FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number 1-10945
OCEANEERING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2628227
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
16001 Park Ten Place, Suite 600
Houston, Texas 77084
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 578-8868
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $0.25 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X , No .
Aggregate market value of the voting stock held by non-affiliates of the
registrant at June 1, 1995, based upon the closing sale price of the Common
Stock on the New York Stock Exchange $217,725,000
Number of shares of Common Stock outstanding at June 1, 1995 23,060,024
Documents Incorporated by Reference:
Portions of the proxy statement to be filed on or before July 31, 1995,
pursuant to Regulation 14A of the Securities and Exchange Act of 1934 to
the extent set forth in Part III, Items 10-13 of this report.
OCEANEERING INTERNATIONAL, INC.
Annual Report on Form 10-K
INDEX
PART I
Item 1 Business
Item 2 Properties
Item 3 Legal Proceedings
Item 4 Submission of Matters to a
Vote of Security Holders
Item 4a Executive Officers of the Registrant
PART II
Item 5 Market for the Registrant's Common Equity
and Related Shareholder Matters
Item 6 Selected Financial Data
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations
* Item 8 Financial Statements and Supplementary Data
Item 9 Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure
PART III
Item 10 Directors and Executive Officers
of the Registrant
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial
Owners and Management
Item 13 Certain Relationships and Related Transactions
PART IV
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K
SIGNATURES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
* Refers the reader to Part IV, Item 14.
PART I
Item 1. BUSINESS.
General Development of Business
Oceaneering International, Inc., (together with its subsidiaries,
"Oceaneering" or the "Company") is an advanced applied technology company
which provides engineered services and hardware to customers who operate in
marine, space and other harsh environments. The Company supplies a
comprehensive range of integrated technical services to a wide array of
industries and is one of the world's largest underwater services
contractors. Principal services are provided to the oil and gas industry
and include drilling support, subsea construction, production systems,
facilities maintenance and repair, survey and positioning and specialized
onshore and offshore engineering and inspection. Oceaneering was organized
in 1969 out of the combination of three diving service companies founded in
the early 1960s. Since its establishment, the Company has concentrated on
the development and marketing of underwater services requiring the use of
advanced deepwater technology. The Company conducts operations in the
United States and 28 other countries. The Company's international
operations, principally in the North Sea, Far East, Africa and the Middle
East, accounted for approximately 51% of its 1995 fiscal year revenues, or
$122,000,000.
In January 1990, the Company acquired all of the outstanding capital stock
of Sonsub Limited, a United Kingdom company ("Sonsub"), whose principal
assets were ten large and four small Remotely Operated Vehicles ("ROVs").
ROVs are unmanned submersible vehicles operated from the surface that are
used widely in the offshore oil and gas industry.
In December 1990, the Company was awarded a contract by a major oil company
to provide and maintain a Floating Production, Storage and Offloading
("FPSO") system offshore Gabon. This represented the first major project
for the Company's Offshore Production Systems division ("OPS") which was
formed to develop economical production alternatives for offshore oil and
gas fields. A 78,000 deadweight ton ("dwt") tanker was purchased and
converted into an FPSO for this project and was delivered to its first
location in December 1991. The unit is currently operating offshore
Angola. See Item 7 - "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
In August 1992, the Company acquired Eastport International, Inc.,
("Eastport"), a designer, developer and operator of advanced robotic
systems and ROVs specializing in the non-oilfield market, in a transaction
accounted for as a pooling of interests. All financial information herein
has been restated to include the results of Eastport from Eastport's
inception (June 21, 1989). Eastport's assets included two ROVs, one of
which is rated for water depths to 25,000 feet, a deep tow sonar system and
two other work ROVs.
In May 1993, the Company purchased the business and assets of the Space
Systems Division of ILC Dover, Inc., ("ILC") which were consolidated with
the Company's Oceaneering Space Systems division. This business designs,
develops and fabricates spacecraft hardware and high temperature insulation
products.
In July 1993, the Company purchased Oil Industry Engineering, Inc., a
designer and fabricator of subsea control systems, which now operates as
the Oceaneering Intervention Engineering division ("OIE"). In March 1994,
the Company purchased the operating subsidiaries of Multiflex International
Inc., a manufacturer of subsea control umbilical cables, which now operates
as the Oceaneering Multiflex division ("Multiflex"). Together with the
Company's existing Offshore Production Systems division, these acquisitions
form the basis of the Company's continuing expansion in the Offshore Field
Development business.
The Company intends to pursue a strategy of acquiring, as opportunities
arise, additional assets or businesses, either directly through merger,
consolidation, or purchase or indirectly through joint ventures. The
Company is also applying its skills and technology in further developing
business unrelated to the oil and gas industry and performing services for
the United States and foreign governments and the telecommunications,
aerospace, insurance, marine and environmental remediation industries.
Financial Information About Industry Segments
The table containing revenues, operating income and assets by business
segment for the fiscal years ended March 31, 1995, 1994 and 1993 is
incorporated herein by reference from Note 6 of the Notes to Consolidated
Financial Statements.
Description of Business
OILFIELD MARINE SERVICES
The Company's Oilfield Marine Services business consists of underwater
construction, underwater and above-water inspection and maintenance
(including repair) and survey. All of these services are frequently
provided to customers on an integrated basis.
Underwater Construction, Maintenance and Inspection. The Company provides
underwater support services for all phases of offshore oil and gas
operations - exploration, development and production. During the
exploration phase, the Company provides positioning, placement and
monitoring of subsea exploration equipment, collects data on seafloor
characteristics at proposed drilling sites and assists with the
navigational positioning of drilling rigs. During the development phase,
the Company's underwater crews assist with the installation of production
platforms and the connection of subsea pipelines. During the production
phase, the Company inspects, maintains and repairs offshore platforms,
pipelines and subsea equipment. Such services include testing, monitoring
and replacing cathodic protection devices and inspecting platforms and
pipelines for defects and unsupported spans, which the Company may then be
contracted to repair or replace. Following production, the Company's
salvage crews assist with the removal of the platforms and restoration of
the seabed to its original condition.
The Company's underwater services require the use of a variety of
techniques and equipment. Underwater services are performed by divers or
through the use of advanced work systems such as manned Atmospheric Diving
Systems ("ADSs") and unmanned ROVs. The Company uses ROVs to provide
underwater services at depths or in situations in which diving would be
uneconomical or infeasible. An ROV may be outfitted with manipulators,
sonar, television cameras, specialized tooling packages and other equipment
or features to facilitate the performance of underwater tasks. The Company
currently owns over 70 ROVs.
When a project requires manned intervention, the Company uses divers or ADS
technology. An ADS encloses the operator in a one-atmosphere (surface
pressure) diving suit or manipulator diving bell. The Company operates two
types of ADSs. The first type, the WASP, is a one-man suit equipped with
manipulators to allow the operator to perform gripping and turning actions.
The WASP ADSs work in water depths from the surface to 2,000 feet. The
other type of ADS is a tethered diving bell equipped with a manipulator
arm. The bell carries two operators to water depths of 3,000 feet. The
WASP and the tethered manipulator diving bell have onboard life-support
systems and are capable of providing audiovisual transmissions to the
surface. The Company does not use divers (as distinguished from ADS
operators) to perform functions in water depths greater than 1,000 feet.
Revenues of the Company from all business segments attributable to ADS and
ROV services for the fiscal years ended March 31, 1995, 1994 and 1993 were
$55,000,000, $57,000,000 and $49,000,000 respectively.
Underwater services using all of these techniques are performed from
drilling rigs, platforms, barges and vessels.
Above-Water Inspection Services. Through its Solus Schall division ("Solus
Schall"), the Company offers a wide range of inspection services to
customers required to obtain third party inspections to satisfy contractual
structural specifications and requirements, internal safety standards or
regulatory requirements. Historically, the Company has focused on the
inspection of pipelines and onshore fabrication of offshore facilities for
the oil and gas industry. The Company also conducts onsite inspections of
refineries, nuclear and conventional power stations and operates laboratory
facilities for the testing of aero-engine components and other
manufacturing equipment. Certain of Solus Schall's pipeline inspection
activities are performed through the use of specialized X-ray crawlers,
which travel independently inside pipelines, stopping to perform
radiographic inspection of welds. Solus Schall derives the majority of its
revenues from foreign operations.
In connection with Solus Schall's inspection services (both onshore and
offshore), the Company developed a computer-aided method of managing
inspection data, which consists of a software package that provides a
standardized format for the storage, retrieval and analysis of multi-year
inspection data. Originally developed for platform inspections, the
software has been expanded for use in the inspection of pipelines, vessels
and refinery piping.
Survey Services. The Company provides a range of survey and navigational
positioning services for the oil and gas industry, as well as ocean search
and recovery projects. Applications include surface positioning for rig
moves and the installation of pipelines and platforms, subsea positioning
and acoustics, geophysical surveys, deep tow surveys and pipeline surveys.
OFFSHORE FIELD DEVELOPMENT
Mobile Offshore Production Systems. OPS was established as a group during
fiscal 1989 to provide subsea intervention services and the engineering,
procurement, construction, installation and operation of mobile offshore
production systems ("MOPS") to customers for marginal and remote field
production and extended well testing. OPS has been awarded several
contracts pertaining to MOPS activities and subsea workover and maintenance
needs, including deepwater extended well testing in the Gulf of Mexico and
has served as prime contractor on an extended well testing project in the
North Sea. In December 1990, the Company was awarded its first major MOPS
contract for the provision of an FPSO involving the conversion of a 78,000
dwt tanker into an FPSO for the production, processing, storage and
offloading of oil into shuttle tankers. The unit has been operating
offshore West Africa since December 1991.
Subsea Products. OIE, Multiflex and the Pipeline Repair Systems unit of
the Company form the Subsea Products group which complements the activities
of the OPS group. OIE includes the subsea intervention business previously
carried out by OPS and the subsea control systems business acquired in July
1993. OIE now provides subsea intervention services, design and
fabrication of ROV interface tooling, including ROV replaceable and ROV
operable valves, and design and fabrication of subsea control systems.
In March 1994, the Company acquired the business of Multiflex which has
facilities in Houston, Texas and Edinburgh, Scotland for the production of
subsea control umbilical cables. These cables are used for the remote
operation of subsea installations and equipment and typically incorporate
both electrical and hydraulic control lines.
ADVANCED TECHNOLOGIES
Since fiscal 1986, the Company has provided project management, engineering
services and equipment to non-oilfield customers for applications in harsh
environments. The Company serves government, industrial marine, space and
environmental remediation services markets by using existing assets for new
customers and by extending the use of technology developed in oilfield
operations to new applications. Two separate divisions of Oceaneering -
Oceaneering Technologies ("OTECH") and Oceaneering Space Systems ("OSS") -
perform these services.
Marine. OTECH performs work for customers having specialized requirements
underwater or in other harsh environments. Customers include U.S. and
foreign governments and the telecommunications, aerospace, insurance and
environmental remediation industries. Since 1982, the Company has provided
deep ocean search and recovery services on behalf of the United States
government, including the U.S. Navy and the National Aeronautics and Space
Administration ("NASA"). In other services for the Navy, Oceaneering
provides various engineering and underwater services ranging from aircraft
salvage and recovery operations to inspection and maintenance of the Navy's
fleet of surface ships and submarines. The Company also maintains and
operates deepwater cable lay and maintenance vehicles on behalf of American
Telephone & Telegraph Company.
OTECH operates ROVs that are rated for work in water depths from the
surface to 25,000 feet. In June 1990, the Company purchased an ROV that
has worked in water depths to 14,700 feet and is capable of working in
water depths to 20,000 feet. Assets acquired with Eastport include an ROV
designed for use in water depths to 25,000 feet. The more advanced ROVs
owned by the Company are equipped with lighter umbilical cords containing
optic fibers which allow for improved communications with the surface.
Other specialized equipment owned by the Company includes ROV cable lay and
maintenance equipment and deep tow, side scan sonar systems which are rated
for use in 20,000 feet. One of the Company's deep tow systems has been
used to locate downed aircraft in water depths to 14,700 feet.
Engineering. OSS directs the Company's efforts towards applying undersea
technology and experience in the space industry. The Company has worked
with NASA and NASA subcontractors on a variety of projects including
portable life-support systems, decompression techniques, tools and robotic
systems, and standards and guidelines to ensure robotic compatibility for
space station equipment and payloads. OSS is developing cryogenic life-
support system technology for neutral buoyancy testing and future space
missions. Related life-support technology has been developed for future
use by environmental remediation workers and fire fighters. OSS was
expanded in fiscal 1994 by the purchase of the assets of ILC. ILC had
supported NASA by producing space shuttle crew support equipment, including
the design, development and fabrication of spacecraft extravehicular and
intravehicular hardware and soft goods, air crew life-support equipment,
mechanical and electromechanical devices and high temperature insulation.
These activities have continued, and the Company is providing advanced
refrigeration equipment for use on the International Space Station. The
activities of OSS are substantially dependent on continued government
funding for the nation's space program. OTECH designs and develops
specialized tools and builds ROV systems to customer specifications for use
in deepwater and hazardous environments. It also develops ROVs for the
Company including associated ROV control vans and computer-based control
systems. In April 1990, the Company delivered a remotely operated cable
burial and repair system to a group of international telecommunications
companies, and in fiscal 1992, delivered a second remotely operated cable
burial and repair system for telecommunications use and an ROV system for
salvage work.
MARKETING
Oilfield Marine Services. The Company markets its services primarily to
international and foreign national oil and gas companies. It also provides
services as a subcontractor to companies operating as prime contractors.
Contracts are typically awarded on a competitive bid basis and are for the
most part short-term. See Item 7 - "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and Capital
Resources."
Offshore Field Development. The Company markets both its mobile offshore
production systems and subsea products primarily to international and
foreign national oil and gas companies, utilizing the Company's existing
administrative structure to identify potential business opportunities.
MOPS are offered for extended well testing, early production and
development of marginal fields and prospects in areas lacking pipelines and
processing infrastructure. Contracts are typically awarded on a
competitive basis, generally for periods of one or more years. The Company
owns one MOPS unit, which is currently contracted. Further equipment will
be added as profitable opportunities arise. The Company believes that
Multiflex enables it to identify market opportunities at an earlier stage
as umbilical design is typically part of the initial planning phase in
field development. The Company is able to offer an integrated service
consisting of design, engineering, project management and provision of
hardware.
Advanced Technologies. The Company markets its marine services and related
engineering services to government agencies, major defense contractors,
NASA subcontractors and to telecommunications, construction and other
industrial customers outside the energy sector. The Company also markets
to insurance companies, salvage associations and other customers who have
requirements for specialized operations in deep water. Marketing efforts
in the environmental remediation business are directed towards the
petrochemical industry.
Major Customers. Five principal customers of the Company accounted for
approximately 34%, 36% and 31% of the Company's consolidated revenues in
fiscal 1995, 1994 and 1993, respectively. The Royal Dutch Shell group of
companies accounted for more than 10% of the Company's consolidated
revenues in fiscal 1995, 1994 and 1993. Also see Note 6 of the Notes to
Consolidated Financial Statements.
COMPETITION
The Company's businesses are highly competitive.
Oilfield Marine Services. The Company believes that it is one of five
companies that provides underwater services on a worldwide basis. The
Company competes for contracts with the other four worldwide companies and
with numerous companies operating locally in various areas. Competition
for underwater services historically has been based on the type of
underwater equipment available, location of or ability to deploy such
equipment, quality of service and price. In recent years, price has been
the most important factor in obtaining contracts; however, the ability to
develop improved equipment and techniques and to attract and retain skilled
personnel is also an important competitive factor in the Company's markets.
The number of the Company's competitors is inversely correlated with water
depth, as less sophisticated equipment and technology is required in
shallow water. With respect to projects that require less sophisticated
equipment or diving techniques, small companies have sometimes been able to
bid for contracts at prices uneconomic to the Company.
The Company believes that its ability to provide a wide range of underwater
services, including technological applications in deeper water on a
worldwide basis, should enable it to compete effectively in the oilfield
exploration and development market. As a result of uncertainty and
volatility in oil and gas pricing generally, oil and gas exploration and
development expenditures fluctuate from year to year. In particular,
budgetary approval for more expensive drilling and production in deeper
water or harsh environments, areas in which the Company believes it has a
competitive advantage, may be postponed or suspended. In some areas, the
ability of the Company to obtain contracts depends upon its ability to
charter vessels for use as work platforms. On occasion, the Company will
bid jointly with vessel owners for contracts, and it endeavors to develop
ongoing relations with various vessel owners.
The worldwide inspection market consists of a wide range of inspection and
certification requirements in many industries. Solus Schall competes in
only selected portions of this market. The Company believes that its broad
geographic sales and operational coverage, long history of operations,
technical reputation, application of X-ray crawler pipeline radiography and
accreditation to international quality standards enable it to compete
effectively in its selected inspection services market segments.
In the North Sea and, to a lesser extent, in other areas, oil and gas
companies utilize prequalification procedures that reduce the number of
prospective bidders for their projects. In certain countries political
considerations tend to favor local contractors.
Offshore Field Development. The Company believes that it is well
positioned to compete in the offshore field development market through its
ability to identify and offer optimum solutions, supply equipment, provide
capital on a limited basis and utilize the expertise in associated subsea
technology and offshore construction and operations gained through its
extensive operational experience worldwide. The Company is one of several
companies that offer leased MOPS units. Potential competitors include
companies having underutilized assets such as drilling rigs and tankers,
although access to the capital needed to convert units to MOPS may be a
limiting factor.
Although there are several competitors offering either specialized products
or operating in limited geographic areas, the Company believes that it is
one of two companies who compete on a worldwide basis for the provision of
subsea control umbilical cables.
Advanced Technologies. The Company believes that its specialized ROV
assets and experience in deep water operations give it a competitive
advantage in obtaining contracts in water depths greater than 5,000 feet.
The number of the Company's competitors is inversely correlated with water
depth, due to the advanced technical knowledge and sophisticated equipment
required for deep water operations.
Engineering services is a very broad market with a large number of
competitors. The Company competes in specialized areas in which it can
combine its extensive program management experience, engineering services
and the capability to continue the development of conceptual project
designs into the manufacture of prototype equipment.
The Company also utilizes the administrative structure of the Oilfield
Marine Services business to identify opportunities in foreign countries and
to provide additional local support for non-oil and gas customers.
SEASONALITY, BACKLOG AND RESEARCH AND DEVELOPMENT
A material amount of the Company's revenues is generated by contracts for
marine services in the Gulf of Mexico and North Sea, which are usually
seasonal from April through November. Revenues in the Offshore Field
Development and Advanced Technologies segments are generally not seasonal.
The amounts of backlog orders believed to be firm for Oilfield Marine
Services as of March 31, 1995 and 1994 were $94,000,000 and $69,000,000,
respectively. Of these amounts, $39,000,000 and $28,000,000, respectively,
were not expected to be performed within the fiscal year following such
respective dates. At March 31, 1995 and 1994, the Company had
approximately $27,000,000 and $25,000,000, respectively, in backlog for
Offshore Field Development, all of which was expected to be completed
within the fiscal year following such respective dates. At March 31, 1995
and 1994, the Company had approximately $39,000,000 and $22,000,000,
respectively, in backlog for Advanced Technologies. Of these amounts,
$12,000,000 and none, respectively, were not expected to be performed
within the fiscal year following such respective dates. At March 31, 1995
the Company had approximately $7,000,000 of additional contracted work for
Advanced Technologies which is not funded and is substantially dependent
upon continued government funding for the nation's space program.
No material portion of the Company's business is subject to renegotiation
of profits or termination of contracts by the United States government.
The Company's research and development expenditures were approximately
$3,600,000, $3,700,000 and $6,500,000 during fiscal 1995, 1994 and 1993,
respectively. These amounts do not include, nor is the Company able to
determine, the expenditures by others in connection with joint research
activities in which the Company participated or expenditures by the Company
in connection with research conducted during the course of performing field
operations.
REGULATION
The Company's operations are subject to various types of governmental
regulation. The Company's operations are affected from time to time and in
varying degrees by foreign and domestic political developments and foreign,
federal and local laws and regulations. In particular, oil and gas
production operations and economics are affected by price control, tax,
environmental and other laws relating to the petroleum industry, by changes
in such laws and by constantly changing administrative regulations. Such
developments may directly or indirectly affect the Company's operations and
those of its customers.
Compliance with federal, state and local provisions regulating the
discharge of materials into the environment or relating to the protection
of the environment has not had a material impact on the Company's capital
expenditures, earnings or competitive position.
In connection with its foreign operations, the Company is required in some
countries to obtain licenses or permits in order to bid on contracts or
otherwise to conduct business operations. Some foreign countries require
that the Company enter into a joint venture or similar business arrangement
with local individuals or businesses in order to conduct business.
While not a formal requirement, Oceaneering's quality management systems
are certified to the British Standard BS 5750 Part 2:1987, which is the
equivalent of ISO 9002, covering the full range of subsea and topside
services offered in the United Kingdom. The quality management systems of
both the OIE and Multiflex units of the Subsea Products Group are certified
to ISO 9001 for their products and services.
RISKS AND INSURANCE
The Company's operations are subject to all the risks normally incident to
offshore exploration, development and production, including claims under
U.S. maritime laws. These risks could result in damage to or loss of
property, suspension of operations and injury to or death of personnel.
The Company insures its real and personal property and equipment. The
Company's vessels are insured against damage or loss, including war and
pollution risks. The Company also carries workers' compensation, maritime
employer's liability, general liability, including third party pollution,
and other insurance customary in its businesses. All insurance is carried
at levels of coverage and deductibles which the Company considers
financially prudent. On some contracts, the Company may have certain
exposures for loss or damage to the customer's facilities or for unexpected
weather delays, which the Company may cover by special insurance when it
deems advisable. Due to the very high costs for limited coverage and, in
the Company's opinion, limited exposure, the Company does not carry
professional liability insurance. In some jurisdictions, legal pleadings
in personal injury actions may include a claim for an amount of punitive
damages which may not be covered by insurance.
A significant part of the Company's operations is conducted outside the
United States. For the fiscal years ended March 31, 1995, 1994 and 1993,
foreign operations accounted for 51%, 61% and 66% of the Company's
revenues, respectively.
Foreign operations are subject to additional political and economic
uncertainties, including the possibility of repudiation of contracts and
confiscation of property, fluctuations in currency exchange rates,
limitations on repatriation of earnings and foreign exchange controls.
Typically, the Company is able to limit the currency risks by arranging
compensation in United States dollars or freely convertible currency and,
to the extent possible, limiting acceptance of blocked currency to amounts
which match its expense requirements in local currencies.
Certain of the countries in which the Company operates have enacted
exchange controls to regulate foreign currency exchange. Exchange controls
in some of the countries in which the Company operates provide for
conversion of local currency into foreign currency for payment of debts,
equipment rentals, technology transfer, technical assistance and other fees
or repatriation of capital. Transfers of profits and dividends can be
restricted or limited by exchange controls.
EMPLOYEES
As of March 31, 1995, the Company had approximately 1,900 employees. The
Company's work force varies seasonally and peaks during the summer months.
None of the Company's domestic employees is currently represented by a
labor union. Approximately 6% of the Company's employees are represented
by unions in foreign countries. The Company considers its relations with
its employees to be satisfactory.
Foreign and Domestic Operations and Export Sales
The table presenting revenues, profitability and assets attributable to
each of Oceaneering's geographic areas for the fiscal years 1995, 1994 and
1993 is incorporated herein by reference from Note 6 of the Notes to
Consolidated Financial Statements.
Item 2. PROPERTIES.
See Item 1 - "Business - Description of Business - Oilfield Marine
Services, Offshore Field Development and Advanced Technologies" for a
description of equipment used in providing the Company's services.
Oceaneering maintains office, shop and yard facilities in various parts of
the world. In these locations, the Company typically leases office
facilities to house its administrative and engineering staff, shops
equipped for fabrication, testing, repair and maintenance activities and
warehouses and yard areas for storage and mobilization of equipment en
route to work sites. The largest of such properties is located in Morgan
City, Louisiana and consists of 146,500 total square feet, of which 25,300
square feet are covered office and storage space owned by the Company and
the remainder is leased. The Company owns and leases property in Singapore
of approximately 28,700 square feet, of which 16,200 square feet are owned.
The Company leases 31,000 square feet of office space and 42,800 square
feet of yard area in Aberdeen, Scotland. Other major leased properties
include approximately 24,600 square feet in Dubai, United Arab Emirates,
and 37,000 square feet in Port Harcourt, Nigeria. These properties are
used primarily by the Oilfield Marine Services business segment of the
Company. Leased properties utilized primarily by the Offshore Field
Development segment consist of 53,500 square feet of workshop and office
space in Houston, Texas and manufacturing facilities in Houston, Texas and
Edinburgh, Scotland, of 96,000 square feet and 70,000 square feet,
respectively. In addition, the Company owns manufacturing facilities in
Magnolia, Texas of 65,000 square feet. The Company also leases
approximately 116,000 square feet in Upper Marlboro, Maryland, which
includes 86,000 square feet of offices and workshops and approximately
50,000 square feet of offices and workshops in Houston, Texas, which are
utilized by the Advanced Technologies business segment.
Item 3. LEGAL PROCEEDINGS.
The business of Oceaneering ordinarily results in actions for damages
alleging personal injury under the general maritime laws of the United
States, including the Jones Act, for alleged negligence. The Company
reports actions for personal injury to its insurance carriers and believes
that the settlement or disposition of such suits will not have a material
effect on its financial position or results of operations. The information
set forth under "Commitments and Contingencies - Litigation" in Note 5 of
the Notes to Consolidated Financial Statements is incorporated herein by
reference.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the
fiscal year ended March 31, 1995.
Item 4a. EXECUTIVE OFFICERS OF THE REGISTRANT.
Executive Officers. The following is information with respect to the
executive officers of Oceaneering International, Inc., as of June 1, 1995:
OFFICER EMPLOYEE
NAME AGE POSITIONS SINCE SINCE
John R. Huff 49 Chairman of the Board, 1986 1986
President and Chief Executive
Officer
T. Jay Collins 48 Executive Vice President - 1993 1993
Oilfield Marine Services
Stephen Helburn 48 Senior Vice President - 1984 1982
Asia
F. Richard Frisbie 52 Senior Vice President - 1981 1974
Marketing and Technology
Marvin J. Migura 44 Senior Vice President and 1995 1995
Chief Financial Officer
George R. 47 Vice President, General 1988 1988
Haubenreich, Jr. Counsel and Secretary
Richard V. Chidlow 51 Controller and Chief 1990 1987
Accounting Officer
Each executive officer serves at the discretion of the Chief Executive
Officer and the Board of Directors and is subject to reelection or
reappointment each year after the annual meeting of shareholders.
Oceaneering does not know of any arrangement or understanding between any
of the above persons and any other person or persons pursuant to which he
was selected or appointed as an officer.
Family Relationships. There are no family relationships between any
director or executive officer.
Business Experience. John R. Huff has been a director, President and Chief
Executive Officer of the Company since 1986. He was elected Chairman of
the Board in August 1990. Prior to joining the Company in August 1986, he
served from May 1980 until January 1986 as Chairman and President of
Western Oceanic Inc., the offshore drilling subsidiary of The Western
Company of North America ("Western Oceanic"). From February 1986 through
July 1986, he was Managing Partner of an investment banking group
specializing in the energy industry. He is a director of BJ Services
Company, Triton Energy Corporation and Production Operators Corp.
T. Jay Collins, Executive Vice President, joined the Company in October
1993 as Senior Vice President and Chief Financial Officer. In May 1995, he
was appointed Executive Vice President of the Company's Oilfield Marine
Services business. From 1986 to 1992 he was with Teleco Oilfield Services,
Inc., most recently as Executive Vice President of Finance and
Administration and previously as Senior Vice President of Operations.
Prior to Teleco, he spent twelve years with Sonat, Inc., serving as Senior
Vice President of Finance at Sonat Offshore Drilling and President of
Houston Systems Manufacturing. His operational experience with Sonat
Offshore Drilling includes international management in Venezuela,
Singapore, Egypt and Ivory Coast.
Stephen Helburn, Senior Vice President - Asia, joined the Company in 1982
as General Manager of the Gulf Coast Division and served as Vice
President - Americas Region from 1987 to 1990 and as Senior Vice
President - Worldwide Operations from 1990 to 1995. He has over 20 years
of experience in the underwater services industry. From 1972 to 1978, he
was an engineer with Chicago Bridge & Iron Industries, Inc., ("CBI"), where
he was responsible for a variety of projects including wet welding
development research, project management and construction. From 1979 to
1982, he was manager of the underwater welding division of Seacon Services,
Inc., the offshore subsidiary of CBI.
F. Richard Frisbie, Senior Vice President - Marketing and Technology,
joined the Company in 1984 when Solus Ocean Systems, Inc., ("SOSI") was
acquired. From 1974 to 1984, he held various engineering and management
positions with SOSI and its predecessors. Over the past 20 years, he has
been responsible for various technical developments in remotely operated
underwater vehicle designs and the use of robotics and remotely operated
devices for applications in harsh environments, including nuclear power
plants. He also has previous experience in the aerospace industry.
Marvin J. Migura, Senior Vice President and Chief Financial Officer, joined
the Company in 1995. From 1987 to 1994, he was employed as Senior Vice
President and Chief Financial Officer with Zapata Corporation, a
diversified energy services company. From 1975 to 1987 he held various
financial positions with Zapata Corporation.
George R. Haubenreich, Jr. joined the Company in June 1988 as Vice
President, General Counsel and Secretary. From 1979 until joining the
Company, he held various legal positions with The Coastal Corporation, a
diversified energy company, his last being Senior Staff Counsel. From 1974
until 1979, he was an attorney with Exxon Company, U.S.A.
Richard V. Chidlow joined the Company in January 1987 as Controller for the
Americas Region. From September 1988 until May 1990, he was Controller for
the Europe, Africa and Asia group in Aberdeen, and was appointed Controller
and Chief Accounting Officer in June 1990. From 1975 until joining the
Company he held various positions with Western Oceanic, his last being
Manager of Accounting.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS.
Oceaneering's Common Stock is listed on the New York Stock Exchange (symbol
OII). The following table sets forth, for the fiscal periods indicated,
the high and low closing sales prices for Oceaneering's Common Stock as
reported on the New York Stock Exchange (consolidated transaction reporting
system):
Fiscal 1995 Fiscal 1994
High Low High Low
For the quarter ended:
June 30 $14-1/4 $11 $16 $12-3/4
September 30 14-1/8 12-1/4 17-1/8 13-1/2
December 31 13-1/8 9-3/4 18 12-1/8
March 31 10-5/8 7-7/8 14-1/2 12-1/8
On June 1, 1995, Oceaneering had 804 holders of record of its Common Stock,
par value $0.25. On that date, the closing sales price of the shares, as
quoted on the New York Stock Exchange, was $9-5/8.
Oceaneering has made no Common Stock dividend payments since 1977. Its
present bank credit agreement restricts aggregate dividends to 50% of
cumulative net earnings from December 31, 1994.
Item 6. SELECTED FINANCIAL DATA.
Results of Operations:
Fiscal Years Ended March 31,
1995 1994 1993 1992 1991
(in thousands, except per share
figures)
Revenues $239,936 $229,760 $215,603 $193,582 $168,928
Cost of services 190,772 177,199 157,048 143,117 120,775
Gross margin 49,164 52,561 58,555 50,465 48,153
Selling, general and
administrative
expenses 36,410 31,631 32,903 30,239 29,683
Income from
operations $ 12,754 $ 20,930 $ 25,652 $ 20,226 $18,470
Net income
applicable to
common stock $ 5,496 $ 14,931 $ 19,401 $ 16,115 $16,870
Net income per
common share
equivalent 0.23 0.62 0.82 0.68 0.72
Depreciation and
amortization 16,232 12,196 11,528 8,013 7,731
Capital expenditures 32,057 36,730 11,996 35,312 21,310
Other Financial Data:
As of March 31,
1995 1994 1993 1992 1991
(in thousands, except ratios)
Working capital
ratio 1.44 1.74 1.92 1.65 2.26
Cash and cash
equivalents $12,865 $ 26,486 $ 33,973 $ 23,281 $ 18,364
Working capital 23,106 34,425 42,492 28,556 42,406
Total assets 187,752 171,993 154,524 144,905 120,670
Short-term debt 118 124 96 2,065 1,243
Long-term debt 9,472 171 235 2,311 3,184
Total debt 9,590 295 331 4,376 4,427
Shareholders' equity 115,140 113,353 98,331 86,622 70,111
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Liquidity and Capital Resources
At March 31, 1995, the Company had working capital of $23,100,000, including
$11,400,000 of unrestricted cash. Additionally, as of April 12, 1995 the
Company had $65,600,000 available for borrowings under its new $75,000,000
credit facility and $12,600,000 was unused under its uncommitted line of
credit. See Note 3 of the Notes to Consolidated Financial Statements. The
Company expects to meet its ongoing annual cash requirements out of
operating cash flow; if significant investment opportunities arise, the
Company may use external financing. Current maturities under capital lease
obligations are not material and none of the $9,400,000 of long-term bank
debt is required to be repaid prior to fiscal 1999.
While liquidity and capital resources are considered adequate, the Company's
working capital has declined over the last two years. A higher level of
capital expenditures, including business acquisitions, during a period of
lower cash flows from operations contributed to the decline. The
$23,100,000 of working capital at March 31, 1995 compared to $34,400,000 and
$42,500,000 as of March 31, 1994 and 1993, respectively. Likewise, the
working capital ratio of 1.44 at March 31, 1995 was lower than the ratio of
1.74 and 1.92 at the end of fiscal years 1994 and 1993, respectively.
Capital expenditures for the fiscal years ended March 31, 1995, 1994 and
1993 were $32,100,000, $36,700,000 and $12,000,000, respectively. Capital
expenditures for fiscal 1995 consisted of the purchase and upgrade of a
dynamically positioned offshore support vessel, acquisition of the remainder
of the capital stock of a jointly owned company which owned an offshore
support vessel, upgrades to ROVs and the acquisition of environmental
services equipment. Capital expenditures for fiscal 1994 include the
acquisition costs of the ILC, OIE and Multiflex businesses, additions and
upgrades to the Company's fleet of ROVs and improvements to the FPSO.
Capital expenditures for fiscal 1993 consisted primarily of upgrades to the
Company's fleet of ROVs, including the addition of two new large ROV
systems. There were no material commitments for capital expenditures at the
close of fiscal 1995.
During fiscal 1995 the Company completed the purchase of 1,000,000 shares of
its stock pursuant to a plan approved in June 1994. After re-issue of
shares to meet the Company's regular obligations to the Oceaneering
Retirement Investment Plan and to satisfy share option exercises there was a
balance of 977,363 shares of treasury stock remaining at March 31, 1995.
The purchases were financed primarily by bank borrowings.
The primary industry that the Company serves, oil and gas, is a cyclical
industry and remains volatile, resulting in potentially large fluctuations
in demand for the Company's primary services, which could result in
significant changes in the Company's revenues and profits. Although the oil
and gas industry continues to be the Company's principal market, the Company
also performs services for the United States and foreign governments, and
the telecommunications, aerospace, insurance and environmental remediation
industries. The Company is continually seeking opportunities for business
combinations to improve its market position or expand into related service
lines.
The Company operates primarily as a subcontracting services company under
short-term day-rate contracts. However, the Company owns certain
specialized capital assets, in particular the FPSO, which if not fully
utilized could have a negative effect on cash resources as a result of
continuing fixed operating costs and reduced revenues. The FPSO is
currently operating profitably offshore Angola under a contract which has
been extended for a second year expiring in January 1996.
Because of its significant foreign operations, the Company is exposed to
currency fluctuations and exchange risks. Oceaneering minimizes these risks
primarily through matching, to the extent possible, revenues and expenses in
the various currencies in which it operates. Cumulative translation
adjustments as of March 31, 1995, relate primarily to the Company's
permanent investment in and loans to its United Kingdom subsidiary. See
Item 1 - "Business - Description of Business - Risks and Insurance."
Inflation has not had a material effect on the Company in the past two years
and no such effect is expected in the near future.
Results of Operations
Revenues for fiscal 1995 were $239,936,000 as compared to $229,760,000 and
$215,603,000 for fiscal 1994 and 1993, respectively. Gross margin was 20%
for fiscal 1995, compared with 23% and 27% for fiscal 1994 and 1993,
respectively. Net income in fiscal 1995, 1994 and 1993 was $5,496,000,
$14,931,000 and $19,401,000, respectively.
Information on the Company's business segments is shown in Note 6 of the
Notes to Consolidated Financial Statements.
Oilfield Marine Services. Historically, a major part of the Company's
revenues, operating income and cash flow had been generated by the oilfield
marine services segment of its business. In fiscal 1995, however, revenues
for this segment continued to decline and the operations resulted in a loss
for the year. Operating cash flow for fiscal 1995 from oilfield marine
services remained positive and the Company increased its capital spending
during the year with the intent of enhancing future operating results. The
segment's capital expenditures consisted primarily of the acquisition and
upgrade of a dynamically positioned offshore support vessel. Capital
expenditure requirements are related mainly to replacement and upgrade of
its existing equipment and for equipment purchased to service specific
contracts, although the Company does add selected assets in existing service
lines as opportunities arise. The table below sets out revenues and
profitability for this segment for fiscal 1995, 1994 and 1993.
For the Years Ended March 31,
1995 1994 1993
(in thousands, except percentages)
Revenues $106,294 $122,625 $144,790
Gross Margins 19,872 31,355 38,021
Gross Margin % 19% 26% 26%
Operating Margins (2,485) 9,194 16,012
Operating Margin % (2)% 7% 11%
Revenues and margins declined in fiscal 1995 compared to fiscal 1994 as a
result of reduced demand principally in the North Sea and West Africa
operating areas. In addition, gross margins were negatively impacted in
fiscal 1995 by an unfavorable arbitration ruling relating to a contract
executed in fiscal 1991 and difficulties experienced in collection of the
amounts due under a foreign contract.
Revenues and margins for fiscal 1994 decreased from fiscal 1993 reflecting
reduced demand in all major operating areas. Lower oil prices and resulting
oil company project delays contributed to this decline.
Gross margin percentage in West Africa during fiscal 1994 was lower than for
fiscal 1993 reflecting increased competitive pressures. This decline was
offset by improved performance from ROV operations and total gross margin
percentage for this segment for fiscal 1994 was maintained at the same
percentage level as the prior year.
Offshore Field Development. This segment includes FPSO operations, other
MOPS related work for customers requiring engineering, design and project
management services and subsea products.
The table below sets out revenues and profitability for this segment for
fiscal 1995, 1994 and 1993.
For the Years Ended March 31,
1995 1994 1993
(in thousands, except percentages)
Revenues $62,918 $37,121 $17,580
Gross Margins 13,726 4,432 6,326
Gross Margin % 22% 12% 36%
Operating Margins 6,676 1,191 3,031
Operating Margin % 11% 3% 17%
Revenue and gross margins for the Offshore Field Development segment for
fiscal 1995 were higher than for fiscal 1994 as a result of the contribution
of Multiflex which was acquired in March 1994, increased activity in the OIE
division and a full year of profitable FPSO operations. The FPSO contract
was extended for a second year expiring in January 1996.
Revenue and gross margins for the Offshore Field Development segment for
fiscal 1994 were negatively impacted by the operations of the FPSO which was
contracted on a month to month basis for the first two quarters at rates
which were sufficient only to cover cash expenses. From the fourth quarter
of fiscal 1994 the FPSO operated under a contract providing substantially
higher rates than its previous contract. MOPS revenues and margins for
fiscal 1994 were favorably impacted by a large project which the Company
completed in the North Sea; the Company did not have any similar contracts
in fiscal 1995.
Results for the FPSO for fiscal 1993 reflect the terms of the original
contract up to the date of termination on December 10, 1992; the FPSO
continued to operate under another contract at a substantially reduced rate
that generated lower revenues, margins and profits for the remainder of the
fiscal year. Revenues from the FPSO for fiscal 1995, 1994 and 1993 were
$16,685,000, $10,405,000 and $11,649,000, respectively. Gross margins from
the FPSO for fiscal 1995, 1994 and 1993 were $8,717,000, $2,074,000 and
$5,291,000, respectively. For any period of time that the FPSO is not
contracted or contracted at reduced rates, there will be a negative impact
on the Company's revenues, margins and earnings.
Expansion of this business will require access to additional assets suitable
for MOPS applications which may be accomplished by outright purchase,
leasing or other financing arrangement. The Company expects to continue to
invest in other MOPS assets as profitable opportunities arise. Funds for
such investments are available from cash flows from operations, existing
cash or credit facilities.
Advanced Technologies. The table below sets out revenues and profitability
for this segment for fiscal 1995, 1994 and 1993.
For the Years Ended March 31,
1995 1994 1993
(in thousands, except percentages)
Revenues $70,724 $70,014 $53,233
Gross Margins 15,566 16,774 14,208
Gross Margin % 22% 24% 27%
Operating Margins 8,563 10,545 6,609
Operating Margin % 12% 15% 12%
Revenues for fiscal 1995 were at the same level as for fiscal 1994. Gross
margins decreased as a result of lower demand for engineering services and
costs associated with entry into the environmental services business.
Revenues for fiscal 1994 improved over fiscal 1993 primarily as a result of
the contribution from the ILC acquisition which was finalized in May 1993.
Demand for ROV services from non-oilfield customers remained firm in fiscal
1994 compared to fiscal 1993; revenues in other areas were at or below the
prior year.
Gross margins for this segment decreased to 24% in fiscal 1994 from 27% in
fiscal 1993. Increased revenues generated by the ILC acquisition were at
lower margins primarily due to the higher level of subcontract work in
certain contracts. This was partially offset by higher margins earned on
engineering work in fiscal 1994 compared with the prior year.
Other. Selling, general and administrative expenses were $36,410,000 in
fiscal 1995 compared to $31,631,000 in fiscal 1994 and $32,903,000 in fiscal
1993. Fiscal 1995 reflects the addition of the Multiflex operations and
includes $500,000 of nonrecurring cost related to the consolidation of
operational bases in Scotland. Fiscal 1993 includes $1,200,000 of
nonrecurring costs incurred in connection with the acquisition of Eastport.
The Company's effective tax rate increased during fiscal 1995 compared to
fiscal 1994 as a result of an increase in the amount of pre-tax income
subject to taxing jurisdictions with higher effective tax rates, primarily
the United States, and losses in fiscal 1995 in areas, primarily the North
Sea, where the Company derives no tax benefit as it already has net
operating loss carryforwards.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
In this report, the consolidated financial statements and supplementary data
of the Company appear in Part IV, Item 14 and are hereby incorporated by
reference. See Index to Financial Statements and Schedules.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information with respect to the directors and nominees for election to
the Board of Directors of Oceaneering International, Inc., is incorporated
by reference from Oceaneering International, Inc.'s definitive proxy
statement to be filed on or before July 31, 1995, pursuant to Regulation 14A
under the Securities Exchange Act of 1934. The information with respect to
the executive officers of Oceaneering International, Inc., is provided under
Item 4a of Part I of this Annual Report on Form 10-K.
Item 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is incorporated by reference from the
proxy statement described in Item 10 above.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by Item 12 is incorporated by reference from the
proxy statement described in Item 10 above.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 13 is incorporated by reference from the
proxy statement described in Item 10 above.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this report.
1. Financial Statements.
(i) Report of Independent Public Accountants
(ii) Consolidated Balance Sheets
(iii) Consolidated Statements of Income
(iv) Consolidated Statements of Cash Flows
(v) Consolidated Statements of Shareholders' Equity
(vi) Notes to Consolidated Financial Statements
2. Exhibits:
Registration
or File Form or Exhibit
Exhibit Number Report Date Number
3 Articles of Incorporation
and By-laws
*3.01 Certificate of Incorporation,
as amended 0-8418 10-K March 1988 3(a)
*3.02 By-laws, as amended 0-8418 10-K March 1987 3(b)
*3.03 Amendment to Certificate
of Incorporation 33-36872 S-8 Sept. 1990 4(b)
*3.04 Amendment to By-laws 0-8418 10-K March 1991 3(d)
*3.05 Amendment to By-laws 1-10945 8-K Nov. 1992 2
4 Instruments defining the rights
of security holders, including
indentures
*4.01 Specimen of Common Stock
Certificate 1-10945 10-K March 1993 4(a)
*4.02 Interest Rate and Currency
Exchange Agreement dated
July 29, 1991 0-8418 10-Q Sept. 1991 4(a)
*4.03 Shareholder Rights Agreement
dated November 20, 1992 1-10945 8-K Nov. 1992 1
4.04 Bank Credit Agreement dated April 12, 1995
10 Material contracts
*10.01 1981 Incentive Stock Option
Plan, as amended 2-80506 S-8 Sept. 1987 28(e)
*10.02 Oceaneering Retirement
Investment Plan, as amended 2-77451 S-8 Oct. 1985 4(f)
*10.03 Employment Agreement dated
August 15, 1986 between
John R. Huff and Registrant 0-8418 10-K March 1987 10(l)
*10.04 1987 Incentive and Non-
Qualified Stock Option Plan 33-16469 S-1 Sept. 1987 10(o)
*10.05 Oceaneering International, Inc.
Special Incentive Plan 33-16469 S-1 Sept. 1987 10(n)
*10.06 Senior Executive Severance
Plan, as amended 0-8418 10-K March 1989 10(k)
*10.07 Supplemental Senior Executive
Severance Agreements, as
amended 0-8418 10-K March 1989 10(l)
10.08 Oceaneering International, Inc.
Executive Retirement Plan,
as amended
*10.09 Share Purchase Agreement
related to the purchase of
Sonsub Limited 0-8418 8-K Jan. 1990 2
*10.10 1990 Long-Term Incentive Plan 33-36872 S-8 Sept. 1990 4(f)
*10.11 1990 Nonemployee Directors
Stock Option Plan 33-36872 S-8 Sept. 1990 4(g)
*10.12 Indemnification Agreement
between Registrant and its
Directors 0-8418 10-Q Sept. 1991 10(a)
*10.13 1991 Executive Incentive
Agreements 0-8418 10-K March 1992 10(p)
10.14 Restricted Stock Award
Agreement
*10.15 Restricted Stock Award 1-10945 10-K March 1994 10(q)
Incentive Agreements
10.16 Bank Uncommitted Credit Line
Agreement dated March 31, 1995
10.17 1995 Bonus Award Plan
21 Subsidiaries of the Registrant
23 Consent of Independent Public
Accountants
24 Powers of Attorney
27 Financial Data Schedule
* Indicates exhibit previously filed with the Securities and Exchange
Commission as indicated and incorporated herein by reference.
(b) Reports on Form 8-K.
The registrant filed no reports on Form 8-K during the last quarter
of the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
OCEANEERING INTERNATIONAL, INC.
Date: June 21, 1995 By: //s//JOHN R. HUFF
John R. Huff
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
//s// JOHN R. HUFF President, Principal June 21, 1995
John R. Huff Executive Officer, Director
//s// MARVIN J. MIGURA Senior Vice President, June 21, 1995
Marvin J. Migura Principal Financial Officer
//s// RICHARD V. CHIDLOW Controller, Principal June 21, 1995
Richard V. Chidlow Accounting Officer
GORDON M. ANDERSON* Director
CHARLES B. EVANS* Director
DAVID S. HOOKER* Director
D. MICHAEL HUGHES* Director
*By: //s// GEORGE R. HAUBENREICH, JR. June 21, 1995
George R. Haubenreich, Jr.
Attorney-in-Fact <PAGE>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Index to Financial Statements
Report of Independent Public Accountants
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Consolidated Statements of Shareholders' Equity
Notes to Consolidated Financial Statements
Selected Quarterly Financial Data
Index to Schedules
Schedules have been omitted because of the absence of the condition under
which they are required or because the required information is included in
the financial statements or related footnotes thereto.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Oceaneering International, Inc.:
We have audited the accompanying consolidated balance sheets of Oceaneering
International, Inc. (a Delaware corporation) and subsidiaries as of March
31, 1995 and 1994, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the
period ended March 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Oceaneering
International, Inc. and subsidiaries as of March 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the three
years in the period ended March 31, 1995 in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
May 18, 1995
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
March 31, 1995 March 31, 1994
CURRENT ASSETS:
Cash and cash equivalents $ 12,865 $ 26,486
Accounts receivable, net of
allowances for doubtful accounts
of $1,238 and $1,023 58,360 51,563
Prepaid expenses and other 4,613 2,764
Total current assets 75,838 80,813
PROPERTY AND EQUIPMENT, at cost:
Marine services equipment 175,528 136,799
Mobile offshore production equipment 24,694 24,464
Other 28,648 25,658
228,870 186,921
Less accumulated depreciation 134,515 114,153
Net property and equipment 94,355 72,768
INVESTMENTS AND OTHER ASSETS:
Goodwill, net of amortization of
$1,546 and $576 13,051 14,021
Other 4,508 4,391
TOTAL ASSETS $187,752 $171,993
See Notes to Consolidated Financial Statements
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 1995 March 31, 1994
CURRENT LIABILITIES:
Accounts payable $ 15,110 $ 13,773
Accrued liabilities 29,870 25,808
Income taxes payable 7,634 6,683
Current portion of long-term debt 118 124
Total current liabilities 52,732 46,388
LONG-TERM DEBT 9,472 171
OTHER LONG-TERM LIABILITIES 9,507 10,912
MINORITY INTERESTS 901 1,169
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common Stock, par value $0.25;
90,000,000 shares authorized;
24,017,046 and 23,995,796
shares issued 6,004 5,999
Additional paid-in capital 80,800 80,062
Treasury stock, 977,363 shares at cost (8,596) --
Retained Earnings 44,199 38,703
Cumulative translation adjustments (7,267) (11,411)
Total shareholders' equity 115,140 113,353
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $187,752 $171,993
See Notes to Consolidated Financial Statements
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data)
For the Years Ended March 31,
1995 1994 1993
REVENUES $239,936 $229,760 $215,603
COST OF SERVICES 190,772 177,199 157,048
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 36,410 31,631 32,903
Income from operations 12,754 20,930 25,652
INTEREST INCOME 547 831 1,104
INTEREST EXPENSE (695) (951) (1,353)
OTHER INCOME (EXPENSE), NET (383) 48 (21)
MINORITY INTERESTS 287 (99) (225)
Income before income taxes 12,510 20,759 25,157
PROVISION FOR INCOME TAXES (7,014) (5,828) (5,756)
NET INCOME $ 5,496 $ 14,931 $ 19,401
NET INCOME PER COMMON SHARE
EQUIVALEN $ 0.23 $ 0.62 $ 0.82
See Notes to Consolidated Financial Statements
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Years Ended
March 31,
1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,496 $14,931 $19,401
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 16,232 12,196 11,528
Currency translation adjustments
and other 1,221 (174) (2,463)
Decrease (increase) in accounts
receivable (6,797) 2,601 (4,696)
Decrease (increase) in prepaid
expenses and other current assets (1,849) 2,433 (1,034)
Decrease (increase) in other assets (1,986) (41) 161
Increase (decrease) in accounts
payable 1,331 (4,048) 4,176
Increase (decrease) in accrued
liabilities 4,062 (1,840) (1,116)
Increase in income taxes payable 951 265 1,628
Increase (decrease) in other long-
term liabilities (1,673) 1,564 (2,500)
Total adjustments to net income 11,492 12,956 5,684
NET CASH PROVIDED BY OPERATING ACTIVITIES 16,988 27,887 25,085
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (32,057) (15,394)(11,996)
Business acquisitions, net of cash
acquired -- (21,336) --
Other investing activities -- 528 244
NET CASH USED IN INVESTING ACTIVITIES (32,057) (36,202)(11,752)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term bank
borrowings 9,400 -- --
Payments on revolving
note payable -- -- (1,314)
Payments on long-term debt (99) (96) (2,731)
Proceeds from issuance of common stock 743 924 1,404
Purchases of treasury stock (8,596) -- --
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 1,448 828 (2,641)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (13,621) (7,487) 10,692
CASH AND CASH EQUIVALENTS - BEGINNING OF
YEAR 26,486 33,973 23,281
CASH AND CASH EQUIVALENTS - END OF YEAR $12,865 $26,486 $33,973
See Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended March 31, 1995, 1994 and 1993
(in thousands)
Additional Cumulative
Common Stock Issued Paid-in Treasury Retained Translation
Shares Amount Capital Stock Earnings Adjustment Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1992 23,335 $ 5,834 $77,343 -- $ 4,237 $ (792) $86,622
Net Income -- -- -- -- 19,401 -- 19,401
Pooling adjustment -- -- -- -- 134 -- 134
Translation adjustments -- -- -- -- -- (9,463) (9,463)
Stock options and warrants
exercised 238 59 1,345 -- -- -- 1,404
Tax benefit from exercise of
options -- -- 233 -- -- -- 233
Balance, March 31, 1993 23,573 5,893 78,921 -- 23,772 (10,255) 98,331
Net Income -- -- -- -- 14,931 -- 14,931
Translation adjustments -- -- -- -- -- (1,156) (1,156)
Stock options exercised 84 21 519 -- -- -- 540
Restricted Stock issued 339 85 299 -- -- -- 384
Tax benefit from exercise of
options -- -- 323 -- -- -- 323
Balance, March 31, 1994 23,996 5,999 80,062 -- 38,703 (11,411) 113,353
Net Income -- -- -- -- 5,496 -- 5,496
Translation adjustments -- -- -- -- -- 4,144 4,144
Stock options exercised 21 5 104 -- -- -- 109
Restricted Stock plan
compensation expense -- -- 634 -- -- -- 634
Treasury stock purchase of
977 shares at cost -- -- -- (8,596) -- -- (8,596)
Balance, March 31, 1995 24,017 $ 6,004 $80,800 $(8,596) $44,199 $(7,267) $115,140
See Notes to Consolidated Financial Statements
</TABLE>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF MAJOR ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Oceaneering
International, Inc., (the "Company") and its 50% or more owned and
controlled subsidiaries. The Company accounts for its investments in
unconsolidated affiliated companies under the equity method. All
significant intercompany accounts and transactions have been eliminated.
In August 1992, the Company exchanged 807,501 shares of its Common Stock
for all of the outstanding shares of Eastport International, Inc.,
("Eastport") in a transaction accounted for as a pooling of interests.
Eastport was a designer, developer and operator of advanced robotic systems
and Remotely Operated Vehicles ("ROVs") specializing in the non-oilfield
market.
In May 1993, the Company purchased the business and assets of the Space
Systems Division of ILC Dover, Inc. ("ILC"). ILC designs, develops and
fabricates spacecraft hardware and high temperature insulation products.
In July 1993, the Company purchased Oil Industry Engineering, Inc., a
designer and fabricator of subsea control systems and in March 1994, the
Company purchased the operating subsidiaries of Multiflex International
Inc., a manufacturer of subsea control umbilical cables. Total cost of the
three acquisitions was $21,336,000 cash. The acquisitions were accounted
for under the purchase method and the operating results of the businesses
acquired are included in the consolidated financial statements of the
Company from the respective dates of acquisition. The costs of acquisition
have been allocated on the basis of the estimated fair value of the assets
acquired and liabilities assumed. This allocation resulted in goodwill of
approximately $14,000,000. Had these acquisitions taken place at the
beginning of fiscal 1993, unaudited pro forma revenues, net income, and net
income per common share equivalent of the Company for fiscal 1994 and 1993
would have been $259,282,000, $15,400,000 and $0.64, and $256,465,000,
$19,626,000 and $0.83, respectively. The pro forma information has been
prepared for comparative purposes only and is not necessarily indicative of
the operating results that would have occurred had the acquisitions taken
place at the beginning of fiscal 1993 nor are they necessarily
representative of operating results which may occur in the future.
Cash and Cash Equivalents
Cash and cash equivalents include demand deposits and highly liquid
investments with original maturities of three months or fewer from the date
of the investment. Approximately $1,500,000 and $1,300,000 of the
Company's cash at March 31, 1995 and 1994, respectively, was restricted and
is deposited as security in interest bearing accounts in connection with
legal proceedings.
Depreciation and Amortization
The Company provides for depreciation of Property and Equipment primarily
on the straight-line method over estimated useful lives of 3 to 12 years
for marine services equipment, 10 years for mobile offshore production
equipment and 3 to 25 years for buildings, improvements and other
equipment.
The costs of repair and maintenance of Property and Equipment are charged
to operations as incurred, while the costs of improvements are capitalized.
Upon the disposition of property and equipment, the related cost and
accumulated depreciation accounts are relieved and the resulting gain or
loss is included in other income (expense).
Goodwill arising from business acquisitions is amortized on the straight-
line method over 15 years.
Revenue Recognition
Substantially all of the Company's revenue is derived from billings under
contracts that provide for specific time, material and equipment charges,
which are accrued daily and billed monthly. Significant lump-sum contracts
are accounted for using the percentage-of-completion method. Revenues on
contracts with a substantial element of research and development are
recognized to the extent of cost until such time as the probable final
profitability can be determined. Anticipated losses on contracts, if any,
are recorded in the period that such losses are first determinable.
Income Taxes
Effective fiscal 1994, the Company adopted Financial Accounting Standards
Board standard number ("SFAS") 109, "Accounting for Income Taxes", which
supersedes SFAS 96. The cumulative impact of the adoption of this standard
was not material.
Foreign Currency Translation
All balance sheet asset and liability accounts of foreign subsidiaries are
translated into U.S. dollars at the rate of exchange in effect at the
balance sheet date. All income statement accounts are translated at
average exchange rates during the year. Adjustments arising from these
translations are accumulated in a separate account within Shareholders'
Equity.
Net Income Per Common Share Equivalent
Net income per common share equivalent has been computed on the basis of
the weighted average number of shares of Common Stock and Common Share
Equivalents outstanding in each fiscal year (24,047,000, 24,069,000 and
23,788,000 in 1995, 1994 and 1993, respectively).
Other Long-Term Liabilities
Other long-term liabilities include $6,566,000 and $7,289,000 at March 31,
1995 and 1994, respectively, for self-insurance reserves not expected to be
paid out in the following fiscal year and $2,441,000 and $2,623,000,
respectively, for deferred income taxes.
Reclassifications
Certain amounts from prior years have been reclassified to conform with the
current year presentation.
2. INCOME TAXES
The Company and its domestic subsidiaries, including acquired companies
from the respective dates of acquisition, file a consolidated federal
income tax return. The Company conducts its operations in a number of
foreign locations which have varying codes and regulations with regard to
income and other taxes, some of which are subject to interpretation.
Foreign income taxes are provided at the appropriate tax rates in
accordance with the Company's interpretation of the respective tax
regulations after review and consultation with its internal tax department,
tax consultants and, in some cases, legal counsel in the various foreign
locations. Management believes that adequate provisions have been made for
all taxes which will ultimately be payable.
Deferred income taxes are provided for temporary differences in the
recognition of income and expenses for financial and tax reporting
purposes. The Company's policy is to provide for deferred U.S. income
taxes on unrepatriated foreign income only to the extent such income is not
to be invested indefinitely in the related foreign entity.
The provision for income taxes for the year ended March 31, 1995, includes
a provision for U.S. federal and state income taxes of $5,080,000 and
foreign taxes of $1,934,000. The provision for income taxes for the year
ended March 31, 1994, included a provision for U.S. federal and state
income taxes of $3,120,000 and foreign taxes of $2,708,000. The provision
for income taxes for the year ended March 31, 1993, included a provision
for U.S. federal and state income taxes of $2,248,000 and foreign taxes of
$3,508,000. As of March 31, 1995, the Company had loss carryforwards of
approximately $18,000,000 which are available to reduce future United
Kingdom Corporation Tax which would otherwise be payable.
The provision for income taxes for the year ended March 31, 1995, consists
of $9,021,000 for current taxes less a $2,007,000 change in net deferred
taxes. The provisions for the years ended March 31, 1994 and 1993
consisted primarily of current taxes.
Cash taxes paid were $8,070,000, $5,785,000 and $4,949,000 for the fiscal
years ended March 31, 1995, 1994 and 1993, respectively.
As of March 31, 1995, the Company's worldwide deferred tax assets and
liabilities and related valuation reserves were as follows:
March 31,
1995 1994
(in thousands)
Gross deferred tax assets $10,807 $10,774
Valuation allowance (7,002) (8,794)
Net deferred tax assets $3,805 $1,980
Deferred tax liabilities $2,441 $2,623
The Company's deferred tax assets consist primarily of net operating loss
carryforwards ("NOLs") in its United Kingdom subsidiary; these NOLs have no
expiration date. Deferred tax liabilities consist primarily of
depreciation and amortization.
The Company has established a valuation allowance for deferred tax assets
after taking into account factors that are likely to affect the Company's
ability to utilize the tax assets. In particular, the Company conducts its
business through several foreign subsidiaries and, although the Company
expects its consolidated operations to be profitable, there is no assurance
that profits will be earned in entities or jurisdictions which have NOLs
available. Since April 1, 1994, changes in the valuation allowance
primarily relate to the expected utilization of foreign NOLs and
realization of foreign tax credits.
Income taxes, computed by applying the federal statutory income tax rate to
income before income taxes and minority interests, are reconciled to the
actual provisions for income taxes as follows:
For the Years Ended
March 31,
1995 1994 1993
(in thousands)
Computed U.S. statutory expense $ 4,278 $ 7,300 $ 8,630
Utilization of foreign
NOL carryforwards -- -- (3,166)
Change in valuation allowances 333 (1,723) --
Withholding taxes and foreign
earnings taxed at rates different
from U.S. statutory rates and other, net 2,403 251 292
Total provision for income taxes $ 7,014 $ 5,828 $ 5,756
3. DEBT
Long-term debt: March 31,
1995 1994
(in thousands)
Bank debt $9,400 $ --
Capital lease obligations 190 295
Less: Current portion (118) (124)
Total long-term debt $9,472 $ 171
Maturity Schedule
(in thousands)
Fiscal Year
1996 $ 118
1997 72
1998 --
1999 4,700
2000 4,700
Credit Agreement
On April 12, 1995 the Company and a group of banks signed a new credit
agreement in the amount of $75,000,000 (the "Credit Agreement"). Existing
short-term bank borrowings of $9,400,000 were subsequently refinanced under
the Credit Agreement at an interest rate of 6.75% per annum. Consequently,
$65,600,000 of the $75,000,000 was available at that date. There is a
commitment fee of .225% per annum on the unused portion of the Credit
Agreement.
Under the Credit Agreement, the Company has the option to borrow dollars
through Euro-Dollar loans at the London Interbank Offered Rate ("LIBOR")
plus 5/8%, certificate of deposit loans at the reserve adjusted certificate
of deposit rate plus 3/4%, or base rate loans at the agent bank's prime
rate. The agreement contains certain restrictive covenants relative to
consolidated debt, tangible net worth and fixed charge coverage. Loans
under the agreement are unsecured. Under the agreement, dividends may not
exceed 50% of cumulative consolidated net income from December 31, 1994.
The Company has an uncommitted credit agreement dated March 31, 1995 with a
bank in the amount of $20,000,000 for use for borrowings and letters of
credit (the "Uncommitted Line"). As of March 31, 1995, the Company had
approximately $7,400,000 in letters of credit outstanding issued through
credit lines available under a prior loan agreement. These were included
within the Uncommitted Line on April 12, 1995, and the prior agreement was
terminated.
Effective October 1, 1991, the Company entered into an interest rate swap
agreement to reduce the impact of changes in interest rates under a
previous term loan facility. The notional amount declines by $1,500,000 on
the first business day of each calendar quarter and was $10,500,000 at
March 31, 1995. The fixed rate in the swap is 7.9% and the floating rate
is the three-month LIBOR. The differential to be paid or received is
recognized as interest expense or income on a current basis.
Cash interest payments of $889,000, $1,136,000 and $1,247,000 were made in
fiscal 1995, 1994 and 1993, respectively.
4. EMPLOYEE BENEFIT PLANS
Retirement Investment Plans
The Company currently has four separate employee retirement investment
plans which cover its full-time employees. The Oceaneering Retirement
Investment Plan is a deferred compensation plan in which domestic employees
may participate by deferring a portion of their gross monthly salary and
directing the Company to contribute the deferred amount to the plan. The
Company matches a portion of the deferred compensation. The Company's
contributions to the plan were $992,000, $807,000 and $409,000 for the plan
years ended December 31, 1994, 1993 and 1992, respectively. When acquired,
Eastport had a defined contribution plan covering substantially all its
employees. Eastport's contributions to its plan were $17,000 for the six-
month period ended December 31, 1992, and $285,000 for the plan year ended
June 30, 1992. The Eastport plan was merged with the Oceaneering
Retirement Investment Plan on December 31, 1992. The second plan is the
Oceaneering International Services Pension Scheme for employees in the
United Kingdom. The Company provides funding for this plan based on
actuarial calculations. The plan assets exceed vested benefits and are not
material to the assets of the Company. Company contributions were $67,000,
$85,000 and $105,000 for the years ended March 31, 1995, 1994 and 1993,
respectively. There have been no new participants in this plan since March
1990. The third plan is the Personal Pension Plan for employees in the
United Kingdom. Under this plan, which became effective May 1991,
employees may contribute a portion of their gross monthly salary. The
Company also contributes a portion of the participants' gross monthly
salary. Company contributions to this plan for the years ended March 31,
1995, 1994 and 1993, were $108,000, $62,000 and $57,000, respectively. The
fourth plan, the Oceaneering International, Inc. Executive Retirement Plan,
covers selected key management employees and executives of the Company as
approved by the Compensation Committee of the Company's Board of Directors
("Compensation Committee"). The participants in this plan may contribute a
portion of their gross monthly salary and the Company matches up to 100% of
that contribution. Company expense related to the plan during the years
ended March 31, 1995, 1994 and 1993, was $287,000, $220,000 and $221,000,
respectively.
Incentive and Stock Option Plans
The Company has in effect shareholder approved nonemployee director stock
option and long-term incentive plans. Under the 1990 Nonemployee Director
Stock Option Plan ("Nonemployee Director Plan"), options to purchase up to
an aggregate of 100,000 shares of the Company's Common Stock may be granted
to nonemployee directors of the Company. Each director of the Company is
automatically granted an option to purchase 2,000 shares of Common Stock on
the date the director becomes a nonemployee director of the Company and
each year thereafter at an exercise price per share equal to 50% of the
fair market value of a share of Common Stock on the date the option is
granted. The options granted are not exercisable until the later to occur
of six months from the date of grant or the date the optionee has completed
two years of service as a director of the Company. Expense is recorded
related to these options which have an exercise price less than fair market
value on the date the option is granted. Expense recorded in fiscal 1995,
1994 and 1993 was not material.
Under the 1990 Long-Term Incentive Plan ("Incentive Plan"), a total of
1,600,000 shares of Common Stock, or cash equivalents of Common Stock, are
available for awards to employees and other persons (excluding nonemployee
directors) having an important business relationship with the Company and
its subsidiaries. The Incentive Plan is administered by the Compensation
Committee, which determines the type or types of award(s) to be made to
each participant and sets forth in the related award agreement the terms,
conditions and limitations applicable to each award. The Compensation
Committee may grant stock options, stock appreciation rights, stock and
cash awards. Options are normally granted at not less than fair market
value of the optioned shares at the date of grant. Options outstanding are
exercisable over a period up to ten years, vesting at the rate of 20% per
year for three years beginning one year after grant and 40% at the end of
the fourth year. In fiscal 1992, the Compensation Committee granted to
certain key executives of the Company contingent cash incentive awards
totaling a maximum aggregate amount of $2,000,000 payable over a three-year
period, conditional upon the achievement of certain performance goals for
the Company's Common Stock and continued employment of participants. In
September 1992, the performance requirement for the Company's Common Stock
was met; in September 1993 and September 1994, respectively, the second and
third of four equal installments were paid to the participants. After
taking into account amounts paid and forfeitures, the maximum amount of the
awards remaining to be paid is $412,500, conditional upon continued
employment of participants. During fiscal 1994, the Compensation Committee
granted to certain key executives of the Company restricted Common Stock of
the Company designed (i) to make a material portion of their potential
future compensation contingent on performance of the Company's Common Stock
and (ii) to retain their employ with the Company. These grants are subject
to earning requirements on the basis of a percentage change between the
price of the Common Stock of the Company versus the average of the Common
Stock price of a peer group of companies over a three-year time period. Up
to one-third of the total grant may be earned each year depending upon the
cumulative Company's Common Stock performance, with any amount earned
subject to vesting in four equal installments over three years conditional
upon continued employment. At the time of each vesting, a participant
receives a tax assistance payment which the participant must reimburse the
Company if the vested Common Stock is sold by the participant within three
years after the vesting date. In June 1994, the entire one-third of the
total grant was earned, subject to vesting requirements. At March 31,
1995, a total of 28,250 shares was vested and a total of 310,750 shares of
restricted stock was outstanding under these grants, of which 84,750 shares
were earned, subject to vesting requirements.
The Company also has in effect three other stock option plans under which
options to purchase have been issued to employees and other persons
affiliated with the Company. Since approval of the Incentive Plan, no
further grants or awards under these three stock option plans have been
made or can be made or granted. All of these stock option plans are
administered by the Compensation Committee. Options were normally granted
at not less than the fair market value of the optioned shares at the date
of grant.
Options outstanding, under these three plans which were granted
periodically from May 1988 to December 1992, are normally exercisable over
a five-year or ten-year term with vesting at the rate of 20% per year for
three years beginning one year after the date of grant and 40% at the end
of the fourth year. Options issued under one of these plans, the 1987
Special Incentive Plan, are exercisable in 20% increments on each of the
first five anniversaries of the date of grant.
During fiscal 1995, under the Incentive Plan, options to purchase 408,500
shares were granted at prices ranging from $6.5625 to $12.0625. At March
31, 1995, options to purchase 1,422,080 shares at prices ranging from $4.00
to $16.00 were outstanding and options to purchase 671,130 shares at prices
ranging from $4.00 to $16.00 were exercisable. At March 31, 1995, there
were 294,150 shares under the plans available for grant, of which 232,150
could be used for awarding stock options, stock appreciation rights, stock
and cash awards.
5. COMMITMENTS AND CONTINGENCIES
Lease Commitments
At March 31, 1995, the Company occupied several facilities under
noncancellable operating leases expiring at various dates through 2065.
Future minimum rentals under these leases are as follows:
1996 $2,259,000
1997 1,689,000
1998 1,573,000
1999 1,429,000
2000 728,000
Thereafter 1,574,000
TOTAL LEASE COMMITMENTS $9,252,000
Rental expense, which includes hire of vessels, specialized equipment and
real estate rental, was approximately $12,680,000, $15,976,000 and
$18,531,000 for the years ended March 31, 1995, 1994 and 1993,
respectively.
Insurance
The Company self-insures for workers' compensation, maritime employer's
liability and comprehensive general liability claims to levels it considers
financially prudent and carries insurance after the initial claim levels,
which can be by occurrence or in the aggregate, are met by the Company.
Management believes that adequate accruals have been established for
expected liabilities arising from such obligations.
Litigation
Various actions and claims are pending against the Company and its
subsidiaries, most of which are covered by insurance. In the opinion of
management, the ultimate liability, if any, which may result from these
actions and claims will not materially affect the consolidated financial
position or results of operations of the Company.
Letters of Credit
The Company had $7,600,000 and $6,600,000 in letters of credit outstanding
as of March 31, 1995 and 1994, respectively, as guarantees in force for
various performance and bid bonds which are usually for a period of one
year or the duration of the contract.
Financial Instruments and Risk Concentration
Financial instruments which potentially subject the Company to
concentrations of credit risk are primarily cash and cash equivalents, bank
borrowings and accounts receivable. The carrying value of cash and cash
equivalents and bank borrowings approximates fair value due to the short
maturity of those instruments. Accounts receivable are generated from a
broad and diverse group of customers primarily from within the energy
industry, which is the Company's major source of revenues. The Company
maintains an allowance for doubtful accounts based upon expected
collectibility.
6. OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA
Business Segment Information
The Company supplies a comprehensive range of integrated technical services
to a wide array of industries and is one of the world's largest underwater
services contractors. The Company's Oilfield Marine Services business
consists of underwater construction, underwater and above-water inspection
and maintenance (including repair), survey and engineering. The Company's
Offshore Field Development business includes the engineering, procurement,
construction and installation of mobile offshore production systems, subsea
intervention services and the production of subsea control umbilical
cables. The Company's Advanced Technologies business provides project
management, engineering services and equipment for applications in harsh
environments, primarily in non-oilfield markets.
The following summarizes certain financial data by business segment:
For the Years Ended March 31,
1995 1994 1993
(in thousands)
Revenues
Oilfield Marine Services $106,294 $122,625 $144,790
Offshore Field Development 62,918 37,121 17,580
Advanced Technologies 70,724 70,014 53,233
Total $239,936 $229,760 $215,603
Income from Operations
Oilfield Marine Services $ (2,485) $ 9,194 $ 16,012
Offshore Field Development 6,676 1,191 3,031
Advanced Technologies 8,563 10,545 6,609
Total $ 12,754 $ 20,930 $ 25,652
Identifiable Assets
Oilfield Marine Services $ 86,422 $ 70,259 $ 78,985
Offshore Field Development 53,124 45,153 24,192
Advanced Technologies 28,520 24,393 10,050
Total $168,066 $139,805 $113,227
Capital Expenditures
Oilfield Marine Services $ 25,916 $ 9,261 $ 9,819
Offshore Field Development 1,263 16,465 --
Advanced Technologies 4,878 11,004 2,177
Total $ 32,057 $ 36,730 $ 11,996
Depreciation and Amortization Expenses
Oilfield Marine Services $ 7,861 $ 6,950 $ 6,553
Offshore Field Development 4,690 2,276 2,780
Advanced Technologies 3,681 2,970 2,195
Total $ 16,232 $ 12,196 $ 11,528
Income from operations for each business segment is determined before
interest income or expense, other expense, minority interests and the
provision for income taxes. An allocation of these items is not considered
practical. All assets specifically identified with a particular business
segment have been segregated. Cash and cash equivalents, prepaid expenses
and other current assets, investments and other assets and long-term debt
have not been allocated to particular business segments.
Revenues of approximately $34,000,000 in fiscal 1995, $26,000,000 in fiscal
1994 and $26,000,000 in fiscal 1993 were from the Royal Dutch Shell group
of companies. No other individual customer accounted for more than 10% of
revenues in fiscal 1995, 1994 or 1993.
Geographic Operating Areas
Financial data by geographic area is summarized as follows:
FOR THE YEARS ENDED MARCH 31,
1995 1994 1993
(in thousands)
REVENUES
United States $117,630 $ 89,401 $ 72,983
North Sea 48,934 60,515 50,587
Far East 22,924 24,343 29,753
Africa 36,361 36,510 45,802
Other 14,087 18,991 16,478
TOTAL $239,936 $229,760 $215,603
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS
United States $ 2,856 $ 5,003 $ 4,802
North Sea 188 6,451 5,114
Far East 353 804 2,352
Africa 6,582 4,051 9,112
Other 2,244 4,549 4,002
TOTAL $ 12,223 $ 20,858 $ 25,382
TOTAL ASSETS
United States $ 87,405 $ 91,281 $ 68,054
North Sea 52,449 30,235 29,902
Far East 9,386 8,206 12,007
Africa 33,374 39,459 43,290
Other 5,138 2,812 1,271
TOTAL $187,752 $171,993 $154,524
7. ACCRUED LIABILITIES
Accrued liabilities consisted of the following:
March 31,
1995 1994
(in thousands)
Payroll and related costs $11,899 $10,437
Accrued job costs 9,587 6,906
Other 8,384 8,465
TOTAL ACCRUED LIABILITIES $29,870 $25,808
SELECTED QUARTERLY FINANCIAL DATA
(in thousands, except per share data)
(unaudited)
Fiscal Year Ended March 31, 1995 Quarter Ended
June 30 Sept. 30 Dec. 31 Mar. 31 Total
Revenues $63,370 $66,898 $55,203 $54,465 $239,936
Gross profit 14,094 15,383 8,622 11,065 49,164
Income(loss) from
operations 5,728 6,572 (1,196) 1,650 12,754
Net income(loss) 3,666 4,260 (2,850) 420 5,496
Earnings(loss) per
common share equivalent $ 0.15 $ 0.18 $(0.12) $ 0.02 $ 0.23
Weighted average number
of shares outstanding 24,183 24,204 24,150 23,650 24,047
Fiscal Year Ended March 31, 1994 Quarter Ended
June 30 Sept. 30 Dec. 31 Mar. 31 Total
Revenues $59,394 $65,535 $55,492 $49,339 $229,760
Gross profit 13,531 13,878 12,982 12,170 52,561
Income from operations 6,168 6,254 5,223 3,285 20,930
Net income 4,717 4,766 3,889 1,559 14,931
Earnings per common
share equivalent $ 0.20 $ 0.20 $ 0.16 $ 0.06 $ 0.62
Weighted average number
of shares outstanding 23,830 24,137 24,169 24,140 24,069
EXHIBIT INDEX
Registration
or File Form or Exhibit
Exhibit Number Report Date Number
3 Articles of Incorporation
and By-laws
*3.01 Certificate of Incorporation,
as amended 0-8418 10-K March 1988 3(a)
*3.02 By-laws, as amended 0-8418 10-K March 1987 3(b)
*3.03 Amendment to Certificate
of Incorporation 33-36872 S-8 Sept. 1990 4(b)
*3.04 Amendment to By-laws 0-8418 10-K March 1991 3(d)
*3.05 Amendment to By-laws 1-10945 8-K Nov. 1992 2
4 Instruments defining the rights
of security holders, including
indentures
*4.01 Specimen of Common Stock
Certificate 1-10945 10-K March 1993 4(a)
*4.02 Interest Rate and Currency
Exchange Agreement dated
July 29, 1991 0-8418 10-Q Sept. 1991 4(a)
*4.03 Shareholder Rights Agreement
dated November 20, 1992 1-10945 8-K Nov. 1992 1
4.04 Bank Credit Agreement dated
April 12, 1995
10 Material contracts
*10.01 1981 Incentive Stock Option
Plan, as amended 2-80506 S-8 Sept. 1987 28(e)
*10.02 Oceaneering Retirement
Investment Plan, as amended 2-77451 S-8 Oct. 1985 4(f)
*10.03 Employment Agreement dated
August 15, 1986 between
John R. Huff and Registrant 0-8418 10-K March 1987 10(l)
*10.04 1987 Incentive and Non-
Qualified Stock Option Plan 33-16469 S-1 Sept. 1987 10(o)
*10.05 Oceaneering International, Inc.
Special Incentive Plan 33-16469 S-1 Sept. 1987 10(n)
*10.06 Senior Executive Severance
Plan, as amended 0-8418 10-K March 1989 10(k)
*10.07 Supplemental Senior Executive
Severance Agreements, as
amended 0-8418 10-K March 1989 10(l)
10.08 Oceaneering International, Inc.
Executive Retirement Plan,
as amended
*10.09 Share Purchase Agreement
related to the purchase of
Sonsub Limited 0-8418 8-K Jan. 1990 2
*10.10 1990 Long-Term Incentive Plan 33-36872 S-8 Sept. 1990 4(f)
*10.11 1990 Nonemployee Directors
Stock Option Plan 33-36872 S-8 Sept. 1990 4(g)
*10.12 Indemnification Agreement
between Registrant and its
Directors 0-8418 10-Q Sept. 1991 10(a)
*10.13 1991 Executive Incentive
Agreements 0-8418 10-K March 1992 10(p)
10.14 Restricted Stock Award
Agreement
*10.15 Restricted Stock Award 1-10945 10-K March 1994 10(q)
Incentive Agreements
10.16 Bank Uncommitted Credit Line
Agreement dated March 31, 1995
10.17 1995 Bonus Award Plan
21 Subsidiaries of the Registrant
23 Consent of Independent Public
Accountants
24 Powers of Attorney
27 Financial Data Schedule
* Indicates exhibit previously filed with the Securities and Exchange
Commission as indicated and incorporated herein by reference.
EXHIBIT 4.04
EXECUTION COPY
$75,000,000
CREDIT AGREEMENT
dated as of
April 12, 1995
among
OCEANEERING INTERNATIONAL, INC.,
THE BANKS PARTIES HERETO
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
AS AGENT
27009/039/CA/agt<PAGE>
TABLE OF CONTENTS 1
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.......................... 1
1.02 Accounting Terms and Determinations.. 13
ARTICLE II
THE CREDIT
SECTION 2.01 Commitments to Lend.................. 14
2.02 Method of Borrowing.................. 15
2.03 Notes................................ 17
2.04 Maturity of Loan..................... 17
2.05 Interest Rates....................... 17
2.06 Fees................................. 21
2.07 Optional Termination or Reduction
of Commitments...................... 21
2.08 Mandatory Termination and
Reduction of Commitments............ 21
2.09 Optional Prepayments................. 22
2.10 General Provisions as to Payments.... 22
2.11 Funding Losses....................... 23
2.12 Computation of Interest and Fees..... 23
2.13 Maximum Interest Rate................ 24
2.14 Regulation D Compensation............ 24
ARTICLE III
CONDITIONS
SECTION 3.01 Closing.............................. 25
3.02 Borrowings........................... 26
1 The Table of Contents is not a part of this
Agreement.
27009/039/CA/agt
i<PAGE>
Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power........ 27
4.02 Corporate and Governmental
Authorization; Contravention....... 27
4.03 Binding Effect....................... 27
4.04 Financial Information................ 27
4.05 Litigation........................... 28
4.06 Compliance with ERISA................ 28
4.07 Taxes................................ 29
4.08 Subsidiaries......................... 29
4.09 Environmental Matters................ 29
4.10 Regulatory Restrictions on
Borrowing.......................... 30
4.11 Full Disclosure...................... 30
ARTICLE V
COVENANTS
SECTION 5.01 Information.......................... 30
5.02 Payment of Taxes, etc................ 33
5.03 Maintenance of Property; Insurance... 33
5.04 Compliance with Laws................. 33
5.05 Inspection of Property, Books
and Records........................ 33
5.06 Fixed Charge Coverage................ 34
5.07 Funded Debt.......................... 34
5.08 Minimum Consolidated Net Worth....... 34
5.09 Negative Pledge...................... 34
5.10 Consolidations, Mergers and Sales
of Assets.......................... 36
5.11 Investments.......................... 36
5.12 Use of Proceeds...................... 37
5.13 Maintenance of Existence Change
of Business........................ 37
5.14 Restricted Payments.................. 37
5.15 Transactions with Affiliates.......... 37
27009/039/CA/agt
ii<PAGE>
Page
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default.................... 38
6.02 Notice of Default.................... 41
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization........ 41
7.02 Agent and Affiliates................. 41
7.03 Action by Agent...................... 41
7.04 Consultation with Experts............ 41
7.05 Liability of Agent................... 41
7.06 Indemnification...................... 42
7.07 Credit Decision...................... 42
7.08 Successor Agent...................... 42
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
AFFECTING FIXED RATE LOANS
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair.......... 43
8.02 Illegality........................... 43
8.03 Increased Cost and Reduced Return.... 44
8.04 Taxes................................ 46
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans.......... 48
8.06 Substitution of Bank................. 48
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices.............................. 49
9.02 No Waivers........................... 49
9.03 Expenses; Indemnification............ 49
9.04 Sharing of Set-Offs.................. 50
9.05 Amendments and Waivers............... 51
9.06 Successors and Assigns............... 51
9.07 Collateral........................... 53
27009/039/CA/agt
iii<PAGE>
Page
9.08 Governing Law; Submission to
Jurisdiction....................... 53
9.09 Counterparts; Integration;
Effectiveness...................... 53
9.10 WAIVER OF JURY TRIAL................. 53
Exhibit A - Note
Exhibit B-1 - Opinion of Baker & Botts, L.L.P.,
Special Counsel for the Borrower
Exhibit B-2 - Opinion of George R. Haubenreich, Jr.,
General Counsel of the Borrower
Exhibit C - Opinion of Davis Polk & Wardwell,
Special Counsel for the Agent
Exhibit D - Extension Agreement
Exhibit E - Assignment and Assumption Agreement
27009/039/CA/agt
iv<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of April 12, 1995 among
OCEANEERING INTERNATIONAL, INC., the BANKS (as defined
herein) and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Adjusted CD Rate" has the meaning set forth in
Section 2.05(b).
"Adjusted Consolidated Tangible Net Worth" means
at any date (i) the consolidated shareholders' investment of
the Borrower and its Consolidated Subsidiaries, excluding
cumulative foreign currency translation, plus (ii) the
amount (if any) by which such consolidated shareholders'
investment is reduced as a result of the Stock Repurchase
Program and minus (iii) all consolidated assets properly
classified as intangible assets in accordance with generally
accepted accounting principles.
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Borrower) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person") or (ii) any Person (other
than the Borrower or a Subsidiary) which is controlled by or
is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
27009/039/CA/agt
1<PAGE>
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"Agreement" means this Credit Agreement, as
amended, restated and modified from time to time.
"Assignee" has the meaning set forth in Section
9.06(c).
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 9.06, and their respective successors.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for
such day.
"Base Rate Loan" means a Loan to be made as a Base
Rate Loan pursuant to the applicable Notice of Borrowing or
pursuant to Article VIII.
"Borrower" means Oceaneering International, Inc.,
a Delaware corporation, and its successors.
"Borrower's 1994 Form 10-K" means the Borrower's
annual report on Form 10-K for the fiscal year ended March
31, 1994, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
"Borrowing" means a borrowing hereunder consisting
of Loans made to a Borrower at the same time by each Bank
severally. A Borrowing is a "Domestic Borrowing" if such
Loans are Domestic Loans or a "Euro-Dollar Borrowing" if
such Loans are Euro-Dollar Loans. A Domestic Borrowing is a
"CD Borrowing" if such Domestic Loans are CD Loans or a
"Base Rate Borrowing" if such Domestic Loans are Base Rate
Loans.
"CD Base Rate" has the meaning set forth in
Section 2.05(b).
"CD Loan" means a Loan to be made as a CD Loan
pursuant to the applicable Notice of Borrowing.
"CD Margin" has the meaning set forth in Section
2.05(b).
27009/039/CA/agt
2<PAGE>
"CD Reference Banks" means Texas Commerce Bank
National Association and Morgan Guaranty Trust Company of
New York.
"Closing Date" means the date on or after the
Effective Date on which the Agent shall have received the
documents specified in or pursuant to Section 3.01.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commitment" means, with respect to each Bank
listed on the signature pages hereof, the amount set forth
opposite the name of such Bank on such signature pages (as
such amount may change pursuant to Section 9.06) and with
respect to any Bank which becomes a party to this Agreement
pursuant to Section 9.06, the amount of the Commitment
thereby assumed by it, in each case as such amount may be
reduced from time to time pursuant to Sections 2.07 and
2.08.
"Commitment Reduction Date" means each March 31,
June 30, September 30 and December 31, from and including
the June 30 following the Conversion Date, prior to the
Termination Date, and the Termination Date.
"Completion Guarantees" means completion
guarantees (if any) to be provided by the Borrower in
connection with the Soekor Project Debt.
"Consolidated EBITDA" means, for any fiscal
period, Consolidated Net Income for such period, determined
before the effect of any extraordinary or other non-
recurring gain (but not loss), plus, to the extent deducted
in determining Consolidated Net Income for such period, the
aggregate amount of (i) Consolidated Interest Expense, (ii)
income tax expense and (iii) depreciation, amortization and
other similar non-cash charges.
"Consolidated Funded Debt" means at any date the
Funded Debt of the Borrower and its Consolidated
Subsidiaries, determined on a consolidated basis as of such
date.
"Consolidated Interest Expense" means, for any
period, the interest expense of the Borrower and its
Consolidated Subsidiaries determined on a consolidated basis
for such period.
"Consolidated Net Income" means, for any fiscal
period, the net income of the Borrower and its Consolidated
27009/039/CA/agt
3<PAGE>
Subsidiaries, determined on a consolidated basis for such
period.
"Consolidated Rental Expense" means, for any
period, the aggregate rental expense of the Borrower and its
Consolidated Subsidiaries (excluding such expense in respect
of any lease the term of which is one year or less)
determined on a consolidated basis for such period.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Borrower in its consolidated
financial statements as of such date.
"Conversion Date" means April 12, 1998, or, if the
Revolving Credit Period shall have been extended pursuant to
Section 2.01(c), April 12, 1999.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases,
(v) all non-contingent obligations (and, for purposes of
Section 5.09 and the definitions of Material Debt and
Material Financial Obligations, all contingent obligations)
of such Person to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by
such Person, and (vii) all Debt of others Guaranteed by such
Person; provided that any Debt of any Person which is
Guaranteed by the Borrower or any Subsidiary pursuant to any
applicable joint venture or other similar arrangement shall
be deemed Debt of the Borrower or such Subsidiary only to
the extent of its ratable share thereof in accordance with
such joint venture arrangement.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Derivatives Obligations" of any Person means all
obligations (other than Debt) of such Person in respect of
any rate swap transaction, basis swap, forward rate
transaction, forward purchase, commodity swap, commodity
option, equity or equity index swap, equity or equity index
27009/039/CA/agt
4<PAGE>
option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar
transaction (including any option with respect to any of the
foregoing transactions) or any combination of the foregoing
transactions.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its
Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as
its Domestic Lending Office by notice to the Borrower and
the Agent; provided that any Bank may so designate separate
Domestic Lending Offices for its Base Rate Loans, on the one
hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means Base Rate Loans or CD Loans
or both.
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 9.09.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental
restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Substances
or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation
thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
27009/039/CA/agt
5<PAGE>
"ERISA Group" means the Borrower, any Subsidiary
and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section
414 of the Code.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for domestic
and international business (including dealings in Dollar
deposits) in London.
"Euro-Dollar Lending Office" means, as to each
Bank, its office, branch or affiliate located at its address
set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Euro-Dollar
Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar
Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Loans" means any Loans to be made as
Euro-Dollar Loans pursuant to the applicable Notice of
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in
Section 2.05(c).
"Euro-Dollar Reference Banks" means the principal
London offices of Texas Commerce Bank National Association
and Morgan Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents).
"Event of Default" has the meaning set forth in
Section 6.01.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on
27009/039/CA/agt
6<PAGE>
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Charge Coverage Ratio" means, at any date,
the ratio of (i) the sum of Consolidated EBITDA plus
Consolidated Rental Expense, in each case for the four
consecutive fiscal quarters of the Borrower and its
Consolidated Subsidiaries ending on or most recently prior
to such date to (ii) the sum of Consolidated Interest
Expense and Consolidated Rental Expense for such period plus
the aggregate principal amount of scheduled amortization of
long term Debt of the Borrower and its Consolidated
Subsidiaries during such period.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or both.
"Funded Debt" means at any date, with respect to
any Person, all Debt of such Person which is not a current
liability as of such date.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person or in
any manner providing for the payment of any Debt of any
other Person or otherwise protecting the holder of such Debt
against loss (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, or to take-or-pay or
otherwise), provided that the term "Guarantee" shall not
include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a
verb has a correlative meaning.
"Hazardous Substances" means any toxic,
radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
27009/039/CA/agt
7<PAGE>
"Interest Period" means: (1) with respect to
each Euro-Dollar Borrowing, the period commencing on the
date of such Borrowing and ending one, two, three or six
months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) if any Interest period includes a date on
which a payment of principal of the Loans is required
to be made under Section 2.08 but does not end on such
date, then (i) the principal amount (if any) of each
Euro-Dollar Loan required to be repaid on such date
shall have an Interest Period ending on such date and
(ii) the remainder (if any) of each such Euro-Dollar
Loan shall have an Interest Period determined as set
forth above.
(2) with respect to each CD Borrowing, the period
commencing on the date of such Borrowing and ending 30, 60,
90 or 180 days thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b)(i) below)
which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) if any Interest Period includes a date on
which a payment of principal of the Loans is required
to be made under Section 2.08 but does not end on such
date, then (i) the principal amount (if any) of each CD
Loan required to be repaid on such date shall have an
Interest Period ending on such date and (ii) the
remainder (if any) of each such CD Loan shall have an
Interest Period determined as set forth above.
27009/039/CA/agt
8<PAGE>
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
"Investment" means any investment in any Person,
whether by means of share purchase, capital contribution,
loan, time deposit or otherwise, excluding accounts
receivable from any Person arising in the ordinary course of
business from the sale of goods or services.
"Lending Office" means as to any Bank its
Domestic Lending Office or its Euro-Dollar Lending Office,
as the context may require.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan
and "Loans" means Domestic Loans or Euro-Dollar Loans or
both.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.05(c).
"Material Debt" means Debt (other than the Notes)
of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related transactions, in an aggregate
principal or face amount exceeding $2,000,000.
"Material Financial Obligations" means a principal
or face amount of Debt and/or payment or collateralization
obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in
one or more related transactions, exceeding in the aggregate
$2,000,000.
27009/039/CA/agt
9<PAGE>
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of
$5,000,000.
"Material Subsidiary" means at any time a
Subsidiary which as of such time meets the definition of a
"significant subsidiary" contained as of the date hereof in
Regulation S-X of the Securities and Exchange Commission;
provided, that the term "Material Subsidiary" shall in any
event include OISL, Solus, Oceaneering International A.G., a
Zug, Switzerland corporation, and its successors, and
Oceaneering International PTE, Ltd., a Singapore
corporation, and its successors.
"Morgan" means Morgan Guaranty Trust Company of
New York, and its successors.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group
(i) is then making or accruing an obligation to make
contributions or (ii) has at any time within the preceding
five years made contributions, including for these purposes
any Person which ceased to be a member of the ERISA Group
during such five year period which was at such time a member
of the ERISA Group for employees of any Person which was at
such time a member of the ERISA Group.
"Non-Recourse Debt" means Debt (i) which is
incurred or assumed by the Borrower or any Subsidiary for
the purpose of financing all or any part of the cost of
acquiring assets which do not (except where the maker is a
Subsidiary specifically incorporated to hold the assets
securing such Non-Recourse Debt) constitute all or
substantially all of the assets of the Borrower or such
Subsidiary, as the case may be, and which are used for the
performance of a particular offshore diving (including
design engineering and remote operated vehicle services) or
engineering, construction or inspection project, and (ii)
either (a) (1) as to which the recourse of the holder of
such Debt to the Borrower or any Subsidiary in respect of
such Debt is limited to the Borrower's or such Subsidiary's
interest in such assets, (2) as to which such holder shall
have (subject to clause (3)) waived any right to enforce
such Debt as a general obligation of the Borrower or such
Subsidiary, as the case may be, and agreed to enforce such
Debt only against such assets and (3) as to which Debt the
holder shall have subordinated in favor of the Banks,
pursuant to subordination provisions reasonably satisfactory
in form and substance to the Banks, its rights as the holder
of a claim treated as a recourse claim under 11 U.S.C. Sec.
27009/039/CA/agt
10<PAGE>
1111 (b)(1)(A) or (b) such assets securing such Debt
constitute substantially all of the assets of a Subsidiary
specifically established to hold such assets and Debt.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" has the meaning set forth in
Section 2.02.
"OISL" means Oceaneering International Services
Limited, an English corporation, and its successors.
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
9.06(b).
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and either
(i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group
or (ii) has at any time within the preceding five years been
maintained, or contributed to, by any Person which was at
such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly
announced by Morgan in New York City from time to time as
its Prime Rate.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
27009/039/CA/agt
11<PAGE>
"Refunding Borrowing" means a Borrowing which,
after application of the proceeds thereof, results in no net
increase in the outstanding principal amount of Loans made
by any Bank.
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Required Banks" means at any time Banks having at
least 60% of the aggregate amount of the Commitments or, if
the Commitments shall have been terminated, holding Notes
evidencing at least 60% of the aggregate unpaid principal
amount of the Loans.
"Restricted Payment" means (i) any dividend or
other distribution on any shares of the Borrower's capital
stock (except dividends payable solely in shares of, or
warrants or rights to subscribe for or purchase shares of,
its capital stock) or (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any
shares of the Borrower's capital stock or (b) any option,
warrant or other right to acquire shares of the Borrower's
capital stock.
"Revolving Credit Period" means the period from
the date hereof to and including the Conversion Date.
"Soekor Project Debt" means Debt to be incurred to
finance the Soekor E-BT project in South Africa, in an
aggregate amount not exceeding $75,000,000, which Debt (i)
will satisfy the criteria for Non-Recourse Debt once the
Completion Guarantees have been extinguished and (ii) is, in
all respects, reasonably satisfactory to the Required Banks.
It is understood that, depending on the final terms of such
Debt, further modification of the terms of this Agreement
may be necessary or appropriate.
"Solus" means Solus Ocean Systems, Inc., a
Delaware corporation, and its successors.
"Stock Repurchase Program" means the Borrower's
stock buyback program which commenced August, 1994, for not
more than 2,000,000 shares of the Borrower's common stock,
but only to the extent that the aggregate amount paid by the
Borrower in respect of such program does not exceed
$20,000,000.
"Subsidiary" means any corporation or other entity
of which at least 50% of the securities or other ownership
interests having ordinary voting power to elect members of
27009/039/CA/agt
12<PAGE>
the board of directors or other persons performing similar
functions (other than any such securities or ownership
interests having such voting power only by reason of the
happening of a contingency) are at the time directly or
indirectly owned or controlled by the Borrower or one or
more Subsidiaries, or by the Borrower and one or more
Subsidiaries.
"Substantial Asset Sale" means any sale, long term
lease or other disposition (including any such transaction
effected by way of merger or consolidation or through the
issuance or sale of capital stock of a Subsidiary) by the
Borrower or a Subsidiary, in a single transaction or a
series of related transactions, of assets having an
aggregate net book value at the date of disposition
exceeding $10,000,000, but excluding (i) dispositions of
inventory and used, surplus or worn out equipment in the
ordinary course of business, (ii) dispositions to the
Borrower or a Wholly Owned Consolidated Subsidiary and (iii)
dispositions of cash and cash equivalents otherwise
permitted under this Agreement.
"Termination Date" means the second anniversary of
the Conversion Date, or, if such date is not a Euro-Dollar
Business Day, the next preceding Euro-Dollar Business Day.
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued
but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of
a member of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
"Wholly Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock
or other ownership interests of which (except directors'
qualifying shares) are at one time directly or indirectly
owned by the Borrower.
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted
27009/039/CA/agt
13<PAGE>
accounting principles as in effect from time to time,
applied on a basis consistent (except for changes approved
by the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries delivered to the
Banks; provided that, if the Borrower notifies the Agent
that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or
if the Agent notifies the Borrower that the Required Banks
wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in
effect immediately before the relevant change in generally
accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Borrower and the Required
Banks.
ARTICLE II
THE CREDIT
SECTION 2.01. Commitments to Lend.
(a) During Revolving Credit Period. During the
Revolving Credit Period each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to lend to
the Borrower from time to time amounts not to exceed in the
aggregate at any one time outstanding the amount of its
Commitment. Each Borrowing under this subsection (a) shall
be in an aggregate principal amount of $2,000,000 or any
larger multiple of $1,000,000 (except that the first
Borrowing shall be in the aggregate principal amount of at
least $2,500,000 and except that any such Borrowing may be
in the aggregate amount of the unused Commitments) and shall
be made from the several Banks ratably in proportion to
their respective Commitments. Within the foregoing limits,
the Borrower may borrow under this subsection (a), repay, or
to the extent permitted by Section 2.09, prepay Loans and
reborrow at any time during the Revolving Credit Period
under this subsection (a).
(b) After Revolving Credit Period. After the
Revolving Credit Period each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make a
new loan to the Borrower upon any repayment of outstanding
Loans pursuant to Section 2.04 or any optional prepayment of
outstanding Loans pursuant to Section 2.09 for the purpose
of refunding all or a portion of such outstanding Loans;
27009/039/CA/agt
14<PAGE>
provided that the principal amount of such Bank's new Loan
shall not exceed the principal amount of its outstanding
Loan or Loans being repaid or prepaid; and provided further
that the aggregate principal amount of such Bank's
outstanding Loans shall at no time exceed its Commitment as
reduced from time to time pursuant to Sections 2.07 and
2.08. Each Borrowing under this subsection (b) shall be
made from the several Banks ratably in proportion to their
respective Commitments. Amounts required to be repaid
pursuant to Section 2.08(d) shall not be reborrowed, and
amounts repaid pursuant to Section 8.02 shall not be
reborrowed except as provided therein.
(c) Extension of Revolving Credit Period. The
Revolving Credit Period may be extended, in the manner set
forth in this subsection (c), from April 12, 1998 to April
12, 1999. If the Borrower wishes to request such an
extension of the Revolving Credit Period, the Borrower shall
give notice to that effect to the Agent on a date between
October 12, 1997 and February 12, 1998, whereupon the Agent
shall notify each of the Banks of such notice. Each Bank
will use its best efforts to respond to such request,
whether affirmatively or negatively, within 30 days. If all
Banks respond affirmatively, then, subject to receipt by the
Agent of counterparts of an Extension Agreement in
substantially the form of Exhibit D duly completed and
signed by all of the parties hereto, the Revolving Credit
Period shall be extended to April 12, 1999.
(d) General. The failure of any Bank to make any
Loan shall not in itself relieve any other Bank of its
obligation to lend hereunder (it being understood, however,
that no Bank shall be responsible for the failure of any
other Bank to make any Loan required to be made by such
other Bank).
SECTION 2.02. Method of Borrowing. (a) The
Borrower shall give the Agent notice (a "Notice of
Borrowing") not later than 11:00 A.M. (New York City time)
on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the
third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic
Borrowing or a Euro-Dollar Business Day in the case of
a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
27009/039/CA/agt
15<PAGE>
(iii) whether the Loans comprising such Borrowing
are to be CD Loans, Base Rate Loans or Euro-Dollar
Loans, and
(iv) in the case of a CD Borrowing or a Euro-
Dollar Borrowing, the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such Borrowing
and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 1:00 p.m. (New York City time)
on the date of each Borrowing, each Bank shall (except as
provided in subsection (d) of this Section) make available
its ratable share of such Borrowing, in Federal or other
funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. Unless the
Agent determines that any applicable condition specified in
Article III has not been satisfied, the Agent will make the
funds so received from the Banks available to the Borrower
at the Agent's aforesaid address.
(d) If any Bank makes a new Loan hereunder on a
day on which the Borrower is to repay all or any part of an
outstanding Loan from such Bank, such Bank shall apply the
proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be made
available by such Bank to the Agent as provided in
subsection (c) of this Section, or remitted by the Borrower
to the Agent as provided in Section 2.10, as the case may
be.
(e) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsections (c) and (d) of this
Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the Agent,
such Bank and the Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such
27009/039/CA/agt
16<PAGE>
amount is repaid to the Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.05 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.03. Notes. (a) The Loans of each Bank
shall be evidenced by a single Note payable to the order of
such Bank for the account of its Applicable Lending Office
in an amount equal to the aggregate unpaid principal amount
of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and
the Agent, request that its Loans of a particular type be
evidenced by a separate Note in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference
in this Agreement to the "Note" of such Bank shall be deemed
to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01(a), the Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount, type and
maturity of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with
any transfer or enforcement of its Note, endorse on the
schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such
Loan then outstanding; provided that the failure of any Bank
to make any such recordation or endorsement shall not affect
the obligations of the Borrower hereunder or under the
Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and
when required.
SECTION 2.04. Maturity of Loans. Each Loan
included in any Borrowing shall mature, and the principal
amount thereof shall be due and payable, on the last day of
the Interest Period applicable to such Borrowing.
SECTION 2.05. Interest Rates. (a) Each Base
Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made
27009/039/CA/agt
17<PAGE>
until the earlier of its repayment or due date, at a rate
per annum equal to the Base Rate for such day. Such
interest shall be payable for each Interest Period on the
last day thereof. Any overdue principal of or interest on
any Base Rate Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum
of 2% plus the Base Rate for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day during
the Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b)(i) of the definition of
Interest Period, have an Interest Period of less than 30
days, such portion shall bear interest during such Interest
Period at the rate applicable to Base Rate Loans during such
period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period
is longer than 90 days, at intervals of 90 days after the
first day thereof. Any overdue principal of or interest on
any CD Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2%
plus the higher of (i) the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to the Interest Period
for such Loan and (ii) the Base Rate for such day.
"CD Margin" means (i) for any day on or prior to
the Conversion Date, 0.75% and (ii) for any day thereafter,
1.0%.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
27009/039/CA/agt
18<PAGE>
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid at
10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of
such CD Reference Bank to which such Interest Period applies
and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. Sec. 327.3(e) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day
during the Interest Period applicable thereto, at a rate per
annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to
such Interest Period. Such interest shall be payable for
each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of
three months after the first day thereof.
27009/039/CA/agt
19<PAGE>
"Euro-Dollar Margin" means (i) for any day on or
prior to the Conversion Date, 0.625% and (ii) for any day
thereafter, 0.875%.
The "London Interbank Offered Rate" applicable to
any Interest Period means the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London
interbank market at approximately 11:00 A.M. (London time)
two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the higher
of (i) the sum of 2% per annum plus the Euro-Dollar Margin
for such day plus the London Interbank Offered Rate
applicable to the Interest Period for such Loan and (ii) the
sum of 2% per annum plus the Euro-Dollar Margin for such day
plus the quotient obtained (rounded upward, if necessary, to
the next higher 1/100 of 1%) by dividing (x) the average
(rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which one day (or,
if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such period of time not
longer than six months as the Agent may select) deposits in
dollars in an amount approximately equal to such overdue
payment due to each of the Euro-Dollar Reference Banks are
offered to such Euro-Dollar Reference Bank in the London
interbank market for the applicable period determined as
provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a)
or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% per annum plus the Base Rate for such
day).
(e) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the Borrower and the Banks of each rate of
interest so determined, and its determination thereof shall
be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
hereby. If any Reference Bank does not furnish a timely
quotation, the Agent shall determine the relevant interest
rate on the basis of the quotation or quotations furnished
27009/039/CA/agt
20<PAGE>
by the remaining Reference Bank or Banks or, if none of such
quotations is available on a timely basis, the provisions of
Section 8.01 shall apply.
SECTION 2.06. Fees. (a) During the Revolving
Credit Period, the Borrower shall pay to the Agent for the
account of the Banks ratably in proportion to their
Commitments a commitment fee at the rate of 0.225% per annum
on the daily average amount by which the aggregate amount of
the Commitments exceeds the aggregate outstanding principal
amount of the Loans. Such commitment fee shall accrue from
and including the Effective Date to but excluding the last
day of the Revolving Credit Period, and shall be payable
quarterly in arrears on each March 31, June 30, September 30
and December 31 during the Revolving Credit Period and on
the last day of the Revolving Credit Period.
(b) The Borrower shall pay to the Agent for its
own account fees in the amounts and at the times heretofore
agreed in writing between the Borrower and the Agent.
SECTION 2.07. Optional Termination or Reduction
of Commitments. The Borrower may, upon at least three
Domestic Business Days' notice to the Agent, terminate
entirely at any time or proportionately reduce the unused
portions of the Commitments from time to time by an
aggregate amount of $5,000,000 or any larger multiple
thereof. If the Commitments are terminated in their
entirety, all accrued commitment fees shall be payable on
the effective date of such termination.
SECTION 2.08. Mandatory Termination and Reduction
of Commitments. (a) The Commitments shall terminate on the
Termination Date and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on
such date.
(b) On any date on or after the last day of the
Revolving Credit Period on which the Commitment of any Bank
shall be greater than the aggregate principal amount of the
Loans of such Bank outstanding on such date (after giving
effect to any repayment, prepayment and borrowing on such
date), the Commitment of such Bank shall be automatically
reduced to an amount equal to such outstanding principal
amount.
(c) The Commitment of each Bank shall be further
reduced, on each Commitment Reduction Date, by an amount
equal to one-eighth (1/8) of such Bank's Commitment in
effect on the last day of the Revolving Credit Period (after
giving effect to any reduction pursuant to subsection (b) on
27009/039/CA/agt
21<PAGE>
such date). No reduction of any Commitment pursuant to
subsection (b) shall reduce the amount of any subsequent
mandatory reduction of such Commitment pursuant to this
subsection (c).
(d) On each Commitment Reduction Date, the
Borrower shall repay such principal amount (together with
accrued interest thereon) of each Bank's outstanding Loans,
if any, as may be necessary so that after such repayment,
the aggregate unpaid principal amount of such Bank's Loans
does not exceed the amount of such Bank's Commitment as then
reduced.
SECTION 2.09. Optional Prepayments. (a) Subject
in the case of any Fixed Rate Loans to Section 2.11, the
Borrower may, upon at least three Domestic Business Days'
notice to the Agent, prepay any Domestic Borrowing or upon
at least three Euro-Dollar Business Days' notice to the
Agent, prepay any Euro-Dollar Borrowing, in each case in
whole at any time, or from time to time in part in amounts
aggregating $1,000,000 or any larger multiple thereof, by
paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably
the Loans of the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.10. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of,
and interest on, the Loans and of commitment fees hereunder,
not later than 1:00 p.m. (New York City time) on the date
when due, in Federal or other funds immediately available in
New York City, to the Agent at its address referred to in
Section 9.01. The Agent will promptly distribute to each
Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of
commitment fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof
27009/039/CA/agt
22<PAGE>
shall be the next preceding Euro-Dollar Business Day. If
the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be
payable for such extended time.
(b) Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is
due to the Banks hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to
the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for
each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.11. Funding Losses. If the Borrower
makes any payment of principal with respect to any Fixed
Rate Loan (pursuant to Article II, VI or VIII or otherwise)
on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.05(d), or if the Borrower fails
to borrow or prepay any Fixed Rate Loans after notice has
been given to any Bank in accordance with Section 2.02(b) or
2.09(b), the Borrower shall reimburse each Bank within 15
days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the
period after any such payment or failure to borrow or
prepay, provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.12. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
27009/039/CA/agt
23<PAGE>
SECTION 2.13. Maximum Interest Rate. (a)
Nothing contained in this Agreement or the Notes shall
require the Borrower to pay interest at a rate exceeding the
maximum rate permitted by applicable law.
(b) If the amount of interest payable for the
account of any Bank by the Borrower on any interest payment
date in respect of the immediately preceding interest
computation period, computed pursuant to Section 2.05, would
exceed the maximum amount permitted by applicable law to be
charged to the Borrower by such Bank, the amount of interest
payable for its account on such interest payment date shall
be automatically reduced to such maximum permissible amount.
(c) If the amount of interest payable for the
account of any Bank in respect of any interest computation
period is reduced pursuant to subsection (b) of this Section
2.13 and the amount of interest payable for its account by
the Borrower in respect of any subsequent interest
computation period, computed pursuant to Section 2.05, would
be less than the maximum amount permitted by applicable law
to be charged to the Borrower by such Bank, then the amount
of interest payable for its account by the Borrower in
respect of such subsequent interest computation period shall
be automatically increased to such maximum permissible
amount; provided that at no time shall the aggregate amount
by which interest paid for the account of any Bank has been
increased pursuant to this subsection (c) exceed the
aggregate amount by which interest paid for its account has
theretofore been reduced pursuant to subsection (b) of this
Section 2.13.
SECTION 2.14. Regulation D Compensation. So long
as Regulation D shall require reserves to be maintained
against "Eurocurrency liabilities" (or against any other
category of liabilities which includes deposits by reference
to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of
any Bank to United States residents), each Bank may require
the Borrower to pay, contemporaneously with each payment of
interest on the Euro-Dollar Loans, additional interest on
the related Euro-Dollar Loan of such Bank at a rate per
annum equal to the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one minus the reserve
ratio prescribed by Regulation D (as such Regulation shall
have been amended to the date of the notice referred to in
clause (x) below) for such requirements (expressed as a
decimal) over (ii) the rate specified in clause (i)(A), such
rate per annum to be adjusted automatically on and as of the
effective date of any change in such reserve ratio. Any
27009/039/CA/agt
24<PAGE>
Bank wishing to require payment of such additional interest
(x) shall so notify the Borrower and the Agent, in which
case such additional interest on the Euro-Dollar Loans of
such Bank shall be payable with respect to each related
Interest Period commencing at least five Euro-Dollar
Business Days after the giving of such notice and (y) shall
notify the Borrower and the Agent at least five Euro-Dollar
Business Days prior to each date on which interest is
payable on the Euro-Dollar Loans of the amount then due it
under this Section.
ARTICLE III
CONDITIONS
SECTION 3.01. Closing. The closing hereunder
shall occur upon receipt by the Agent of the following
documents, each dated the Closing Date unless otherwise
indicated:
(a) a duly executed Note for the account of each
Bank dated on or before the Closing Date complying with
the provisions of Section 2.03;
(b) an opinion of Baker & Botts, L.L.P., special
counsel for the Borrower, and of George R. Haubenreich,
Jr., General Counsel of the Borrower, substantially in
the respective forms of Exhibits B-1 and B-2 hereto,
and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks
may reasonably request;
(c) an opinion of Davis Polk & Wardwell, special
counsel for the Agent, substantially in the form of
Exhibit C hereto and covering such additional matters
relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(d) evidence satisfactory to it that the
commitments under the Credit Agreement dated as of
September 1, 1988 among the Borrower, the borrowing
subsidiaries listed therein, the banks party thereto
and Morgan Guaranty Trust Company of New York, as agent
(as amended, the "Existing Credit Agreement") have
terminated, all loans thereunder have been repaid in
full (all Banks hereunder which are also banks under
the Existing Credit Agreement hereby agreeing that such
repayment may be made, whether at the end of interest
periods under the Existing Credit Agreement or not) and
all accrued fees and other amounts payable thereunder
27009/039/CA/agt
25<PAGE>
(including, without limitation, any funding costs
payable pursuant to the Existing Credit Agreement) have
been paid in full; and
(e) all documents the Agent may reasonably
request relating to the existence of the Borrower, the
corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the
Agent.
The Agent shall promptly notify the Borrower and the Banks
of the Closing Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) the fact that the Closing Date shall have
occurred on or prior to April 12, 1995;
(b) receipt by the Agent of a Notice of Borrowing
as required by Section 2.02;
(c) the fact that, immediately after such
Borrowing, the aggregate outstanding principal amount
of the Loans will not exceed the aggregate amount of
the Commitments;
(d) the fact that, immediately before and after
such Borrowing, no Default shall have occurred and be
continuing; and
(e) the fact that the representations and
warranties of the Borrower contained in this Agreement
(except, in the case of a Refunding Borrowing, the
representations and warranties set forth in Sections
4.04(c) and 4.05 as to any matter which has theretofore
been disclosed in writing by the Borrower to the Banks)
shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in clauses (c), (d)
and (e) of this Section.
27009/039/CA/agt
26<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted
unless the failure to have or maintain such powers,
licenses, authorizations, consents and approvals could not
reasonably be expected to have a material adverse effect on
the financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole.
SECTION 4.02. Corporate and Governmental
Authorization; Contravention. The execution, delivery and
performance by the Borrower of this Agreement and the Notes
are within the Borrower's corporate power, have been duly
authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or
by-laws of the Borrower, of any agreement or other
instrument binding upon the Borrower or of any judgment,
injunction, order or decree binding upon the Borrower or
result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower
and each Note, when executed and delivered in accordance
with this Agreement, will constitute a valid and binding
obligation of the Borrower, in each case enforceable in
accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or
moratorium or similar laws relating to the enforcement of
creditors' rights generally and by general principles of
equity.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the
Borrower and its Subsidiaries as of March 31, 1994 and the
related consolidated statements of operations, shareholders'
investment and cash flows for the fiscal year then ended,
reported by Arthur Andersen & Co. and set forth in the
27009/039/CA/agt
27<PAGE>
Borrower's 1994 Form 10-K, a copy of which has been
delivered to each of the Banks, fairly present, in all
material respects, in conformity with generally accepted
accounting principles, the consolidated financial position
of the Borrower and its Subsidiaries as of such date and
their consolidated results of operations and cash flows for
such fiscal year.
(b) The unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as of December 31, 1994
and the related unaudited consolidated statements of
operations, shareholders' investment and cash flows for the
nine months then ended, set forth in the Borrower's Form 10-
Q filed with the Securities and Exchange Commission for the
fiscal quarter then ended, a copy of which has been
delivered to each of the Banks, fairly present, in all
material respects, in conformity with generally accepted
accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a) above,
the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
nine month period (subject to normal year-end adjustments).
(c) Since December 31, 1994 there has been no
material adverse change in the business, financial position
or results of operations of the Borrower and its
Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. There is no action,
suit or proceeding pending, or (to the knowledge of the
Borrower) threatened, against or affecting the Borrower or
any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable possibility of an adverse decision which could
reasonably be expected to materially adversely affect the
business or consolidated results of operations of the
Borrower and its Subsidiaries, taken as a whole, or which in
any manner questions the validity of this Agreement or the
Notes.
SECTION 4.06. Compliance with ERISA. Each member
of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with respect
to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the
Code with respect to each Plan. No member of the ERISA
Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any
Plan, (ii) failed to make any contribution or payment to any
Plan or Multiemployer Plan, or made any amendment to any
27009/039/CA/agt
28<PAGE>
Plan, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under
ERISA or the Code or (iii) incurred any liability under
Title IV of ERISA, which has resulted or could result in the
imposition of a Lien or the posting of a bond or other
security, other than a liability to the PBGC for premiums
under Section 4007 of ERISA.
SECTION 4.07. Taxes. The Borrower and its
Subsidiaries have filed all United States Federal income tax
returns and all other material tax returns which are
required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment
received by the Borrower or any Subsidiary or are contesting
such assessment in good faith. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries
in respect of taxes or other governmental charges are, in
the opinion of the Borrower, adequate.
SECTION 4.08. Subsidiaries. Each of the
Borrower's corporate Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted unless the failure to have or
maintain such powers, licenses, authorizations, consents and
approvals could not reasonably be expected to have a
material adverse effect on the financial condition or
results of operations of the Borrower and its Subsidiaries,
taken as a whole.
SECTION 4.09. Environmental Matters. In the
ordinary course of its business, the Borrower conducts an
ongoing review of the effect of Environmental Laws on the
business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it takes all reasonable
steps to identify and evaluate associated liabilities and
costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or
operating expenditures required to achieve or maintain
compliance with environmental protection standards imposed
by law or as a condition of any license, permit or contract,
any related constraints on operating activities, including
any periodic or permanent shutdown of any facility or
reduction in the level of or change in the nature of
operations conducted thereat, any costs or liabilities in
connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third
parties, including employees, and any related costs and
27009/039/CA/agt
29<PAGE>
expenses). On the basis of this review, the Borrower has
reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental
Laws, are not reasonably expected to have a material adverse
effect on the business, financial condition, results of
operations or prospects of the Borrower and its Consolidated
Subsidiaries, considered as a whole.
SECTION 4.10. Regulatory Restrictions on
Borrowing. The Borrower is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended, a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or
otherwise subject to any regulatory scheme which restricts
its ability to incur Debt.
SECTION 4.11. Full Disclosure. All written
information heretofore furnished by the Borrower to the
Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby was, to the
Borrower's knowledge, true and accurate in all material
respects on the date as of which such information was stated
or certified. The Borrower has disclosed to the Banks in
writing any and all facts known to the Borrower which
materially and adversely affect or may affect (to the extent
the Borrower can now reasonably foresee), the business,
operations or financial condition of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or the ability
of the Borrower to perform its obligations under this
Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has
any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will
deliver to each of the Banks:
(a) as soon as available and in any event within
90 days after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of
operations, shareholders' investment and cash flows for
such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal
27009/039/CA/agt
30<PAGE>
year, all reported on by Arthur Andersen LLP or other
independent public accountants of nationally recognized
standing;
(b) as soon as available and in any event within
45 days after the end of each of the first three
quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter
and the related consolidated statements of operations
and cash flows for such quarter and for the portion of
the Borrower's fiscal year ended at the end of such
quarter, setting forth in each case in comparative form
the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal
year, all as included in the Borrower's Form 10-Q (or
successor form) for such fiscal quarter, prepared in
accordance with generally accepted accounting
principles consistently applied (except any change with
respect to consistent application of accounting
principles concurred in by the Borrower's independent
public accountants) and fairly presenting, in all
material respects, the consolidated financial position
of the Borrower and its Consolidated Subsidiaries as of
the end of such quarter and their consolidated results
of operations and cash flows for such period (subject
to normal year-end adjustments);
(c) simultaneously with the delivery of each set
of financial statements referred to in subsections (a)
and (b) above, a certificate of the President or the
Treasurer or the Vice President-Finance of the Borrower
(i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in
compliance with the requirements of Sections 5.06,
5.07, 5.08, 5.10, 5.11 and 5.14, inclusive, on the date
of such financial statements and (ii) stating whether
there exists on the date of such certificate any
Default and, if any Default then exists, setting forth
the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto;
(d) forthwith upon the occurrence of any Default,
a certificate of the President or the Treasurer or the
Vice President-Finance of the Borrower setting forth
the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all
27009/039/CA/agt
31<PAGE>
financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or
its equivalent) and annual, quarterly or monthly
reports (other than, except as reasonably requested by
any Bank, the exhibits thereto) which the Borrower
shall have filed with the Securities and Exchange
Commission;
(g) if and when any member of the ERISA Group (i)
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV
of ERISA, or knows that the plan administrator of any
Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such
reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any
Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of
the Code, a copy of such application; (v) gives notice
of intent to terminate any Plan under Section 4041(c)
of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy
of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or makes
any amendment to any Plan which has resulted or could
result in the imposition of a Lien or the posting of a
bond or other security, a certificate of the chief
financial officer or the chief accounting officer of
the Borrower setting forth details as to such
occurrence and the action, if any, which the Borrower
or applicable member of the ERISA Group is required or
proposes to take; and
(h) from time to time such additional information
regarding the financial position or business of the
Borrower or any Subsidiary as the Agent, at the request
of any Bank, may reasonably request.
27009/039/CA/agt
32<PAGE>
SECTION 5.02. Payment of Taxes, etc. The
Borrower will, and will cause each Material Subsidiary to
pay and discharge promptly when due and payable all taxes,
assessments and other governmental charges imposed upon it
or any of its property, provided that the Borrower or any
Subsidiary shall not be required to pay any such tax,
assessment or other governmental charge the payment of which
is being contested in good faith.
SECTION 5.03. Maintenance of Property; Insurance.
(a) Subject to Section 5.10, the Borrower will keep, and
will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and
condition, ordinary wear and tear and force majeure
excepted.
(b) The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the
Borrower or in such Subsidiary's own name) with financially
sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts and
against at least such risks (and with such risk retention)
as are usually insured against in the same general area by
companies of established repute engaged in the same or a
similar business; and will furnish to the Banks, upon
reasonable request from the Agent, information presented in
reasonable detail as to the insurance so carried.
SECTION 5.04. Compliance with Laws. The Borrower
will comply, and cause each Subsidiary to comply, in all
material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental
Laws and ERISA and the rules and regulations thereunder)
except where (i) the necessity of compliance therewith is
contested in good faith by appropriate proceedings or (ii)
the failure to so comply could not reasonably be expected to
have a material adverse effect on the financial condition or
results of operations of the Borrower and its Subsidiaries,
taken as a whole.
SECTION 5.05. Inspection of Property, Books and
Records. The Borrower will keep, and will cause each
Subsidiary to keep, proper books of record and account in
which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and
activities in order to allow for the preparation of
financial statements in accordance with generally accepted
accounting principles; and will permit, and will cause each
Subsidiary to permit, representatives of any Bank at such
Bank's expense to visit and inspect any of their respective
27009/039/CA/agt
33<PAGE>
properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective
affairs, finances and accounts with their respective
officers, employees and independent public accountants, all
at such reasonable times during normal business hours and as
often as may reasonably be desired and without undue
interference with the operations of the Borrower or its
Subsidiaries.
SECTION 5.06. Fixed Charge Coverage. The Fixed
Charge Coverage Ratio will at no time be less than 2.0 to
1.0.
SECTION 5.07. Funded Debt. Consolidated Funded
Debt will not exceed (i) during the period from the initial
incurrence by the Borrower or any Subsidiary of any Soekor
Project Debt until such time as any Completion Guarantees
have been extinguished, 100% of Adjusted Consolidated
Tangible Net Worth and (ii) at any other time, 80% of
Adjusted Consolidated Tangible Net Worth. For purposes of
this Section, any preferred stock of a Consolidated
Subsidiary held by a Person other than the Borrower or a
Wholly Owned Consolidated Subsidiary shall be included, at
the higher of its voluntary or involuntary liquidation
value, in determining Consolidated Funded Debt.
SECTION 5.08. Minimum Consolidated Tangible Net
Worth. Adjusted Consolidated Tangible Net Worth will not at
any date be less than the sum of (i) $90,000,000 plus (ii)
75% of Consolidated Net Income for each fiscal quarter ended
after December 31, 1994 and on or prior to such date, but
only to the extent that Consolidated Net Income for any such
fiscal quarter is positive plus (iii) 75% of the increase in
consolidated stockholders' equity of the Borrower from any
equity issuances by the Borrower after the date hereof and
on or prior to such date.
SECTION 5.09. Negative Pledge. Neither the
Borrower nor any Subsidiary will create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired
by it, except:
(a) Liens existing on the date of this Agreement
securing Debt outstanding on the date of this Agreement
in an aggregate principal amount not exceeding
$1,000,000;
(b) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Subsidiary and not created in contemplation of such
event;
27009/039/CA/agt
34<PAGE>
(c) any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part
of the cost of acquiring such asset, provided that such
Lien attaches to such asset concurrently with or within
90 days after the acquisition thereof;
(d) any Lien on any asset of any corporation
existing at the time such corporation is merged into or
consolidated with the Borrower or a Subsidiary and not
created in contemplation of such event;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Subsidiary and
not created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by
any Lien permitted by any of the foregoing subsections
of this Section, provided that such Debt is not
increased and is not secured by any additional assets;
(g) any Lien arising pursuant to any order of
attachment, distraint or similar legal process arising
in connection with court proceedings so long as (i) the
portion of any judgment or order for the payment of
money secured thereby which is not fully payable
through insurance is less than $2,000,000 or (ii) the
execution or other enforcement thereof is effectively
stayed and the claims secured thereby are being
contested in good faith by appropriate proceedings;
(h) Liens on any asset of any corporation in
favor of the United States of America or any state
thereof, or any department, agency or instrumentality
or political subdivision of the United States of
America or any state thereof to secure partial,
progress, advance or other payments pursuant to any
statute or contract or to secure any Debt (including
Debt of the pollution control or industrial revenue
bond type) incurred for the purpose of financing all or
any part of the purchase price or the cost of
construction of the property subject to such Lien;
(i) any Lien on any assets securing either
Non-Recourse Debt or, while any Completion Guarantees
remain in effect, Soekor Project Debt;
(j) Liens arising in the ordinary course of its
business which (i) do not secure Debt or Derivatives
Obligations and (ii) do not in the aggregate materially
detract from the value of its assets or materially
27009/039/CA/agt
35<PAGE>
impair the use thereof in the operation of its
business;
(k) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate
amount of cash and cash equivalents subject to such
Liens may at no time exceed $2,000,000; and
(l) Liens not otherwise permitted by the
foregoing clauses of this Section securing Debt or
Derivative Obligations in an aggregate principal amount
not to exceed 5% of Adjusted Consolidated Tangible Net
Worth at any time outstanding.
SECTION 5.10. Consolidations, Mergers and Sales
of Assets. The Borrower will not consolidate or merge with
or into any other Person unless (i) the Borrower is the
surviving entity and (ii) immediately after such merger no
Default shall have occurred and be continuing. The Borrower
will not, and will not permit any Subsidiary to, make a
Substantial Asset Sale.
SECTION 5.11. Investments. Neither the Borrower
nor any Subsidiary will make or acquire any Investment in
any Person other than:
(a) Investments existing on the date hereof;
(b) Investments in the Borrower or its
Subsidiaries;
(c) any Investment in any Person which,
after the making of such Investment, shall be or
become a Subsidiary;
(d) temporary cash Investments in money
market instruments;
(e) Investments by the Borrower through the
exchange of Borrower's capital stock for such
Investments;
(f) Investments consisting of undistributed
earnings of a Person; and
(g) any Investment not otherwise permitted
by the foregoing clauses of this Section if,
immediately after any such Investment is made or
acquired, the aggregate net book value of all
Investments permitted by this clause (g) does not
exceed $10,000,000.
27009/039/CA/agt
36<PAGE>
SECTION 5.12. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrower for working capital and capital expenditures in the
ordinary course of business or for the repayment of Debt and
for the Borrower's other general corporate purposes. None
of such proceeds will be used in violation of Section 7 of
the Securities Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including but not
limited to Regulation U of the Board of Governors of the
Federal Reserve System.
SECTION 5.13. Maintenance of Existence; Change of
Business. The Borrower and each Material Subsidiary shall
at all times, except as otherwise permitted under Section
5.10, maintain its corporate existence, and the Borrower
will not, and will not permit its Subsidiaries to,
substantially change the general lines of business of the
Borrower and its Subsidiaries considered as a whole. Such
current general lines of business are petroleum services,
marine and underwater services, inspection services,
government contracting services, aerospace services and
survey services.
SECTION 5.14. Restricted Payments. Neither the
Borrower nor any Subsidiary will declare or make any
Restricted Payment unless, after giving effect thereto (i)
no Default shall have occurred and be continuing and (ii)
the aggregate of all Restricted Payments (other than in
respect of (a) the Stock Repurchase Program and (b) other
repurchases by the Borrower of its capital stock in
connection with employee compensation or benefit plans in an
amount not to exceed $10,000,000 in a fiscal year) declared
or made subsequent to December 31, 1994 does not exceed 50%
of the cumulative Consolidated Net Income of the Borrower
and its Subsidiaries from December 31, 1994 through the end
of its then most recent fiscal quarter (treated for this
purpose as a single accounting period).
SECTION 5.15. Transactions with Affiliates. The
Borrower will not, and will not permit any Subsidiary to,
directly or indirectly, pay any funds to or for the account
of, make any Investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property,
guarantee or other agreement to pay, purchase or service,
directly or indirectly, any Debt, or otherwise) in, lease,
sell, transfer or otherwise dispose of any assets, tangible
or intangible, to, or participate in, or effect, any
transaction with, any Affiliate except on an arms-length
basis on terms at least as favorable to the Borrower or such
Subsidiary as could have been obtained from a third party
who was not an Affiliate; provided that the foregoing
27009/039/CA/agt
37<PAGE>
provisions of this Section shall not prohibit any such
Person from declaring or paying any lawful dividend or other
payment ratably in respect of all of its capital stock of
the relevant class so long as, after giving effect thereto,
no Default shall have occurred and be continuing.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) the Borrower shall fail to pay when due any
principal of any Note;
(b) the Borrower shall fail to pay any interest
on any Note, any fees hereunder or any other obligation
hereunder for a period of five days after the same
shall become due;
(c) the Borrower shall fail to observe or perform
any covenant contained in Sections 5.06 through 5.15,
inclusive;
(d) the Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by subsection (a), (b) or (c)
above) for 30 days after notice thereof has been given
to the Borrower by the Agent at the request of any
Bank;
(e) any representation, warranty, certification
or statement made by the Borrower in this Agreement or
in any certificate, financial statement or other
document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect
when made;
(f) the Borrower or any Material Subsidiary shall
fail to make any payment in respect of any Material
Financial Obligation (other than (i) any deferred
purchase payment obligation incurred by the Borrower in
connection with its acquisition of all of the stock or
a material portion of the assets of a corporation and
withheld by the Borrower in good faith or (ii) the
Notes) when due or within any applicable grace period;
27009/039/CA/agt
38<PAGE>
(g) any event or condition shall occur which
results in the acceleration of the maturity of any
Material Debt or the acceleration of the termination of
commitments to lend monies or extend credit in any
other form in an aggregate amount in excess of
$2,000,000 to the Borrower or any Subsidiary or enables
(or, with the giving of notice or lapse of time or
both, would enable) the holder of any such Debt or the
maker of such commitment, as the case may be, or any
Person acting on such holder's or maker's behalf to
accelerate the maturity of such Debt or accelerate the
termination of such commitment, as the case may be;
(h) the Borrower or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its property,
or shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the
foregoing;
(i) an involuntary case or other proceeding shall
be commenced against the Borrower or any Material
Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of
60 days; or an order for relief shall be entered
against the Borrower or any Material Subsidiary under
the federal bankruptcy laws as now or hereafter in
effect;
(j) any member of the ERISA Group shall fail to
pay when due an amount or amounts aggregating in excess
of $2,000,000 which it shall have become liable to pay
under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV
of ERISA by any member of the ERISA Group, any plan
27009/039/CA/agt
39<PAGE>
administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or
to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated;
or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more
members of the ERISA Group to incur a current payment
obligation in excess of $2,000,000;
(k) a final judgment or order for the payment of
money the portion of which not fully payable through
insurance equals or exceeds $2,000,000 (or the
equivalent amount in any other currency) shall be
rendered against the Borrower or any Material
Subsidiary and such judgment or order shall continue
unsatisfied and in effect and unstayed for a period of
30 days after the date of entry thereof; or
(l) any Person or group of Persons (within the
meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 50% or more of the outstanding shares of common
stock of the Borrower; or, during any period of twelve
consecutive calendar months, individuals who were
directors of the Borrower on the first day of such
period shall cease to constitute a majority of the
board of directors of the Borrower;
then, and in every such event, the Agent shall (i) if
requested by the Required Banks, by notice to the Borrower
terminate the Commitments (if still in existence), and they
shall thereupon terminate, and (ii) if requested by the
Required Banks, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the
Notes shall thereupon become, due and payable without
presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided
that in the case of any of the Events of Default specified
in clause (h) or (i) above with respect to the Borrower,
without any notice to the Borrower or any other act by the
Agent or the Banks, the Commitments shall thereupon
terminate and the Notes (together with accrued interest
thereon) shall become immediately due and payable without
27009/039/CA/agt
40<PAGE>
presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Borrower under Section 6.01(d) promptly
upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Agent by
the terms hereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan shall
have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the
same as though it were not the Agent, and Morgan and its
affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower
or any Subsidiary or affiliate of the Borrower as if it were
not the Agent thereunder.
SECTION 7.03. Action by Agent. The obligations
of the Agent under this Agreement are only those expressly
set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly
provided in Article VI .
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its
27009/039/CA/agt
41<PAGE>
affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (w) any statement,
warranty or representation made in connection herewith or
any borrowing hereunder; (x) the performance or observance
of any of the covenants or agreements of the Borrower
hereunder; (y) the satisfaction of any condition specified
in Article III, except receipt of items required to be
delivered to the Agent; or (z) the validity, effectiveness
or genuineness of this Agreement or any other instrument or
writing furnished in connection herewith. The Agent shall
not incur any liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing)
believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from the Agent's gross
negligence or willful misconduct) that the Agent may suffer
or incur in connection with this Agreement or any action
taken or omitted by the Agent hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any
other Bank, and based on such documents and other
information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not
taking any action hereunder.
SECTION 7.08. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Borrower. Upon any such resignation, the Required Banks
shall have the right to appoint a successor Agent, which
successor Agent shall be approved by the Borrower, which
approval shall not be unreasonably withheld. If no
successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a
27009/039/CA/agt
42<PAGE>
commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having
a combined capital and surplus of at least $50,000,000.
Upon the acceptance of its appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties
of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After
any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
AFFECTING FIXED RATE LOANS
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any Fixed Rate Borrowing:
(a) the Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts)
are not being offered to the Reference Banks in the
relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate
amount of the Commitments advise the Agent that the
Adjusted CD Rate or the London Interbank Offered Rate,
as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of
funding their CD Loans or Euro-Dollar Loans, as the
case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such
date, such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 8.02. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
27009/039/CA/agt
43<PAGE>
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully
continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the
then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently
with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans
of the other Banks), and such Bank shall make such a Base
Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System, but
excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve
Percentage and (ii) with respect to any Euro-Dollar Loan,
any such requirement with respect to which such Bank is
entitled to compensation during the relevant Interest Period
27009/039/CA/agt
44<PAGE>
under Section 2.14), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of
any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank
to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent),
the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Borrower
and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A
27009/039/CA/agt
45<PAGE>
certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution
methods. Notwithstanding the foregoing subsections (a) and
(b) of this Section 8.03, the Borrower shall only be
obligated to compensate any Bank for any amount arising or
accruing during (i) any time or period commencing not more
than 180 days prior to the date on which such Bank notifies
the Agent and the Borrower that it proposes to demand such
compensation and identifies to the Agent and the Borrower
the statute, regulation or other basis upon which the
claimed compensation is or will be based and (ii) any time
or period during which, because of the retroactive
application of such statute, regulation or other such basis,
such Bank did not know (and would not in the exercise of
reasonable diligence have known) that such amount would
arise or accrue.
SECTION 8.04. Taxes. (a) For purposes of this
Section 8.04, the following terms have the following
meanings:
"Taxes" means any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings
with respect to any payment by the Borrower pursuant to this
Agreement or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Bank and
the Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the
laws of which such Bank or the Agent (as the case may be) is
organized or in which its principal executive office is
located or, in the case of each Bank, in which its
Applicable Lending Office is located and (ii) in the case of
each Bank, any United States withholding tax imposed on such
payments but only to the extent that such Bank is subject to
United States withholding tax at the time such Bank first
becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or
similar charges or levies, which arise from any payment made
pursuant to this Agreement or under any Note or from the
execution or delivery of, or otherwise with respect to, this
Agreement or any Note.
"United States" means the United States of
America, including the States and the District of Columbia,
but excluding its territories and possessions.
27009/039/CA/agt
46<PAGE>
(b) Any and all payments by the Borrower to or
for the account of any Bank or the Agent hereunder or under
any Note shall be made without deduction for any Taxes or
Other Taxes; provided that, if the Borrower shall be
required by law to deduct any Taxes or Other Taxes from any
such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law and
(iv) the Borrower shall furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank
and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as
the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days
after such Bank or the Agent (as the case may be) makes
demand therefor.
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the
United States is a party which exempts the Bank from United
States withholding tax or reduces the rate of withholding
tax on payments of interest for the account of such Bank or
certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a
trade or business in the United States.
(e) For any period with respect to which a Bank
has failed to provide the Borrower with the appropriate form
pursuant to Section 8.04(d) (unless such failure is due to a
27009/039/CA/agt
47<PAGE>
change in treaty, law or regulation occurring subsequent to
the date on which such form originally was required to be
provided), such Bank shall not be entitled to
indemnification under Section 8.04(b) or (c) with respect to
Taxes imposed by the United States; provided that if a Bank,
which is otherwise exempt from or subject to a reduced rate
of withholding tax, becomes subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request
to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section 8.04, then such Bank will change the jurisdiction of
its Applicable Lending Office if, in the judgment of such
Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is
not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant
to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or
Euro-Dollar Loans and the Borrower shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through
the Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by
such Bank as CD Loans or Euro-Dollar Loans, as the case
may be, shall be made instead as Base Rate Loans (on
which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of
the other Banks), and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, has been repaid, all
payments of principal which would otherwise be applied
to repay such Fixed Rate Loans shall be applied to
repay its Base Rate Loans instead.
SECTION 8.06. Substitution of Bank. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04, the
Borrower shall have the right, with the assistance of the
Agent, to seek a mutually satisfactory substitute bank or
27009/039/CA/agt
48<PAGE>
banks (which may be one or more of the Banks) to purchase
the Note and assume the Commitment of such Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address,
facsimile number or telex number set forth on the signature
pages hereof, (y) in the case of any Bank, at its address,
facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any
party, such other address, facsimile number or telex number
as such party may hereafter specify for the purpose by
notice to the Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate
answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is
received, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by
any other means, when delivered at the address specified in
this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses
of the Agent, including the reasonable fees and
disbursements of special counsel for the Agent, in
connection with the preparation and administration of this
Agreement, any waiver or consent hereunder or any amendment
hereof or any Default or alleged Default hereunder and (ii)
if an Event of Default occurs, all reasonable out-of-pocket
27009/039/CA/agt
49<PAGE>
expenses incurred by the Agent and each Bank, including
(without duplication) the reasonable fees and disbursements
of outside counsel and the allocated cost of inside counsel,
in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify the Agent
and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that
no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to any Note held by it which is greater
than the proportion received by any other Bank in respect of
the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other
Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest
with respect to the Notes held by the Banks shall be shared
by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness hereunder. The
Borrower agrees, to the fullest extent it may effectively do
so under applicable law, that any holder of a participation
in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor
of the Borrower in the amount of such participation.
27009/039/CA/agt
50<PAGE>
SECTION 9.05. Amendments and Waivers. Any
provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal
of or rate of interest on any Loan or any fees hereunder,
(iii) postpone the date fixed for any payment of principal
of or interest on any Loan or any fees hereunder or for any
reduction or termination of any Commitment, (iv) change the
aggregate amount by which or to which the Commitments are
required to be reduced on or prior to any Commitment
Reduction Date or (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of
the Notes, or the number of Banks, which shall be required
for the Banks or any of them to take any action under this
Section or any other provision of this Agreement.
SECTION 9.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii), (iii) or (iv) of
Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the
27009/039/CA/agt
51<PAGE>
benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all,
or a proportionate part (equivalent to an initial Commitment
of not less than $5,000,000 or such lesser amount as may be
acceptable to the Borrower and the Agent) of all, of its
rights and obligations under this Agreement and the Notes,
and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit E hereto executed by such
Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Borrower, which shall not be
unreasonably withheld, and acknowledgement of the Agent;
provided that if an Assignee is an affiliate of such
transferor Bank or was a Bank immediately prior to such
assignment, no such consent shall be required. Upon
execution and delivery of such instrument and payment by
such Assignee to such transferor Bank of an amount equal to
the purchase price agreed between such transferor Bank and
such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a
Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required.
Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Bank, the Agent and the
Borrower shall make appropriate arrangements so that, if
required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is
not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower
and the Agent certification as to exemption from deduction
or withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any
27009/039/CA/agt
52<PAGE>
greater payment under Section 8.03 or 8.04 than such Bank
would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the
provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration;
Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the
entire agreement and understanding among the parties hereto
and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective upon
receipt by the Agent of counterparts hereof signed by each
of the parties hereto (or, in the case of any party as to
which an executed counterpart shall not have been received,
receipt by the Agent in form satisfactory to it of
telegraphic, telex, facsimile or other written confirmation
from such party of execution of a counterpart hereof by such
party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
27009/039/CA/agt
53<PAGE>
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
27009/039/CA/agt
54<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
OCEANEERING INTERNATIONAL, INC.
By_ROBERT_P._MINGOIA_________
Title: Treasurer
16001 Park Ten Place, Suite 650
Houston, Texas 77084
Telex number: 775181
Telecopy number: (713) 578-5243
Commitments
$ 30,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By_JAMES_S._FINCH____________
Title: Vice President
$ 25,000,000 TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By_MONA_M._FOCH_____________
Title: Vice President
$ 20,000,000 FIRST INTERSTATE BANK OF
TEXAS, N.A.
By_ANN_M._RHOADS_____________
Title: Vice President
_________________
Total Commitments
$75,000,000
=================
27009/039/CA/agt
55<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By______________________________
Title:
60 Wall Street
New York, New York 10260
Telex number: 177615
Telecopy number: (212) 648-5014
27009/039/CA/agt
56<PAGE>
EXHIBIT A
NOTE
New York, New York
, 19
For value received, OCEANEERING INTERNATIONAL,
INC., a Delaware corporation (the "Borrower"), promises to
pay to the order of (the "Bank"), for
the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below
on the last day of the Interest Period relating to such
Loan. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the
rate or rates provided for in the Credit Agreement. All
such payments of principal and interest shall be made in
lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New
York.
All Loans made by the Bank, the respective types
and maturities thereof and all repayments of the principal
thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding
may be endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make
any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit
Agreement.
This note is one of the Notes referred to in the
Credit Agreement dated as of April 12, 1995 among the
Borrower, the banks parties thereto and Morgan Guaranty
Trust Company of New York, as Agent (as amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity
hereof.
OCEANEERING INTERNATIONAL, INC.
27009/039/CA/agt<PAGE>
By______________________________
Title:
27009/039/CA/agt
2<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________________
Type Amount of
Amount of Principal Maturity Notation
Date of Loan Loan Repaid Date Made By
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
27009/039/CA/agt
3<PAGE>
EXHIBIT B-1
OPINION OF SPECIAL
COUNSEL FOR THE BORROWER
[Dated as provided
in Section 3.01 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as special counsel to Oceaneering
International, Inc. (the "Borrower") in connection with the
Credit Agreement (the "Credit Agreement") dated as of April
12, 1995 among the Borrower, the Banks (as defined therein)
and Morgan Guaranty Trust Company of New York, as Agent, and
are rendering this opinion pursuant to Section 3.01 of the
Credit Agreement. Terms defined in the Credit Agreement
and not otherwise defined herein are used herein as therein
defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
[Provided separately]
27009/039/CA/agt<PAGE>
EXHIBIT B-2
OPINION OF GENERAL
COUNSEL OF THE BORROWER
[Dated as provided
in Section 3.01 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am General Counsel of Oceaneering International,
Inc., a Delaware corporation (the "Borrower"), and am
familiar with the Credit Agreement (the "Credit Agreement")
dated as of April 12, 1995 among the Borrower, the Banks (as
defined therein) and Morgan Guaranty Trust Company of New
York, as Agent (the "Agent"). Terms defined in the Credit
Agreement and not otherwise defined herein are used herein
as therein defined.
I have examined originals or copies, certified or
otherwise identified to my satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as I have deemed necessary or
advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion
that:
[Provided separately]
27009/039/CA/agt<PAGE>
EXHIBIT C
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL
COUNSEL FOR THE AGENT
[Dated as provided in
Section 3.01 of the
Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
Credit Agreement (the "Credit Agreement") dated as of April
12, 1995 among Oceaneering International, Inc., a Delaware
corporation (the "Borrower"), the Banks (as defined therein)
and Morgan Guaranty Trust Company of New York, as Agent (the
"Agent"), and have acted as special counsel for the Agent
for the purpose of rendering this opinion pursuant to
Section 3.01(c) of the Credit Agreement. Terms defined in
the Credit Agreement and not otherwise defined herein are
used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of such documents, corporate
records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
27009/039/CA/agt<PAGE>
the Borrower's corporate powers and have been duly
authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and each Note constitutes
a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general
principles of equity.
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in connection
with the above matter. This opinion may not be relied upon
by you for any other purpose or relied upon by any other
person without our prior written consent.
Very truly yours,
27009/039/CA/agt
2<PAGE>
EXHIBIT D
EXTENSION AGREEMENT
Oceaneering International, Inc.
16001 Park Ten Place, Suite 650
Houston, Texas 77084
Morgan Guaranty Trust Company
of New York, as Agent under
the Credit Agreement
referred to below
60 Wall Street
New York, NY 10260
Gentlemen:
The undersigned hereby agree to extend, effective
___________, 1998, the Revolving Credit Period under the
Credit Agreement dated as of April 12, 1995 among
Oceaneering International, Inc. (the "Borrower"), the Banks
parties thereto and Morgan Guaranty Trust Company of New
York, as agent (the "Credit Agreement") for one year to
April 12, 1999. Terms defined in the Credit Agreement are
used herein as therein defined.
This Extension Agreement shall be construed in
accordance with and governed by the law of the State of New
York.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By __________________________
Title:
27009/039/CA/agt<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By __________________________
Title:
FIRST INTERSTATE BANK OF
TEXAS, N.A.
By __________________________
Title:
Agreed and accepted:
OCEANEERING INTERNATIONAL, INC.
By __________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By __________________________
Title:
27009/039/CA/agt
2<PAGE>
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among <NAME OF
ASSIGNOR> (the "Assignor"), <NAME OF ASSIGNEE> (the
"Assignee"), OCEANEERING INTERNATIONAL, INC. (the
"Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent (the "Agent").
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the Credit Agreement dated as
of April 12, 1995 among the Borrower, the Assignor and the
other Banks party thereto, as Banks, and the Agent (the
"Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the
Assignor has a Commitment to make Loans to the Borrower in
an aggregate principal amount at any time outstanding not to
exceed $__________;
WHEREAS, Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount
of $__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its
outstanding Loans, and the Assignee proposes to accept
assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns
and sells to the Assignee all of the rights of the Assignor
27009/039/CA/agt<PAGE>
under the Credit Agreement to the extent of the Assigned
Amount, and the Assignee hereby accepts such assignment from
the Assignor and assumes all of the obligations of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of
the corresponding portion of the principal amount of the
Loans made by the Assignor outstanding at the date hereof.
Upon the execution and delivery hereof by the Assignor, the
Assignee, the Borrower and the Agent and the payment of the
amounts specified in Section 3 required to be paid on the
date hereof (i) the Assignee shall, as of the date hereof,
succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and
(ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor
released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the
Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them. It
is understood that commitment and/or facility fees accrued
to the date hereof are for the account of the Assignor and
such fees accruing from and including the date hereof are
for the account of the Assignee. Each of the Assignor and
the Assignee hereby agrees that if it receives any amount
under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the
account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to
such other party.
SECTION 4. Consent of the Borrower and
Acknowledgement of the Agent. This Agreement is conditioned
upon the consent of the Borrower and the acknowledgement of
the Agent pursuant to Section 9.06(c) of the Credit
Agreement. The execution of this Agreement by the Borrower
and the Agent is evidence of such consent and
acknowledgement. Pursuant to Section 9.06(c), the Borrower
agrees to execute and deliver a Note payable to the order of
the Assignee to evidence the assignment and assumption
provided for herein.
27009/039/CA/agt
2<PAGE>
SECTION 5. Non-Reliance on Assignor. The Assignor
makes no representation or warranty in connection with, and
shall have no responsibility with respect to, the solvency,
financial condition, or statements of the Borrower, or the
validity and enforceability of the obligations of the
Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and
without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its
own independent appraisal of the business, affairs and
financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
<NAME OF ASSIGNOR>
By_________________________
Name:
Title:
<NAME OF ASSIGNEE>
By__________________________
Name:
Title:
27009/039/CA/agt
3<PAGE>
OCEANEERING INTERNATIONAL, INC.
By__________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Name:
Title:
27009/039/CA/agt
4<PAGE>
EXHIBIT 10.08
OCEANEERING INTERNATIONAL, INC.
EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Effective February 1, 1993)<PAGE>
OCEANEERING INTERNATIONAL, INC.
EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Effective February 1, 1993)
I N D E X
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . 2
Section:
1.1 Account . . . . . . . . . . . . . . . . . . . 2
1.2 Affiliate . . . . . . . . . . . . . . . . . . 2
1.3 Beneficiary . . . . . . . . . . . . . . . . . 2
1.4 Code . . . . . . . . . . . . . . . . . . . . . 2
1.5 Committee . . . . . . . . . . . . . . . . . . 2
1.6 Company . . . . . . . . . . . . . . . . . . . 2
1.7 Company Matching Account . . . . . . . . . . . 2
1.8 Company Matching Contribution . . . . . . . . 2
1.9 Compensation . . . . . . . . . . . . . . . . . 2
1.10 Contribution . . . . . . . . . . . . . . . . . 2
1.11 Contribution Percentage . . . . . . . . . . . 3
1.12 Deferred Company Contribution . . . . . . . . 3
1.13 Employee Contribution Account . . . . . . . . 3
1.14 Employee Contributions . . . . . . . . . . . . 3
1.15 ERISA . . . . . . . . . . . . . . . . . . . . 3
1.16 Effective Date . . . . . . . . . . . . . . . . 3
1.17 Employee . . . . . . . . . . . . . . . . . . . 3
1.18 Employer . . . . . . . . . . . . . . . . . . . 3
1.19 Entry Date . . . . . . . . . . . . . . . . . . 3
1.20 Fiduciaries . . . . . . . . . . . . . . . . . 3
1.21 Income of the Investment Accounts . . . . . . 3
1.22 Investment Account(s) . . . . . . . . . . . . 3
1.23 Investment Fund . . . . . . . . . . . . . . . 3
1.24 Investment Manager . . . . . . . . . . . . . . 4
1.25 Participant . . . . . . . . . . . . . . . . . 4
1.26 Participation . . . . . . . . . . . . . . . . 4
1.27 Participation Year . . . . . . . . . . . . . . 4
1.28 Plan . . . . . . . . . . . . . . . . . . . . . 4
1.29 Plan Year . . . . . . . . . . . . . . . . . . 4
1.30 Retirement Date . . . . . . . . . . . . . . . 4
1.31 Service . . . . . . . . . . . . . . . . . . . 4
1.32 Valuation Date . . . . . . . . . . . . . . . . 4
ARTICLE II ADMINISTRATION OF THE PLAN . . . . . . . . . . 5
Section:
2.1 Appointment of Committee . . . . . . . . . . . 5
2.2 Records of Committee . . . . . . . . . . . . . 5
2.3 Committee Action . . . . . . . . . . . . . . . 5
2.4 Committee Disqualification . . . . . . . . . . 5
2.5 Committee Compensation, Expenses and Advisers 5
(i)<PAGE>
Page
2.6 Committee Liability . . . . . . . . . . . . . 5
2.7 Committee Determinations . . . . . . . . . . . 6
2.8 Information from Employer . . . . . . . . . . 6
2.9 General Powers of Committee . . . . . . . . . 6
2.10 Uniform Administration . . . . . . . . . . . . 7
2.11 Reporting Responsibilities . . . . . . . . . . 7
2.12 Disclosure Responsibilities . . . . . . . . . 7
2.13 Participant Statements . . . . . . . . . . . . 7
2.14 Allocation of Responsibility Among Fiduciaries for
Plan
Administration . . . . . . . . . . . . . . 7
2.15 Presenting Claims for Benefits . . . . . . . . 8
2.16 Claims Review Procedure . . . . . . . . . . . 9
2.17 Disputed Benefits . . . . . . . . . . . . . . 9
ARTICLE III PARTICIPATION AND SERVICE . . . . . . . . . . 10
Section:
3.1 Participation . . . . . . . . . . . . . . . . 10
3.2 Participants to Furnish Required Information . 10
3.3 Participation Service . . . . . . . . . . . . 10
3.4 Participation Upon Re-Employment . . . . . . . 10
3.5 Transferred or Ineligible Participants . . . . 10
ARTICLE IV CONTRIBUTIONS AND FORFEITURES . . . . . . . . 11
Section:
4.1 Deferred Company Contributions . . . . . . . . 11
4.2 Company Matching Contributions . . . . . . . . 11
4.3 Employee Contributions . . . . . . . . . . . . 12
4.4 Funding Policy . . . . . . . . . . . . . . . . 13
4.5 Special One-Time Vesting . . . . . . . . . . . 13
4.6 Special One-Time Employee and Deferred Company
Contributions . . . . . . . . . . . . . . . 13
ARTICLE V ACCOUNTS OF PARTICIPANTS . . . . . . . . . . . 14
Section:
5.1 Individual Accounts . . . . . . . . . . . . . 14
5.2 Account Adjustments . . . . . . . . . . . . . 14
5.3 Valuation of Investment Accounts . . . . . . . 14
5.4 Recognition of Different Investment Funds . . 14
ARTICLE VI PARTICIPANTS' BENEFITS . . . . . . . . . . . . 15
Section:
6.1 Retirement of Participant on or After Retirement
Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Disability of Participant . . . . . . . . . . 15
6.3 Death of Participant . . . . . . . . . . . . . 15
6.4 Other Termination of Service . . . . . . . . . 15
6.5 Beneficiaries in the Event of Death . . . . . 16
6.6 Qualified Election . . . . . . . . . . . . . . 16
(ii)<PAGE>
Page
6.7 Valuation Dates Determinative of Participants'
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.8 Loans and Withdrawals . . . . . . . . . . . . 17
6.9 Tax Payments . . . . . . . . . . . . . . . . . 17
6.10 Cessation of Deferred Company Contributions and
Company Matching Contributions and Tax Payment 17
ARTICLE VII PAYMENT OF BENEFITS . . . . . . . . . . . . . 18
ARTICLE VIII INVESTMENT OF ACCOUNTS . . . . . . . . . 19
Section:
8.1 Investment Accounts . . . . . . . . . . . . . 19
8.2 Investment Manager . . . . . . . . . . . . . . 19
8.3 Investment Directions of Participants . . . . 19
8.4 Change of Investment Directions . . . . . . . 19
8.5 Benefits Provided Solely From Individual Accounts . 20
ARTICLE IX ADOPTION OF PLAN BY OTHER ORGANIZATIONS;
AMENDMENT AND TERMINATION OF THE PLAN;
DISCONTINUANCE OF CONTRIBUTIONS TO THE
INVESTMENT ACCOUNTS . . . . . . . . . . . . . 21
Section:
9.1 Procedure for Adoption . . . . . . . . . . . . 21
9.2 Effect of Adoption . . . . . . . . . . . . . . 21
9.3 Amendment . . . . . . . . . . . . . . . . . . 21
9.4 Acceptance or Rejection of Amendment by Employers . 22
9.5 Termination . . . . . . . . . . . . . . . . . 22
(iii)<PAGE>
Page
9.6 Liquidation and Distribution of Investment
Accounts Upon
Termination . . . . . . . . . . . . . . . . 22
9.7 Effect of Termination or Discontinuance of Company
Matching
Contributions . . . . . . . . . . . . . . . 22
9.8 Merger of Plan . . . . . . . . . . . . . . . . 23
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . 24
Section:
10.1 Terms of Employment . . . . . . . . . . . . . 24
10.2 Controlling Law . . . . . . . . . . . . . . . 24
10.3 Invalidity of Particular Provisions . . . . . 24
10.4 Non-Alienability of Rights of Participants . . 24
10.5 Payments in Satisfaction of Claims of
Participants . . . . . . . . . . . . . . . . . . . . . . . . 24
10.6 Impossibility of Diversion of Investment Accounts . 24
(iv)<PAGE>
OCEANEERING INTERNATIONAL, INC.
EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Effective February 1, 1993)
Effective as of February 1, 1989, the Board of
Directors of Oceaneering International, Inc., a Delaware
corporation (the "Company"), authorized the adoption of a
non-qualified profit-sharing plan, in the form of the Oceaneering
International, Inc. Executive Retirement Plan (the "Prior Plan")
for the benefit of a select group of management or highly
compensated employees to provide retirement income and to promote
the best interests of the Company by attracting and retaining
desirable employees.
The Board of Directors of the Company also
authorized the establishment of individual secular trusts
effective February 1, 1989, among the Company, each of the
employees eligible to participate in the Prior Plan, D. Michael
Hughes and George R. Haubenreich, Jr., as Trustees (the "Trust
Agreements"). The Trust Agreements were intended to constitute a
part of the Prior Plan.
Effective February 1, 1993, the Board of Directors
has authorized the amendment, restatement and continuation of the
Prior Plan in the form of this Plan (the "Plan") and the
termination of the Trust Agreements.
The Plan is not intended to qualify under
Sections 401 and 501 of the Internal Revenue Code of 1986, as
amended from time to time, but is, however, intended to meet the
applicable requirements of the Employee Retirement Income
Security Act of 1974, as amended from time to time.
NOW, THEREFORE, the Company hereby amends, restates
and continues the Oceaneering International, Inc. Executive
Retirement Plan, which shall read as follows:
-1-<PAGE>
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and
phrases shall have the following meanings unless the context
clearly requires a different meaning:
1.1 Account: The accounts maintained for a Participant
pursuant to Section 5.1.
1.2 Affiliate: A corporation or other trade or business
which is not an Employer under this Plan but which, together with
an Employer, is "under common control" within the meaning of
Sections 414(b) and (c) of the Code, as modified by
Section 415(h) of the Code.
1.3 Beneficiary: A Participant's spouse, or such other
natural person or persons, or the trustee of an inter vivos trust
for the benefit of natural persons, entitled to receive a
Participant's death benefits, as provided in Section 6.5 hereof.
1.4 Code: The Internal Revenue Code of 1986, as amended
from time to time.
1.5 Committee: The Compensation Committee appointed by the
Board of Directors of the Company to act as administrator of this
Plan and to perform the duties described in Article II hereof.
1.6 Company: Oceaneering International, Inc., a Delaware
corporation.
1.7 Company Matching Account: The separate account
maintained for a Participant to record his share of Company
Matching Contributions, and the investment thereof.
1.8 Company Matching Contribution: The amount of cash
contributed by the Employer to the Investment Accounts as a
Company Matching Contribution, pursuant to Section 4.2.
1.9 Compensation: The base salary paid to a Participant by
an Employer for personal services rendered, not including
incentive compensation, bonuses, any other item of special
compensation, any Company Matching Contributions to this Plan or
any Employer or Affiliate contributions to any other pension,
profit-sharing or welfare plan. For the purpose of determining
the amount of such Compensation, the books and records of the
Employer shall be conclusive.
1.10 Contribution: Any amount contributed to the Investment
Accounts pursuant to the provisions of this Plan, whether
incident to the original adoption of this Plan, or at any time
-2-<PAGE>
subsequent thereto, by the Employer to the extent of profits or
by a Participant out of his Compensation.
1.11 Contribution Percentage: The percentage applied to
Deferred Company Contributions pursuant to Section 4.2.
1.12 Deferred Company Contribution: The contingent amount
accrued on the books of the Company or an Employer for purposes
of this Plan, but subject to all the terms and restrictions
hereof, pursuant to Section 4.1.
1.13 Employee Contribution Account: The separate account
maintained for a Participant to record his Contributions to the
Plan and the investment thereof.
1.14 Employee Contributions: The amount contributed by a
Participant out of his Compensation pursuant to Section 4.3.
1.15 ERISA: Public Law No. 93-406, the Employee Retirement
Income Security Act of 1974, as amended from time to time.
1.16 Effective Date: February 1, 1993.
1.17 Employee: Any person employed by the Employer,
including all directors and officers of the Employer except any
such person who is not regularly and principally employed by such
Employer.
1.18 Employer: The Company and any eligible organization
that shall adopt this Plan pursuant to the provisions of
Article IX, and the successors, if any, to such organization.
1.19 Entry Date: The first day of each calendar month
during the Plan Year.
1.20 Fiduciaries: The Employer, the Committee and the
Investment Manager, but only with respect to the specific
responsibilities of each for Plan administration, all as
described in Section 2.14 hereof. Any person or group of persons
may serve in more than one fiduciary capacity with respect to the
Plan.
1.21 Income of the Investment Accounts: The net gain or
loss of the Investment Accounts from investments, as reflected by
interest payments, dividends, realized and unrealized gains and
losses on securities and other investment transactions and
expenses paid from the Investment Accounts.
1.22 Investment Account(s): All Contributions of Employers
and Participants, together with all income, profits or increments
thereon which are deposited in separate investment accounts for
-3-<PAGE>
each Participant with the Investment Manager in the name of each
Participant as described in Section 8.1 hereof.
1.23 Investment Fund: The mutual funds offered by the
Investment Manager as described in Section 8.1 hereof.
1.24 Investment Manager: The investment manager or managers
authorized to manage the assets of the Investment Funds in
accordance with the terms of the Plan pursuant to Section 8.2
hereof.
1.25 Participant: An eligible Employee who, pursuant to the
provisions of Article III hereof, is participating in the Plan.
1.26 Participation: The period commencing as of the date
the Employee becomes a Participant and ending on the last day of
the pay period during which his termination of Service occurs.
1.27 Participation Year: A twelve (12) consecutive month
period commencing on the Participant's Entry Date or on any
anniversary of such Entry Date.
1.28 Plan: The Oceaneering International, Inc. Executive
Retirement Plan set forth herein, a non-qualified profit-sharing
plan, as amended from time to time.
1.29 Plan Year: The calendar year commencing January 1 and
ending December 31.
1.30 Retirement Date: The first day of the calendar month
coincident with or next following the sixty-fifth (65th) birthday
of a Participant.
1.31 Service: A Participant's employment with Employers and
Affiliates.
1.32 Valuation Date: The last business day of each calendar
quarter during the Plan Year or any other date on which a special
valuation is made pursuant to Section 5.3.
Words used in this Plan in the singular shall include
the plural and in the plural the singular, and the gender of
words used shall be construed to include whichever may be
appropriate under any particular circumstances.
-4-<PAGE>
ARTICLE II
ADMINISTRATION OF THE PLAN
2.1 Appointment of Committee: The Board of Directors of
the Company (the "Board of Directors") shall appoint a
Compensation Committee (the "Committee") of not less than three
(3) persons, who may be Employees of the Company or an Affiliate,
to perform the administrative duties set forth herein. The
Committee shall be the administrator of the Plan. Each member of
the Committee shall serve for such term as the Board of Directors
may designate or until his death, resignation or removal by the
Board of Directors. The Board of Directors shall promptly
appoint successors to fill any vacancies in the Committee.
2.2 Records of Committee: The Committee shall keep
appropriate records of its proceedings and the administration of
the Plan. The Committee shall make available to Participants and
their Beneficiaries for examination, during business hours, such
records of the Plan as pertain to the examining person and such
documents relating to the Plan as may be required by ERISA.
2.3 Committee Action: The Committee may act through the
concurrence of a majority of its members expressed either at a
meeting of the Committee, or in writing without a meeting.
Concurrence of a member of the Committee may be by telegram or
letter. Any member of the Committee, or the Secretary of the
Committee (who need not be a member of the Committee), may
execute on behalf of the Committee any certificate or other
written instrument evidencing or carrying out any action approved
by the Committee. The Committee may delegate any of its rights,
powers and duties to any one or more of its members. The
Chairman of the Committee shall be agent of the Plan and the
Committee for the service of legal process at the principal
office of the Company in Houston, Texas.
2.4 Committee Disqualification: A member of the Committee
who may be a Participant shall not vote on any question relating
specifically to himself.
2.5 Committee Compensation, Expenses and Advisers: The
members of the Committee shall serve without bond (unless
otherwise required by law) and without compensation for their
services as such. The Committee may select, and authorize the
Investment Manager to compensate suitably, such attorneys, agents
and representatives as it may deem necessary or advisable to the
performance of its duties. All expenses of the Committee that
shall arise in connection with the administration of the Plan
shall be paid by the Company.
2.6 Committee Liability: Except to the extent that such
liability is created by ERISA, no member of the Committee shall
-5-<PAGE>
be liable for any act or omission of any other member of the
Committee, nor for any act or omission on his own part except for
his own gross negligence or willful misconduct, nor for the
exercise of any power or discretion in the performance of any
duty assumed by him hereunder. The Company shall indemnify and
hold harmless each member of the Committee from any and all
claims, losses, damages, expenses (including counsel fees
approved by the Committee), and liabilities (including any
amounts paid in settlement with the Committee's approval arising
from any act or omission of such member in connection with duties
and responsibilities under the Plan, except when the same is
judicially determined to be due to the gross negligence or
willful misconduct of such member or as prohibited by law.
2.7 Committee Determinations: The Committee, on behalf of
the Participants and their Beneficiaries, shall enforce this Plan
in accordance with its terms and shall have all powers necessary
for the accomplishment of that purpose, including, but not by way
of limitation, the following powers:
(a) To determine all questions relating to the
eligibility of Employees to become Participants, the
period of Service of Participants and the
Compensation of Participants;
(b) To notify the Investment Manager of a
Participant's termination of Service;
(c) To interpret and construe all terms,
provisions, conditions and limitations of this Plan
and to reconcile any inconsistency or supply any
omitted detail that may appear in this Plan in such
manner and to such extent, consistent with the
general terms of this Plan, as the Committee shall
deem necessary and proper to effectuate the Plan for
the greatest benefit of all parties interested in the
Plan; and
(d) To make and enforce such rules and
regulations for the administration of the Plan as are
not inconsistent with the terms set forth herein.
2.8 Information from Employer: To enable the Committee to
perform its functions, each Employer shall supply full and timely
information to the Committee of all matters relating to the dates
of employment of its Employees for purposes of determining
eligibility of Employees to participate hereunder, the
Compensation of all Participants, their retirement or other cause
for termination of employment, and such other pertinent facts as
the Committee may require; and the Committee shall advise the
Investment Manager of such of the foregoing facts as may be
-6-<PAGE>
pertinent to the Investment Manger's administration of the
Investment Accounts.
2.9 General Powers of Committee: In addition to all other
powers herein granted, and in general consistent with the
provisions hereof, the Committee shall have all other rights and
powers reasonably necessary to supervise and control the
administration of this Plan. The determination of any fact by
the Committee and the construction placed by the Committee upon
the provisions of this Plan shall be binding upon all of the
Participants under this Plan, their Beneficiaries and the
Employers.
2.10 Uniform Administration: Whenever in the administration
of the Plan, any action is required by an Employer or the
Committee, including, but not by way of limitation, action with
respect to eligibility of Employees, Contributions and benefits,
such action shall be uniform in nature as applied to all persons
similarly situated.
2.11 Reporting Responsibilities: As Administrator of the
Plan, the Committee shall file with the appropriate office of the
Internal Revenue Service or the Department of Labor all reports,
returns and notices required under ERISA or the Code, including,
but not limited to, annual reports and amendments thereof to be
filed with the Department of Labor.
2.12 Disclosure Responsibilities: The Committee shall make
available to each Participant and Beneficiary such records,
documents and other data as may be required under ERISA, and
Participants or Beneficiaries shall have the right to examine
such records at reasonable times during business hours. Nothing
contained in this Plan shall give any Participant or Beneficiary
the right to examine any data or records reflecting the
compensation paid to, or relating to any account of, any other
Participant or Beneficiary, except as may be required under
ERISA.
2.13 Participant Statements: As soon as practicable after
each Valuation Date, the Investment Manager shall cause a written
statement to be prepared and delivered to each Participant
reflecting as of that Valuation Date:
(a) The balance in his Account as of the
preceding Valuation Date;
(b) The amount of any Company Matching
Contributions and Employee Contributions allocated to
his Account for the period ending on such Valuation
Date;
-7-<PAGE>
(c) The adjustments to his Account to reflect
Income of the Investment Accounts, expenses of the
Investment Accounts and withdrawals from the
Investment Accounts, if any, during the period ending
on such Valuation Date; and
(d) The new balance in his Account as of that
Valuation Date.
2.14 Allocation of Responsibility Among Fiduciaries for Plan
Administration: The Fiduciaries shall have only those specific
powers, duties, responsibilities and obligations as are
specifically given them under this Plan. In general, the
Employer shall have the sole responsibility for making the
Contributions provided for under Sections 4.1, 4.2 and 4.3. The
Company shall have the sole authority to appoint and remove the
Investment Manager. The Company may amend or terminate this Plan
in whole or in part, and each other Employer may amend or
terminate this Plan with respect to its Employees to the extent
provided in Article IX. The Committee shall have the sole
responsibility for the administration of the Plan, and the Board
of Directors shall have sole authority to appoint and remove
members of the Committee. Each Fiduciary warrants that any
directions given, information furnished, or action taken by it
shall be in accordance with the provisions of the Plan, as the
case may be, authorizing or providing for such direction,
information or action. Furthermore, each Fiduciary may rely upon
any such direction, information or action of another Fiduciary as
being proper under this Plan, and is not required under this Plan
to inquire into the propriety of any such direction, information
or action. It is intended under this Plan that each Fiduciary
shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under this Plan and
shall not be responsible for any act or failure to act of another
Fiduciary. No Fiduciary guarantees the Investment Accounts in
any manner against investment loss or depreciation in asset
value.
2.15 Presenting Claims for Benefits: Any Participant or the
Beneficiary of any deceased Participant may submit written
application to the Committee regarding any benefit asserted to be
due him under the Plan. Such application shall set forth the
nature of the claim and such other information as the Committee
may reasonably request. Promptly upon the receipt of any
application required by this Section, the Committee shall
determine whether or not the Participant or Beneficiary involved
is entitled to a benefit hereunder and, if so, the nature thereof
and shall notify the applicant of its findings.
If a claim is wholly or partially denied, the Committee
shall so notify the applicant within ninety (90) days after
receipt of the application by the Committee, unless special
-8-<PAGE>
circumstances require an extension of time for processing the
application. If such an extension of time for processing is
required, written notice of the extension shall be furnished to
the applicant prior to the end of the initial ninety (90) day
period. In no event shall such extension exceed a period of
ninety (90) days from the end of such initial period. The
extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the
Committee expects to render its final decision. Notice of the
Committee's decision to deny a claim in whole or in part shall be
set forth in a manner calculated to be understood by the
applicant and shall contain the following:
(i) the specific reason or reasons for the
denial;
(ii) specific reference to the pertinent Plan
provisions on which the denial is based;
(iii) a description of any additional
material or information necessary for the applicant
to perfect the claim and an explanation of why such
material or information is necessary; and
(iv) an explanation of the claims review
procedure set forth in Section 2.16 hereof.
If notice of denial is not furnished, and if the claim is not
granted within the period of time set forth above, the claim
shall be deemed denied for purposes of proceeding to the review
stage described in Section 2.16.
2.16 Claims Review Procedure: If an application filed by a
Participant or Beneficiary under Section 2.15 above shall result
in a denial by the Committee of the benefit applied for, either
in whole or in part, such applicant shall have the right, to be
exercised by written request filed with the Committee within
sixty (60) days after receipt of notice of the denial of his
application or, if no such notice has been given, within sixty
(60) days after the application is deemed denied under
Section 2.15, for the review of his application and of his
entitlement to the benefit for which he applied. Such request
for review may contain such additional information and comments
as the applicant may wish to present. Within sixty (60) days
after receipt of any such request for review, the Committee shall
reconsider the application in light of such additional
information and comments as the applicant may have presented, and
if the applicant shall have so requested, shall afford the
applicant or his designated representative a hearing before the
Committee. The Committee shall also permit the applicant or his
designated representative to review pertinent documents in its
possession, including copies of the Plan document and information
-9-<PAGE>
provided by the Company relating to the applicant's entitlement
to such benefit. The Committee shall make a final determination
with respect to the applicant's application for review as soon as
practicable, and in any event not later than sixty (60) days
after receipt of the aforesaid request for review, except that
under special circumstances, such as the necessity for holding a
hearing, such sixty (60) day period may be extended to the extent
necessary, but in no event beyond the expiration of one hundred
twenty (120) days after receipt by the Committee of such request.
If such an extension of time for review is required because of
special circumstances, written notice of the extension shall be
furnished to the applicant prior to the commencement of the
extension. Notice of such final determination of the Committee
shall be furnished to the applicant in writing, in a manner
calculated to be understood by him, and shall set forth the
specific reasons for the decision and specific references to the
pertinent provisions of the Plan upon which the decision is
based. If the decision on review is not furnished within the
time period set forth above, the claim shall be deemed denied on
review.
2.17 Disputed Benefits: If any dispute still exists between
a Participant or a Beneficiary and the Committee after a review
of the claim or in the event any uncertainty shall develop as to
the person to whom payment of any benefit hereunder shall be
made, the Investment Manager may withhold the payment of all or
any part of the benefits payable hereunder to the Participant or
Beneficiary until such dispute has been resolved by a court of
competent jurisdiction or settled by the parties involved.
-10-<PAGE>
ARTICLE III
PARTICIPATION AND SERVICE
3.1 Participation: Certain key management Employees and
executives of the Company, who shall be nominated by the Chief
Executive Officer of the Company and approved by the Committee,
shall be eligible to commence participation in the Plan as of the
Effective Date or the next following Entry Date, if their
eligibility to participate is approved by the Committee after the
Effective Date. An Employee who chooses not to participate in
the Plan when he first becomes eligible, by failing to authorize
Employee Contributions and to complete such other enrollment
actions as the Committee shall require, may commence
participation only if he is subsequently offered another
opportunity to participate by the Committee. The Committee may
declare a Participant to be ineligible for further participation
in the Plan at any time. In no event shall eligibility to
participate in the Plan be determined with reference to any
minimum or maximum age or upon completion of any minimum period
of Service.
Notwithstanding any provision of this Plan to the
contrary, for purposes of eligibility to participate in this
Plan, the term "Employee" shall not include any individuals who
are "leased employees" as defined in Section 414(n) of the Code
or who are compensated on an hourly basis.
3.2 Participants to Furnish Required Information: Each
Participant shall furnish the Committee such information as the
Committee may consider to be necessary or desirable in
administering the Plan in such form as may be prescribed by the
Committee.
3.3 Participation Service: For purposes of determining the
Contribution Percentage applicable to a Participant under
Article IV, such Participant shall be credited with one (1) year
of Participation Service for each Participation Year throughout
which such Participant is continuously employed by Employers and
Affiliates and during which such Participant has not been
declared ineligible for further participation in the Plan.
3.4 Participation Upon Re-Employment: Upon the employment
by an Employer of any person who had previously been employed by
an Employer on or after the Effective Date, whether or not such
person was previously a Participant, such person shall be treated
as a new Employee and, as such, only eligible to participate
pursuant to Section 3.1.
3.5 Transferred or Ineligible Participants: If a
Participant is transferred from an Employer to an Affiliate, or
if the Committee declares him ineligible for further
-11-<PAGE>
participation in the Plan, his participation shall be suspended
until he again becomes eligible to participate pursuant to
Section 3.1. During such suspension or ineligibility, the
Participant shall not be entitled to make Employee Contributions
and no Company Matching Contributions shall be made to his
Company Matching Account.
-12-<PAGE>
ARTICLE IV
CONTRIBUTIONS AND FORFEITURES
4.1 Deferred Company Contributions: The Committee shall
determine, with respect to each Participant, the appropriate
rate, not to exceed one hundred percent (100%), at which Deferred
Company Contributions are to match Employee Contributions made by
such Participant in accordance with Section 4.3. As the
Participant makes Employee Contributions for a Participation
Year, the Employer shall accrue on its books Deferred Company
Contributions in the name of the Participant for that
Participation Year at such appropriate rate. No Participant has
any interest in or claim to a Deferred Company Contribution.
Deferred Company Contributions accrued in the name of a
Participant for a Participation Year shall be adjusted to reflect
the investment performance that would have resulted if such
contributions had been invested in an Investment Fund selected by
the Participant under Section 8.3 and shall be reduced to reflect
any Company Matching Contributions made with respect to such
Deferred Company Contributions.
4.2 Company Matching Contributions: Until the applicable
Contribution Percentage becomes one hundred percent (100%), the
Employer shall contribute Company Matching Contributions for a
Participation Year to a Participant's Company Matching Account,
unless participation is suspended pursuant to Section 3.5, as of
the last day of the Participation Year. The amount of Company
Matching Contributions to be contributed for the Participation
Year then ended shall be determined as follows:
Step 1. Separately for the Participation Year
then ended and each previous Participation Year - to
the amount of adjusted Deferred Company Contributions
accrued in the name of the Participant for the
particular Participation Year, add all Company
Matching Contributions previously made with respect
to the Deferred Company Contributions accrued in the
name of the Participant for the particular
Participation Year.
Step 2. Multiply each sum obtained in Step 1 by
the Contribution Percentage determined in accordance
with the following schedule based on the
Participant's then full Years of Participation
Service:
-13-<PAGE>
Contribution
Years of Participation Service Percentage
Less than 1 year 0%
At least 1 year but less than 2 25%
At least 2 years but less than 3 50%
At least 3 years but less than 4 75%
4 years or more 100%
Step 3. Determine the amount, if any, by which
each product obtained in Step 2 exceeds the sum of all
Company Matching Contributions previously made with
respect to the Deferred Company Contributions accrued
in the name of the Participant for the particular
Participation Year.
Step 4. The amount of Company Matching
Contributions to be contributed for the Participation
Year then ended shall be equal to the sum of the
excess amounts determined in Step 3.
Once the applicable Contribution Percentage becomes one hundred
percent (100%), Company Matching Contributions shall be made at
the time Deferred Company Contributions accrue. Each
Participant's Company Matching Account shall be fully vested and
non-forfeitable at all times.
Company Matching Contributions may, at the
Participant's election, be contributed "net of taxes," by
directing the Employer on the form specified by the Committee to
contribute the specified amount after reduction for applicable
tax withholding, or "gross of taxes," by directing the Employer
on said form to contribute the specified amount without such
reduction and to apply the applicable tax withholding against
other amounts paid by the Employer to the Participant. In either
event, however, the Participant shall be subject to any liability
for taxes (including federal income taxes) arising with respect
to Company Matching Contributions made to his Company Matching
Account.
4.3 Employee Contributions: Each Participant may elect to
make an Employee Contribution in any whole percentage of
Compensation up to his individual maximum percentage, such
percentage to be determined annually by the Committee. No
Employee Contribution shall be made with respect to any period
during which participation in the Plan is suspended pursuant to
Section 3.5. Each Participant's Employee Contribution shall be
effected by payroll deduction and shall be contributed to the
Investment Accounts by the Employer at periods of time determined
by the Employer beginning on or after the Effective Date, except
that (a) Employees who become Participants as of the Effective
Date may make a single Employee Contribution by check for the
-14-<PAGE>
amount that would have been contributed by payroll deduction for
the period from the Effective Date to the date the Participant's
election is received by the Committee and (b) Employees who
become Participants after the Effective Date may, at the
discretion of the Committee, make a one-time only Employee
Contribution by check in an amount permitted by the Committee.
Each Participant's Employee Contribution Account shall be fully
vested and non-forfeitable at all times.
A Participant may change the amount of his Employee
Contribution (not to exceed his individual maximum percentage) as
of March 1 of any Plan Year by directing the Committee in writing
at least fifteen (15) days prior to such date to change the rate
of the Contribution. In the event of a voluntary suspension of
Employee Contributions by the Participant at any time during the
Plan Year, the Participant may not resume making Employee
Contributions until the March 1 following the expiration of one
(1) year from the date of suspension.
4.4 Funding Policy: The provisions of this Article IV
shall be deemed the procedure for establishing and carrying out
the funding policy and method of the Plan. Such funding policy
and method shall be administered by the Employer and other
Fiduciaries consistent with the objectives of the Plan and with
the applicable requirements of Title I of ERISA.
4.5 Special One-Time Vesting: All Participants shall be
one hundred percent (100%) vested in their existing Deferred
Company Contributions on January 31, 1993. All future Company
contributions shall be subject to the provisions in Sections 4.1
and 4.2.
4.6 Special One-Time Employee and Deferred Company
Contributions: An Employee who first becomes a Participant in
this Plan in February 1993 shall be eligible to make a one-time
lump-sum Employee Contribution in an amount equal to ten percent
(10%) of his Compensation. The contributions in this Section 4.6
shall be subject to the other provisions of this Article IV.
-15-<PAGE>
ARTICLE V
ACCOUNTS OF PARTICIPANTS
5.1 Individual Accounts: The Committee shall create and
maintain adequate records to disclose the interest in the Plan of
each Participant, former Participant and Beneficiary. Such
records shall be in the form of individual accounts maintained by
the Investment Manager and credits and charges shall be made to
such accounts in the manner herein described. Each Participant
shall have two separate accounts, a Company Matching Account and
an Employee Contribution Account (collectively an "Account").
Distributions and withdrawals made from an Account shall be
charged to the Account as of the date paid.
5.2 Account Adjustments: The Accounts of Participants,
former Participants and Beneficiaries may be adjusted as of any
Valuation Date to reflect Income of the Investment Accounts,
Company Matching Contributions and Employee Contributions for
each Account.
5.3 Valuation of Investment Accounts: A valuation of the
Investment Accounts shall be made as of each Valuation Date and
as of such other special Valuation Dates as may be specified by
the Committee. Each valuation shall be based on the fair market
value of assets in the Investment Accounts at the end of the day
on the Valuation Date. For the purposes of each such valuation,
the assets of the Investment Accounts shall be valued at their
respective current market values.
5.4 Recognition of Different Investment Funds: As provided
in Article VIII, specific Investment Funds shall be established
and each Participant shall direct, within the limitations set
forth in Section 8.3, the proportion of the balance in his
Company Matching Account and Employee Contribution Account that
shall be deposited in each specific Investment Fund.
Consequently, when appropriate, a Participant shall have a
Company Matching Account and an Employee Contribution Account in
each such Investment Fund and the allocations described in
Section 5.2 shall be adjusted in such manner as is appropriate to
recognize the existence of Investment Funds. Because
Participants have a choice of Investment Funds, any reference in
this Plan to an Account shall be deemed to mean and include all
accounts of a like nature which are maintained for the
Participant under each Investment Fund.
-16-<PAGE>
ARTICLE VI
PARTICIPANTS' BENEFITS
6.1 Retirement of Participant on or After Retirement
Date: In the event a Participant's Service terminates on or
after his Retirement Date, the Employer shall promptly make a
special Company Matching Contribution to the Participant's
Company Matching Account in an amount equal to any adjusted
Deferred Company Contributions which are then shown as accrued on
the Employer's books with respect to the Participant.
Thereafter, the Participant shall be entitled to a distribution
of his Account in accordance with Article VII.
6.2 Disability of Participant: If the Committee shall find
and advise the Investment Manager that the Service of a
Participant has been terminated because of total and permanent
physical or mental disability, which in the judgment of the
Committee, based upon advice of competent physicians of their
selection, will permanently prevent such Participant from
resuming his Service with an Employer, the Employer shall
promptly make a special Company Matching Contribution to the
Participant's Company Matching Account in an amount equal to any
adjusted Deferred Company Contributions which are then shown as
accrued on the Employer's books with respect to the Participant.
Thereafter, the Participant shall be entitled to a distribution
of his Account in accordance with Article VII.
6.3 Death of Participant: In the event of the
Participant's death, and after receipt by the Committee of
acceptable proof of death, the Employer shall promptly make a
special Company Matching Contribution to the Participant's
Company Matching Account in an amount equal to any adjusted
Deferred Company Contributions which are then shown as accrued on
the Employer's books with respect to the Participant.
Thereafter, the Participant's Beneficiary (which, except as
provided in Sections 6.5 and 6.6, shall be the Participant's
surviving spouse) shall be entitled to a distribution of the
Participant's Account in accordance with Article VII.
6.4 Other Termination of Service:
(a) Standard Termination: Except as otherwise
provided in Section 6.4(b), in the event a
Participant's Service terminates under circumstances
not described in Section 6.1, 6.2 or 6.3, the Employer
shall promptly make a special Company Matching
Contribution to the Participant's Company Matching
Account in an amount determined in accordance with the
first paragraph of Section 4.2, but with the phrase
"Participation Year during which the Participant's
Service terminates" substituted for the phrase
-17-<PAGE>
"Participation Year then ended" wherever the latter
phrase appears in said paragraph. After such special
Company Matching Contribution has been made, all
adjusted Deferred Company Contributions which are then
shown as accrued in the name of the Participant on the
Employer's books shall be cancelled. Thereafter, the
Participant shall be entitled to a distribution of his
Account in accordance with Article VII.
(b) Change in Control: Notwithstanding the
foregoing, in the event of the insolvency or
bankruptcy of the Company or in the event of a change
in control of the Company, each Employer shall
promptly make a special Company Matching Contribution
to the Company Matching Account of each Participant
for whom it is the Employer in an amount equal to any
Deferred Company Contributions which are then shown as
accrued on the Employer's books with respect to the
Participant. A change of control shall only be deemed
to have taken place if: (i) a third person, including
a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, becomes
the beneficial owner of shares of the Company having
thirty percent (30%) or more of the total number of
votes that may be cast for the election of directors
of the Company or (ii) as the result of, or in
connection with, any cash tender or exchange offer,
merger or other business combination, sale of assets
or contested election or any combination, sale of
assets or contested election or any combination of the
foregoing transactions (a "Transaction"), the persons
who were directors of the Company before the
Transaction shall cease to constitute a majority of
the Board of Directors or any successor to the
Company. Without limiting the foregoing, no change of
control shall be deemed to have taken place if a
person or persons are appointed or elected as a member
or members of the Board of Directors as a result of or
in connection with a Transaction or other event unless
items (i) or (ii) above shall also have occurred.
6.5 Beneficiaries in the Event of Death: Upon the death of
a Participant, his Account shall be distributed to the
Participant's surviving spouse, but if there is no surviving
spouse, or if the surviving spouse has already consented by a
qualified election pursuant to Section 6.6, to the Beneficiary or
Beneficiaries designated by the Participant in a written
designation filed with his Employer, or if no such designation
shall have been so filed, to his estate. No designation of any
Beneficiary other than the Participant's surviving spouse shall
be effective unless in writing and received by the Participant's
-18-<PAGE>
Employer, and in no event shall it be effective as of the date
prior to such receipt.
6.6 Qualified Election: The Participant's spouse may waive
the right to the Participant's Account. The waiver must be in
writing and the Participant's spouse must acknowledge the effect
of the waiver. The spouse's consent to a waiver must be
witnessed by a Plan representative or a notary public. The
Participant may file a waiver without the spouse's consent if it
is established to the satisfaction of the Committee that such
written consent may not be obtained because there is no spouse or
the spouse may not be located. Any consent under this
Section 6.6 will be valid only with respect to the spouse who
signs the consent. Additionally, a revocation of a prior waiver
may be made by a Participant without the consent of the spouse at
any time before the distribution of the Account. The number of
revocations shall not be limited.
6.7 Valuation Dates Determinative of Participants'
Rights: If it should be necessary to value a Participant's
Account upon his termination of Service, such value shall be
determined as of the Valuation Date coinciding with or next
following the termination of his Service. The distribution of
such Participant's Account shall be determined in the manner set
forth in Article VII.
6.8 Loans and Withdrawals: No loans or withdrawals are
permitted under the Plan.
6.9 Tax Payments: As of the end of each Plan Year during
the period of Participation, the Company or an Employer will make
a cash payment to each Participant in an amount determined by the
Committee, which amount will be sufficient to pay such
Participant's federal income tax liability (assuming the highest
rates of federal income tax applicable to any individual taxpayer
in the year in which such payment is due) with respect to
(i) earnings, if any, on the Participant's Employee Contributions
and Company Matching Contributions (other than earnings
constituting capital gains occasioned by distributions at
termination of Service under Article VII) and (ii) such cash
payment.
6.10 Cessation of Deferred Company Contributions and Company
Matching Contributions and Tax Payment: No tax payment will be
paid and all Deferred Company Contributions and Company Matching
Contributions shall cease if a Participant makes a deposit,
withdrawal or an investment direction from his Investment
Accounts with the Investment Manager inconsistent with the terms
of this Plan; provided, however, that the Committee, at its sole
discretion, may subsequently reinstate or make tax payments
and/or Deferred Company Contributions and Company Matching
Contributions to such a Participant.
-19-<PAGE>
-20-<PAGE>
ARTICLE VII
PAYMENT OF BENEFITS
At the time that a Participant becomes entitled to a
single-sum distribution of benefits under the terms of
Section 6.1, 6.2 or 6.4, the Participant shall be given full
authority as to the disposition of his Investment Account and the
assets of the Investment Account shall henceforth be subject to
the control and direction of such Participant.
Notwithstanding the foregoing, the Committee shall
direct the Investment Manager that upon a Participant's death,
his Investment Account shall be paid within one year after the
Participant's death to the Participant's Beneficiary in a
single-sum distribution, subject to Sections 6.5 and 6.6 hereof.
-21-<PAGE>
ARTICLE VIII
INVESTMENT OF ACCOUNTS
8.1 Investment Accounts: All contributions of Employers
and Participants, together with all income, profits or increments
thereon shall be deposited in separate investment accounts
("Investment Accounts") for each Participant with the Investment
Manager in the name of each Participant. Contributions to a
Participant's Investment Account shall be invested among the
Investment Funds pursuant to the Participant's directions given
in accordance with the provisions of Sections 8.3 and 8.4.
Except as otherwise provided herein, interest, dividends and
other income or profits and gains, without distinction between
principle and income arising from an Investment Fund, shall be
invested and reinvested in the Investment Fund in which they
arise.
A Participant may only invest his Investment Accounts
in the Investment Funds designated by the Employer and offered by
the Investment Manager to Participants in this Plan. Pending
investment acquisitions in an Investment Fund, the Investment
Manager may hold funds thereof uninvested, or in bank deposits,
money-market investments, Treasury Bills, commercial paper or
like holdings.
8.2 Investment Manager: The Committee shall appoint an
Investment Manager or Managers to manage (including the power to
acquire and dispose of) the assets of the Investment Funds in
accordance with the terms of this Plan.
8.3 Investment Directions of Participants: Effective as of
the Effective Date or any following Entry Date, each Participant
may by written notice to the Investment Manager, in the form and
manner prescribed by it or the Committee, direct that the total
of the Contributions allocable to his Company Matching Account
and Employee Contribution Account be invested in accordance with
such percentages as he may designate among the Investment Funds.
8.4 Change of Investment Directions: Subject to any
restrictions or conditions which may be established by the
Investment Manager, a Participant may direct that the investment
of the total, or any part thereof, of the existing account
balances in his Company Matching Account and Employee
Contribution Account be changed from one authorized Investment
Fund to another authorized Investment Fund at any time by
contacting the Investment Manager. During February of each Plan
Year or within thirty (30) days after a new investment fund is
offered by the Investment Manager to Participants in this Plan,
each Participant may, by written notice to the Committee in the
manner prescribed by it and subject to any restrictions or
-22-<PAGE>
conditions which may be established by the Committee, direct that
the investment of all future contributions by and on behalf of
the Participant be changed from one authorized Investment Fund to
another authorized Investment Fund(s), effective as of the next
following March 1 or on the first day of the month next following
thirty (30) days after a new investment fund is offered by the
Investment Manager to Participants in this Plan.
8.5 Benefits Provided Solely From Individual Accounts: All
the benefits provided under Article VI hereof shall be paid or
distributed by the Investment Manager out of the Participant's
Investment Account with the Investment Manager. No Fiduciary
shall be responsible or liable in any manner for payment of any
such benefits, and all Participants hereunder shall look solely
to such Investment Account and to the adequacy thereof for the
payment of benefits of any nature or kind which may at any time
be payable hereunder. The Investment Manager is to look solely
to the Participant for instructions as to prompt disbursement of
his Account in accordance with Participant's instructions.
-23-<PAGE>
ARTICLE IX
ADOPTION OF PLAN BY OTHER ORGANIZATIONS;
AMENDMENT AND TERMINATION OF THE PLAN;
DISCONTINUANCE OF CONTRIBUTIONS TO THE INVESTMENT ACCOUNTS
9.1 Procedure for Adoption: Any corporation or other
organization which is or may become an Affiliate and which is not
already an Employer under this Plan may, with the consent and
approval of the Company, adopt the Plan by formal resolution or
decision of its own board of directors or other governing
authority, for all or any classification of persons in its
employment, and thereby, from and after the specified effective
date become an "Employer" as defined in this Plan. Such adoption
shall be effected and evidenced by an adoptive instrument
executed by the adopting Affiliate and consented to by the
Company. The adoptive instrument may contain such specific
changes and variations in Plan terms and provisions as may be
acceptable to the Company. The adoptive instrument shall become,
as to such adopting Affiliate and its employees, a part of this
Plan as then amended. The effective date of the Plan for any
such adopting Affiliate shall be that stated in the adoptive
instrument, and from and after such effective date such adopting
Affiliate shall assume all the rights, obligations and
liabilities of an Employer hereunder. The administrative powers
and control of the Company, as provided in the Plan, including
the sole right of amendment, of appointment and removal of the
Committee and the Investment Manager and their successors, shall
not be diminished by reason of the participation of any Employer
in the Plan. Any Employer may withdraw from the Plan at any time
without affecting other Employers by complying with the
provisions of the Plan. The Company may, in its absolute
discretion, terminate an Employer's participation at any time
when in its sole judgment such adopting Employer fails or refuses
to discharge its obligations under the Plan.
9.2 Effect of Adoption: The following special provisions
shall apply to all Employers:
(a) An Employee shall be considered in
continuous Service while regularly employed
simultaneously or successively by one or more
Employers.
(b) The transfer of a Participant from one
Employer to another or to an Affiliate shall not be
deemed a termination of Service.
9.3 Amendment: The Company shall have the right to amend
or modify this Plan at any time and from time to time to any
extent that it may deem advisable. Any such amendment or
modification shall be set out in an instrument in writing duly
-24-<PAGE>
authorized by the Board of Directors and executed by the Company.
No such amendment or modification shall, however, increase the
duties or responsibilities of the Investment Manager without its
consent thereto in writing, or have the effect of transferring to
or vesting in any Employer any interest or ownership in any
properties of the Investment Accounts, or of permitting the same
to be used for or diverted to purposes other than for the
exclusive benefit of the Participants and their Beneficiaries and
the payment of expenses of the Plan. No amendment shall decrease
the Account of any Participant. Notwithstanding anything herein
to the contrary, the Plan may be amended in such manner as may be
required at any time to make it conform to the requirements of
any United States statutes with respect to the Investment
Accounts, or of any amendment thereto, or of any regulations or
rulings issued pursuant thereto, and no such amendment shall be
considered prejudicial to any then existing rights of any
Participant or his Beneficiary under the Plan.
9.4 Acceptance or Rejection of Amendment by Employers: The
Company shall promptly deliver to each other Employer any
amendment to this Plan. Each such Employer will be deemed to
have consented to such amendment unless it notifies the Company
in writing within thirty (30) days after receipt of the amendment
that it does not consent thereto.
9.5 Termination: The Company shall have the right to
terminate this Plan at any time and from time to time to any
extent that it may deem advisable. A termination of the Plan as
to any particular Employer (and only as to any such particular
Employer) shall occur under the following circumstances:
(a) The Plan may be terminated by the delivery
to the Investment Manager of an instrument in writing
approved and authorized by the board of directors of
such Employer. In such event, termination of the Plan
shall be effective as of any subsequent day specified
in such instrument.
(b) The Plan shall terminate effective at the
expiration of sixty (60) days following the merger or
dissolution of any Employer, unless within such time a
successor organization approved by the Company shall
deliver to the Investment Manager a written instrument
certifying that such organization (i) has become the
Employer of more than fifty percent (50%) of those
Employees of such Employer who are then Participants
under this Plan and (ii) has adopted the Plan as to
its Employees.
9.6 Liquidation and Distribution of Investment Accounts
Upon Termination: In the event a termination of the Plan in
respect of any Employer shall occur, a separation of and
-25-<PAGE>
withdrawal from the Investment Accounts in respect of the
Participants of such Employer shall be made as of the effective
date of such termination of the Plan.
9.7 Effect of Termination or Discontinuance of Company
Matching Contributions: If any Employer shall completely
discontinue its Company Matching Contributions to the Investment
Accounts or suspend its Company Matching Contributions to the
Investment Accounts under such circumstances as to constitute a
complete discontinuance of Contributions within the purview of
the reasoning of U.S. Treasury Regulations Sec. 1.401-6(c), then
throughout any such period of discontinuance of Company Matching
Contributions all other provisions of the Plan shall continue in
full force and effect with respect to such Employer other than
the provisions for Contributions by such Employer.
9.8 Merger of Plan: In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part
of the assets and liabilities of the Investment Accounts to a
trust fund held under any other non-qualified plan of deferred
compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the
Investment Accounts applicable to such Participants shall be
transferred to the trust fund only if:
(a) Each Participant would (if either this Plan
or the other plan then terminated) receive a benefit
immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately
before the merger, consolidation or transfer (if this
Plan had then terminated); and
(b) Resolutions of the board of directors of the
Employer under this Plan, or of any new or successor
employer of the affected Participants, shall authorize
such transfer of assets; and, in the case of the new
or successor employer of the affected Participants,
its resolutions shall include an assumption of
liabilities with respect to such Participants'
inclusion in the new employer's plan.
-26-<PAGE>
ARTICLE X
MISCELLANEOUS
10.1 Terms of Employment: The adoption and maintenance of
the provisions of this Plan shall not be deemed to constitute a
contract between any Employer and any Employee, or to be a
consideration for, or an inducement or condition of, the
employment of any person. Nothing herein contained shall be
deemed to give to any Employee the right to be retained in the
employ of an Employer or to interfere with the right of an
Employer to discharge an Employee at any time, nor shall it be
deemed to give to an Employer the right to require any Employee
to remain in its employ, nor shall it interfere with any
Employee's right to terminate his employment at any time.
10.2 Controlling Law: Subject to the applicable provisions
of ERISA, as the same may be amended from time to time, which may
be applicable and provide to the contrary, this Plan shall be
construed, regulated and administered under the laws of the State
of Texas.
10.3 Invalidity of Particular Provisions: In the event any
provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the
remaining provisions of this Plan but shall be fully severable,
and this Plan shall be construed and enforced as if said illegal
or invalid provisions had never been inserted therein.
10.4 Non-Alienability of Rights of Participants: No
interest, right or claim in or to any part of an Investment
Account or any payment therefrom shall be assignable,
transferable, voluntary or involuntary by operation of law or
otherwise, or subject to sale, mortgage, pledge, hypothecation,
commutation, anticipation, garnishment, attachment, execution or
levy of any kind, and the Investment Manager shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge,
hypothecate, commute or anticipate the same, except to the extent
required by law.
10.5 Payments in Satisfaction of Claims of
Participants: Any payment or distribution to any Participant or
his legal representative or any Beneficiary in accordance with
the provisions of this Plan shall be in full satisfaction of all
claims under the Plan against the Employer. The Investment
Manager may require that any distributee execute and deliver to
the Investment Manager a receipt and a full and complete release
as a condition precedent to any payment or distribution under the
Plan.
10.6 Impossibility of Diversion of Investment
Accounts: Notwithstanding any provision herein to the contrary,
-27-<PAGE>
no part of the corpus or the income of the Investment Accounts
shall ever be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries. No
part of the Investment Accounts shall ever directly or indirectly
revert to the Employer.
-28-<PAGE>
IN WITNESS WHEREOF, the Company has executed these
presents as evidenced by the signatures of its duly authorized
officers, in a number of copies, all of which shall constitute
but one and the same instrument, which may be sufficiently
evidenced by any such executed copy hereof, this 16th day of
June, 1995, but effective as of February 1, 1993.
OCEANEERING INTERNATIONAL, INC.
By//s// George R. Haubenreich, Jr.
ATTEST:
//s// Sheila F. Jaynes
THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day
personally appeared George R. Haubenreich, Jr., Sheila F. Jaynes
of OCEANEERING INTERNATIONAL, INC., known to me to be the persons
and officers whose names are subscribed to the foregoing
instrument, and acknowledged to me that they executed the same as
the act of the said OCEANEERING INTERNATIONAL, INC., a
corporation, and that they are duly authorized to perform the
same and that they executed the same as the act and deed of said
corporation for the purposes and consideration therein expressed
and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 6th day
of June, 1995.
//s// June M. Templet
Notary Public, State of Texas
-29-
EXHIBIT 10.16
March 31, 1995
Oceaneering International, Inc.
16001 Park Ten Place, Suite 600
Houston, Texas 77084
Attention: T. Jay Collins,
Executive Vice President &
Chief Financial Officer
Ladies and Gentlemen:
Citibank, N.A. (the "Bank") is pleased to establish an
uncommitted line of credit in your favor not to exceed
$US20,000,000.00 (Twenty Million Dollars) at any time outstanding
and available for your use from time to time through March 31,
1996, unless the Bank should advise, or be advised by you, to the
contrary. This line of credit agreement (this "Agreement") is
not a commitment but sets forth the terms and conditions under
which the Bank may in its sole discretion make advances (the
"Advances") to you and may issue (as "Issuing Bank") letters of
credit for a term not to exceed two (2) years from the date of
issuance (each a "Letter of Credit") for your account from time
to time under such line of credit.
1. The Advances. (a) All Advances under the line of
credit shall be payable on demand and shall be evidenced by your
Demand Promissory Note substantially in the form of Exhibit A
hereto (the "Note"). Advances under the Note may be made by the
Bank at the oral or written request of persons designated
pursuant to the resolution delivered to the Bank pursuant to
Section 3 below and shall be disbursed by credit to your account
at the office of the Citibank, N.A. located at 399 Park Avenue,
New York, New York 10043 or otherwise in accordance with the
written instruction of such persons. In accordance with the
terms of the Note, you shall be permitted to choose as the
applicable interest rate basis for each Advance one of the
following (as defined in the Note): Citibank's Alternate Base
Rate, LIBOR plus an additional amount mutually agreed upon by the
Bank and you prior to the time of a borrowing under the Note, or
the Quoted Rate; provided that LIBOR and Quoted Rate Advances
(each a "Fixed Rate Advance") shall only be available for
principal amounts of at least $1,000,000 or $500,000,
respectively, that are whole-integer multiples of $100,000. All
capitalized terms not otherwise defined herein are used with the
same meanings as in the Note.
rew:atc
oceaneering - 3/30/95<PAGE>
(b) If due to either (i) the introduction of or any change
(including without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of
any law or regulation or (ii) the compliance of the Bank with any
guideline or request from any central bank or other governmental
authority (whether or not having force of law), there shall be
any increase in the cost to the Bank of agreeing to make or
making, funding or maintaining Advances, then you shall from time
to time, upon demand by the Bank, pay to the Bank additional
amounts sufficient to indemnify the Bank against such increased
cost. You further agree to indemnify and save the Bank harmless
from any loss, cost, damage, liability or expense which may be
suffered or incurred by the Bank, resulting from the imposition
of reserve requirements to transactions covered hereby under
Regulation D of the Board of Governors of the Federal Reserve
System or otherwise (including without limitation the loss, cost,
damage, liability or expense incurred in maintaining any such
reserve). A certificate as to the amount of such increased cost,
submitted to you by the Bank, shall be conclusive, absent
manifest error.
rew:atc
oceaneering - 3/30/95 2<PAGE>
(c) You agree to compensate the Bank on written request by
the Bank (which request will set forth in reasonable detail the
basis for requesting such amounts) for all reasonable losses,
expenses and liabilities (including, without limitation, any
interest paid by the Bank to lenders of funds borrowed by it to
make or carry Fixed Rate Advances) and any loss sustained by the
Bank in connection with the reemployment of such funds which Bank
may sustain if for any reason (whether due to demand for payment
by the Bank (except for demand by the Bank in circumstances where
no default or event of default exists or where no imminent breach
by Borrower of the note and/or this Agreement exists in the
reasonable view of the Bank), voluntary prepayment by the
Borrower or any other reason) you repay any Fixed Rate Advance on
a day which is not the last day of the applicable Interest Period
or as a consequence of your failure to borrow any such Advance
after giving notice thereof or to pay the principal of any such
Advance when due under this Agreement and the Note.
2. Letters of Credit. You may from time to time request
the Bank to cause the Issuing Bank to issue a Letter of Credit
for your account by executing the Issuing Bank's standard form of
letter of credit application (each an "Application"). The
Issuing Bank shall not be obligated to issue any Letter of Credit
at any time but each Letter of Credit shall be subject to the
terms and conditions contained in the related Application and
shall expire no more than two (2) years after the date of
issuance. You shall pay the Bank a commission payable at
issuance on each standby Letter of Credit computed at the rate of
.75% per annum (based on a year of 360 days and actual days
elapsed) on the maximum amount available or to be available for
drawing thereunder (assuming compliance with all conditions
thereof), or $450.00 (which ever is greater) payable in arrears
on the last day of each calendar quarter and on the expiration
date thereof. In the event that the Issuing Bank notifies the
Bank that you have failed to pay any obligations under any
Application when due, you shall be deemed to have requested an
Advance from the Bank in such amount bearing interest at the
Alternate Base Rate and the Bank is hereby irrevocably authorized
to make such an Advance and deliver the proceeds thereof to the
Issuing Bank for application to such obligations.
3. Loan Documents. You shall provide to the Bank (i) a
copy of this Agreement executed by you, (ii) your executed Note,
(iii) a certificate of your secretary or assistant secretary,
dated a recent date, containing a copy of the resolutions of your
board of directors authorizing the execution and performance of
this Agreement, the Note, the Applications, and all other
documents executed or to be executed by you hereunder or
thereunder (collectively, the "Loan Documents") and certifying as
to the incumbency and specimen signatures of your officers
authorized to execute each such Loan Document and to give or
rew:atc
oceaneering - 3/30/95 3<PAGE>
designate others to give notices hereunder and thereunder, and
(iv) a copy of your articles or certificate of incorporation
certified by the Secretary of State of your state of
incorporation as of a recent date.
4. Representations and Covenants. Until the termination
of this line of credit and payment in full of your obligations
under this letter agreement, the Note and the Applications (the
"Obligations") you will provide to the Bank: (i) within 90 days
after the end of each fiscal year, annual financial statements
certified by accountants acceptable to the Bank; (ii) within 45
days after the end of each fiscal quarter (except the fourth
quarter) unaudited financial statements certified by your chief
financial officer; and (iii) such other information concerning
your business, operations, properties, prospects and financial or
other condition as the Bank may request from time to time. In
addition, you agree at all times during the term of this Letter
Agreement to advise the Bank immediately upon obtaining knowledge
of (but in any event not later than twenty (20) days from the
date of) the occurrence of a default under the terms of or an
Event of Default as defined under any credit agreement or senior
credit facilities between the Borrower and any financial
institution or other third party. Such notice maybe in the form
of oral communication promptly confirmed in writing via letter,
telex, telecopier or telefacsimile.
5. Obligations Payable on Demand. Except as otherwise
required by the terms of the Demand Promissory Note, all of the
Obligations shall be payable on demand, notwithstanding the
duration of any Interest Period for any Advance, the expiration
date of any Letter of Credit or anything else contained herein or
in any of the Loan Documents. Upon such demand, you shall pay
to us, in addition to all principal and interest then outstanding
under the Note, an amount equal to the maximum amount (the
"Maximum Available Amount") which may at any time be drawn under
all Letters of Credit then outstanding (assuming compliance with
all conditions thereof and whether or not any beneficiary under
any Letter of Credit shall have presented, or shall be entitled
at such time to present, the drafts or other documents required
to draw under such Letter of Credit), which amount shall be held
in a cash collateral account to be established by you with the
Issuing Bank as cash collateral for your obligations under the
Applications, provided that in the event of cancellation or
expiration of any Letter of Credit or any reduction in the
Maximum Available Amount, we shall apply the difference between
the Maximum Available Amount immediately prior to such
cancellation, expiration or reduction and the Maximum Available
Amount immediately after such cancellation, expiration or
reduction, to the payment of any outstanding Obligations and
shall pay any excess to whomsoever shall be lawfully entitled to
receive such funds. Amounts deposited in the cash collateral
rew:atc
oceaneering - 3/30/95 4<PAGE>
account shall be invested by the Bank at your request in approved
certificates of deposit or other readily marketable instruments
or securities mutually agreed upon by you and the Bank.
6. Indemnification. You agree to indemnify and hold
harmless the Bank and its affiliates, officers, directors,
employees, agents and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses, liabilities
and expenses (including, without limitation, fees and
disbursements of counsel) which may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out
of or in connection with or by reason of, or in connection with
the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with
this Agreement or the Obligations, including, without limitation,
any transaction in which the proceeds of any borrowing are or are
to be applied, whether or not an Indemnified Party is a party
thereto and whether or not the transactions contemplated herein
are consummated, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct.
7. Amendments and Waivers. No amendment, modification or
waiver of this Agreement, the Note or any term hereof or thereof
shall be effective unless in writing and signed by you and the
Bank.
8. Integration. This letter agreement, the Note and any
other Loan Documents constitute the final agreement between you
and the Bank on the subject matter hereof and supersede all prior
understandings, representations and agreements.
9. Assignments and Participations. We may assign to any
of our affiliates or, with your consent (which shall not be
unreasonably withheld), to one or more other financial
institutions, all or a portion of our rights and obligations
under this letter and the Note. Upon delivery to you of written
notice of such assignment signed by both parties thereto, (i) the
assignee shall become a party hereto and shall assume our rights
and obligations hereunder to the extent of such assignment, (ii)
the assignor shall relinquish its rights and be released from its
obligations under this letter to the same extent and (iii) you
shall promptly execute and deliver new notes to the assignee and
assignor as necessary to reflect their respective rights and
obligations hereunder after giving effect to such assignment. We
may also sell participations in all or a portion of our rights
and obligations under this Agreement, provided that our
obligations hereunder shall remain unchanged, we shall remain
solely responsible to the other parties hereto for the
performance thereof and you shall continue to deal solely and
rew:atc
oceaneering - 3/30/95 5<PAGE>
directly with us in connection with our rights and obligations
hereunder. We may disclose to any existing or prospective
transferee under this Section any information received by us from
or on behalf of you pursuant to this letter, so long as the
recipient has agreed to hold in confidence any such information
which is confidential in nature. Notwithstanding anything else
set forth herein, we may at any time create a security interest
in all or any portion of our rights under this letter (including
without limitation the Advances and the Note) in favor of any
Federal Reserve Bank.
10. Governing Law and Jurisdiction. This Agreement shall
be governed by and construed in accordance with the internal laws
of the State of New York. The Borrower hereby consents to the
personal jurisdiction of any court of the United States or the
State of New York sitting in New York City, New York in any
action or proceeding arising out of or relating to this agreement
or the Note, agrees that all claims in respect of any such action
or proceeding may be heard and determined in such court and
waives the defense of inconvenient forum to the maintenance of
any such action or proceeding.
If the foregoing is satisfactory to you, please indicate
your acceptance by signing the enclosed copy of this letter and
returning it to the Bank at Citibank, N.A. c/o Citicorp North
America, Inc., Two Allen Center, 1200 Smith Street, Houston,
Texas 77002.
Yours very truly
CITIBANK, N.A.
By_MARK_J._LYONS____________________
Title_Vice President________________
Accepted and agreed to as of
the date first stated above:
OCEANEERING INTERNATIONAL, INC.
By: ROBERT P. MINGOIA
Title: Treasurer
rew:atc
oceaneering - 3/30/95 6<PAGE>
EXHIBIT A
DEMAND PROMISSORY NOTE
$20,000,000.00
March 31, 1995
FOR VALUE RECEIVED, the undersigned, Oceaneering International,
Inc., a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY
ON DEMAND to the order of Citibank, N.A. (the "Bank"), at its office
(the "Reference Bank") located at 399 Park Avenue, New York, New
York, the principal sum of $20,000,000.00 (Twenty Million Dollars)
or, if less, the aggregate principal amount of all advances (each an
"Advance") made hereunder by the Bank to the Borrower outstanding at
the time of such demand; together with interest on any and all
principal amounts remaining unpaid hereunder from time to time
outstanding from and including the date hereof until such principal
amounts are finally paid in full, at such interest rates and payable
at such times, as are specified below. This Demand Promissory Note
is the Note referred to in, and is entitled to the benefits of, the
letter agreement between the Borrower and the Bank dated as of March
31, 1995 (as amended from time to time, the "Letter Agreement").
1. All Advances hereunder shall bear interest, payable on
demand or if no demand is made then monthly on the last day of each
calendar month during the term hereof, at a fluctuating interest rate
per annum in effect from time to time equal at all times to the
Alternate Base Rate (as defined below), with each change in the
fluctuating interest rate hereunder taking effect simultaneously with
the corresponding change in the Alternate Base Rate; provided that
upon not less than three Business Days (as defined below) notice to
the Bank, the Borrower may elect to have all or any portion (in the
amount of at least $1,000,000 that are whole-integer multiples of
$100,000) of the aggregate principal amount of such Advances bear
interest for the Interest Period (as defined below) specified in such
notice at LIBOR (as defined below), plus an additional amount
mutually agreed upon by the Borrower and the Bank, payable on the
last day of such Interest Period; and provided further, that upon
offer by the Bank and acceptance by the Borrower on any Business Day,
the Borrower may elect to have all or any portion (in the amount of
at least $500,000 that are whole-integer multiples of $100,000) of
the aggregate principal amount of such Advances bear interest at a
rate equal to the Quoted Rate (as defined below), payable on the last
day of such Interest Period.
2. As used in this Demand Promissory Note, the following terms
shall have the following meanings:
rew:atc
oceaneering - 3/30/95<PAGE>
"Alternate Base Rate" means, at all times, a fluctuating rate
per annum equal to the highest of:
(i) the rate of interest announced publicly by the
Reference Bank in New York, New York, for time to time, as the
Reference Bank's base rate; or
(ii) the sum of (A) 1/2 of one percent per annum plus (B)
the rate obtained by dividing (x) the latest three-week moving
average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United
States money market banks (such three-week moving average being
determined weekly by the Reference Bank on the basis of such
rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by the Reference Bank, in
either case adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4
on one percent), by (y) a percentage equal to 100% minus the
average of the daily percentages specified during such three-
week period by the Federal Reserve Board for determining the
maximum reserve requirement (including, but not limited to, any
marginal reserve requirements for the Reference Bank in respect
of liabilities consisting of or including (among other
liabilities) three-month non-personal time deposits of at least
$100,000), plus (C) the average during such three-week period of
the daily net annual assessment rates estimated by the Reference
Bank for determining the current annual assessment payable by
the Reference Bank to the Federal Deposit Insurance Corporation
for insuring three-month time deposits in the United States; or
(iii) one half of one percent per annum above the weighted
average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of
the quotations for such transactions received by the Reference
Bank from three Federal funds brokers of recognized standing
selected by it.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, with respect to
any Advance bearing interest by reference to LIBOR, a day of the year
on which dealings are carried on in the London interbank market.
"Indebtedness" means (a) all indebtedness of the Borrower for
borrowed money or for the deferred purchase price of property or
services under material contracts (other than current trade
rew:atc
oceaneering - 3/30/95 2<PAGE>
liabilities incurred in the ordinary course of the Borrower's
business and payable in accordance with customary practices and which
in any event are no more than 120 days past due or, if more than 120
days past due, are being contested in good faith and adequate
reserves with respect thereof have been made on the books of the
Borrower), (b) all obligations under senior credit facilities, (c)
all obligations under Finance leases, (d) all obligations and
liabilities secured by liens on any property owned by the Borrower
whether or not the Borrower has assumed or is otherwise liable for
the payment thereof.
"Interest Period" means (i) in the case of a Quoted Rate
Advance, the number of days mutually agreed by the Borrower and the
Bank and (ii) in the case of a LIBOR Advance, one, two or three
months; provided that (a) no Interest Period shall be selected which
will end after the Termination Date and (b) if the last day of any
Interest Period would otherwise occur on a day other than a Business
Day, such Interest Period shall end on the next succeeding Business
Day, except that if such extension would cause the last day of any
Interest Period for a LIBOR Advance to occur in the next following
calendar month, such Interest Period shall end on the next preceding
Business Day.
"LIBOR" means, for any Interest Period, the rate per annum at
which deposits in United States dollars are offered by the principal
office of the Reference Bank in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days
(as defined below) before the first day of such Interest Period in an
amount substantially equal to the principal amount of such Advance
and for a period equal to such Interest Period, provided that if, on
any date, it shall become unlawful for the Bank to continue to fund
or maintain any amount hereunder at LIBOR, or LIBOR shall fail to
reflect the cost to Bank of funding or maintaining such amount, such
amount shall bear interest from and after such date at the Alternate
Base Rate.
"Quoted Rate" means, for any Interest Period, the rate per annum
offered by the Bank to the Borrower and agreed to by the Borrower for
such Interest Period, provided, however, that if no rate per annum
shall be agreed by the Borrower and the Bank prior to 1:00 p.m. (New
York time) on the first day of such Interest Period as the Quoted
Rate for such Interest Period, the Quoted Rate for such Interest
Period shall be equal to the Alternate Base Rate. The Bank may give
the Borrower a written confirmation of the principal amount, Quoted
Rate and Interest Period applicable to any Advance bearing interest
at the Quoted Rate and, unless the Borrower shall object thereto
within one Business Day after receiving such confirmation, such
confirmation shall be conclusive and binding for all purposes. If
the Borrower shall make a timely objection as to the rate or term set
forth in such confirmation, such Advances shall bear interest at the
Alternate Base Rate.
rew:atc
oceaneering - 3/30/95 3<PAGE>
3. Both principal and interest hereunder are payable prior to
1:00 P.M. (New York City time) on the day for payment thereof
(whether upon demand or otherwise) in lawful money of the United
States of America to the Bank at the office of the Reference Bank
referred to above, in same day funds. Whenever any payment hereunder
shall be stated to be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation
of payment of interest. All computations of interest shall be made
by the Bank on the basis of a year of 365 or 366 days (if based on
the Base Rate) or 360 days (in the case of any other rate) for the
actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest is payable. The
Borrower hereby authorizes the Reference Bank, if and to the extent
payment is not made when due hereunder, to charge from time to time
against any or all of the Borrower's accounts with the Reference Bank
(without notice to the Borrower) and make available to the Bank any
amount so due. Any amount of principal or interest which is not paid
when due (whether on demand, at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is
due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to two percent (2%) per annum above the
Alternate Base Rate.
4. The duration of any Interest Period shall in no way affect
the Bank's right to demand payment hereunder at any time; provided
that, unless the Bank shall have made a demand hereunder for payment,
the Borrower shall have no right to prepay or to change the interest
rate basis for any unpaid principal amount bearing interest by
reference to LIBOR or the Quoted Rate other than on the last day of
the Interest Period therefor. To the extent that any unpaid
principal amount hereof bears interest at the Alternate Base Rate,
the Borrower may pay all or any part thereof on not less than three
Business Days' notice to the Bank, together with accrued interest to
the date of such payment on the amount paid.
5. The date and amount of each Advance, the interest rate
selection, the Interest Period applicable thereto (if any) and all
payments made by the Borrower on account of principal hereof shall be
recorded by the Bank and, prior to any transfer of this Demand
Promissory Note, entered by the Bank on the grid attached hereto,
which is part of this Demand Promissory Note, provided that the Bank
shall not be liable to the Borrower or to any other person for
failure to record any of the foregoing matters on the grid or
otherwise in the Bank's records. Such grid or such other record
maintained by the Bank shall, in the absence of manifest error, be
conclusive evidence of the matters so recorded.
6. Each Advance made by the Bank to the Borrower under this
Demand Promissory Note shall be subject to the satisfaction of the
condition precedent to funding such Advance and a representation by
rew:atc
oceaneering - 3/30/95 4<PAGE>
the Borrower to the Bank that no default or Event of Default (as
defined in such agreements) exist under any senior credit facilities
or credit agreements to which the Borrower is a party on the date of
and at the time of the making of such Advance by the Bank hereunder.
7. In the event of an actual or deemed entry of an order for
relief with respect to the Borrower under the Federal Bankruptcy
Code, this Demand Promissory Note, all interest hereon and all other
amounts payable hereunder shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
8. If the Borrower shall default in any payment of principal
of or interest on any Indebtedness (other than this Note) after the
expiration of the applicable grace period provided for in any
agreement, note or instrument under which such Indebtedness was
created, upon the happening of such event, without demand by the
Bank, all interest hereon and all amounts due hereunder shall
automatically become due and payable, without notice, presentment or
protest of any kind, all of which are expressly waived by the
Borrower.
9. The Borrower hereby waives presentment for payment, demand,
notice of dishonor and protest of this Demand Promissory Note and, to
the full extent permitted by law the right to plead any statute of
limitations as a defense to any demand hereunder. The Borrower
agrees to pay on demand all losses, costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with
the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Demand Promissory Note and any other instruments
and documents delivered in connection herewith, including, without
limitation, reasonable counsel fees and expenses in connection
therewith.
10. This Demand Promissory Note shall be governed by, and
construed in accordance with, the laws of the State of New York. The
Borrower hereby consents to the personal jurisdiction of any court of
the United States or the State of New York sitting in New York City,
New York in any action or proceeding arising out of or relating to
this Demand Promissory Note or the Letter Agreement, agrees that all
claims in respect of any such action or proceeding may be heard and
determined in such court and waives the defense of inconvenient forum
to the maintenance of any such action or proceeding.
IN WITNESS WHEREOF, the Borrower has caused this Demand
Promissory Note to be executed and delivered by its duly authorized
officer, as of the day and year and at the place first above written.
OCEANEERING INTERNATIONAL, INC.
rew:atc
oceaneering - 3/30/95 5<PAGE>
By:
Title:
rew:atc
oceaneering - 3/30/95 6<PAGE>
TRANSACTIONS ON DEMAND PROMISSORY NOTE OF
IN FAVOR OF CITIBANK, N.A. dated March 31, 1995
Amount of
Borrowing
Made This Interest Interest Amount of Notation
Date Date Period Rate Payment Made By
rew:atc
oceaneering - 3/30/95 7<PAGE>
EXHIBIT B
FORM OF OPINION OF BORROWER'S COUNSEL
[Date]
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3 of
the letter agreement dated as of , 19 (the "Letter
Agreement"), between (the
"Borrower") and you. Terms defined in the Credit Agreement are
used herein as therein defined.
We have acted as counsel for the Borrower in connection with
the preparation, execution and delivery of the Letter Agreement.
In that connection, we have examined: (1) the Letter Agreement,
(2) the documents furnished by the Borrower pursuant to Section 3
of the Letter Agreement, (3) the [Articles] [Certificate] of
Incorporation of the Borrower and all amendments thereto (the
"Charter"), (4) the by-laws of the Borrower and all amendments
thereto (the "By-laws"), (5) a certificate of the Secretary of
State of , dated , 19 , attesting
to the continued corporate existence and good standing of the
Borrower in that State. We have also examined the originals, or
copies certified to our satisfaction, of the documents listed in
a certificate of the chief financial officer of the Borrower,
dated the date hereof (the "Certificate"), certifying that the
documents listed in such certificate are all of the indentures,
loan or credit agreements, leases, guarantees, mortgages,
security agreements, bonds, notes and other agreements or
instruments, and all of the orders, writs, judgments, awards,
injunctions and decrees, which affect or purport to affect the
Borrower's right to borrow money or the Borrower's obligations
under the Letter Agreement or the Note. In addition, we have
examined the originals, or copies certified to our satisfaction,
of such other corporate records of the Borrower, certificates of
public officials and of officers of the Borrower, and agreements,
instruments and other documents, as we have deemed necessary as a
basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not
independently established by us, relied upon certificates of the
Borrower or its officers or of public officials. We have assumed
the due execution and delivery, pursuant to due authorization, of
the Letter Agreement by the Bank.
rew:atc
oceaneering - 3/30/95<PAGE>
Based upon the foregoing and upon such investigation as we
have deemed necessary, we are of the following opinion:
1. The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the
State of .
2. The execution, delivery and performance by the
Borrower of the Letter Agreement and the Note are within the
Borrower's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (i)
the Charter or the By-laws or (ii) any law, rule or
regulation applicable to the Borrower (including, without
limitation, Regulation X of the Board of Governors of the
Federal Reserve System) or (iii) any contractual or legal
restriction contained in any document listed in the
Certificate or, to the best of our knowledge, contained in
any other similar document. The Letter Agreement and the
Note have been duly executed and delivered on behalf of the
Borrower.
3. No authorization, approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery
and performance by the Borrower of the Letter Agreement and
the Note [, except for , all of which have been
duly obtained or made and are in full force and effect].
4. The Letter Agreement and the Note are legal, valid
and binding obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms,
subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally and subject to the
effect of general principles of equity, including (without
limitation) concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether considered in
a proceeding in equity or at law).
5. To the best of our knowledge, there are no pending
or overtly threatened actions or proceedings against the
Borrower or any of its subsidiaries before any court,
governmental agency or arbitrator which purport to affect
the legality, validity, binding effect or enforceability of
the Letter Agreement or the Note or which are likely to have
a materially adverse effect upon the financial condition or
operations of the Borrower or any of its subsidiaries.
[*6. In any action or proceeding arising out of or
relating to the Letter Agreement or the Note in any court of
the State of or in any federal court sitting in
rew:atc
oceaneering - 3/30/95 2<PAGE>
the State of , such court would recognize and
give effect to the provisions of Section of the Letter
Agreement wherein the parties thereto agree that the Letter
Agreement and the Note shall be governed by, and construed
in accordance with, the laws of the State of New York.]
We are qualified to practice law in the State of
and we do not purport to be experts on any laws
other than the laws of the State of [, the General
Corporation Law of the State of Delaware] and the Federal laws of
the United States. [**For purposes of the opinion set forth in
paragraph 4 above, we have assumed with your permission that the
laws of the State of New York are identical to the laws of the
State of .]
Very truly yours,
* Include if the Borrower is located in a state other than New
York.
** Include if Borrower's counsel is not admitted in New York.
rew:atc
oceaneering - 3/30/95 3<PAGE>
EXHIBIT 10.17
OCEANEERING INTERNATIONAL, INC.
1995 BONUS AWARD PLAN
The 1995 Bonus Award Plan is approved by the Company's Board of
Directors and administered by its Compensation Committee.
Individuals who are nominated and approved for inclusion in the
Plan will be reviewed after final year end results are completed.
Recommendations for cash bonus awards will be based on the
accomplishment of results (Individual, Profit Center and Total
Company) in order to determine the amount of award, if any, to be
made. People must be amongst the nominated group for
eligibility, and be employed by the Company at the time of
funding. Bonuses will be earned when paid. Individuals, as
designated, will be subject to a maximum bonus eligibility of 10%
- 100% of current base salary.
The 1995 Bonus Award Plan is based on achieving specific results
by the Individual, his Profit Center and the Total Company. In
order to integrate each of these performances in a fashion that
benefits the Shareholders and Employees, each item is
interrelated. The amount of award recommendation will be based
on the following methodology:
Individual Coefficient
The Individual Coefficient is determined by taking the
individual's weighted average evaluation of objectives
achieved times the individual's salary maximum. This is the
beginning step in determining the final award. An
individual's performance must meet certain minimum criteria
or he is eliminated from bonus award consideration.
Profit Center Results Contribution
The Profit Center Contribution is determined by comparing
the Profit Center Net Income Objective with the results
achieved and determining the Contribution to the Individual
Coefficient.
Should the Profit Center results be below a specified
amount, all the individuals in that Profit Center may be
eliminated from the Award Program. The President may review
the performance of areas within the region on a case-by-case
basis and take appropriate action. Should the actual
results be equal to or greater than such specified amount,
the individual becomes eligible for an award.
Oceaneering International, Inc. Results Contribution
The Company Results Contribution is determined by comparing
the Company's FY95 Net Income Result with the Objective<PAGE>
planned. The results achieved determine the multiplier that
will be used. Thus, an individual may, subject to the
determined maximum, be recommended for an award equal to the
Individual Coefficient times the Profit Center Contribution
times the Company Results Contribution times current base
salary.
The 1995 Bonus Award Plan is in effect FY95. A similar plan may
or may not be approved for FY96. It is extremely important that
the Company continue improved results in FY95. All participants
must be committed to a reward system based on achieving results.
The Company is entrepreneurially oriented and must use its
maximum creativity, effort and determination in achieving
individual results that collectively increases its Shareholders'
Net Wealth. The 1995 Bonus Award Plan is structured to foster
that position.
June 16, 1994<PAGE>
EXHIBIT 21
SUBSIDIARIES OF
OCEANEERING INTERNATIONAL, INC.
Percentage of Ownership Jurisdiction
by Oceaneering of
Subsidiary International, Inc. Organization
Eastport International, Inc. 100% Delaware
Monocean Oceaneering Engenharia
Submarina Ltda. 100% Brazil
Multiflex, Inc. 100% Texas
Multiflex Limited 100% Scotland
Multiflex U.K., Inc. 100% Texas
Norsk Subsea Cable AS 49% Norway
Ocean Barge Limited Partnership 75% Texas
Ocean Systems Do Brasil Servicos
Subaquaticos Ltda. 100% Brazil
Ocean Systems Engineering, Inc. 100% Texas
Ocean Systems Engineering Limited 100% England
Oceaneering Arabia Ltd. 50% Saudi Arabia
Oceaneering A/S 100% Norway
Oceaneering Australia Pty. Limited 50% Australia
Oceaneering do Brasil Servicos
Submarinos Ltda. 100% Brazil
Oceaneering FSC, Inc. 100% Barbados
Oceaneering International AG 100% Switzerland
Oceaneering International (Ireland) Limited 100% Ireland
Oceaneering International (M) Sdn. Bhd. 100% Malaysia
Oceaneering International (Netherlands) B.V. 100% Netherlands
Oceaneering International Pte Ltd 100% Singapore
Oceaneering International, S.A. de C.V. 100% Mexico
Oceaneering International Services Limited 100% England
Oceaneering International (Sharjah) Limited 100% Sharjah
Oceaneering Limited 100% Canada
Oceaneering Space Systems, Inc. 100% Delaware
Oceaneering Survey, Inc. 100% Delaware
Oceaneering Technologies, Inc. 100% Delaware
Oceaneering Underwater GmbH 100% Switzerland
Oceanteam A/S 50% Norway
Oceanteam UK Limited 100% Scotland
Oil Industry Engineering, Inc. 100% Texas
P. T. Calmarine 50% Indonesia
QAF-Solus Offshore Sdn Bhd 50% Brunei
Servicios Marinos Oceaneering Chile Limitada 100% Chile
Solus Emirates 49% U.A.E.
Solus Ocean Systems, Inc. 100% Delaware
Solus Oceaneering (Malaysia) Sdn. Bhd. 49% Malaysia
Solus Offshore Ltd. 100% Cayman Islands
Solus Schall Limited 100% England
Solus Schall (Nigeria) Limited 50% Nigeria
Specialty Wire and Cable Company, Inc. 100% Texas
Steadfast Oceaneering, Inc. 100% Virginia
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report included in this Form 10-
K, into the Company's previously filed Form S-8 Registration
Statements filed on May 11, 1982 (Reg. No. 2-77451), November 22,
1982 (Reg. No. 2-80506), July 13, 1988 (Reg. No. 33-23059), June
12, 1989 (Reg. No. 33-29277), and September 24, 1990 (Reg. No. 33-
36872).
ARTHUR ANDERSEN LLP
Houston, Texas
June 21, 1995<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware
corporation ("Company"), intends to file with the Securities and
Exchange Commission ("Commission") under the Securities Exchange
Act of 1934, as amended ("Act"), an Annual Report on Form 10-K
for the fiscal year ended March 31, 1995 ("10-K"), with any and
all exhibits and/or amendments to such 10-K, and other documents
in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a
director or officer or both, as the case may be, of the Company,
does hereby appoint JOHN R. HUFF, T. JAY COLLINS and GEORGE R.
HAUBENREICH, JR. and each of them severally, his true and lawful
attorney or attorneys with power to act with or without the other
and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a
director, officer or both, as the case may be, of the Company,
said 10-K and any and all amendments thereto and all instruments
necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf
of the undersigned in any and all capacities every act whatsoever
necessary or desirable to be done in the premises as fully and to
all intents and purposes as the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 17th day of February, 1995.
//S//
D. Michael Hughes
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware
corporation ("Company"), intends to file with the Securities and
Exchange Commission ("Commission") under the Securities Exchange
Act of 1934, as amended ("Act"), an Annual Report on Form 10-K
for the fiscal year ended March 31, 1995 ("10-K"), with any and
all exhibits and/or amendments to such 10-K, and other documents
in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a
director or officer or both, as the case may be, of the Company,
does hereby appoint JOHN R. HUFF, T. JAY COLLINS and GEORGE R.
HAUBENREICH, JR. and each of them severally, his true and lawful
attorney or attorneys with power to act with or without the other
and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a
director, officer or both, as the case may be, of the Company,
said 10-K and any and all amendments thereto and all instruments
necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf
of the undersigned in any and all capacities every act whatsoever
necessary or desirable to be done in the premises as fully and to
all intents and purposes as the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 17th day of February, 1995.
//S//
Gordon M. Anderson
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware
corporation ("Company"), intends to file with the Securities and
Exchange Commission ("Commission") under the Securities Exchange
Act of 1934, as amended ("Act"), an Annual Report on Form 10-K
for the fiscal year ended March 31, 1995 ("10-K"), with any and
all exhibits and/or amendments to such 10-K, and other documents
in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a
director or officer or both, as the case may be, of the Company,
does hereby appoint JOHN R. HUFF, T. JAY COLLINS and GEORGE R.
HAUBENREICH, JR. and each of them severally, his true and lawful
attorney or attorneys with power to act with or without the other
and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a
director, officer or both, as the case may be, of the Company,
said 10-K and any and all amendments thereto and all instruments
necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf
of the undersigned in any and all capacities every act whatsoever
necessary or desirable to be done in the premises as fully and to
all intents and purposes as the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 17th day of February, 1995.
//S//
John R. Huff
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware
corporation ("Company"), intends to file with the Securities and
Exchange Commission ("Commission") under the Securities Exchange
Act of 1934, as amended ("Act"), an Annual Report on Form 10-K
for the fiscal year ended March 31, 1995 ("10-K"), with any and
all exhibits and/or amendments to such 10-K, and other documents
in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a
director or officer or both, as the case may be, of the Company,
does hereby appoint JOHN R. HUFF, T. JAY COLLINS and GEORGE R.
HAUBENREICH, JR. and each of them severally, his true and lawful
attorney or attorneys with power to act with or without the other
and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a
director, officer or both, as the case may be, of the Company,
said 10-K and any and all amendments thereto and all instruments
necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf
of the undersigned in any and all capacities every act whatsoever
necessary or desirable to be done in the premises as fully and to
all intents and purposes as the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 17th day of February, 1995.
//S//
David S. Hooker
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware
corporation ("Company"), intends to file with the Securities and
Exchange Commission ("Commission") under the Securities Exchange
Act of 1934, as amended ("Act"), an Annual Report on Form 10-K
for the fiscal year ended March 31, 1995 ("10-K"), with any and
all exhibits and/or amendments to such 10-K, and other documents
in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a
director or officer or both, as the case may be, of the Company,
does hereby appoint JOHN R. HUFF, T. JAY COLLINS and GEORGE R.
HAUBENREICH, JR. and each of them severally, his true and lawful
attorney or attorneys with power to act with or without the other
and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a
director, officer or both, as the case may be, of the Company,
said 10-K and any and all amendments thereto and all instruments
necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf
of the undersigned in any and all capacities every act whatsoever
necessary or desirable to be done in the premises as fully and to
all intents and purposes as the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 17th day of February, 1995.
//S//
Charles B. Evans
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements filed as part of the Company's 10-K and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 12,865
<SECURITIES> 0
<RECEIVABLES> 59,598
<ALLOWANCES> 1,238
<INVENTORY> 0
<CURRENT-ASSETS> 75,838
<PP&E> 228,870
<DEPRECIATION> 134,515
<TOTAL-ASSETS> 187,752
<CURRENT-LIABILITIES> 52,732
<BONDS> 9,472
<COMMON> 6,004
0
0
<OTHER-SE> 99,136
<TOTAL-LIABILITY-AND-EQUITY> 187,752
<SALES> 239,936
<TOTAL-REVENUES> 239,936
<CGS> 190,772
<TOTAL-COSTS> 190,772
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 695
<INCOME-PRETAX> 12,510
<INCOME-TAX> 7,014
<INCOME-CONTINUING> 5,496
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,496
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
