day and
not earlier than the 120th day prior to the first anniversary of the
preceding year's annual meeting. The deadline for delivery and receipt
of such notices for the 2000 Annual Meeting of Stockholders was the close
of business on February 4, 2000, and the deadline for delivery and
receipt of such notices for the 2001 Annual Meeting of Stockholders is the
close of business on February 9, 2001. A copy of the Company's By-laws is
available upon request from the Corporate Secretary of the Company at 777 N.
Eldridge Parkway, Houston, Texas 77079-4493.
OTHER MATTERS TO BE PRESENTED
The Company has not been notified of and the Board of Directors
does not know of any other matters to be presented for action at the
2000 Annual Meeting of Stockholders. If any other matters should
properly come before the Annual Meeting, the proxy holders intend to
vote on such matters in accordance with their best judgment.
VOTING VIA THE INTERNET OR BY TELEPHONE
SHARES REGISTERED IN THE NAME OF A BROKERAGE FIRM OR BANK
If your shares are registered with a brokerage firm or bank,
you may be eligible to vote via the Internet or to vote
telephonically by calling the telephone number referenced on your
broker's or bank's voting form. A number of brokerage firms
participate in a program provided through ADP Investor Communication
Services that offers telephone and Internet voting options. This
program is different from the program provided by Harris Bank for
shares registered directly in the name of the stockholder, which is
discussed below. If your shares are held in an account at a
brokerage firm or bank participating in the ADP program, you may
vote those shares telephonically by calling the telephone number
referenced on your voting form, or you may vote electronically via
the Internet at the following address:
www.proxyvote.com
SHARES REGISTERED DIRECTLY IN THE NAME OF THE STOCKHOLDER; 401(k)
SHARES
If your shares are registered directly with the Company's
transfer agent and registrar, Harris Bank, or are held through the
Global Marine Savings Incentive Plan, you may vote telephonically by
calling the toll-free telephone number listed on your proxy card or
voting instruction form. You may also vote via the Internet at the
following address:
www.harrisbank.com/wproxy
You should understand that the usual charges you bear for accessing
the Internet may apply to your voting via the Internet.
GLOBAL MARINE INC.
By ALEXANDER A. KREZEL
Corporate Secretary
Houston, Texas
March 30, 2000
<PAGE>
EXHIBIT A
GLOBAL MARINE
NON-EMPLOYEE DIRECTOR
RESTRICTED STOCK PLAN
____________________________
SECTION 1 - NAME, PURPOSE, EFFECTIVE DATE AND DURATION
This plan will be known as the Global Marine Non-Employee
Director Restricted Stock Plan. The purposes of this plan are to
enable Global Marine Inc. ("Global Marine") to attract and retain
persons of outstanding competence to serve as its non-employee
directors and further identify the non-employee directors' interests
with those of its other stockholders by paying a portion of the non-
employee directors' compensation in restricted shares of common
stock of Global Marine. This plan will become effective as of the
date of its approval by Global Marine's stockholders, will be
unlimited in duration, and, in the event of plan termination, will
remain in effect as long as any awards are outstanding under the
plan.
SECTION 2 - AVAILABLE STOCK
An aggregate of 250,000 shares of common stock, $.10 par value
per share, of Global Marine will be available for delivery pursuant
to this plan. The shares may be authorized but unissued shares,
reacquired shares, or both. Any shares awarded under this plan that
are forfeited for any reason will again be available for new awards
under the plan. In the event the number of shares available on a
particular day for awards under this plan is insufficient to grant
all awards to be granted on that day as specified by the plan, then
all directors who are entitled to an award on such day will share
ratably in the number of shares then available.
SECTION 3 - PARTICIPATION
Participation in this plan is limited to directors of Global
Marine who are not also employees of Global Marine or any of its
subsidiaries. An employee-director who retires from employment with
Global Marine and its subsidiaries will become eligible to
participate in and receive awards of restricted stock under the plan
at the time of his or her first re-election as a non-employee
director. For purposes of this plan "employee" includes all
individuals on the employee payroll of Global Marine or its
subsidiaries and excludes, without limitation, consultants who are
not on such payroll.
SECTION 4 - AWARDS
For services rendered in the calendar quarter then ending, an
award will be made as of the last day of each March, June,
September, and December, commencing June 30, 2000, to each person
who is an eligible participant in the plan on the day of the award
and was an eligible participant for at least one month prior to the
day of the award. Each award will consist of shares of restricted
common stock of Global Marine with an aggregate value of $5,000 on
the day of the award. The number of shares of stock subject to each
award will be determined by dividing $5,000 by the value of a share
of the stock on the day of the award (such value being determined as
set forth below in Section 5) and then rounding down to the nearest
whole number of shares. The restricted shares subject to each award
will be immediately issued and registered in the name of the
participant, and such issuance and registration will be evidenced by
an entry on the registry books of Global Marine and, if Global
Marine so elects, by a certificate issued by Global Marine, but the
restricted shares and such certificates, if any, will be expressly
subject to all of the restrictions, terms and conditions set forth
below in Section 6.
<PAGE>
SECTION 5 - VALUATION OF SHARES
The value of each share of stock awarded pursuant to this plan
will be the share's fair market value determined without taking into
account any restrictions applicable to the share. The fair market
value of a share of stock on a given day will be (a) the mean
between the high and low sales prices on that day for a share of the
stock as reported by THE WALL STREET JOURNAL under the New York
Stock Exchange Composite Transactions quotation system or under any
successor quotation system; or (b) if the stock is not traded on the
New York Stock Exchange, the mean between the high and low sales
prices on that day for a share of the stock as reported by THE WALL
STREET JOURNAL under the quotations system under which such sales
prices are reported; or (c) if THE WALL STREET JOURNAL does not
report such sales prices, the mean between the high and low sales
prices on that day for a share of the stock as reported by a
newspaper or trade journal selected by the Compensation Committee of
Global Marine's Board of Directors; or (d) if no such sales prices
are available for such day, the closing price as so reported or so
quoted for the immediately preceding business day; or (e) if no such
newspaper or trade journal reports such prices or if no such price
quotation is available, the price at which the Compensation
Committee of Global Marine's Board of Directors acting in good faith
determines through any reasonable valuation methods that a share of
stock might change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and both
having reasonable knowledge of the relevant facts.
SECTION 6 - RESTRICTIONS, REMOVAL OF RESTRICTIONS,
AND TERMS AND CONDITIONS OF AWARDS
(a) Each participant will have the right to receive all dividends
and other distributions made with respect to restricted shares
awarded pursuant to this plan and registered in his or her name
and will have the right to vote or execute proxies with respect
to such registered restricted shares, unless and until such
shares are forfeited pursuant to this plan. All book entries
and share certificates, if any, evidencing restricted stock
issued pursuant to this plan will carry or be endorsed with a
legend referring to the restrictions imposed by this plan.
Possession of certificates evidencing restricted stock issued
pursuant to this plan, if any, will be retained by the
Corporate Secretary of Global Marine until the provisions of
this plan relating to removal of the restrictions have been
satisfied.
(b) Except as authorized by the following sentence, shares of
restricted stock issued pursuant to this plan may not be sold,
assigned, pledged or otherwise transferred by the participant
unless and until all of the restrictions imposed by the plan
have been removed pursuant to the plan and a new book entry
evidencing the shares has been made or certificate representing
the shares has been issued which does not carry or is not
endorsed with the legend regarding the restrictions. Shares of
restricted stock issued and registered in the name of any
participant under this plan, or any portion thereof, may be
transferred by the participant to (i) the spouse, children or
grandchildren of the participant ("Immediate Family Members"),
(ii) a trust or trusts for the exclusive benefit of the
participant and/or Immediate Family Members, (iii) a
partnership in which the participant and/or Immediate Family
Members are the only partners, (iv) a transferee pursuant to a
judgment, decree or order relating to child support, alimony or
marital property rights that is made pursuant to a domestic
relations law of a state or country with competent jurisdiction
(a "Domestic Relations Order"), or (v) such other transferee as
may be approved by the Compensation Committee of Global
Marine's Board of Directors in its sole and absolute
discretion; provided, however, that (x) the Compensation
Committee may prohibit any transfer with or without cause in
its sole and absolute discretion, and (y) subsequent transfers
of transferred restricted shares or any portion thereof are
prohibited except those to or by the original participant in
accordance with this section or pursuant to a Domestic
Relations Order. Following any transfer, the shares will
continue to be subject to the same restrictions, terms and
conditions as were applicable immediately prior to transfer,
and any and all references to the participant in this plan will
be deemed to refer to the transferee; provided, however, that
any and
<PAGE>
all references to service or events of termination of
service in this plan will continue to mean the original
participant's service or events of termination of the original
participant's service. Each transfer will be effected by
written notice thereof duly signed and delivered by the
transferor to the Corporate Secretary of Global Marine at
Global Marine's principal business office. Such notice will
state the name and address of the transferee, the amount of
restricted stock being transferred, and such other information
as may be requested by the Corporate Secretary. The person or
persons entitled to receive distributions and vote or execute
proxies with respect to the restricted shares, and to receive
a certificate with respect to the shares when the provisions of
this plan relating to the removal of restrictions have been
satisfied, will be that person or those persons appearing on
Global Marine's registry books as the owner or owners of the
restricted shares, and Global Marine may treat the person or
persons in whose name or names the shares are registered as the
owner or owners of the shares for all purposes. Global Marine
will have no obligation to, or liability for any failure to,
notify the participant or any transferee of any forfeiture of
restricted shares or of any event that will or might result in
such forfeiture.
(c) None of the shares of restricted stock awarded under this plan
will become free of restrictions and non-forfeitable until
termination of the participant's service as a director of
Global Marine. Such shares will become free of restrictions
and non-forfeitable at the earlier of:
(i) the participant's termination of service as a director
resulting from his death, or resulting from his
"disability" (which means an inability, as determined by
Global Marine's Board of Directors, to perform duties and
services as a director by reason of a medically
determinable physical or mental impairment, supported by
medical evidence, which can be expected to last for a
continuous period of not less than six months);
(ii) the participant's mandatory retirement as a director of
Global Marine resulting from operation of the provisions
of Global Marine's by-laws regarding the age beyond which
an individual may not serve as a director, or, if said by-
law provisions are inapplicable, the participant's
termination of service as a director on or after the last
day of his term of office during which he attains age 70;
(iii) the participant's termination of service as a
director resulting from his being removed from his
office as a director or from failure of Global
Marine's Board of Directors to nominate him for re-
election, in either case other than for "cause"
(which means an act or acts of misconduct harmful to
Global Marine or any of its affiliates and does not
mean inadequate performance or incompetence); or
(iv) the participant's resignation or failure to stand
for re-election with the consent of Global Marine's
Board of Directors (which means approval by at least
80% of the directors voting, with the affected
director abstaining), or any failure to be re-
elected after being nominated by the Board.
Termination of service as a director for any other reason will
result in forfeiture of the restricted shares.
(d) Notwithstanding any other provision of this plan, a "change in
control" of Global Marine (as defined below) will result in the
immediate removal of all restrictions relating to all of the
restricted shares awarded pursuant to this plan. In any
situation involving acceleration of the removal of restrictions
in connection with a change in control, Global Marine may
elect, by action of its Board of Directors, to repurchase the
affected shares at their value as of the effective day of the
repurchase, determined as set forth above in Section 5, instead
of releasing the shares to the participant owning such shares.
For purposes of this plan, a "change in control" of Global
Marine will mean:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d) or 14(d) of the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of
<PAGE>
35% or more of either (A) the then outstanding shares of common
stock of Global Marine (the "Outstanding Company Common
Stock") or (B) the combined voting power of the then
outstanding voting securities of Global Marine entitled
to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided,
however, that the following acquisitions will not
constitute a change in control: (I) any acquisition by
Global Marine or by any affiliate of Global Marine that
remains under Global Marine's control, (II) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Global Marine or by any
affiliate controlled by Global Marine, (III) the sale,
exchange, transfer or other disposition of substantially
all of the assets of Global Marine to the Chief Executive
Officer of Global Marine (the "CEO"), alone or with other
officers of Global Marine, or a merger, consolidation or
other reorganization involving Global Marine and the CEO,
alone or with other officers of Global Marine, or any
other entity in which the CEO (alone or with other
officers) has, directly or indirectly, a substantial
equity or ownership interest, (IV) a transaction otherwise
commonly referred to as a "management leveraged buyout,"
or (V) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the
conditions described in clauses (I), (II), (III), or (IV)
are satisfied; or
(ii) Individuals who, as of the date Global Marine's
stockholders approve this plan, constitute Global Marine's
Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of Global
Marine's Board of Directors; provided, however, that any
individual becoming a director subsequent to the date
Global Marine's stockholders approve this plan whose
election, or nomination for election by Global Marine's
stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board will be considered as though such individual were
a member of the Incumbent Board, but excluding for this
purpose any such individual whose initial assumption of
office occurs as a result of either an actual or
threatened election contest (meaning a solicitation of the
type that would be subject to Rule 14a-11 of Regulation
14A under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than Global Marine's Board of Directors; or
(iii) Approval by Global Marine's stockholders of a
reorganization, merger or consolidation, in each
case unless, following such reorganization, merger
or consolidation, (A) more than 50% of,
respectively, the then outstanding shares of common
stock of the corporation resulting from such
reorganization, merger or consolidation and the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors is then
beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such
reorganization, merger or consolidation in
substantially the same proportions as their
ownership, immediately prior to such reorganization,
merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person
(excluding Global Marine, any affiliate of Global
Marine that remains under Global Marine's control,
any employee benefit plan (or related trust)
sponsored or maintained by Global Marine or by any
affiliate controlled by Global Marine or such
corporation resulting from such reorganization,
merger or consolidation, and any Person beneficially
owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, 35%
or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case
may be) beneficially owns, directly or indirectly,
35% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting
from such reorganization, merger or consolidation or
the combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors, and (C)
at least a majority of the members of the board of
directors of the corporation resulting from such
reorganization, merger or consolidation were
<PAGE>
members of the Incumbent Board at the time of the
execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(iv) Approval by Global Marine's stockholders of any plan or
proposal which would result directly or indirectly in (A)
a complete liquidation or dissolution of Global Marine,
or (B) the liquidation, transfer, sale or other
disposition of all or substantially all of the assets of
Global Marine, other than to a corporation with respect
to which following such sale or other disposition (I) more
than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting
power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale
or other disposition in substantially the same proportion
as their ownership, immediately prior to such sale or
other disposition, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may
be, (II) no person (excluding Global Marine, any affiliate
of Global Marine that remains under Global Marine's
control, any employee benefit plan (or related trust)
sponsored or maintained by Global Marine or by any
affiliate controlled by Global Marine or such corporation,
and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly,
35% or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 35% or more of,
respectively, the then outstanding shares of common stock
of such corporation or the combined voting power of the
then outstanding voting securities of such corporation
entitled to vote generally in the election of directors,
and (III) at least a majority of the members of the board
of directors of such corporation were members of the
Incumbent Board at the time of the execution of the
initial agreement or action of Global Marine's Board of
Directors providing for such sale or other disposition of
assets.
(e) All shares with respect to which the restrictions are not
removed in accordance with this plan when a participant
terminates service as a Global Marine director will be
forfeited by the participant.
(f) The issuance, registration or delivery of any shares pursuant
to this plan may be postponed for such period as may be
required to comply with any applicable requirements of any
national securities exchange or any requirements under any
other law or regulation applicable to the issuance,
registration or delivery of such shares, and Global Marine will
not be obligated to issue, register or deliver any such shares
if the issuance, registration or delivery thereof will
constitute a violation of any provision of any law or
regulation of any governmental authority or any national
securities exchange.
SECTION 7 - AMENDMENT OR TERMINATION OF PLAN
Global Marine reserves the right to amend, suspend or terminate
this plan at any time by action of its Board of Directors, provided,
however, that, subject to Section 9 (relating to certain adjustments
to shares) such action will not (a) adversely affect any
participant's rights under this plan with respect to awards of
restricted stock made prior to such action without the participant's
consent, (b) increase the aggregate number of shares available for
award under this plan without the approval of Global Marine's
stockholders, or (c) change the plan's restriction periods for
restricted stock without the approval of Global Marine's
stockholders.
<PAGE>
SECTION 8 - ADMINISTRATION
This plan will be administered by the Compensation Committee of
Global Marine's Board of Directors. All decisions made by the
Compensation Committee with respect to interpretation of the terms
of the plan, with respect to the restrictions, terms and conditions
of the restricted shares, and with respect to any questions or
disputes arising under the plan, will be final and binding on Global
Marine and the participants and on their successors, heirs and
beneficiaries.
SECTION 9 - CHANGES IN STOCK
AND ADJUSTMENT OF NUMBER OF SHARES
In the event of a corporate transaction involving Global Marine
(including without limitation any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination or exchange
of shares), Global Marine's Board of Directors may make adjustments
to preserve the benefits or potential benefits of awards under this
plan. Such adjustments may include adjustment of the number and
kind of shares which may be issued or delivered under the plan,
adjustment of the number and kind of shares subject to outstanding
awards, and any other adjustments that the Board of Directors
determines to be equitable.
SECTION 10 - DESIGNATION OF BENEFICIARY
A participant may file with the Corporate Secretary of Global
Marine a designation of beneficiary or beneficiaries on a form
approved by the Corporate Secretary (which designation may be
changed or revoked by the participant's sole election) to receive
distribution of all or a designated portion of the participant's
restricted shares awarded under this plan upon the death of the
participant. If no beneficiary has been designated or survives the
participant, then the participant's restricted shares awarded under
this plan will be distributed as directed by the executor or
administrator of the participant's estate.
SECTION 11 - RIGHT TO TERMINATE SERVICES
This plan will not impose any obligation on Global Marine to
continue the services of any participant as a director, and it will
not impose any obligation on any participant to remain a director.
SECTION 12 - POOLING OF INTERESTS ACCOUNTING
Global Marine's Board of Directors may, in its sole and
absolute discretion, declare inoperative anything in this plan or in
the restrictions, terms or conditions pertaining to any award under
the plan, including any outstanding award, that adversely affects
pooling of interests accounting.
<PAGE>
APPENDIX I
[FORM OF PROXY CARD]
GLOBAL MARINE INC.
Proxy Solicited By the Board of Directors
For the Annual Meeting of Stockholders - May 11, 2000
R. E. Rose, W. M. Ralls, and J. L. McCulloch, and each or any of them, with
full power of substitutions 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 St. Regis hotel, 1919 Briar Oaks Lane, Houston, Texas on
Thursday, May 11, 2000, at 9:00 a.m., and at any postponements or adjournments
of that meeting, as set forth below, and in their discretion upon any other
business that may properly come before the meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES NAMED AND FOR EACH OF THE OTHER
PROPOSALS SPECIFIED HEREIN.
(PLEASE VOTE, SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY.)
DEAR STOCKHOLDER:
ON THE REVERSE SIDE OF THIS CARD ARE INSTRUCTIONS ON HOW TO VOTE YOUR
SHARES FOR THE ELECTION OF DIRECTORS AND ALL OTHER PROPOSALS BY TELEPHONE OR
OVER THE INTERNET. PLEASE CONSIDER VOTING BY TELEPHONE OR OVER THE INTERNET.
YOUR VOTE IS RECORDED AS IF YOU MAILED IN YOUR PROXY CARD. WE BELIEVE VOTING
IN THIS WAY IS CONVENIENT.
THANK YOU FOR YOUR ATTENTION TO THESE MATTERS.
GLOBAL MARINE INC.
<PAGE>
GLOBAL MARINE INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR 1-4.
For All
1. Election of the following nominees For Withheld Except
as directors: 01-Edward A. Blair, ( ) ( ) ( )
02-John M. Galvin, 03-Ben G. Streeman
_________________________________
Except nominee(s) written above.
2. Approval of the Global Marine For Against Abstain
Non-Employee Director Restricted ( ) ( ) ( )
Stock Plan.
3. Approval of an increase in the For Against Abstain
authorized shares for the Global ( ) ( ) ( )
Marine 1998 Stock Option and
Incentive Plan.
4. Ratification of appointment of For Against Abstain
PricewaterhouseCoopers LLP as ( ) ( ) ( )
independent certified public
accountants for the Company and its
subsidiaries.
IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING ANY ANY POSPONEMENTS 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.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH PROXY CARD HERE
CONTROL NUMBER [LOGO]
[ ]
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE OR INTERNET!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
GLOBAL MARINE INC. encourages you to take advantage ofthe new and convenient
ways to vote your shares. If voting by proxy, this year you may vote by mail,
or choose one of the two methods described below. Your telephone or Internet
vote authorizes the named proxies to vote your shares in the same manner as
if you marked, signed, and returned your proxy card. To vote by telephone
or Internet, read the accompanying proxy statement and then follow these easy
steps:
TO VOTE BY PHONE
Call toll free 1-888-215-6478 in the United States or Canada any time on a
touch tone telephone. There is NO CHARGE to you for the call.
Enter the 6-digit Control Number located above.
Option #1 To vote as the Board of Directors recommends for ALL proposals:
Press 1
When asked, please confirm your vote by pressing 1.
Option #2 If you choose to vote on each proposal separately, Press 0 and
follow the simple recorded instructions.
TO VOTE BY INTERNET
Go to the following website: WWW.HARRISBANK.COM/WPROXY
Enter the information requested on your computer screen, including your
6-digit Control Number located above.
Follow the simple instructions on the screen.
If you vote by telephone or the Internet, DO NOT mail back the proxy card.
THANK YOU FOR VOTING!
<PAGE>
[FORM OF 401(k) VOTING INSTRUCTION FORM]
[401(k) PLAN]
GLOBAL MARINE INC.
Confidential Voting Directions
For The Annual Meeting of Stockholders - May 11, 2000
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 16, 2000, and attributable to the undersigned's Plan account
at the Annual Meeting of Stockholders of GLOBAL MARINE INC. to be held at
The St. Regis hotel, 1919 Briar Oaks Lane, Houston, Texas on Thursday,
May 11, 2000, at 9:00 a.m. , and at any postponement or adjournments of that
meeting, as set forth below, and in their discretion 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 MAY 5, 2000, THE SHARES
ATTRIBUTABLE TO YOUR ACCOUNT WILL NOT BE VOTED.
(PLEASE INDICATE YOUR DIRECTIONS, SIGN AND DATE ON REVERSE SIDE AND
RETURN PROMPTLY.)
DEAR STOCKHOLDER:
ON THE REVERSE SIDE OF THIS CARD ARE INSTRUCTIONS ON HOW TO VOTE YOUR
SHARES FOR THE ELECTION OF DIRECTORS AND ALL OTHER PROPOSALS BY TELEPHONE OR
OVER THE INTERNET. PLEASE CONSIDER VOTING BY TELEPHONE OR OVER THE INTERNET.
YOUR VOTE IS RECORDED AS IF YOU MAILED IN YOUR PROXY CARD. WE BELIEVE VOTING
IN THIS WAY IS CONVENIENT.
THANK YOU FOR YOUR ATTENTION TO THESE MATTERS.
GLOBAL MARINE INC.
<PAGE>
GLOBAL MARINE INC.
[401(k) PLAN]
PLEASE MARK DIRECTIONS IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR 1-4.
For All
1. Election of the following nominees For Withheld Except
as directors: 01-Edward A. Blair, ( ) ( ) ( )
02-John M. Galvin, 03-Ben G. Streetman
____________________________________
Except nominee(s) written above
2. Approval of the Global Marine For Against Abstain
Non-Employee Director Restricted ( ) ( ) ( )
Stock Plan.
3. Approval of an increase in the For Against Abstain
authorized shares for the Global ( ) ( ) ( )
Marine 1998 Stock Option and
Incentive Plan.
4. Ratification of appointment of For Against Abstain
PricewaterhouseCoopers LLP as ( ) ( ) ( )
independent certified public
accountants for the Company and
its subsidiaries.
IN THEIR DISCRETION THE TRUSTEE MAY AUTHORIZE THE VOTING OF SAID SHARES UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY
POSTPONEMENTS OR ADJOURNMENTS THEREOF FOR A VOTE OF THE COMMON STOCK.
______________________ ___________________
Signature Date
PLEASE INDICATE YOUR DIRECTIONS, DATE, AND SIGN EXACTLY AS YOU NAME APPEARS
ON THIS CARD.
PROMPTLY RETURN USING THE ENCLOSED ENVELOPE.
- ---------------------------------------------------------------------------
DETACH PROXY CARD HERE
CONTROL NUMBER [LOGO]
[ ]
NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE OR INTERNET!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK
GLOBAL MARINE INC. encourages you to take advantage of the new and convenient
ways to vote your shares. If voting by proxy, this year you may vote by
mail, or choose one of the two methods described below. Your telephone or
Internet vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed, and returned your proxy card. To vote by
telephone or Internet, read the accompanying proxy statement and then follow
these easy steps:
TO VOTE BY PHONE
Call toll free 1-888-698-8071 in the United States or Canada any time on
a touch tone telephone. There is NO CHARGE to you for the call.
Enter the 6-digit Control Number located above.
Option #1: To vote as the Board of Directors recommends for ALL proposals:
Press 1
When asked, please confirm your vote by pressing 1.
Option #2: If you choose to vote on each proposal separately, Press 0 and
follow the simple recorded instructions.
TO VOTE BY INTERNET
Go the followng website: WWW.HARRISBANK.COM/WPROXY
Enter the information requested on your computer screen, including your
6-digit Control Number located above.
Follow the simple instructions on the screen.
<PAGE>
APPENDIX II
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.
(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.
(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.
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 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.
(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:
(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.
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.
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.
(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.
