<PAGE>
As filed with the Securities and Exchange Commission on September 15, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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GLOBAL MARINE INC.
(Exact name of registrant as specified in its charter)
Delaware 95-1849298
(I.R.S. Employer Identification No.)
(State or other jurisdiction of
incorporation or organization)
<TABLE>
<S> <C>
James L. McCulloch
Senior Vice President and General Counsel
777 N. Eldridge Parkway 777 N. Eldridge Parkway
Houston, Texas 77079-4493 Houston, Texas 77079-4493
(281) 596-5100 (281) 596-5100
(Address, including zip code and telephone number,
including area code, of registrant's principal (Name, address, including zip code and telephone number,
executive offices) including area code, of agent for service)
</TABLE>
Copy to:
J. David Kirkland, Jr.
Baker Botts L.L.P.
3000 One Shell Plaza
Houston, Texas 77002
(713) 229-1234
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Maximum Amount of
Amount to be Proposed Maximum Offering Aggregate Offering Registration
Title of Shares to be Registered Registered Price per Shares Price Fee
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<S> <C> <C> <C> <C>
Zero Coupon Convertible $600,000,000
Debentures Due principal amount
June 23, 2020(1)....... at maturity 53.125%(2) $318,750,000(2) $84,150
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Common Stock, par value
$.10 per share......... (3) (3) (3) (4)
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</TABLE>
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(1) The Zero Coupon Convertible Debentures Due June 23, 2020 were issued at an
original price of $499.60 per $1,000 principal at maturity, which
represents an aggregate issue price of $299,760,000 and a principal amount
at maturity of $600,000,000.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based upon the
average of the bid and asked prices of the debentures on the PORTALSM
Market on September 13, 2000.
(3) Includes 7,330,920 shares of common stock issuable upon conversion of the
debentures at the rate of 12.2182 shares of common stock for each $1,000
principal amount at maturity of the debentures. This registration statement
is registering the resale of the debentures and the underlying common stock
into which the debentures are convertible. Pursuant to Rule 416 under the
Securities Act, such number of shares of common stock registered hereby
shall include an intermediate number of shares of common stock that may be
issued in connection with a stock split, stock dividend, recapitalization
or similar event.
(4) Pursuant to Rule 457(i), there is no additional filing fee with respect to
the shares of common stock issuable upon conversion of the debentures
because no additional consideration will be received in connection with the
exercise of the conversion privilege.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. The +
+selling securityholder may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This prospectus is not an offer to sell these securities and is not +
+soliciting an offer to buy these securities in any state where the offer of +
+sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 15, 2000
Prospectus
$600,000,000
[Global Marine Inc. Logo]
Global Marine Inc.
Zero Coupon Convertible Debentures Due June 23, 2020
and
Common Stock Issuable Upon Conversion of the Debentures
-----------
We issued the debentures in a private placement in June 2000 at an issue
price of $499.60 per debenture. This prospectus will be used by selling
securityholders to resell their debentures and the common stock issuable upon
conversion of their debentures.
The debentures are our senior unsecured obligations. We will not pay interest
on the debentures prior to maturity. The issue price represents a yield to
maturity of 3.5% per year.
We may redeem the debentures in whole or in part on or after June 23, 2005.
Holders may require us to repurchase the debentures at a price per debenture on
June 23, 2005, of $594.25; on June 23, 2010, of $706.82; and on June 23, 2015,
of $840.73. We may choose to pay the repurchase price in cash or shares of our
common stock or a combination of cash and shares of our common stock.
The debentures are convertible at the option of the holder at any time prior
to maturity, unless previously redeemed, into our common stock at a conversion
rate of 12.2182 shares of common stock per debenture, subject to adjustments in
certain events.
Our common stock is traded on the New York Stock Exchange under the symbol
"GLM." The last reported sales price of our common stock on the New York Stock
Exchange on September 13, 2000, was $32.81. The debentures trade on the
PORTALSM Market.
Investing in the debentures involves risks. See "Risk Factors" on page 8.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
Prospectus dated , 2000.
<PAGE>
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. The selling
securityholders are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should not assume that the information in
this prospectus or any prospectus supplement is accurate as of any date other
than the date on its cover page or that any information we have incorporated by
reference is accurate as of any date other than the date of the documents
incorporated by reference.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Where You Can Find More Information.. 3
Special Note Regarding Forward-
Looking Statements.................. 4
Prospectus Summary................... 6
Risk Factors......................... 8
Use of Proceeds...................... 13
Ratio of Earnings to Fixed Charges... 13
Description of the Debentures........ 14
</TABLE>
<TABLE>
<S> <C>
Description of Capital Stock..................... 30
Selling Securityholders.......................... 34
Certain United States Federal Income Tax
Considerations.................................. 35
Plan of Distribution............................. 40
Legal Matters.................................... 42
Experts.......................................... 42
Independent Accountants.......................... 42
</TABLE>
2
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You can read and copy
any materials we file with the SEC at the SEC's public reference room at 450
Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549. You can
obtain information about the operation of the SEC's public reference room by
calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site that
contains information we file electronically with the SEC, which you can access
over the Internet at http://www.sec.gov. Our SEC filings are also available
from our Web site at http://www.glm.com. Information contained on our Web site
or any other Web site is not incorporated by reference in this prospectus and
does not constitute part of this prospectus. You can obtain information about
us at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.
This prospectus is part of a registration statement that we have filed with
the SEC relating to the debentures and the underlying common stock into which
the debentures may be converted. This prospectus does not contain all of the
information we have included in the registration statement and the accompanying
exhibits and schedules in accordance with the rules and regulations of the SEC
and we refer you to the omitted information. The statements this prospectus
makes pertaining to the content of any contract, agreement or other document
that is an exhibit to the registration statement necessarily are summaries of
their material provisions, and we qualify them in their entirety by reference
to those exhibits for complete statements of their provisions. The registration
statement, exhibits and schedules are available at the SEC's public reference
room or through its Web site.
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information we incorporate by reference is an
important part of this prospectus, and later information that we file with the
SEC will automatically update and supersede that information. We incorporate by
reference into this prospectus the documents listed below, and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is complete. As of the date
of this prospectus, the documents incorporated by reference are:
. Our annual report on Form 10-K for the calendar year ended December 31,
1999
. Our quarterly reports on Form 10-Q for the quarters ended March 31, 2000
and June 30, 2000
. Our current report on Form 8-K dated June 21, 2000
. The description of the common stock in our registration statement on
Form 8-A filed on March 6, 1989, as amended by Amendment No. 1 thereto
on Form 8 filed with the SEC on March 15, 1989, as they may be amended
in the future to update, change or modify these descriptions
You may request a copy of these filings (other than an exhibit to those
filings, unless we have specifically incorporated that exhibit by reference in
the filing), at no cost, by writing or telephoning us at the following address:
Global Marine Inc.
Attn: Corporate Secretary
777 N. Eldridge Parkway
Houston, Texas 77079-4493
Telephone: (281) 596-5100
3
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the information we incorporate by reference,
includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
All statements other than statements of historical fact are, or may be deemed
to be, forward-looking statements. Forward-looking statements include
statements about the following subjects:
. our expectations for future company performance and earnings
. revenues expected to be generated by our rigs
. our views regarding the timing of a market recovery in various drilling
markets and the amounts and timing of capital spending increases by our
customers
. our projections regarding the costs of the rig that is under
construction
. financing of the costs of rig construction
. our expectations regarding the date by which the rig under construction
will be completed and enter service and the impact of adding the rig to
our fleet
. rig capability once it enters service
. our expectations regarding the dates by which rigs will complete their
commitments and by which revenue backlog will be realized
. our views regarding market outlook
. our expectations regarding the sufficiency of and reimbursements under
our insurance policies
. our expectations regarding disputed amounts of rig repair costs and
dayrate revenue that we can claim and collect
. our expectations regarding future income tax rates, liabilities and
benefits and future capital expenditures
. our views on the merits of claims against us
. our belief in our ability to meet current obligations
. other statements that are not historical facts
Forward-looking statements in this prospectus or any documents incorporated
by reference into this prospectus are identifiable by use of the following
words and other similar expressions, among others:
. "anticipate" . "intent"
. "believe" . "may"
. "budget" . "might"
. "could" . "plan"
. "estimate" . "predict"
. "expect" . "project"
. "forecast" . "should"
Our forward-looking statements speak only as of the date of this prospectus
or the date of the document incorporated by reference and are based on
currently available industry, financial and economic data and our operating
plans. They are also inherently uncertain, and investors must recognize that
events could turn out to be materially different from our expectations. Factors
that could cause or contribute to these differences include:
. changes in markets for oil and gas and for offshore drilling services,
including decreases in demand for our services which may result from
curtailments of oil and gas operators' drilling programs due to changes
in oil or gas prices
4
<PAGE>
. the uncertainties inherent in dealing with other parties and resolving
disputed matters through negotiation, arbitration, litigation or by
other means
. changing tax laws and regulations, as well as changing interpretations
of such laws and regulations
. the risks of operating in international markets, including changes in
political, economic, trade and regulatory climates
. unanticipated costs or delays in our construction project due to various
factors, including price inflation, contract disputes, design and
engineering problems, regulatory requirements and labor difficulties
. competitive and technological changes that affect our ability to market
our services competitively and cost effectively
. the operational risks and uncertainties inherent in offshore oil and gas
drilling, particularly on a turnkey basis
. other risk factors as may be discussed in our reports filed with the
Securities and Exchange Commission
We disclaim any obligation or undertaking to disseminate any updates or
revisions to our statements, forward-looking or otherwise, to reflect changes
in our expectations or any change in events, conditions or circumstances on
which any of those statements are based.
5
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PROSPECTUS SUMMARY
Because this is a summary, it may not contain all information that may be
important to you. You should read this entire prospectus, including the
information incorporated by reference and the financial data and related notes,
before making an investment decision. When used in this prospectus, the terms
"we," "our" and "us" refer to Global Marine and not to the selling
securityholders.
ABOUT GLOBAL MARINE
Global Marine is one of the largest offshore drilling contractors in the
world, with a modern, diversified, active fleet of 32 mobile offshore drilling
rigs worldwide, plus one dynamically positioned, ultra-deepwater drillship
under construction. In addition, we believe we are the industry's largest
provider of offshore drilling management services priced primarily on a
completed-project, or "turnkey" basis.
Our principal executive offices are located at 777 N. Eldridge Parkway,
Houston, Texas 77079-4493, and our telephone number is (281) 596-5100.
THE OFFERING
Securities Offered.......... $600,000,000 principal amount at maturity of Zero
Coupon Convertible Debentures Due June 23, 2020.
We will not pay interest on the debentures prior
to maturity. Each debenture was issued at a price
of $499.60 per debenture. The principal amount at
maturity is $1,000 for each debenture.
Maturity Date............... June 23, 2020.
Yield to Maturity of
Debentures................. 3.5% per year calculated from June 23, 2000.
Conversion Rights........... You have the option to convert the debentures
into our common stock at any time prior to
maturity, unless the debentures have been
previously redeemed or purchased.
You can convert the debentures into common stock
at a conversion rate of 12.2182 shares for each
$1,000 principal amount at maturity. The
conversion rate will be subject to adjustment if
certain events occur. Upon conversion, you will
receive only common stock. You will not receive
any cash payment for the accrued original issue
discount to the conversion date. See "Description
of the Debentures--You have the right to convert
the debentures into common stock."
The debentures are initially convertible into
7,330,920 shares of our common stock.
Optional Redemption by
Global Marine.............. On or after June 23, 2005, we can redeem all or
part of the debentures for cash at any time at
the redemption prices listed in this prospectus.
See "Description of the Debentures--We have the
option to redeem the debentures."
6
<PAGE>
Original Issue Discount..... The securityholders may offer and sell the
debentures at a discount from their value at
maturity. We initially issued the debentures at a
price of $499.60 per debenture. Over time, the
debentures will increase in accreted value until
they reach their maturity value of $1,000 on June
23, 2020. Original issue discount is the
difference between the initial sale price and the
principal amount of the debenture at maturity.
We will not pay interest on the debentures.
However, you should be aware that accrued
original issue discount must be included
periodically in your gross income for federal
income tax purposes. See "Certain United States
Federal Income Tax Considerations."
Sinking Fund................ None.
Repurchase of Debentures at
the Option of the Holder... We will purchase the debentures at your option at
a price of $594.25 on June 23, 2005, at a price
of $706.82 on June 23, 2010, and at a price of
$840.73 on June 23, 2015, per $1,000 principal
amount at maturity. We may elect to pay the
repurchase price in cash, common stock or a
combination of cash and common stock. See
"Description of the Debentures--You have the
right to require us to repurchase the
debentures."
Change in Control........... You may require us to repurchase the debentures
if we experience a change in control.
The change in control redemption price is equal
to the issue price plus accrued original issue
discount to the date of redemption. See
"Description of the Debentures--You have the
option to require us to repurchase the debentures
upon a change in control."
Optional Conversion by
Global Marine upon a tax
event...................... If certain changes are made to the federal tax
laws, we have the option to begin paying interest
on the debentures instead of accruing original
issue discount. We would pay 3.5% per year in
interest on the principal amount that had accrued
on the debentures up until the date we exercised
this option. See "Description of the Debentures--
We have the option to convert the debentures to
interest-bearing debentures upon a tax event."
Ranking..................... The debentures constitute senior debt and rank
equally with all of our unsecured and
unsubordinated debt obligations. The debentures
will rank senior to any future subordinated
indebtedness. We are not restricted under the
indenture pursuant to which the debentures were
issued from incurring debt. See "Description of
the Debentures--The debentures are senior debt."
Use of Proceeds............. We will not receive any of the proceeds from the
sale of the debentures or the underlying common
stock by any selling securityholders.
Trading..................... The common stock is traded on the New York Stock
Exchange under the symbol "GLM."
7
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RISK FACTORS
Before making an investment decision, you should consider carefully the
following matters, in addition to the other information included or
incorporated by reference in this prospectus or the registration statement of
which this prospectus is a part.
Our business depends on the level of activity in the oil and gas industry,
which is significantly affected by the level and volatility of oil and gas
prices
Our business depends on the level of activity in offshore oil and gas
exploration, development and production in markets worldwide. Oil and gas
prices, and market expectations of potential changes in these prices,
significantly affect this level of activity. Worldwide political, economic and
military events have contributed to oil and gas price volatility and are likely
to continue to do so in the future. Some factors that have affected and are
likely to continue affecting oil and gas prices and the level of demand for our
services include the following:
. worldwide demand for oil and gas
. the ability of the Organization of Petroleum Exporting Countries, or
OPEC, to set and maintain production levels and pricing
. the level of production by non-OPEC countries
. domestic and foreign tax policy
. laws and governmental regulations that restrict exploration and
development of oil and gas in various offshore jurisdictions
. advances in exploration and development technology
. the political environment of oil-producing regions
The level of activity in the oil and gas industry has not fully recovered from
the recent downturn, which continues to adversely affect our dayrates and rig
utilization
The global reduction in exploration and development spending by our
customers, resulting from the sustained period of significantly lower oil
prices from late 1997 through early 1999 and consolidation activity among major
oil producers over the same period, resulted in lower utilization and dayrates
for our drilling rigs in that period. Despite a recovery in crude oil prices
during the latter part of 1999 and the first part of 2000, spending levels have
not increased significantly and there remains surplus rig capacity. Although we
have seen some improvement in the United States Gulf of Mexico and offshore
West Africa jackup markets since the third quarter of 1999, the market for
second and third-generation semisubmersible rigs remains weak, particularly in
the North Sea. The North Sea continues to lag other major markets and will
likely remain soft for the remainder of 2000. Currently we have two idle
semisubmersible rigs in the North Sea, one idle semisubmersible rig in Canada
and one idle jackup rig in West Africa. We may be required to idle additional
rigs or to enter into lower-rate follow on contracts in response to market
conditions in the future.
Our business is highly price competitive and cyclical, with periods of low
demand and excess rig availability
The offshore drilling business is highly competitive with numerous industry
participants. The industry has experienced consolidation in recent years and
may experience additional consolidation. Some of our competitors have greater
resources than we have.
Drilling contracts are, for the most part, awarded on a competitive bid
basis. Price competition is often the primary factor in determining which
qualified contractor is awarded a job, although rig availability and the
8
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quality and technical capability of service and equipment are also factors.
Further, our drilling management services business is subject to the usual
risks associated with having a limited number of customers for its services.
Our industry historically has been cyclical. There have been periods of high
demand, short rig supply and high dayrates, followed by periods of lower
demand, excess rig supply and low dayrates. The industry experienced a period
of significantly lower demand during 1999 as a result of reduced spending for
exploration and development by our customers in response to dramatically lower
crude oil prices during late 1997 and throughout 1998. In addition, rig
availability rose in 1999 as a result of contract expirations and construction
by other drilling contractors of new rigs that are competing with our rigs.
Periods of excess rig supply intensify the competition in the industry and
often result in rigs being idled.
Turnkey drilling operations are contingent on our ability to win bids and on
rig availability
Our results of operations from our drilling management services may be
limited by our ability to obtain and successfully perform turnkey drilling
contracts based on competitive bids, as well as other factors. Our ability to
obtain turnkey drilling contracts largely depends on the number of these
contracts available for bid, which in turn is influenced by market prices for
oil and gas, among other factors. Accordingly, results of our drilling
management service operations may vary widely from quarter to quarter and from
year to year. Furthermore, turnkey operations may be constrained by the
availability of rigs, particularly in the United States Gulf of Mexico where
the market for turnkey drilling is currently strong.
Turnkey drilling operations expose us to additional risks because we assume the
risk for operational problems and the contracts are on a fixed-price basis
Our compensation under turnkey contracts depends on whether we successfully
drill to a specified depth or under some of our contracts, complete the well.
As compared with dayrate contracts, where ultimate control is exercised by the
operator, we are exposed to additional risks when serving as turnkey drilling
contractor, because we make all critical decisions. Under a turnkey contract,
the amount of our compensation is fixed at the amount we bid to drill the well.
Thus, we will not be paid if operational problems prevent performance unless we
choose to drill a new well at our own expense. Further, we must absorb the loss
if unforeseen problems arise that cause the cost of performance to exceed the
turnkey price. In contrast, in a dayrate contract, these risks are retained by
the customer. Although we budget for these contingencies, there can be no
assurance that the cost of contingencies will not exceed budgeted amounts. We
are not insured against all of these risks associated with turnkey drilling
operations. See "--Our business involves numerous hazards and we are not fully
insured for all of them."
Failure to obtain and retain key personnel could hurt our operations
We require highly skilled personnel to operate and provide technical
services and support for our business. Competition for the skilled labor
required for offshore operations has intensified as the number of deepwater
rigs added to worldwide fleets or under construction has increased in the last
few years. Although such competition has not materially affected us to date, we
have found it more difficult to find qualified individuals, and the possibility
exists that competition for skilled labor could limit our results of
operations.
Our drilling contracts may be terminated due to events beyond our control
Our customers may terminate some of our term drilling contracts if the
drilling unit is destroyed or lost or if drilling operations are suspended for
a specified period of time as a result of a breakdown of major equipment or, in
some cases, due to other events beyond the control of either party. Further, in
times of depressed market conditions, our customers have on occasion sought to
renegotiate firm drilling contracts to reduce their obligations.
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Our construction and conversion projects are subject to delays and cost
overruns
We currently have one rig under construction. The Glomar Jack Ryan, a
dynamically positioned ultra-deepwater drillship, is scheduled to begin
earning dayrate under its drilling contract around November 1, 2000. In the
first quarter of 1998, we entered into fixed-price contracts for the
construction of the Glomar Jack Ryan and another drillship, the Glomar C.R.
Luigs, which was completed in the first quarter of 2000. Because of our
concern about the shipbuilder's financial viability and satisfactory
completion of the two drillships, in November 1999, we agreed to provide
additional funding to the shipbuilder. We agreed to advance up to
approximately $92.6 million above the contract price amounts, plus up to
approximately an additional $12.2 million for one-half of cost overruns. As of
August 11, 2000, we had advanced $103.1 million in total. Although the
agreement under which the advances were made requires the shipbuilder to repay
us any amounts advanced that are in excess of an arbitration award, if any, in
favor of the shipbuilder from a pending dispute in which the builder has
asserted claims for approximately $202 million for cost overruns, in view of
the current financial condition of the shipbuilder, collection of those
amounts is doubtful. As a result of the shipbuilder's failure to timely
deliver the vessel in accordance with the construction contract, we were
granted an injunction allowing us to take possession of the vessel. We posted
a $100 million bond to secure the shipbuilder's lien for the delivery
installment and the unsecured portion of the other claims. On September 14,
2000, the arbitration panel made a provisional award to the shipbuilder in the
amount of approximately $31 million with respect to the delivery installment
portion of the claim. We may appeal the award. Our obligation to pay the
remainder of the bonded amounts, if any, will be subject to determination in
arbitration. The Glomar Jack Ryan was moved to a shipyard in Galveston, Texas,
where final completion and commissioning are being undertaken. Further
difficulties could delay the completion of the Glomar Jack Ryan.
In addition to the Glomar Jack Ryan and Glomar C.R. Luigs, we have made and
expect to continue making upgrade and refurbishment expenditures and may make
substantial new build expenditures under certain circumstances. These projects
are subject to the risks of delay or cost overruns inherent in any large
construction project, including the following:
. shortages of materials or skilled labor
. unforeseen engineering problems
. work stoppages
. financial or operating difficulties of the shipyard constructing the rig
. weather interference
. unanticipated cost increases
. inability to obtain any of the requisite permits or approvals
Significant cost overruns or delays would adversely affect our financial
condition and results of operation.
Our business involves numerous hazards and we are not fully insured for all of
them
Our operations are subject to the usual hazards incident to the drilling of
oil and gas wells, such as blowouts, explosions, oil spills and fires. Our
activities are also subject to perils peculiar to marine operations, such as
collision, grounding, and damage or loss from severe weather. All of these
hazards can cause personal injury and loss of life, severe damage to and
destruction of property and equipment, pollution or environmental damage and
suspension of operations. We insure against, or have indemnification from
customers for, some, but not all, of these risks. Our insurance contains
various limitations on coverage and deductibles.
The occurrence of a significant event, including pollution or environmental
damage, not fully insured or indemnified against or the failure of a customer
to meet its indemnification obligations, could materially and adversely affect
our operations and financial condition. Moreover, no assurance can be made
that we will be able to maintain adequate insurance in the future at rates we
consider reasonable.
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Our international operations involve additional risks not associated with
domestic operations
A significant portion of our revenues is attributable to drilling operations
in foreign countries. These activities accounted for 47% of our consolidated
revenues in 1999, 47% of our consolidated revenues in 1998 and 35% of our
consolidated revenues in 1997. Risks associated with our international
operations in foreign areas include risks of:
. war and civil disturbances or other risks that may limit or disrupt
markets
. expropriation or nationalization of assets
. renegotiation or nullification of existing contracts
. foreign exchange restrictions
. foreign currency fluctuations
. foreign taxation
. the inability to repatriate income or capital
. changing political conditions
. changing foreign and domestic monetary policies
Additionally, in some jurisdictions we are subject to foreign governmental
regulations favoring or requiring the awarding of drilling contracts to local
contractors or requiring foreign contractors to employ citizens of, or purchase
supplies from, a particular jurisdiction. These regulations may adversely
affect our ability to compete. Furthermore, foreign governmental regulations,
which may in the future become applicable to the oil and gas industry, could
reduce demand for our services, or such regulations could directly affect our
ability to compete for customers.
Laws and governmental regulations may add to our costs or limit our drilling
activity
Our business is affected by changes in public policy and by federal, state,
foreign and local laws and regulations relating to the energy industry. The
drilling industry is dependent on demand for services from the oil and gas
exploration industry and, accordingly, we are directly affected by the adoption
of laws and regulations curtailing exploration and development drilling for oil
and gas for economic, environmental and other policy reasons. We may be
required to make significant capital expenditures to comply with governmental
laws and regulations. It is also possible that these laws and regulations may
in the future add significantly to our operating costs or may significantly
limit drilling activity.
Under the U.S. Oil Pollution Act of 1990, or OPA, and similar legislation
enacted in Texas, Louisiana and other coastal states, we are required to
satisfy financial responsibility requirements applicable to mobile offshore
drilling units and offshore facilities, such as oil and gas production
platforms, located in United States waters. In addition, our offshore drilling
operations in the Gulf of Mexico are largely dependent on the drilling activity
of oil and gas companies that are also required to meet various OPA financial
responsibility requirements. If we or our customers are unable to comply with
OPA requirements in the future, it could have a material adverse effect on our
operations and financial condition.
Governments in some foreign countries have become increasingly active in
regulating and controlling the ownership of concessions, companies holding
concessions, the exploration of oil and gas and other aspects of the oil and
gas industries in these countries. In some areas of the world, this
governmental activity has adversely affected the amount of exploration and
development work done by major oil companies and may continue to do so.
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<PAGE>
Compliance with or breach of environmental laws can be costly and could limit
our operations
Our operations are subject to numerous federal, state and local laws and
regulations controlling the discharge of materials into the environment and
removal and cleanup of materials that may harm the environment or otherwise
relating to the protection of the environment. For example, as an operator of
mobile offshore drilling units in navigable United States waters and some
offshore areas, including the Outer Continental Shelf, we may be liable for
damages and for the cost of removing oil spills for which we may be held
responsible. In addition, we may use or handle materials that may be classified
as environmentally hazardous substances as part of our operations. Laws and
regulations protecting the environment have generally become more stringent,
and may, in some cases, impose "strict liability" for environmental damage.
Strict liability means that we may be held liable for damage without regard to
whether we were negligent or at fault. Environmental laws and regulations may
expose us to liability for the conduct of or conditions caused by others or for
acts that were in compliance with all applicable laws at the time they were
performed.
A significant change in our ownership could increase our exposure to federal
income taxation
As of December 31, 1999, we had approximately $513.1 million of net
operating loss carryforwards for United States federal income tax purposes,
expiring from 2005 to 2014. The net operating loss carryforwards are subject to
review and potential disallowance by the Internal Revenue Service upon audit of
our federal income tax returns. Section 382 of the Internal Revenue Code of
1986 may impair the future availability of the net operating loss carryforwards
if ownership of our voting securities changes by more than 50%. This
limitation, if it applied, would limit the utilization of the net operating
loss carryforwards in each taxable year to an amount equal to a federal long-
term tax-exempt bond rate multiplied by the fair market value of all our stock
at the time of the ownership change. The interpretation of Section 382 is
subject to numerous uncertainties. Accordingly, we cannot assure you that those
carryforwards will continue to be available without limitation.
We may not have the ability to raise the funds necessary to finance the change
in control offer or the repurchase required by the debentures
Upon the occurrence of certain specific kinds of change of control events
and on the June 23, 2005, June 23, 2010 or June 23, 2015 purchase dates,
holders of debentures will have the right to require us to repurchase their
debentures. However, it is possible that we will not have sufficient funds at
such time to make the required repurchase of debentures in cash or that
restrictions in our credit agreements or other indebtedness will not allow such
repurchases. In addition, certain important corporate events, such as leveraged
recapitalizations that would increase the level of our indebtedness, would not
constitute a "change in control" under the debentures. See "Description of the
Debentures--You have the option to require us to repurchase the debentures" and
"--You have the right to require us to repurchase the debentures upon a change
of control."
Trading market for the debentures
There is currently no public market for the debentures. To the extent they
are traded, the debentures may trade at a discount from their initial offering
price to investors, depending on prevailing interest rates, the market for
similar securities, our performance and other factors. To the extent that an
active trading market for the debentures does not develop, the liquidity and
trading prices for the debentures may be harmed. We do not currently intend to
apply to list the debentures on any securities exchange or public market.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling securityholder
of the debentures or the underlying common stock.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the periods shown is as
follows:
<TABLE>
<CAPTION>
Six
months
Ended Years Ended December 31,
June 30, -----------------------------
2000 1999 1998 1997 1996 1995
-------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges.......... 1.85x 2.12x 3.26x 4.05x 2.97x 2.12x
</TABLE>
The ratio of earnings to fixed charges is computed by dividing earnings
available for fixed charges by fixed charges. Earnings available for fixed
charges consist of earnings before income taxes plus fixed charges, less
capitalized interest. Fixed charges consist of interest, whether expensed or
capitalized, and the portion of operating lease rental expense that represents
the interest factor.
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<PAGE>
DESCRIPTION OF THE DEBENTURES
General
We issued the debentures under an Indenture, which consists of a base
indenture dated as of September 1, 1997, as supplemented by a first
supplemental indenture dated as of June 23, 2000, governing the debentures.
The following summary of the material provisions of the Indenture does not
purport to be complete. We urge you to read the Indenture, which you may obtain
from us upon request. As used under this caption "Description of the
Debentures," all references to our company or to us mean Global Marine Inc.,
excluding, unless otherwise expressly stated or the context otherwise requires,
its subsidiaries.
The base indenture does not limit the amount of debt securities that we may
issue under it. We may issue debt securities under the base indenture from time
to time in one or more series, each in an amount we authorize prior to
issuance.
The debentures are general unsecured obligations of our company, are limited
to an aggregate principal amount at maturity of $600,000,000 and will mature on
June 23, 2020. The debentures will rank on a parity with all of our other
unsecured and unsubordinated indebtedness.
The debentures were offered and sold at a discount from their value at
maturity. The debentures were initially issued in a private placement at an
original issue price to investors of $499.60 per debenture. Over time, the
amount payable on each debenture will increase until it reaches its maturity
value of $1,000 on June 23, 2020. The debentures will be issued only in
denominations of $1,000 payable at maturity and integral multiples of $1,000
payable at maturity.
The debentures may be converted into shares of our common stock at any time
prior to maturity, unless the debentures have been previously redeemed or
repurchased. The conversion rate is 12.2182 shares of common stock per
debenture. This is equivalent to an initial conversion price of $40.89 per
share of common stock based on the original issue price to investors of the
debentures. The conversion rate is subject to adjustment if certain events
occur. Upon conversion, you will receive only shares of common stock. You will
not receive any cash payment for the accrued original issue discount to the
conversion date.
We will not usually pay interest in cash
We will not pay cash interest on the debentures unless we elect to do so
following a tax event as described below. You should be aware that accrued
original issue discount must be included in your gross income for federal
income tax purposes. Original issue discount is the difference between the
issue price of $499.60 and the $1,000 redemption price of the debenture at
maturity.
We have the option to redeem the debentures
On or after June 23, 2005, we have the option to redeem all or part of the
debentures at any time, upon not less than 15 nor more than 60 days' notice by
mail to holders of debentures, for a price equal to $594.25 per debenture plus
accrued original issue discount at a rate of 3.5% per annum compounded semi-
annually to the date of redemption, on the basis of a 360-day year consisting
of twelve 30-day months. We can also convert the debentures to interest-bearing
debentures upon the occurrence of certain tax events described below. See "--We
have the option to convert the debentures to interest-bearing debentures upon a
tax event." No sinking fund is provided for the debentures.
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<PAGE>
The table below shows redemption prices of debentures at June 23, 2005, at
each following June 23 prior to maturity and at maturity on June 23, 2020. The
prices reflect the accrued original issue discount calculated through each
date. The redemption price of a debenture redeemed between these dates would
include an additional amount reflecting the additional original issue discount
accrued since the immediately preceding date in the table to the actual
redemption date.
<TABLE>
<CAPTION>
(2)
Accrued
(1) Original (3)
Debenture Issue Redemption
Issue Discount Price
Redemption Date Price at 3.5% (1) + (2)
--------------- --------- -------- ----------
<S> <C> <C> <C>
June 23, 2005.................................. $499.60 $94.65 $ 594.25
June 23, 2006.................................. 499.60 115.60 615.23
June 23, 2007.................................. 499.60 137.35 636.95
June 23, 2008.................................. 499.60 159.84 659.44
June 23, 2009.................................. 499.60 183.12 682.72
June 23, 2010.................................. 499.60 207.22 706.82
June 23, 2011.................................. 499.60 232.18 731.78
June 23, 2012.................................. 499.60 258.02 757.62
June 23, 2013.................................. 499.60 284.76 784.36
June 23, 2014.................................. 499.60 312.46 812.06
June 23, 2015.................................. 499.60 341.13 840.73
June 23, 2016.................................. 499.60 370.81 870.41
June 23, 2017.................................. 499.60 401.54 901.14
June 23, 2018.................................. 499.60 433.36 932.96
June 23, 2019.................................. 499.60 466.30 965.90
At stated maturity............................. 499.60 500.40 1,000.00
</TABLE>
From and after the date a tax event occurs and we elect to pay interest at
3.5% per year on the debentures instead of accruing original issue discount,
the principal amount for redemption will be restated, and will be calculated by
adding the issue price and the original issue discount which had accrued up
until the date on which we exercise the option to commence paying cash
interest.
If we decide to redeem fewer than all of the outstanding debentures, the
trustee will select the debentures to be redeemed by lot, on a pro rata basis
or by another method the trustee considers fair and appropriate.
If the trustee selects a portion of your debentures for partial redemption
and you convert a portion of the same debentures, the converted portion will be
deemed to be from the portion selected for redemption. Each debenture will be
redeemed in whole.
You have the right to convert the debentures into common stock
You have the right to convert the debentures into 12.2182 shares of common
stock for each debenture. You may convert a debenture into shares of common
stock at any time until the close of business on the last business day before
June 23, 2020. If a debenture has been called for redemption, you will be
entitled to convert the debenture until the close of business on the business
day immediately preceding the date of redemption. If you had previously
delivered a notice exercising an option to require us to purchase the
debentures, the debentures may be converted only if the notice is withdrawn in
accordance with the Indenture. You may convert fewer than all of your
debentures so long as the debentures converted are an integral multiple of
$1,000 principal amount.
The initial conversion rate is 12.2182 shares of common stock for each
$1,000 principal amount at maturity of debentures. This is equivalent to an
initial conversion price of $40.89 per share of common stock based on the
original issue price to investors of the debentures. You will not receive any
cash payment
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<PAGE>
representing accrued original issue discount upon conversion of a debenture.
Instead, upon conversion we will deliver to you a fixed number of shares of
common stock and any cash payment to account for fractional shares. The cash
payment for fractional shares will be based on the closing price of the shares
of common stock on the trading day immediately prior to the conversion date.
Delivery of shares of common stock will be deemed to satisfy our obligation
to pay the principal amount of the debenture, including accrued original issue
discount. Accrued original issue discount will be deemed paid in full rather
than canceled, extinguished or forfeited. We will not adjust the conversion
ratio to account for the accrued original issue discount.
The conversion rate will be subject to adjustment upon any of the following
events:
. issuance of shares of common stock as a dividend or distribution on the
common stock
. subdivision or combination of the outstanding common stock
. issuance to all stockholders of rights or warrants that allow the
holders to purchase shares of common stock at less than the current
market price
. distribution to all stockholders of debt or other assets but excluding
distributions of rights and warrants described above and all-cash
distributions
. the distribution to all or substantially all stockholders of all-cash
distributions in an aggregate amount that together with (1) any cash and
the fair market value of any other consideration payable in respect of
any tender offer by us or any of our subsidiaries for shares of common
stock consummated within the preceding 12 months not triggering a
conversion price adjustment and (2) all other all-cash distributions to
all or substantially all stockholders made within the preceding 12
months not triggering a conversion price adjustment, exceeds an amount
equal to 12.5% of the market capitalization of our common stock on the
business day immediately preceding the day on which we declare such
distribution
. the purchase of shares of common stock pursuant to a tender offer made
by us or any of our subsidiaries to the extent that the same involves
aggregate consideration that together with (1) any cash and the fair
market value of any other consideration payable in respect of any tender
offer by us or any of our subsidiaries for shares of common stock
consummated within the preceding 12 months not triggering a conversion
price adjustment and (2) all-cash distributions to all or substantially
all stockholders made within the preceding 12 months not triggering a
conversion price adjustment, exceeds an amount equal to 12.5% of the
market capitalization of our common stock on the expiration date of such
tender offer
If we were to adopt a stockholders rights plan under which we issue rights
providing that each share of common stock issued, upon conversion of the
debentures at any time prior to the distribution of separate certificates
representing such rights, will be entitled to receive such rights, there shall
not be any adjustment to the conversion rate as a result of one of the
following:
. the issuance of the rights
. the distribution of separate certificates representing the rights
. the exercise or redemption of such rights in accordance with any rights
agreement
. the termination or invalidation of the rights
We may increase the conversion rate as permitted by law for at least 20
days, so long as the increase is irrevocable during the period. We are not
required to adjust the conversion rate until adjustments greater than 1% have
occurred.
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<PAGE>
If you submit your debentures for conversion after we have elected to
exercise our option to pay interest instead of accruing original issue discount
between a record date and the opening of business on the next interest payment
date (except for debentures or portions of debentures called for redemption on
a redemption date occurring during the period from the close of business on a
record date and ending on the opening of business on the first business day
after the next interest payment date, or if this interest payment date is not a
business day, the second business day after the interest payment date), you
must pay funds equal to the interest payable on the converted principal amount.
You have the option to require us to repurchase the debentures
You have the right to require us to repurchase the debentures on June 23,
2005, June 23, 2010 and June 23, 2015. We will be required, at your option, to
repurchase any outstanding debenture for which you deliver a written repurchase
notice to the paying agent. This notice must be delivered during the period
beginning at any time from the opening of business on the date that is 20
business days prior to the repurchase date until the close of business on the
repurchase date. If the repurchase notice is given and withdrawn during the
period, we will not be obligated to repurchase the related debentures. Our
repurchase obligation will be subject to certain additional conditions. Also,
our ability to satisfy our repurchase obligations may be affected by the
factors described in "Risk Factors" under the caption "We may not have the
ability to raise the funds necessary to finance the change in control offer or
the repurchase required by the debentures."
The repurchase price payable will be equal to the issue price plus accrued
original issue discount through the repurchase date. The table below shows the
repurchase prices of a debenture as of each of the repurchase dates.
<TABLE>
<CAPTION>
Repurchase
Price
----------
<S> <C>
June 23, 2005..................................................... $594.25
June 23, 2010..................................................... $706.82
June 23, 2015..................................................... $840.73
</TABLE>
We may, at our option, elect to pay the repurchase price in cash or shares
of common stock, or any combination thereof. For a discussion of the tax
treatment of a holder receiving cash, shares of common stock or any combination
thereof, see "Certain United States Federal Income Tax Considerations--U.S.
Holders--Sale, Exchange or Retirement of the Debentures" and "--Exercise of
Repurchase Right."
If we have previously exercised our option to pay interest instead of
accruing original issue discount on the debentures following a tax event, the
repurchase price will be equal to the restated principal amount plus the
accrued and unpaid interest that accrued from the date we exercise our option.
See "--We have the option to convert the debentures to interest-bearing
debentures upon a tax event."
We will be required to give notice on a date not less than 20 business days
prior to each repurchase date to all holders at their addresses shown in the
register of the registrar, and to beneficial owners as required by applicable
law, stating among other things:
. whether we will pay the repurchase price of the debentures in cash or
shares of common stock or any combination thereof, specifying the
percentages of each
. if we elect to pay in shares of common stock, the method of calculating
the market price of the common stock
. the procedures that holders must follow to require us to repurchase
their debentures
Your notice electing to require us to repurchase your debentures must state:
. if certificated debentures have been issued, the debenture certificate
numbers, or if not certificated, your notice must comply with
appropriate DTC procedures
17
<PAGE>
. the portion of the principal amount at maturity of debentures to be
repurchased, in multiples of $1,000
. that the debentures are to be repurchased by us pursuant to the
applicable provisions of the Indenture
. in the event we elect, pursuant to the notice that we are required to
give, to pay the repurchase price in shares of common stock, in whole or
in part, but the repurchase price is ultimately to be paid to the holder
entirely in cash because any of the conditions to payment of the
repurchase price or portion of the repurchase price in shares of common
stock is not satisfied prior to the close of business on the repurchase
date, as described below, whether the holder elects
(1) to withdraw the repurchase notice as to some or all of the
debentures to which it relates, or
(2) to receive cash in respect of the entire repurchase price for all
debentures or portions of debentures subject to such repurchase
notice
If you fail to indicate your choice with respect to the election described
in the final bullet point above, you will receive cash for the entire
repurchase price for all debentures subject to the repurchase notice. For a
discussion of the tax treatment of a holder receiving cash instead of shares of
common stock, see "Certain United States Federal Income Tax Considerations--
U.S. Holders--Sale, Exchange or Retirement of the Debentures."
You may withdraw any repurchase notice by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the repurchase
date. The notice of withdrawal must state:
. the principal amount at maturity of the withdrawn debentures
. if certificated debentures have been issued, the certificate numbers of
the withdrawn debentures, or if not certificated, your notice must
comply with appropriate DTC procedures
. the principal amount at maturity, if any, which remains subject to the
repurchase notice
If we elect to pay the repurchase price, in whole or in part, in shares of
common stock, the number of shares to be delivered by us will be equal to the
portion of the repurchase price to be paid in common stock divided by the
market price of one share of common stock as determined by us in our repurchase
notice. We will pay cash based on the market price for all fractional shares in
the event we elect to deliver shares of common stock in payment, in whole or in
part, of the repurchase price.
The "market price" means the average of the sale prices of the common stock
for the five-trading-day period ending on the third business day prior to the
applicable repurchase date (if the third business day prior to the applicable
repurchase date is a trading day, or if not, then on the last trading day prior
to), appropriately adjusted to take into account the occurrence, during the
period commencing on the first of such trading days during such five-trading-
day period and ending on such repurchase date, of certain events that would
result in an adjustment of the conversion rate with respect to the common
stock.
The "sale price" of the common stock on any date means the closing sale
price per share of common stock (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date as reported
in composite transactions for the principal United States securities exchange
on which the common stock is traded or, if the common stock is not listed on a
United States national or regional securities exchange, as reported by the
Nasdaq System.
Because the market price of the common stock is determined prior to the
applicable repurchase date, holders of debentures bear the market risk with
respect to the value of the common stock to be received from the date such
market price is determined to such repurchase date. We may pay the repurchase
price or any portion of the repurchase price in shares of common stock only if
the information necessary to calculate the market price is published in a daily
newspaper of national circulation.
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<PAGE>
Upon determination of the actual number of shares of common stock in
accordance with the foregoing provisions, we will publish such information on
our Web site on the World Wide Web or through such other public medium as we
may use at that time.
Our right to repurchase debentures, in whole or in part, with shares of
common stock is subject to our satisfying various conditions, including:
. the registration of the shares of common stock under the Securities Act
and the Exchange Act, if required
. any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such
qualification and registration
If such conditions are not satisfied with respect to a holder prior to the
close of business on the repurchase date, we will pay the repurchase price of
the debentures of the holder entirely in cash. See "Certain United States
Federal Income Tax Considerations--U.S. Holders--Sale, Exchange or Retirement
of the Debentures." We may not change the form or components or percentages of
components of consideration to be paid for the debentures once we have given
the notice that we are required to give to holders of debentures, except as
described in the first sentence of this paragraph.
Our ability to repurchase debentures with cash may be limited by the terms
of our then-existing borrowing agreements. The Indenture will prohibit us from
repurchasing debentures for cash in connection with the holders' repurchase
right if any event of default under the Indenture has occurred and is
continuing, except a default in the payment of the repurchase price with
respect to the debentures.
A holder must either effect book-entry transfer or deliver the debenture,
together with necessary endorsements, to the office of the paying agent after
delivery of the repurchase notice to receive payment of the repurchase price.
You will receive payment in cash on the repurchase date or the time of book-
entry transfer or the delivery of the debenture. If the paying agent holds
money or securities sufficient to pay the repurchase price of the debenture on
the business day following the repurchase date, then:
. the debenture will cease to be outstanding
. original issue discount (or, if the debentures have been converted to
interest-bearing debentures following a tax event, interest) will cease
to accrue
. all other rights of the holder will terminate
This will be the case whether or not book-entry transfer of the debenture is
made or whether or not the debenture is delivered to the paying agent.
We will comply with the provisions of Rule 13e-4 and any other tender offer
rules under the Securities Exchange Act which may be applicable at the time. We
will file Schedule TO or any other schedule required in connection with any
offer by us to repurchase the debentures at your option.
The debentures are senior debt
The debentures constitute senior debt and rank equally with all of our
unsecured and unsubordinated debt and will rank senior to any future
subordinated indebtedness. As of July 31, 2000, we had outstanding $896.8
million of senior indebtedness, net of discount, issued under the base
indenture (including the $300.9 million accreted value of the debentures). As
of such date, we also had $23.0 million aggregate principal amount outstanding
under our commercial paper program and credit facility combined, leaving $217.0
million available for future combined borrowings thereunder.
We currently conduct substantially all our operations through our
subsidiaries, and our subsidiaries generate substantially all our operating
income and cash flow. As a result, distributions or advances from our
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<PAGE>
subsidiaries are the principal source of funds necessary to meet our debt
service obligations. Contractual provisions or laws, as well as our
subsidiaries' financial condition and operating requirements, may limit our
ability to obtain cash from our subsidiaries that we require to pay our debt
service obligations, including payments on the debentures. In addition, holders
of the debentures will have a junior position to the claims of creditors of our
subsidiaries on their assets and earnings.
We have the option to convert the debentures to interest-bearing debentures
upon a tax event
We have the option to convert the debentures to interest-bearing debentures
on a tax event. From and after the date a tax event occurs, we may elect to pay
interest at 3.5% per year on the debentures instead of accruing original issue
discount. The principal amount, which will be restated, will be calculated by
adding the issue price and the original issue discount which had accrued up
until the date on which we exercise the option. This restated principal amount
will be the amount due at maturity. If we elect this option, interest will be
based on a 360-day year comprised of twelve 30-day months. Interest will accrue
from the option exercise date and will be payable semiannually on June 23 to
holders of record on the immediately preceding June 8 and on December 23 to
holders of record on the immediately preceding December 8.
A tax event occurs when we receive an opinion from an experienced
independent tax counsel stating that, as a result of either:
. any amendment, change or announced prospective change in the laws or
regulations of the United States or any of its political subdivisions or
taxing authorities of the United States or
. any amendment, change, interpretation or application of the laws or
regulations by any legislative body, court, government agency or
regulatory authority
there is more than an insubstantial risk that interest, including original
issue discount, payable on the debentures either
. would not be deductible on a current accrual basis, or
. would not be deductible under any other method,
in whole or in part, by us for United States federal income tax purposes.
You have the right to require us to repurchase the debentures upon a change of
control
If we undergo a change in control, you will have the option to require us to
purchase your debentures 35 business days after the change in control. We will
pay a purchase price equal to the issue price plus accrued original issue
discount through the purchase date or, if applicable, the restated principal
amount plus accrued and unpaid interest to the date of purchase. You may
require us to purchase all or any part of the debentures so long as the
principal amount at maturity of the debentures being purchased is an integral
multiple of $1,000.
A change in control occurs in the following situations:
. any person or group after the first issuance of debentures becomes the
beneficial owner of our voting stock representing more than 50% of the
total voting power of all of our classes of voting stock entitled to
vote generally in the election of the members of our board of directors;
or
. we consolidate with or merge into another person (other than a
Subsidiary); we sell, convey, transfer or lease our properties and
assets substantially as an entirety to a person (other than a
Subsidiary); or any person (other than a Subsidiary) consolidates with
or merges with or into our company, and our outstanding common stock is
reclassified into, exchanged for or converted into the right to receive
any other property or security, provided that none of these
circumstances will be a change in control if the persons that
beneficially own our voting stock immediately prior to a transaction
beneficially own, in substantially the same proportion, shares with a
majority of the total voting power of all outstanding
20
<PAGE>
voting securities of the surviving or transferee person that are entitled
to vote generally in the election of that person's board of directors;
unless, in each case, at least 50% of the consideration, other than cash
payments for fractional shares, in the transaction or transactions
constituting the change in control, consists of shares of voting common stock
of the person that are, or upon issuance will be, traded on a national
securities exchange or approved for trading on an established automated over-
the-counter trading market in the United States.
You must deliver a written notice to the paying agent prior to the close of
business on the business day prior to the date on which the debentures are to
be purchased to exercise the repurchase right upon a change in control. This
notice must specify the debentures submitted for repurchase. You may withdraw
the notice by delivering a written notice of withdrawal to the paying agent
before the same date.
Within 15 business days after a change in control, we will publish and mail
to the trustee and to each holder of the debentures a written notice of the
change in control which specifies the terms and conditions and the procedures
required for exercise of a holder's right to require us to purchase your
debentures.
If we had previously exercised our option to pay interest instead of
accruing original issue discount on the debentures following a tax event, we
will purchase the debentures at a cash price equal to the restated principal
amount plus accrued and unpaid interest that had accrued from the date we
exercised our option. See "--We have the option to convert the debentures to
interest-bearing debentures upon a tax event."
Restrictions on our activities
Other than the change of control repurchase obligation and restrictions on
liens and sale/leaseback transactions described below, the Indenture and the
debentures do not contain any covenants or other provisions designed to
protect holders of the debentures in the event of a highly leveraged
transaction. Other than the change of control repurchase obligation, the
Indenture and the debentures also do not contain provisions that give holders
of the debentures the right to require us to repurchase their securities in
the event of a decline in our credit rating resulting from a takeover,
recapitalization or similar restructuring or otherwise.
We have agreed to two principal restrictions on our activities for the
benefit of holders of the debentures. We have used in this summary description
capitalized terms that we have defined below under "--Glossary." In this
description of the covenants only, all references to us mean Global Marine
Inc. and its Subsidiaries, unless the context clearly indicates otherwise.
Limitation on liens
We have agreed that we will issue, assume or guarantee Indebtedness for
borrowed money secured by a lien upon a Principal Property or shares of stock
or indebtedness of any of our Subsidiaries that owns or leases a Principal
Property only if we secure the debentures and any other debt securities issued
under the base indenture equally and ratably with or prior to the Indebtedness
secured by that lien. If we so secure the debentures, we have the option to
secure any of our other Indebtedness or obligations equally and ratably with
or prior to the Indebtedness secured by the lien and, accordingly, equally and
ratably with the debentures. This covenant has exceptions that permit:
(a) liens existing on the date of original issuance of the debentures
(b) liens on the property, assets, stock, equity or debt of any entity
existing at the time we acquire that entity or its property or at the
time the entity becomes a Subsidiary
(c) intercompany liens in favor of us
(d) liens in favor of governmental bodies to secure progress or advance
payments
(e) liens securing industrial revenue or pollution control bonds
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(f) liens on assets either:
. existing at the time we acquire the assets
. securing all or part of the cost of acquiring, constructing,
improving, developing or expanding the assets or
. securing Indebtedness to finance the purchase price of the assets or
the cost of constructing, improving, developing or expanding the
assets that was incurred before, at or within 24 months after the
acquisition or completion of the assets or their commencing
commercial operation
(g) statutory or other liens arising in the ordinary course of our business
and relating to amounts that are not yet delinquent or that we are
contesting in good faith
(h) liens on current assets securing Indebtedness
(i) liens on stock, partnership or other equity interests in any Joint
Venture or any Subsidiary that owns an equity interest in a Joint
Venture to secure Indebtedness contributed or advanced solely to that
Joint Venture
(j) any extensions, substitutions, replacements or renewals of the above-
described liens.
In addition, without securing the debentures as described above, we may
issue, assume or guarantee Indebtedness that this covenant would otherwise
restrict in a total principal amount that, when added to all of our other
outstanding Indebtedness that this covenant would otherwise restrict and the
total amount of Attributable Indebtedness outstanding for Sale/Leaseback
Transactions, does not exceed a "basket" equal to 15% of Consolidated Net
Tangible Assets. When calculating this total principal amount, we exclude from
the calculation Attributable Indebtedness from Sale/Leaseback Transactions in
connection with which we have voluntarily retired debt securities issued under
the base indenture, Indebtedness of equal rank or Funded Indebtedness as
described in clause (c) below under "Limitation on sale/leaseback
transactions."
Limitation on sale/leaseback transactions
We have agreed that we will enter into a Sale/Leaseback Transaction only if
at least one of the following applies:
(a) we could incur Indebtedness in a principal amount equal to the
Attributable Indebtedness for that Sale/Leaseback Transaction and,
without violating the "Limitation on liens" covenant, could secure that
Indebtedness by a lien on the property to be leased without equally and
ratably securing the debentures
(b) within the period beginning nine months before the closing of the
Sale/Leaseback Transaction and ending nine months after the closing, we
have expended, for property used or to be used in the ordinary course
of our business, an amount equal to all or a portion of the net
proceeds of the transaction and elected to designate that amount as a
credit against that transaction (with any amount not so designated to
be applied as set forth in (c) below or as otherwise permitted)
(c) during the nine-month period after the effective date of the
Sale/Leaseback Transaction, Global Marine Inc. shall have applied to
either
. the voluntary defeasance or retirement of any debt securities issued
under the base indenture or of Indebtedness of equal rank or any
Funded Indebtedness, or
. the acquisition of one or more Principal Properties
an amount equal to the net proceeds of the sale or transfer of the property
leased in the Sale/Leaseback Transaction (or, if greater, the fair value of
that property at the time of the Sale/Leaseback Transaction as determined
by our board of directors, adjusted to reflect the remaining term of the
lease and any amount expended as set forth in clause (b) above), less an
amount equal to the sum of the principal amount of debt
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securities issued under the indenture, Indebtedness of equal rank and
Funded Indebtedness voluntarily defeased or retired, plus any amount
expended to acquire any Principal Properties at fair value, within such
nine-month period and not designated as a credit against any other
Sale/Leaseback Transaction entered into by us during such period.
Glossary
"Attributable Indebtedness" means the present value of the rental payments
during the remaining term of the lease included in the Sale/Leaseback
Transaction. To determine that present value, we use a discount rate equal to
the lease rate of the Sale/Leaseback Transaction. For these purposes, rental
payments do not include any amounts we are required to pay for taxes,
maintenance, repairs, insurance, assessments, utilities, operating and labor
costs and other items that do not constitute payments for property rights. In
the case of any lease that we may terminate by paying a penalty, if the net
amount would be reduced if we terminated the lease on the first date that it
could be terminated, then this lower net amount will be used.
"Consolidated Net Tangible Assets" means the total amount of assets (after
deducting applicable reserves and other properly deductible items) less
. all current liabilities (excluding liabilities that are extendable or
renewable at our option to a date more than 12 months after the date of
calculation and excluding current maturities of long-term indebtedness)
and
. all goodwill, trade names, trademarks, patents, unamortized indebtedness
discount and expense and other like intangible assets
We will calculate our Consolidated Net Tangible Assets based on our most
recent quarterly balance sheet.
"Funded Indebtedness" means all Indebtedness that matures on or is
renewable to a date more than one year after the date the Indebtedness is
incurred.
"Indebtedness" means:
. all indebtedness for borrowed money (whether full or limited recourse)
. all obligations evidenced by bonds, debentures, notes or other similar
instruments
. all obligations under letters of credit or other similar instruments,
other than standby letters of credit, performance bonds and other
obligations issued in the ordinary course of business, to the extent not
drawn or, to the extent drawn, if such drawing is reimbursed not later
than the third business day following demand for reimbursement
. all obligations to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses
incurred in the ordinary course of business
. all capitalized lease obligations
. all Indebtedness of others secured by a lien on any asset of the person
in question (provided that if the obligations so secured have not been
assumed in full or are not otherwise fully the person's legal liability,
then such obligations may be reduced to the value of the asset or the
liability of the person)
. all Indebtedness of others (other than endorsements in the ordinary
course of business) guaranteed by the person in question to the extent
of such guarantee
"Joint Venture" means:
. with respect to properties located in the United States, any
partnership, corporation or other entity, in which up to and including
50% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by Global Marine Inc.
and/or one or more Subsidiaries
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. with respect to properties located outside the United States, any
partnership, corporation or other entity, in which up to and including
60% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by Global Marine Inc.
and/or one or more Subsidiaries
A Joint Venture shall not be a Subsidiary.
"Principal Property" means any drilling rig or drillship, or integral
portion thereof, owned or leased by us and used for drilling offshore oil and
gas wells, which, in the opinion of our board of directors, is of material
importance to the business of Global Marine Inc. and its Subsidiaries taken as
a whole, but no such drilling rig or drillship, or portion thereof, shall be
deemed of material importance if its net book value (after deducting
accumulated depreciation) is less than 2% of Consolidated Net Tangible Assets.
"Sale/Leaseback Transaction" means any arrangement with anyone under which
we lease any Principal Property that we have or will sell or transfer to that
person. This term excludes the following:
. temporary leases for a term of not more than five years
. intercompany leases between us and one of our Subsidiaries or between
two or more of our Subsidiaries
. leases of a Principal Property executed by the time of or within 12
months after the acquisition, the completion of construction or
improvement, or the commencement of commercial operation of the
Principal Property
. arrangements under any provision of law with an effect similar to the
former Section 168(f)(8) of the Internal Revenue Code of 1954
"Subsidiary" means a corporation in which, either directly or indirectly,
(i) we own, (ii) one or more other Subsidiaries own or (iii) we and one or more
other Subsidiaries own more than 50% of the outstanding voting stock of that
corporation. For purposes of this definition, "voting stock" means stock that
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency. A Joint Venture shall not be a Subsidiary.
Effect if we merge, consolidate or sell our assets
The Indenture generally permits a consolidation or merger between us and
another entity. It also permits the sale by us of all or substantially all of
our assets. We have agreed, however, that we will consolidate with or merge
into any entity, or transfer or dispose of all or substantially all of our
assets to any entity, only if:
. we are the continuing corporation or
. if we are not the continuing corporation, the resulting entity is
organized and existing under the laws of any United States jurisdiction
and assumes the due and punctual payments on the debentures and on the
performance of our covenants and obligations under the Indenture and the
debentures and provides for conversion rights in accordance with
applicable provisions of the Indenture and
in either case, immediately after giving effect to the transaction, no default
or event of default would occur and be continuing or would result from the
transaction.
Circumstances when we are in default
The following are events of default with respect to the debentures:
. our failure to pay any interest on the debentures for 30 days (after any
conversion of the debentures to interest-bearing debentures following a
tax event)
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. our failure to pay principal of the debentures at maturity (or, if the
debentures have been converted to interest-bearing debentures following
a tax event, the restated principal amount), issue price, accrued
original discount, redemption price, repurchase price or change in
control price, when the same becomes due and payable
. our failure to comply with any of our covenants or agreements in the
debentures or the Indenture (other than an agreement or covenant that we
have included in the Indenture solely for the benefit of other series of
debt securities) for 90 days after written notice by the trustee or by
the holders of at least 25% in principal amount of all outstanding debt
securities affected by that failure
. certain events involving bankruptcy, insolvency or reorganization of
Global Marine Inc.
A default under one series of debt securities issued under the base
indenture will not necessarily be a default under another series. The trustee
may withhold notice to the holders of the debentures of any default or event of
default (except in any payment on the debentures) if the trustee considers it
in the interest of the holders of the debentures to do so.
If an event of default for the debentures occurs and is continuing, the
trustee or the holders of at least 25% in principal amount of the debentures
(or, in some cases, 25% in principal amount of all debt securities under the
base indenture affected, voting as one class) may declare the issue price plus
accrued original issue discount on the debentures to be due and payable. If an
event of default relating to certain events of bankruptcy, insolvency or
reorganization occurs, the issue price plus accrued original issue discount on
the debentures will become immediately due and payable without any action on
the part of the trustee or any holder. The holders of a majority in principal
amount of the outstanding debentures (or of all debt securities under the base
indenture affected, voting as one class) may in some cases rescind this
accelerated payment requirement. If we exercise our option to pay interest
instead of accruing original issue discount on the debentures following a tax
event, the declaration of acceleration referred to above will make the restated
principal amount plus accrued and unpaid interest immediately payable.
A holder of debentures may pursue any remedy under the Indenture only if:
. the holder gives the trustee written notice of a continuing event of
default for the debentures
. the holders of at least 25% in principal amount of the outstanding
debentures make a written request to the trustee to pursue the remedy
. the holder offers to the trustee indemnity reasonably satisfactory to
the trustee
. the trustee fails to act for a period of 60 days after receipt of notice
and offer of indemnity, and
. during that 60-day period, the holders of a majority in principal amount
of the debentures do not give the trustee a direction inconsistent with
the request
This provision does not, however, affect the right of a holder of debentures
to sue for enforcement of any overdue payment.
In most cases, holders of a majority in principal amount of the outstanding
debentures (or of all debt securities affected, voting as one class) may direct
the time, method and place of
. conducting any proceeding for any remedy available to the trustee
. exercising any trust or power conferred on the trustee not relating to
or arising under an event of default
The base indenture requires us to file with the trustee each year a written
statement as to our compliance with the covenants contained in the indenture.
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Effect of modification and waiver of the indenture
We may amend or supplement the indenture if the holders of a majority in
principal amount of the outstanding debt securities of all series affected by
the amendment or supplement (acting as one class) consent to it. Without the
consent of the holder of each debenture, however, no modification may:
. reduce the amount of debentures whose holders must consent to an
amendment, supplement or waiver
. reduce the rate of or change the time for payment of interest on the
debenture
. reduce the principal of the debenture or change its stated maturity
. reduce any premium payable on the redemption of the debenture or change
the time at which the debenture may or must be redeemed
. change any obligation to pay additional amounts on the debenture
. make payments on the debenture payable in currency other than as
originally stated in the debenture
. impair the holder's right to institute suit for the enforcement of any
payment on the debenture
. make any change in the percentage of principal amount of debentures
necessary to waive compliance with certain provisions of the indenture
or to make any change in this provision for modification
. waive a continuing default or event of default regarding any payment on
the debentures
. adversely affect the conversion or repurchase provisions in the
Indenture
We may amend or supplement the Indenture or waive any provision of it
without the consent of any holders of debentures in certain circumstances,
including
. to cure any ambiguity, omission, defect or inconsistency
. to provide for the assumption of our obligations under the Indenture by
a successor upon any merger, consolidation or asset transfer
. to provide for uncertificated debentures in addition to or in place of
certificated debentures or to provide for bearer debentures
. to provide any security for or guarantees of the debentures
. to comply with any requirement to effect or maintain the qualification
of the Indenture under the Trust Indenture Act of 1939
. to add covenants that would benefit the holders of debentures or to
surrender any rights we have under the Indenture
. to add events of default with respect to the debentures
. to make any change that does not adversely affect any outstanding
debentures of any series in any material respect
The holders of a majority in principal amount of the outstanding debentures
(or of all debt securities affected, voting as one class) may waive any
existing or past default or event of default with respect to those debt
securities. Those holders may not, however, waive any default or event of
default in any payment on any debenture or compliance with a provision that
cannot be amended or supplemented without the consent of each holder affected.
Effect of a discharge of our obligations under the indenture
When we use the term defeasance, we mean discharge from some or all of our
obligations under the Indenture. If we deposit with the trustee funds or
government securities sufficient to make payments on the
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debentures on the dates those payments are due and payable, then, at our
option, either of the following will occur:
. we will be discharged from our obligations with respect to the
debentures ("legal defeasance") or
. we will no longer have any obligation to comply with the restrictive
covenants under the Indenture, and the related events of default will no
longer apply to us ("covenant defeasance")
If we defease the debentures, the holders of the debentures will not be
entitled to the benefits of the Indenture, except for our obligations to
register the transfer or exchange of debentures, replace stolen, lost or
mutilated debentures or maintain paying agencies and hold moneys for payment in
trust. In the case of covenant defeasance, our obligation to pay principal,
premium and interest on the debentures will also survive.
We will be required to deliver to the trustee an opinion of counsel that the
deposit and related defeasance would not cause the holders of the debentures to
recognize income, gain nor loss for federal income tax purposes. If we elect
legal defeasance, that opinion of counsel must be based upon a ruling from the
United States Internal Revenue Service or a change in law to that effect.
Governing law
New York law will govern the Indenture and the debentures.
The trustee
If an event of default occurs and is continuing, the trustee will be
required to use the degree of care and skill of a prudent man in the conduct of
his own affairs. The trustee will become obligated to exercise any of its
powers under the Indenture at the request of any of the holders of any
debentures only after those holders have offered the trustee indemnity
reasonably satisfactory to it.
If the trustee becomes one of our creditors, it will be subject to
limitations in the Indenture on its rights to obtain payment of claims or to
realize on certain property received for any such claim, as security or
otherwise. The trustee is permitted to engage in other transactions with us.
If, however, it acquires any conflicting interest, it must eliminate that
conflict or resign.
Form, exchange, registration and transfer of the debentures
The debentures were issued in registered form, without interest coupons. We
will not charge a service charge for any registration of transfer or exchange
of the debentures. We may, however, require the payment of any tax or other
governmental charge payable for that registration.
Debentures are exchangeable for other debentures, for the same total
principal amount and for the same terms but in different authorized
denominations in accordance with the Indenture. Holders may present debentures
for registration of transfer at the office of the security registrar or any
transfer agent we designate. The security registrar or transfer agent will
effect the transfer or exchange when it is satisfied with the documents of
title and identity of the person making the request.
We have appointed the trustee as security registrar for the debentures. We
may at any time rescind that designation or approve a change in the location
through which any registrar acts. We are required to maintain an office or
agency for transfers and exchanges in each place of payment. We may at any time
designate additional registrars for the debentures.
In the case of any redemption, the security registrar will not be required
to register the transfer or exchange of any debenture either:
. during a period beginning 15 business days prior to the mailing of the
relevant notice of redemption and ending on the close of business on the
day of mailing of such notice
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. if the debentures have been called for redemption in whole or in part,
except the unredeemed portion of any debenture being redeemed in part
Payment and paying agents
Payments on the debentures will be made in U.S. dollars at the office of the
trustee. At our option, however, we may make payments by check mailed to the
holder's registered address or, with respect to global debentures, by wire
transfer. We will make interest payments to the person in whose name the
debenture is registered at the close of business on the record date for the
interest payment.
The trustee is designated as our paying agent for payments on debentures. We
may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying
agent acts.
Subject to the requirements of any applicable abandoned property laws, the
trustee and paying agent shall pay to us upon written request any money held by
them for payments on the debentures that remain unclaimed for two years after
the date upon which that payment has become due. After payment to us, holders
entitled to the money must look to us for payment. In that case, all liability
of the trustee or paying agent with respect to that money will cease.
Book-entry system
The debentures are represented by one or more Global Securities (each a
"Global Security"). Each Global Security was deposited with, or on behalf of,
The Depository Trust Company ("DTC") and is registered in the name of a nominee
of DTC. Except under circumstances described below, the debentures will not be
issued in definitive form.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with DTC or its nominee ("participants") or persons
that may hold interests through participants. Ownership of beneficial interests
in a Global Security is shown on, and the transfer of that ownership may be
effected only through, records maintained by DTC or its nominee (with respect
to interests of persons other than participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Security.
So long as DTC or its nominee is the registered owner of a Global Security,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the debentures represented by that Global Security for all purposes
under the senior indenture. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have debentures
represented by that Global Security registered in their names, will not receive
or be entitled to receive physical delivery of debentures in definitive form
and will not be considered the owners or holders thereof under the senior
indenture. Principal and interest payments, if any, on debentures registered in
the name of DTC or its nominee will be made to DTC or its nominee, as the case
may be, as the registered owner of the relevant Global Security. Neither we,
the trustee, any paying agent or the registrar for the debentures will have any
responsibility or liability for any aspect of the records relating to nor
payments made on account of beneficial interests in a Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest, if any, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of the relevant Global Security as shown on the records of
DTC or its nominee. We also expect that payments by participants to owners of
beneficial interests in a Global Security held through such participants are
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and are the responsibility of such participants.
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If DTC is at any time unwilling or unable to continue as a depositary and a
successor depositary is not appointed by us within 90 days, we will issue
debentures in definitive form in exchange for the entire Global Security for
the debentures. In addition, we may at any time and in our sole discretion
determine not to have debentures represented by a Global Security and, in such
event, will issue debentures in definitive form in exchange for the entire
Global Security relating to such debentures. In any such instance, an owner of
a beneficial interest in a Global Security will be entitled to physical
delivery in definitive form of debentures represented by such Global Security
equal in principal amount to such beneficial interest and to have such
debentures registered in its name. Debentures so issued in definitive form will
be issued as registered debentures in denominations of $1,000 and integral
multiples thereof, unless otherwise specified by us.
Registration rights of selling securityholders
This prospectus is part of a shelf registration statement filed under the
terms of a registration rights agreement between us and Credit Suisse First
Boston Corporation, the initial purchaser of the debentures.
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DESCRIPTION OF CAPITAL STOCK
General
Our authorized capital stock consists of
. 300,000,000 shares of common stock
. 10,000,000 shares of preferred stock, issuable in series
As of July 31, 2000, there were 175,439,471 shares of common stock issued
and outstanding. As of the date of this prospectus, there are no shares of
preferred stock issued or outstanding. Holders of our capital stock are not
entitled to preemptive rights to purchase or subscribe for shares of any class
or any other securities unless our board of directors so states.
We have summarized selected provisions of our capital stock in this section.
This summary is not complete. You should read the provisions of our restated
certificate of incorporation, as amended, and our by-laws currently in effect
for provisions that may be important to you.
Common stock
All issued and outstanding shares of common stock are fully paid and
nonassessable. Any shares of common stock we may issue in connection with the
debentures will be fully paid and nonassessable.
Holders of common stock would share equally in the distribution of
dividends, if and when declared by our board of directors. The payment of
dividends on our common stock may be limited by obligations we may have to
holders of any preferred stock. The common stock has no preemptive rights and
is not convertible, redeemable or assessable, or entitled to the benefits of a
sinking fund.
If we liquidate or dissolve our business, the holders of common stock will
share ratably in all assets available for distribution to stockholders after
creditors are paid and preferred stockholders receive their distributions.
Preferred stock
Our board of directors is allowed, without action by stockholders, to issue
up to 10,000,000 shares of preferred stock in one or more series. Our board of
directors will determine the rights, preferences, privileges and restrictions,
including dividend rights, voting rights, conversion rights, terms of
redemption and liquidation preferences, of a series of the preferred stock.
Voting rights
Holders of common stock are entitled to one vote per share on matters
submitted to them, except where otherwise provided by law or in our restated
certificate of incorporation, as amended. Our board of directors may grant
holders of preferred stock, in the resolutions creating the series of preferred
stock, the right to vote on the election of directors or any questions
affecting us. Holders of preferred stock shall have one vote per share on all
matters on which they are entitled to vote.
Some business transactions, as defined in our restated certificate of
incorporation, as amended, require more than a simple majority vote. These
business transactions are discussed under "Business transactions requiring more
than a majority vote" below.
Classification of board of directors; cumulative voting
Our board of directors is divided into three classes, as nearly equal in
number as possible, serving staggered three-year terms and until their
successors are elected and qualified. The term of a member of our board of
directors may be shortened by death, resignation, or removal from office.
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Classification of our board of directors could:
. make it more difficult for a substantial stockholder to rapidly change
control of our company
. entrench management
. make it more difficult to effect a merger or similar transaction even if
the transaction is favored by a majority of independent stockholders
. discourage actions to acquire control of us by extending the time needed
to effect a change in control of the board of directors because only a
minority of the directors are elected at each annual meeting
When electing directors, each stockholder entitled to vote has the number of
votes equal to the number of votes the shares are entitled to (without regard
to the provision for cumulative voting) multiplied by the number of directors
to be elected. Holders entitled to vote may cast all their votes for a single
director or may distribute them among the number to be voted for or any two or
more of them.
Business transactions requiring more than a majority vote
Holders of at least 75% of the voting power of the then outstanding shares
of our capital stock who are eligible to vote generally in the election of
directors (as of the date of this prospectus, holders of common stock) are
required to approve some types of business transactions between Global Marine
and an "interested stockholder" (as that term is defined in our charter) or its
affiliate, including:
. any merger or consolidation of Global Marine or any of our subsidiaries
. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of any of our assets with a fair market value of $10 million
or more
. the issuance or transfer by us or any subsidiary of any of our
securities or any subsidiary in exchange for consideration of $10
million or more, with certain exceptions
The same level of stockholder approval is also required for:
. the adoption of any plan or proposal for our liquidation or dissolution
proposed by or on behalf of an interested stockholder or its affiliate
. any reclassification of securities or our recapitalization which has the
effect of increasing the proportionate share of our outstanding shares
of any class or series of equity securities or any subsidiary which is
directly or indirectly beneficially owned by any interested stockholder
or its affiliate
The super-majority requirement described above could cause the following:
. a delay, deferral or prevention of a change in control of our company
. entrench management
. make it more difficult to effect a business transaction even if such
transaction is favored by a majority of the independent stockholders
The disinterested directors, as defined in our restated certificate of
incorporation, may waive the provisions described above by special vote
approving the business transaction. These provisions may also be waived if
specific fair price, nature of consideration and procedural requirements are
met. However, a business transaction duly approved by the disinterested
directors need not meet any minimum price, nature of consideration or
procedural requirements.
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Limitation on director's liability
Delaware has adopted a law that allows corporations to limit or eliminate
the personal liability of directors to corporations and their stockholders for
monetary damages for breach of directors' fiduciary duty of care. The duty of
care requires that, when acting on behalf of the corporation, directors must
exercise an informed business judgment based on all material information
reasonably available to them. Absent the limitations allowed by the law,
directors are accountable to corporations and their stockholders for monetary
damages for acts of gross negligence. Although the Delaware law does not change
directors' duty of care, it allows corporations to limit available relief to
equitable remedies such as injunction or rescission. Our certificate of
incorporation limits the liability of our directors to the fullest extent
permitted by this law. Specifically, our directors will not be personally
liable for monetary damages for any breach of their fiduciary duty as a
director, except for liability:
. for any breach of their duty of loyalty to Global Marine or our
stockholders
. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law
. under provisions relating to unlawful payments of dividends or unlawful
stock repurchases or redemptions
. for any transaction from which the director derived an improper personal
benefit
This limitation may have the effect of reducing the likelihood of derivative
litigation against directors, and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty
of care, even though such an action, if successful, might otherwise have
benefitted our stockholders.
Delaware anti-takeover statute
We are a Delaware corporation and are subject to Section 203 of the Delaware
General Corporation Law. In general, Section 203 prevents an "interested
stockholder" (generally a person owning 15% or more of our outstanding voting
stock) from engaging in a broad range of "business combinations" (as defined in
Section 203) with us for three years following the time that person becomes a
15% stockholder unless either:
. before that person became a 15% stockholder, our board of directors
approved the transaction in which the stockholder became a 15%
stockholder or approved the business combination
. upon completion of the transaction that resulted in the stockholder's
becoming a 15% stockholder, the stockholder owned at least 85% of our
voting stock outstanding at the time the transaction began (excluding
stock held by directors who are also officers and by employee stock
plans that do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be tendered
in a tender or exchange offer) or
. after the transaction in which that person became a 15% stockholder, the
business combination is approved by our board of directors and
authorized at a stockholder meeting by at least two-thirds of the
outstanding voting stock not owned by the 15% stockholder
Under Section 203, these restrictions also do not apply to certain business
combinations proposed by a 15% stockholder following the disclosure of an
extraordinary transaction with a person who was not a 15% stockholder during
the previous three years or who became a 15% stockholder with the approval of a
majority of our directors. This exception applies only if that extraordinary
transaction is approved or not opposed by a majority of our directors who were
directors before any person became a 15% stockholder in the previous three
years, or the successors of these directors.
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Potential restrictions on sales of capital stock to non-U.S. citizens
The Secretary of Transportation, acting through the United States Maritime
Administration, is required to approve the sale of interests in and control of
United States flag vessels owned by United States citizens to non-citizens.
This approval right for the transfer of United States flag vessels would be
triggered if non-U.S. citizens hold a majority of our outstanding stock. A
transfer made without approval of the United States Maritime Administration,
where required, would be void and the United States has the power to seek
forfeiture of our rigs, civil penalties (including fines) and enforcement of
certain criminal penalties.
Transfer agent and registrar
The transfer agent and registrar for the common stock is Computershare
Investor Services LLC, Chicago, Illinois.
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SELLING SECURITY HOLDERS
We originally issued the debentures in a private placement. The debentures
were resold by the initial purchaser to qualified institutional buyers within
the meaning of Rule 144A under the Securities Act and to certain persons in
offshore transactions in reliance on Regulation S, in each case in transactions
exempt from registration under the Securities Act. The debentures and the
underlying common stock that may be offered under this prospectus will be
offered by the selling securityholders, which includes their transferees,
pledgees or donees or their successors. The following table sets forth certain
information concerning the principal amount at maturity of debentures
beneficially owned by each selling securityholder and the number of shares of
underlying common stock that may be offered from time to time pursuant to this
prospectus.
The number of shares of common stock shown in the table below assumes
conversion of the full amount of debentures held by such holder at the initial
conversion rate of 12.2182 shares per $1,000 principal amount at maturity of
debentures. This conversion rate is subject to certain adjustments.
Accordingly, the number of shares of common stock issuable upon conversion of
the debentures may increase or decrease from time to time. Under the terms of
the indenture, fractional shares will not be issued upon conversion of the
debentures. Cash will be paid instead of fractional shares, if any.
<TABLE>
<CAPTION>
Principal
Amount at
Maturity of Number of
Debentures Shares of
Beneficially Percentage of Common Stock Percentage of
Owned That Debentures That May Be Common Stock
Name May Be Sold Outstanding Sold Outstanding(1)
---- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Argent Convertible
Arbitrage Fund Ltd..... $10,000,000 1.67% 122,182 *
Aristeia International,
Ltd.................... 9,760,000 1.67% 119,249 *
Aristeia Trading, L.P... 6,240,000 1.04% 76,241 *
Bank Austria Cayman
Island, Ltd............ 6,400,000 1.07% 78,196 *
Bear, Stearns & Co.
Inc.................... 16,375,000 2.73% 200,073 *
Black Diamond Offshore,
Ltd.................... 2,158,000 * 26,366 *
Double Black Diamond
Offshore, LDC.......... 7,453,000 1.24% 91,062 *
General Motors Welfare
Benefit Trust (ST-
Veba).................. 5,000,000 * 61,091 *
Goldman, Sachs and
Company................ 4,750,000 * 58,036 *
Highbridge International
LLC.................... 51,000,000 8.50% 623,128 *
Kentfield Trading Ltd... 13,300,000 2.22% 162,502 *
Lydian Overseas Partners
Master Fund............ 41,000,000 6.80% 500,946 *
Peoples Benefit Life
Insurance Company
(Teamsters Separate
Account)............... 10,000,000 1.67% 122,182 *
Peoples Benefit Life
Insurance Company...... 10,000,000 1.67% 122,182 *
Ramius Capital Group
Holdings, Ltd.......... 1,600,000 * 19,549 *
Spear, Leeds & Kellogg.. 4,000,000 * 48,872 *
White River Securities
L.L.C.................. 16,375,000 2.73% 200,073 *
Worldwide Transactions,
Ltd.................... 389,000 * 4,752 *
Any other holder of
debentures or future
transferee from any
such holder(2)(3)...... 384,200,000 64.03% 4,694,232 2.61%
</TABLE>
--------
* Less than 1%.
(1) Calculated based on Rule 13d-3(d)(i) of the Exchange Act using 175,439,471
shares of common stock outstanding as of July 31, 2000. In calculating this
amount, we treated as outstanding the number of shares of common stock
issuable upon conversion of all of that particular holder's debentures.
However, we did not assume the conversion of any other holder's debentures.
(2) Information concerning other selling holders of debentures or underlying
common stock will be set forth in prospectus supplements from time to time,
if required.
(3) Assumes that any other holders of debentures, or any future transferees,
pledgees, donees or successors of or from any such other holders of
debentures do not beneficially own any common stock other than the common
stock issuable upon conversion of the debentures at the initial conversion
rate.
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The preceding table has been prepared based upon the information furnished
to us by the selling securityholders named above.
The selling securityholders identified above may have sold, transferred or
otherwise disposed of some or all of their debentures since the date on which
the information in the preceding table is presented in transactions exempt from
the registration requirements of the Securities Act. Information concerning the
selling securityholders may change from time to time and, if necessary, we will
supplement this prospectus accordingly. We cannot give an estimate as to the
amount of the debentures or underlying common stock that will be held by the
selling securityholders upon the termination of this offering because the
selling securityholders may offer some or all of their debentures or underlying
common stock pursuant to the offering contemplated by this prospectus. See
"Plan of Distribution."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax
considerations to U.S. holders (as described below) and the material U.S.
federal income and estate tax considerations to non-U.S. holders (as described
below) relating to the purchase, ownership and disposition of the debentures or
shares of common stock. This discussion is limited to holders who hold
debentures and any shares of common stock into which the debentures are
converted as capital assets.
This discussion does not contain a complete analysis of all the potential
tax considerations relating to the purchase, ownership and disposition of the
debentures or shares of common stock. In particular, this discussion does not
address all tax considerations that may be important to you in light of your
particular circumstances (such as the alternative minimum tax provisions) or
under certain special rules. Special rules may apply, for instance, to banks,
tax-exempt organizations, dealers in securities, persons who hold debentures or
shares of common stock as part of a hedge, conversion or constructive sale
transaction, straddle or other risk reduction transaction, or persons who have
ceased to be United States citizens or to be taxed as resident aliens. In
addition, the discussion does not apply to holders of debentures or shares of
common stock that are partnerships. This discussion also does not address the
tax consequences arising under the laws of any foreign, state or local
jurisdiction.
This discussion is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), existing and proposed Treasury Regulations, and judicial
decisions and administrative interpretations thereunder, as of the date hereof,
all of which are subject to change or different interpretations, possibly with
retroactive effect. We cannot assure you that the Internal Revenue Service (the
"IRS") will not challenge one or more of the tax results described herein, and
we have not obtained, nor do we intend to obtain, a ruling from the IRS with
respect to the U.S. federal tax consequences of acquiring, holding or disposing
of the debentures or shares of common stock.
PLEASE CONSULT YOUR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES
TO YOU OF ACQUIRING, HOLDING, CONVERTING OR OTHERWISE DISPOSING OF THE
DEBENTURES AND SHARES OF COMMON STOCK, INCLUDING THE EFFECT AND APPLICABILITY
OF STATE, LOCAL OR FOREIGN TAX LAWS.
U.S. holders
You are a U.S. holder for purposes of this discussion if you are a holder of
a debenture or common stock that is, for U.S. federal income tax purposes:
. a citizen or resident of the United States;
. a corporation created or organized in or under the laws of the United
States or of any political subdivision thereof; or
. an estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source.
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<PAGE>
Original Issue Discount on the Debentures. The debentures were originally
issued at a substantial discount from their principal amount. For U.S. federal
income tax purposes, the excess of the principal amount of each debenture over
its issue price constitutes original issue discount ("OID"). The issue price of
the debentures was $499.60 per $1,000 principal amount. You will be required to
include OID in income as it accrues, in accordance with a constant yield
method, before receipt of the cash or other payment attributable to such
income, regardless of your regular method of accounting for U.S. federal income
tax purposes. Under these rules, you will have to include in gross income
increasingly greater amounts of OID in each successive accrual period. Your
original tax basis for determining gain or loss on the sale or other
disposition of a debenture will be increased by any accrued OID included in
your gross income.
As discussed above, we will be required to pay Additional Interest in the
event of a Registration Default. See "Description of the Debentures--Your
registration rights." The payment of Additional Interest would change the yield
on the debentures and would therefore change the rate at which OID accrues. We
do not expect a Registration Default to occur and therefore intend to report
the accrual of OID on the debentures on the basis that no Additional Interest
will become payable.
Market Discount. Any principal payment or gain you realize on disposition or
retirement of a debenture generally will be treated as ordinary income to the
extent that there is accrued market discount on the debenture. The total amount
of market discount on a debenture will equal the excess of the "revised issue
price" of the debenture (generally, the sum of the issue price of the debenture
and the aggregate amount of accrued OID on the debenture) over your initial tax
basis in the debenture. To the extent you exchange or convert a debenture into
common stock in a transaction that is otherwise tax free, any accrued market
discount on the debenture will carry over and generally be recognized upon a
disposition of the common stock. Unless you irrevocably elect to accrue market
discount under a constant interest method, accrued market discount on a
debenture is the total market discount on the debenture multiplied by a
fraction, the numerator of which is the number of days you have held the
debenture and the denominator of which is the number of days from the date you
acquired the debenture until its maturity. You may be required to defer a
portion of any interest deductions for a taxable year attributable to any
indebtedness incurred or continued to purchase or carry a debenture purchased
with market discount. Any such deferred interest expense would not exceed the
market discount that accrues during the taxable year and is, in general,
allowed as a deduction not later than the year in which such market discount is
includable in income. If you elect to include market discount in income
currently as it accrues on all market discount instruments you acquire in a
particular taxable year and thereafter, (i) the interest deferral described
above will not apply and (ii) market discount will not carry over into common
stock as described above. Any such election is terminable only with the consent
of the IRS and applies to all market discount bonds acquired during or after
the year for which it is made. In some cases gain on a disposition of market
discount property which would otherwise qualify for nonrecognition, such as a
gift, will be includable in income to the extent of accrued market discount.
Acquisition Premium. You will be considered to have acquisition premium on a
debenture to the extent your initial tax basis in the debenture is greater than
the "adjusted issue price" of the debenture (generally, the sum of the issue
price of the debenture and the aggregate amount of accrued OID on the
debenture) but less than the principal amount of the debenture. Any acquisition
premium will reduce the amount of OID received on the debenture that you are
required to include in income.
Sale, Exchange or Retirement of the Debentures. Except as described below,
upon the sale, exchange or retirement of a debenture, you will recognize gain
or loss equal to the difference between the sale or redemption proceeds and
your adjusted tax basis in the debenture. Your adjusted tax basis in a
debenture will generally equal your cost of the debenture increased by any OID
and market discount previously included in income with respect to such
debenture. Except to the extent of any accrued market discount not previously
included in income, gain or loss realized on the sale, exchange or retirement
of a debenture will generally be capital gain or loss and will be long-term
capital gain or loss if the debenture is held for more than one year. You
should consult your tax advisors regarding the treatment of capital gains
(which may be taxed at lower rates than ordinary income for taxpayers who are
individuals) and losses (the deductibility of which is subject
36
<PAGE>
to limitations). Our election to pay interest on the debentures instead of
accruing OID will not constitute a taxable exchange of the debentures to the
holders, although the timing of income recognition could be affected.
Conversion of Debentures. The conversion of a debenture into shares of
common stock will generally not be a taxable event, except with respect to cash
received in lieu of a fractional share. Your basis in the shares received on
conversion of a debenture will be the same as your basis in the debenture at
the time of conversion (exclusive of any tax basis allocable to a fractional
share), and your holding period for the shares received on conversion should
include the holding period of the debenture converted, except that the holding
period of shares attributable to OID may commence on the day following the date
of conversion. The receipt of cash in lieu of a fractional share should
generally result in capital gain or loss (except to the extent of any accrued
market discount allocable to such fractional share) measured by the difference
between the cash received for the fractional share interest and your tax basis
in the fractional share interest.
Exercise of Repurchase Right. If you require us to repurchase a debenture on
a repurchase date and if we issue shares of common stock in full satisfaction
of the purchase price, the exchange of a debenture for shares of common stock
will be treated the same as a conversion. If you require us to repurchase a
debenture on a repurchase date and if we deliver a combination of cash and
shares of common stock in payment of the purchase price, then, in general, (1)
you will recognize gain (but not loss) to the extent that the cash and the
value of the shares exceeds your adjusted tax basis in the debenture, but in no
event will the amount of recognized gain exceed the amount of cash received,
(2) your basis in the shares received will be the same as your basis in the
debenture repurchased by us (exclusive of any basis allocable to a fractional
share), decreased by the amount of cash received (other than cash received in
lieu of a fractional share), and increased by the amount of gain, if any,
recognized by you (other than gain with respect to a fractional share), and (3)
the holding period of the shares received in the exchange will include the
holding period for the debenture which was repurchased, except that the holding
period of shares attributable to OID may commence on the day following the date
of conversion.
Adjustment of Conversion Rate. If at any time we make a distribution of
property to stockholders that would be taxable to such stockholders as a
dividend for U.S. federal income tax purposes (for example, distributions of
evidences of indebtedness or assets of ours, but generally not stock dividends
or rights to subscribe for common stock) and if, pursuant to the anti-dilution
provisions of the indenture, the conversion rate of the debentures is
increased, such increase may be deemed to be the payment of a taxable dividend
to you. If the conversion rate is increased at the discretion of us or in
certain other circumstances, such increase also may be deemed to be the payment
of a taxable dividend to you.
Ownership and Disposition of Shares of Common Stock. Distributions, if any,
paid on shares of common stock generally will be includable in your income as
ordinary income to the extent made from our current or accumulated earnings and
profits. Upon the sale, exchange or other disposition of shares of common
stock, you generally will recognize capital gain or capital loss (except to the
extent of ordinary income in respect of any accrued market discount that has
been carried over to the common stock) equal to the difference between the
amount realized on such sale or exchange and your adjusted tax basis in such
shares. You should consult your tax advisors regarding the treatment of capital
gains (which may be taxed at lower rates than ordinary income for taxpayers who
are individuals) and losses (the deductibility of which is subject to
limitations).
Non-U.S. holders
You are a Non-U.S. holder for purposes of this discussion if you are a
holder of a debenture or common stock that is not a U.S. holder, as described
above.
Withholding Tax on Payments of Principal and Original Issue Discount on
Debentures. The payment of principal (including any OID included therein) on a
debenture by us or any paying agent of ours to you will not be subject to U.S.
federal withholding tax, provided that in the case of a payment in respect of
OID:
. you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our shares;
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<PAGE>
. you are not a controlled foreign corporation that is related to us
within the meaning of the Code; and
. either (A) the beneficial owner of the debenture certifies to the
applicable payor or its agent, under penalties of perjury, that it is
not a U.S. holder and provides its name and address on U.S. Treasury
Form W-8BEN (or a suitable substitute form), or (B) a securities
clearing organization, bank or other financial institution, that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the debenture, certifies under
penalties of perjury that such a Form W-8BEN (or a suitable substitute
form) has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes
the payor with a copy thereof.
Except to the extent otherwise provided under an applicable tax treaty, you
generally will be taxed in the same manner as a U.S. holder with respect to OID
on a debenture if such OID is effectively connected with a U.S. trade or
business of yours. Effectively connected OID received by a Non-U.S. holder that
is a foreign corporation may also be subject to an additional "branch profits
tax" at a 30% rate (or, if applicable, a lower treaty rate), subject to certain
adjustments. Such effectively connected OID will not be subject to withholding
tax if the holder delivers the appropriate form (currently IRS Form 4224 and,
beginning January 1, 2001, a Form W-8ECI) to the payor.
Dividends. Dividends, if any, paid on shares of our common stock to you
generally will be subject to a 30% U.S. federal withholding tax, subject to
reduction if you are eligible for the benefits of an applicable income tax
treaty. Currently, for purposes of determining whether tax is to be withheld at
the 30% rate or at a reduced treaty rate, we will ordinarily presume that
dividends paid to an address in a foreign country are paid to a resident of
such country absent knowledge that such presumption is not warranted. Under
Treasury regulations effective for payments after December 31, 2000, holders
will be required to satisfy certain certification requirements to claim treaty
benefits. Except to the extent otherwise provided under an applicable tax
treaty, you generally will be taxed in the same manner as a U.S. holder on
dividends that are effectively connected with your conduct of a trade or
business in the United States. If you are a foreign corporation, you may also
be subject to a U.S. branch profits tax on such effectively connected income at
a 30% rate or such lower rate as may be specified by an applicable income tax
treaty, subject to certain adjustments.
Gain on Disposition of the Debentures and Shares of Common Stock. You
generally will not be subject to U.S. federal income tax on gain realized on
the sale, exchange or redemption of a debenture, including the exchange of a
debenture for shares of common stock, or the sale or exchange of shares of
common stock unless:
. you are an individual present in the United States for 183 days or more
in the year of such sale, exchange or redemption and either (A) you have
a "tax home" in the United States and certain other requirements are
met, or (B) the gain from the disposition is attributable to an office
or other fixed place of business in the United States;
. in the case of an amount that is attributable to OID, you do not meet
the conditions for exemption from U.S. federal withholding tax, as
described in "Withholding Tax on Payments of Principal and Original
Issue Discount on Debentures," above;
. the gain is effectively connected with your conduct of a United States
trade or business; or
. we are a U.S. real property holding corporation under the "FIRPTA" rules
adopted in 1980.
Generally, a corporation is a U.S. real property holding corporation if the
fair market value of its U.S. real property interests, as defined in the Code
and applicable regulations, equals or exceeds 50% of the aggregate fair market
value of its worldwide real property interests and its other assets used or
held for use in a trade or business. We do not believe that we are currently a
U.S. real property holding corporation or that we will become one in the
future. If we nevertheless did become a U.S. real property holding corporation
then, among other circumstances, an exemption would generally apply to a Non-
U.S. holder who at no time actually or constructively owned (1) more than 5% of
the outstanding debentures, (2) debentures having a fair market
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<PAGE>
value greater than the fair market value of 5% of our outstanding common stock
or (3) more than 5% of our outstanding common stock, assuming our common stock
is at all times regularly traded on an established securities market, as
prescribed by regulations.
U.S. Federal Estate Tax. A debenture held by an individual who at the time
of death is not a citizen or resident of the United States (as specially
defined for U.S. federal estate tax purposes) will not be subject to U.S.
federal estate tax if the individual did not actually or constructively own 10%
or more of the total combined voting power of all classes of our stock and, at
the time of the individual's death, payments with respect to such debenture
would not have been effectively connected with the conduct by such individual
of a trade or business in the United States. Common stock held by an individual
who at the time of death is not a citizen or resident of the United States (as
specially defined for U.S. federal estate tax purposes) will be included in
such individual's estate for U.S. federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise.
Backup withholding and information reporting
U.S. Holders. Payments of interest or dividends made by us on, or the
proceeds of the sale or other disposition of, the debentures or shares of
common stock may be subject to information reporting and U.S. federal backup
withholding tax at the rate of 31% if the recipient of such payment fails to
supply an accurate taxpayer identification number or otherwise fails to comply
with applicable United States information reporting or certification
requirements. Any amount withheld from a payment to a U.S. holder under the
backup withholding rules is allowable as a credit against the holder's U.S.
federal income tax, provided that the required information is furnished to the
IRS.
Non-U.S. Holders. We must report annually to the IRS and to each Non-U.S.
holder the amount of any dividends paid to, and the tax withheld with respect
to, such holder, regardless of whether any tax was actually withheld. Copies of
these information returns may also be made available under the provisions of a
specific treaty or agreement to the tax authorities of the country in which the
Non-U.S. holder resides.
Under current Treasury regulations, backup withholding and information
reporting will not apply to payments of principal, including cash payments in
respect of OID, on the debentures to a Non-U.S. holder if the Non-U.S. holder
certifies as to its Non-U.S. holder status under penalties of perjury or
otherwise establishes an exemption (provided that neither we nor our agent has
actual knowledge that the holder is a U.S. person or that the conditions of any
other exemptions are not in fact satisfied). The payment of the proceeds of the
disposition of debentures or shares of common stock to or through the United
States office of a United States or foreign broker will be subject to
information reporting and backup withholding unless the owner provides the
certification described above or otherwise establishes an exemption. The
proceeds of the disposition by a Non-U.S. holder of debentures or shares of
common stock to or through a foreign office of a broker will not be subject to
backup withholding or information reporting. However, if such broker is a U.S.
person, a controlled foreign corporation for U.S. federal income tax purposes,
a foreign person, 50% or more of whose gross income from all sources for
certain periods is effectively connected with a U.S. trade or business, or, in
the case of payments made after December 31, 2000, a foreign partnership with
certain connections to the United States, information reporting requirements
will apply unless such broker has documentary evidence in its files of the
holder's Non-U.S. status and has no actual knowledge to the contrary or unless
the holder otherwise establishes an exemption. Any amount withheld under the
backup withholding rules is allowable as a credit against the Non-U.S. holder's
U.S. federal income tax, provided that the required information is provided to
the IRS.
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PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the debentures and
the underlying common stock offered by this prospectus. The aggregate proceeds
to the selling securityholders from the sale of the debentures or underlying
common stock will be the purchase price of the debentures or underlying common
stock less any discounts and commissions. A selling securityholder reserves the
right to accept and, together with their agents, to reject, any proposed
purchase of debentures or common stock to be made directly or through agents.
The debentures and the underlying common stock may be sold from time to time
to purchasers
. directly by the selling securityholders and their successors, which
includes their transferees, pledgees or donees or their successors, or
. through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from
the selling securityholders or the purchasers of the debentures and the
underlying common stock. These discounts, concessions or commissions may
be in excess of those customary in the types of transactions involved.
The selling securityholders and any underwriters, broker-dealers or agents
who participate in the distribution of the debentures and the underlying common
stock may be deemed to be "underwriters" within the meaning of Section 2(11) of
the Securities Act. As a result, any profits on the sale of the debentures and
the underlying common stock by selling securityholders and any discounts,
commissions or concessions received by any such broker-dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act.
Selling securityholders who are "underwriters" within the meaning of Section
2(11) of the Securities Act will be subject to prospectus delivery requirements
of the Securities Act. If the selling securityholders were deemed to be
underwriters, the selling securityholders may be subject to certain statutory
liabilities of, including, but not limited to, Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Exchange Act.
If the debentures and the underlying common stock are sold through
underwriters or broker-dealers, the selling securityholders will be responsible
for underwriting discounts or commissions or agent's commissions.
The debentures and the underlying common stock may be sold in one or more
transactions at:
. fixed prices
. prevailing market prices at the time of sale
. prices related to such prevailing market prices
. varying prices determined at the time of sale
. negotiated prices
These sales may be effected in transactions
. on any national securities exchange or quotation service on which the
debentures and underlying common stock may be listed or quoted at the
time of the sale, including the New York Stock Exchange in the case of
the common stock
. in the over-the-counter market
. in transactions otherwise than on such exchanges or services or in the
over-the-counter market
. through the writing of options, whether such options are listed on an
options exchange or otherwise
. through the settlement of short sales
40
<PAGE>
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the debentures and the underlying common stock
or otherwise, the selling securityholders may enter into hedging transactions
with broker-dealers or other financial institutions. These broker-dealers or
other financial institutions may in turn engage in short sales of the
debentures or the underlying common stock in the course of hedging their
positions. The selling securityholders may also sell the debentures and
underlying common stock short and deliver debentures and the underlying common
stock to close out short positions, or loan or pledge debentures or the
underlying common stock to broker-dealers that in turn may sell the debentures
and the underlying common stock.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter, broker-
dealer or agent regarding the sale of the debentures and the underlying common
stock by the selling securityholders.
Our common stock trades on the New York Stock Exchange under the symbol
"GLM." We do not intend to apply for listing of the debentures on any
securities exchange or for quotation through Nasdaq. Accordingly, no assurances
can be given as to the development of liquidity or any trading market for the
debentures. See "Risk Factors--Trading market for the debentures."
There can be no assurance that any selling securityholder will sell any or
all of the debentures or the underlying common stock pursuant to this
prospectus. Further, we cannot assure you that any such selling securityholder
will not transfer, devise or gift the debentures and the underlying common
stock by other means not described in this prospectus. In addition, any
debentures or underlying common stock covered by this prospectus that qualify
for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold
under Rule 144 or Rule 144A rather than under this prospectus. The debentures
and the underlying common stock may be sold in some states only through
registered or licensed brokers or dealers. In addition, in some states the
debentures and underlying common stock may not be sold unless they have been
registered or qualified for sale or an exemption from registration.
The selling securityholders and any other person participating in the sale
of debentures or the underlying common stock will be subject to the Exchange
Act. The Exchange Act rules include, without limitation, Regulation M, which
may limit the timing of purchases and sales of any of the debentures and the
underlying common stock by the selling securityholders and any other such
person. In addition, Regulation M of the Exchange Act may restrict the ability
of any person engaged in the distribution of the debentures and the underlying
common stock to engage in market-making activities with respect to the
particular debentures and the underlying common stock being distributed for a
period of up to five business days before the commencement of such
distribution. This may affect the marketability of the debentures and the
underlying common stock and the ability of any person or entity to engage in
market-making activities with respect to the debentures and the underlying
common stock.
Pursuant to the registration rights agreement that has been filed as an
exhibit to this registration statement, we and the selling securityholders will
be indemnified by the other against certain liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection with these liabilities.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the debentures and underlying common stock
to the public other than commissions, fees and discounts of underwriters,
brokers, dealers and agents.
41
<PAGE>
LEGAL MATTERS
Baker Botts L.L.P., Houston, Texas, will pass upon certain legal matters for
us in connection with the securities offered hereby.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
annual report on Form 10-K for the year ended December 31, 1999, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
INDEPENDENT ACCOUNTANTS
With respect to the unaudited interim consolidated financial information of
Global Marine Inc. included in its quarterly reports on Form 10-Q for the
quarters ended March 31 and June 30, 2000 and incorporated by reference in this
prospectus, PricewaterhouseCoopers LLP reported that they have applied limited
procedures in accordance with professional standards for a review of such
information. However, their separate reports dated May 10 and August 11, 2000
incorporated by reference state that they did not audit and they do not express
an opinion on that unaudited consolidated financial information. Accordingly,
the degree of reliance on their reports on such information should be
restricted in light of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions of
Section 11 of the Securities Act of 1933 for their reports on the unaudited
consolidated financial information because neither such report is a "report" or
a "part" of the registration statement prepared or certified by
PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the
Securities Act.
42
<PAGE>
[GLOBAL MARINE LOGO]
$600,000,000
Zero Coupon Convertible Debentures
Due June 23, 2020
and
Common Stock Issuable Upon Conversion of the Debentures
Prospectus
, 2000
<PAGE>
PART II
Information Not Required in Prospectus
ITEM 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses payable by Global
Marine Inc. (the "Company") in connection with the issuance and distribution of
the securities being registered. All amounts shown are estimates, except the
registration fee.
<TABLE>
<S> <C>
Registration fee................................................... $ 84,150
Printing expenses.................................................. 10,000
Accounting fees and expenses....................................... 20,000
Legal fees and expenses............................................ 20,000
Miscellaneous...................................................... 15,850
--------
Total............................................................ $150,000
========
</TABLE>
ITEM 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation) by reason of the fact
that such person is or was a director or officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A Delaware corporation
may indemnify directors, officers, employees and others in an action by or in
the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the person to be
indemnified has been adjudged to be liable to the corporation. Where a director
or officer is successful on the merits or otherwise in the defense of any
action referred to above or in defense of any claim, issue or matter therein,
the corporation must indemnify such director or officer against the expenses
(including attorneys' fees) which he or she actually and reasonably incurred in
connection therewith.
Section III-11 of the By-laws of Global Marine Inc. provides for
indemnification of the directors and officers of Global Marine Inc. to the full
extent permitted by law, as now in effect or later amended. Section III-11 of
the By-laws provides that expenses incurred by a director or officer in
defending a suit or other similar proceeding shall be paid by the Company upon
receipt of an undertaking by or on behalf of the director or officer to repay
such amount if it is ultimately determined that such director or officer is not
entitled to be indemnified by the Company.
Additionally, the Company's Restated Certificate of Incorporation, as
amended, (the "Charter") contains a provision that limits the liability of the
Company's directors to the fullest extent permitted by the Delaware General
Corporation Law. The provision eliminates the personal liability of directors
to the Company or its stockholders for monetary damages for breach of the
director's fiduciary duty of care as a director. As a result, stockholders may
be unable to recover monetary damages against directors for negligent or
grossly negligent acts or omissions in violation of their duty of care. The
provision does not change the liability of a director for breach of his duty of
loyalty to the Company or to stockholders, for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
for the declaration or payment of dividends in violation of Delaware law, or in
respect of any transaction from which a director receives an improper personal
benefit.
II-1
<PAGE>
In addition to its Charter and By-law provisions, the Company has taken such
other steps as are reasonably necessary to effect its indemnification policy.
Included among such other steps is liability insurance provided by the Company
for its directors and officers for certain losses arising from claims or
charges made against them in their capacities as directors or officers of the
Company. The Company has also entered into indemnification agreements with
individual officers and directors. These agreements generally provide such
officers and directors with a contractual right to indemnification to the full
extent provided by applicable law and the By-laws of the Company as in effect
at the respective dates of such agreements.
The Company has placed in effect insurance that purports (a) to insure it
against certain costs of indemnification which may be incurred by it pursuant
to the aforementioned By-law provision or otherwise and (b) to insure the
officers and directors of the Company and of specified subsidiaries against
certain liabilities incurred by them in the discharge of their functions as
officers and directors except for liabilities arising from their own
malfeasance.
Agreements which may be entered into with underwriters, dealers and agents
who participate in the distribution of securities of the Company may contain
provisions relating to the indemnification of the Company's officers and
directors.
ITEM 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
*4.1 Indenture, dated as of September 1, 1997, between the Company and
Wilmington Trust Company, as Trustee, relating to Senior Debt
Securities of the Registrant. (Incorporated herein by this reference
to Exhibit 4.1 of the Registrant's Registration Statement on Form S-4
(No. 333-39033) filed with the Commission on October 30, 1997.)
*4.2 First Supplemental Indenture dated as of June 23, 2000, between the
Company and Wilmington Trust Company, as Trustee, relating to the Zero
Coupon Convertible Debentures Due June 23, 2020 of the Registrant.
(Incorporated by this reference to Exhibit 4.2 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.)
*4.3 Form of Debenture (included in Exhibit 4.2).
*4.4 Registration Rights Agreement dated as of June 23, 2000, between the
Company and Credit Suisse First Boston Corporation, the Initial
Purchaser of the Zero Coupon Convertible Debentures Due June 23, 2020.
(Incorporated by this reference to Exhibit 4.3 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.)
*4.5 Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on March 15, 1989, effective March 16,
1989. (Incorporated herein by this reference to Exhibit 3(i).1 of the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1993.)
*4.6 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on May
11, 1990. (Incorporated herein by this reference to Exhibit 3(i).2 of
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993.)
*4.7 Certificate of Correction of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on
September 25, 1990. (Incorporated herein by this reference to Exhibit
3(i).3 of the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1993.)
*4.8 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on May
11, 1992. (Incorporated herein by this reference to Exhibit 3(i)4 of
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993.)
*4.9 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on May
12, 1994. (Incorporated herein by this reference to Exhibit 4.5 of the
Registrant's Registration Statement on Form S-3 (No. 33-53691) filed
with the Commission on May 18, 1994.)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
*4.10 Bylaws of the Company as amended through November 14, 1996.
(Incorporated herein by this reference to Exhibit 3(ii).2 of the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1996.)
5 Opinion of Baker Botts L.L.P. as to the validity of the Securities.
12 Computation of ratio of earnings to fixed charges.
15 Awareness letter of PricewaterhouseCoopers LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
24 Powers of Attorney (included on the signature page of the Registration
Statement).
*25.1 Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of Wilmington Trust Company, as trustee under the
Indenture dated as of September 1, 1997, on Form T-1 (Incorporated
herein by this reference to Exhibit 25 of the Registrant's
Registration Statement on Form S-4 (No. 333-39033) filed with the
Commission on October 30, 1997.)
</TABLE>
--------
* Incorporated by reference as indicated.
ITEM 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered
II-3
<PAGE>
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Global Marine
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on the behalf by the undersigned, thereunto duly
authorized, in the City of Houston, the State of Texas, on September 15, 2000.
GLOBAL MARINE INC.
/s/ W. Matt Ralls
By:__________________________________
W. Matt Ralls
Senior Vice President,
Chief Financial Officer and
Treasurer
POWER OF ATTORNEY
Each person whose signature appears below appoints W. Matt Ralls, James L.
McCulloch and Walter A. Baker, and each of them, each of whom may act without
the joinder of the others, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities to sign (i) any and all amendments
(including post-effective amendments) to this registration statement and (ii)
any registration statement of the type contemplated by Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the SEC, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully and for all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on September 15, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Robert E. Rose Chairman, President and Chief Executive
______________________________________ Officer; Director (Principal Executive
Robert E. Rose Officer and Director)
/s/ W. Matt Ralls Senior Vice President, Chief Financial
______________________________________ Officer and Treasurer (Principal Financial
W. Matt Ralls Officer)
/s/ Douglas C. Stegall Vice President and Controller (Principal
______________________________________ Accounting Officer)
Douglas C. Stegall
/s/ Edward A. Blair Director
______________________________________
Edward A. Blair
/s/ Thomas W. Cason Director
______________________________________
Thomas W. Cason
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ John M. Galvin Director
______________________________________
John M. Galvin
/s/ C. Russell Luigs Director
______________________________________
C. Russell Luigs
/s/ Jerry C. Martin Director
______________________________________
Jerry C. Martin
/s/ Edward R. Muller Director
______________________________________
Edward R. Muller
/s/ Paul J. Powers Director
______________________________________
Paul J. Powers
/s/ Ben G. Streetman Director
______________________________________
Ben G. Streetman
/s/ Carroll W. Suggs Director
______________________________________
Carroll W. Suggs
/s/ John Whitmire Director
______________________________________
John Whitmire
</TABLE>
II-6
<PAGE>
ITEM 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
*4.1 Indenture, dated as of September 1, 1997, between the Company and
Wilmington Trust Company, as Trustee, relating to Senior Debt
Securities of the Registrant. (Incorporated herein by this reference
to Exhibit 4.1 of the Registrant's Registration Statement on Form S-4
(No. 333-39033) filed with the Commission on October 30, 1997.)
*4.2 First Supplemental Indenture dated as of June 23, 2000, between the
Company and Wilmington Trust Company, as Trustee, relating to the Zero
Coupon Convertible Debentures Due June 23, 2020 of the Registrant.
(Incorporated by this reference to Exhibit 4.2 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.)
*4.3 Form of Debenture (included in Exhibit 4.2).
*4.4 Registration Rights Agreement dated as of June 23, 2000, between the
Company and Credit Suisse First Boston Corporation, the Initial
Purchaser of the Zero Coupon Convertible Debentures Due June 23, 2020.
(Incorporated by this reference to Exhibit 4.3 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.)
*4.5 Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on March 15, 1989, effective March 16,
1989. (Incorporated herein by this reference to Exhibit 3(i).1 of the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1993.)
*4.6 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on May
11, 1990. (Incorporated herein by this reference to Exhibit 3(i).2 of
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993.)
*4.7 Certificate of Correction of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on
September 25, 1990. (Incorporated herein by this reference to Exhibit
3(i).3 of the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1993.)
*4.8 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on May
11, 1992. (Incorporated herein by this reference to Exhibit 3(i)4 of
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993.)
*4.9 Certificate of Amendment of the Restated Certificate of Incorporation
of the Company as filed with the Secretary of State of Delaware on May
12, 1994. (Incorporated herein by this reference to Exhibit 4.5 of the
Registrant's Registration Statement on Form S-3 (No. 33-53691) filed
with the Commission on May 18, 1994.)
*4.10 Bylaws of the Company as amended through November 14, 1996.
(Incorporated herein by this reference to Exhibit 3(ii).2 of the
Registrant's Annual Report on Form 10-K for the year ended December
31, 1996.)
5 Opinion of Baker Botts L.L.P. as to the validity of the Securities.
12 Computation of ratio of earnings to fixed charges.
15 Awareness letter of PricewaterhouseCoopers LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
24 Powers of Attorney (included on the signature page of the Registration
Statement).
*25.1 Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of Wilmington Trust Company, as trustee under the
Indenture dated as of September 1, 1997, on Form T-1 (Incorporated
herein by this reference to Exhibit 25 of the Registrant's
Registration Statement on Form S-4 (No. 333-39033) filed with the
Commission on October 30, 1997.)
</TABLE>
--------
* Incorporated by reference as indicated.
II-7
