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, 1997
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: (281) 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 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 .
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. Yes X, No .
Aggregate market value of the voting stock held by non-affiliates of the
registrant at May 30, 1997, based upon the closing sale price of the Common
Stock on the New York Stock Exchange $381,067,597
Number of shares of Common Stock outstanding at May 30, 1997 23,094,327
Documents Incorporated by Reference:
Portions of the proxy statement to be filed on or before July 29, 1997,
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.
<PAGE>
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.
<PAGE>
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
that 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, Africa and Far East, accounted
for approximately 58% of its 1997 revenues, or $214 million.
Since 1990, the Company has concentrated on expanding its capabilities to
provide technical solutions to customers operating in harsh environments.
It has accomplished this through acquisitions and internal growth.
In January 1990, the Company acquired all of the outstanding capital stock
of Sonsub Limited, a United Kingdom company, whose principal assets were
ten work class 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
system ("FPSO"). 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, the OCEAN PRODUCER, for this project. The unit was delivered to its
first location in December 1991 and is currently under contract for
operations offshore West Africa.
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. Eastport's assets included two
specialized ROVs, one of which is rated for water depths to 25,000 feet, a
deep tow sonar system and two other work class 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 OPS division, these acquisitions form the basis of the
Company's continuing expansion in the offshore field development business.
In November 1995, the Company was awarded a contract with a major oil
company for the provision of an FPSO. The Company converted a 268,000 dwt
tanker and delivered the unit to its first operational location offshore
West Africa in August 1996. The customer exercised an option to purchase
the unit in December 1996 and the Company is currently continuing to manage
the vessel and to supervise major modifications to increase the production
capacity of the unit.
The Company intends to continue its 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
government agencies and firms in the telecommunications, aerospace, and
civil engineering and construction industries. The Company is continually
seeking opportunities for business combinations to improve its market
position or expand into related service lines.
Financial Information about Industry Segments
The Company's business segments are Oilfield Marine Services, Offshore
Field Development and Advanced Technologies. The table containing
revenues, operating income, identifiable assets, capital expenditures, and
depreciation and amortization by business segment for the years ended March
31, 1997, 1996 and 1995 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
intervention and above-water inspection, maintenance and repair. All of
these services are frequently provided to customers on an integrated basis.
Underwater Intervention Services. 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 assists 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.
Underwater intervention services are performed by ROVs or divers. ROVs are
used at depths or in situations in which diving would be uneconomical or
infeasible. The Company believes that it operates the most technically
advanced fleet of work class ROVs in the world, with about a 25% market
share, and is the industry leader in providing ROV services on deepwater
wells which are the most technically demanding. ROVs are used for a
variety of underwater tasks including drill support, installation and
construction support, pipeline inspections and surveys, and subsea
production facility installation, operation and maintenance. An ROV may be
outfitted with manipulators, sonar, television cameras, specialized tooling
packages and other equipment or features to facilitate the performance of
specific underwater tasks. The Company currently owns more than 75 work
class and inspection class ROVs.
When a project requires manned intervention, the Company uses divers or
Atmospheric Diving Systems ("ADS") technology. An ADS encloses the
operator in a one-atmosphere (surface pressure) diving suit and is suitable
for use in water depths to 2,300 feet. The Company does not use divers (as
distinguished from ADS operators) to perform functions in water depths
greater than 1,000 feet.
The Company also 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.
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 inspections of other
industrial 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.
OFFSHORE FIELD DEVELOPMENT
Mobile Offshore Production Systems. The Company established OPS as a
division during 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. The Company 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. The Company's first FPSO, the OCEAN
PRODUCER, has been operating offshore West Africa since December 1991. The
Company's second FPSO, the ZAFIRO PRODUCER, was delivered to its first
location offshore West Africa in August 1996 to begin operations under a
three-year contract with a major oil company. The customer had an option
to purchase the unit and exercised this option in December 1996. The
Company is continuing to operate the vessel under a management agreement
and is managing a major upgrade of the vessel. Additionally, at May 30,
1997, the Company owned four offshore rigs capable of conversion to MOPS
units.
Subsea Products. OIE, Multiflex and the Pipeline Repair Systems unit of
the Company comprise the Subsea Products division which complements the
activities of OPS. OIE 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.
Multiflex, with facilities in Houston, Texas and Edinburgh, Scotland,
produces subsea control umbilical cables which are used for the remote
operation of subsea installations and equipment and typically incorporate
both electrical and hydraulic control lines.
ADVANCED TECHNOLOGIES
The Company provides project management, engineering services and equipment
to non-oilfield customers for applications in harsh environments. The
Company's Advanced Technologies ("ADTECH") segment serves government
agencies and firms in the telecommunications, aerospace, and civil
engineering and construction industries. This is accomplished in part by
extending the use of existing assets and technology developed in oilfield
operations to new applications.
ADTECH performs work for customers having specialized requirements
underwater or in other harsh environments. ADTECH provides deep ocean
search and recovery services for governmental bodies, including the U.S.
Navy and the National Aeronautics and Space Administration ("NASA"). In
other services for the Navy, ADTECH 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 for AT&T Corp.
ADTECH designs and operates ROVs that are rated for work 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 rated to 5,000
feet and deep tow, side scan sonar systems rated for use in 20,000 feet.
The Company's deep tow systems have been used to locate downed aircraft in
water depths to 14,700 feet.
ADTECH also designs and develops specialized tools and builds ROV systems
to customer specifications for use in deepwater and hazardous environments.
As part of ADTECH, Oceaneering Space Systems ("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 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. The activities
of OSS are substantially dependent on continued government funding for
space programs.
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.
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 and operates a second, both of which have long-term
contracts. The Company also owns equipment which is capable of conversion
to MOPS. 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.
Major Customers. Five principal customers of the Company accounted for
approximately 33%, 29% and 34% of the Company's consolidated revenues in
1997, 1996 and 1995, respectively. The Mobil Corporation group of
companies accounted for more than 10% of the Company's revenues in fiscal
1997. No single customer accounted for more than 10% of the Company's
consolidated revenues in 1996. The Royal Dutch Shell group of companies
accounted for more than 10% of the Company's consolidated revenues in 1995.
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. 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 many
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 that 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. However, the Company's exit from the
diving sector in the North Sea in early fiscal 1998 and the substantial
number of multi-year ROV contracts which were entered into during 1997
should reduce the seasonality of the Company's Oilfield Marine Services
operations. 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, 1997 and 1996 were $154 million and $100 million,
respectively. Of these amounts, $65 million and $26 million, respectively,
were not expected to be performed within the year following such respective
dates. At March 31, 1997 and 1996, the Company had approximately $64
million and $144 million, respectively, in backlog for Offshore Field
Development. Of these amounts, $33 million and $100 million, respectively,
were not expected to be performed within the year following such respective
dates. At March 31, 1997 and 1996, the Company had approximately $31
million and $41 million, respectively, in backlog for Advanced
Technologies. Of these amounts, none and $4 million, respectively, were
not expected to be performed within the year following such respective
dates.
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 $4
million, $6 million and $4 million during 1997, 1996 and 1995,
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 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 covering
the full range of subsea and topside services offered in the United Kingdom
are certified to the British Standard BS EN ISO 9001:1994 and the Norwegian
office is certified to the Norwegian Standard NS EN ISO 9001:1994, both of
which are the equivalent of ISO 9001. 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 costs for limited coverage and, in the
Company's opinion, limited exposure, the Company does not ordinarily 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.
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 government agencies, and firms in the
telecommunications, aerospace, and civil engineering and construction
industries.
The Company operates primarily as a services company under dayrate
contracts. However, the Company also owns certain specialized capital
assets, which if not fully utilized could have a negative effect on cash
resources as a result of continuing fixed operating costs and reduced
revenues.
A significant part of the Company's operations is conducted outside the
United States. For the years ended March 31, 1997, 1996 and 1995, foreign
operations accounted for 58%, 58% and 51% 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, 1997, the Company had approximately 2,300 employees. The
Company's work force varies seasonally and peaks during the summer months.
Approximately 5% of the Company's employees are represented by unions. 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 years 1997, 1996 and 1995 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 to work
sites. The largest facilities are located in Morgan City, Louisiana and
consist of 364,000 total square feet of open and covered storage space and
offices, of which 243,000 square feet are 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 Advanced Technologies business
segment 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.
Item 3. LEGAL PROCEEDINGS.
In the ordinary course of business, Oceaneering encounters 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
year ended March 31, 1997.
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, 1997:
OFFICER EMPLOYEE
NAME AGE POSITIONS SINCE SINCE
John R. Huff 51 Chairman of the Board, 1986 1986
President and Chief Executive
Officer
T. Jay Collins 50 Executive Vice President - 1993 1993
Oilfield Marine Services
Marvin J. Migura 46 Senior Vice President and 1995 1995
Chief Financial Officer
F. Richard Frisbie 54 Senior Vice President - 1981 1974
Deepwater Technology
George R. 49 Vice President, General 1988 1988
Haubenreich, Jr. Counsel and Secretary
Richard V. Chidlow 53 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 1986, he served
from 1980 until 1986 as Chairman and President of Western Oceanic Inc., the
offshore drilling subsidiary of The Western Company of North America
("Western Oceanic"). He is a director of BJ Services Company, Triton
Energy Limited and Homegate Hospitality, Inc.
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.
Marvin J. Migura, Senior Vice President and Chief Financial Officer, joined
the Company in May 1995. From 1975 to 1994 he held various financial
positions with Zapata Corporation, then a diversified energy services
company, most recently as Senior Vice President and Chief Financial Officer
from 1987 to 1994.
F. Richard Frisbie, Senior Vice President - Deepwater 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.
George R. Haubenreich, Jr., Vice President, General Counsel and Secretary,
joined the Company in 1988. 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, Controller and Chief Accounting Officer, joined the
Company in 1987 as Controller for the Americas Region. From 1988 until
1990, he was Controller for the Europe, Africa and Asia group in Aberdeen,
and was appointed to his present position in 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 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 1997 Fiscal 1996
High Low High Low
For the quarter ended:
June 30 $17 $ 13-5/8 $10-5/8 $ 8-7/8
September 30 18-3/8 14-1/2 12-1/8 8-1/2
December 31 19-1/4 13-3/4 13 8-3/4
March 31 18-1/2 15 14-1/2 10-7/8
On May 30, 1997, Oceaneering had 646 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 $17.
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:
Years Ended March 31,
1997 1996 1995 1994 1993
(in thousands, except per share figures)
Revenues $368,773 $289,506 $239,936 $229,760 $215,603
Cost of services 290,801(a) 234,731 190,772 177,199 157,048
Gross margin 77,972 54,775 49,164 52,561 58,555
Selling, general and
administrative expenses 36,363 34,589 36,410 31,631 32,903
Income from operations $ 41,609 $ 20,186 $ 12,754 $ 20,930 $ 25,652
Net income applicable
to common stock $ 19,445 $ 12,357 $ 5,496 $ 14,931 $ 19,401
Net income per common
share equivalent 0.81 0.53 0.23 0.62 0.82
Depreciation and
amortization 32,687(b) 20,567 16,232 12,196 11,528
Capital expenditures 79,599 57,171 32,057 36,730 11,996
Other Financial Data:
As of March 31,
1997 1996 1995 1994 1993
(in thousands, except ratios)
Working capital ratio 1.55 1.62 1.44 1.74 1.92
Cash and cash
equivalents $ 23,034 $ 9,351 $ 12,865 $ 26,486 $33,973
Working capital 52,962 42,427 23,106 34,425 42,492
Total assets 268,255 256,096 187,752 171,993 154,524
Short-term debt -- 183 118 124 96
Long-term debt -- 48,000 9,472 171 235
Total debt -- 48,183 9,590 295 331
Shareholders' equity 156,334 127,098 115,140 113,353 98,331
(a) Includes $25,047 gain on disposition of FPSO, $7,980 impairment
adjustment and $7,980 provision for special drydocking.
(b) Includes $7,980 impairment adjustment.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
All statements in this Form 10-K, other than statements of historical
facts, including, without limitation, statements regarding the Company's
business strategy, plans for future operations, and industry conditions,
are forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. The Company
utilizes a variety of internal and external data and management judgment in
order to develop such forward-looking information. Although the Company
believes that the expectations reflected in such forward-looking statements
are reasonable, because of the inherent limitations in the forecasting
process, as well as the relatively volatile nature of the industry in which
the Company operates, it can give no assurance that such expectations will
prove to have been correct. Accordingly, evaluation of future prospects of
the Company must be made with caution when relying on forward-looking
information.
Liquidity and Capital Resources
The Company considers its liquidity and capital resources adequate to
continue its growth initiatives. At March 31, 1997, the Company had
working capital of $53 million, including $21 million of unrestricted cash.
Additionally, the Company had all of its $80 million credit facility
available and $38 million was unused under uncommitted lines of credit.
The Company expects to meet its ongoing annual cash requirements from
existing cash on hand, operating cash flow, and available credit
facilities. Net income plus depreciation and amortization (commonly
referred to as Cash Flow from Operations) of $52 million for 1997
represented a substantial increase from the $33 million and the $22 million
for 1996 and 1995, respectively.
In November 1995, the Company announced that it had been awarded a contract
by a major oil company to provide an FPSO. The contract was a dayrate
lease arrangement with an initial term of three years which commenced on
delivery of the FPSO in August 1996. The Company purchased and converted
an existing 268,000 dwt crude oil tanker into the FPSO ZAFIRO PRODUCER at a
capital cost of $68 million. To facilitate the funding of the capital
expenditures required for this project, the Company expanded its committed
credit facility from $75 million to $120 million.
The contract provided the customer with the options to either extend the
contract at reduced rates or purchase the vessel and terminate the lease at
any time during the initial three-year period. The customer exercised its
purchase option in December 1996 and the Company utilized part of the
proceeds to repay the debt which had been incurred in conversion of the
vessel. To lower commitment fees, the Company subsequently reduced its
committed credit facility to $80 million, none of which was used at the end
of 1997.
Working capital at the end of 1997 was $53 million which compared to $42
million at the end of 1996 and $23 million at the end of 1995. The
increase in working capital in 1997 was a result of the disposition of the
FPSO ZAFIRO PRODUCER. The higher working capital in 1996 compared to 1995
was primarily attributable to the receivable generated by a large MOPS
conversion project completed for a customer during 1996. Subsequent to the
year-end, the receivable, which was not due until 1998, was paid in full by
the customer and was therefore treated as a current asset.
Capital expenditures for the years ended March 31, 1997, 1996 and 1995 were
$80 million, $57 million and $32 million, respectively. Capital
expenditures in 1997 included $38 million to complete the conversion of the
ZAFIRO PRODUCER. Other expenditures consisted of additions to the
Company's fleet of ROVs and two support vessels. Capital expenditures for
1996 included $30 million of acquisition and conversion costs of the FPSO
ZAFIRO PRODUCER, completion of upgrades on two dynamically-positioned
("DP") vessels and additions to the Company's fleet of ROVs. Capital
expenditures for 1995 included the purchase and upgrade of a DP 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. There were
no material commitments for capital expenditures at the close of 1997.
During 1995 the Company completed the purchase of 1,000,000 shares of its
Common Stock pursuant to a plan approved in June 1994. The purchases were
financed primarily by bank borrowings. After re-issue of shares to meet
the Company's regular obligations to the Oceaneering Retirement Investment
Plan and Restricted Stock plan, and to satisfy share option exercises,
there were 110,017 shares of treasury stock remaining at March 31, 1997.
In April 1997, the Company approved a new plan to purchase up to a maximum
of 3,000,000 shares of its Common Stock. The Company expects to fund such
purchases from existing resources and operating cash flows.
As a result of the disposition of the FPSO ZAFIRO PRODUCER, the Company
fully repaid its long-term debt in December 1996. The ratio of the
Company's debt to total capitalization will vary from time to time
depending primarily upon the level of capital spending.
Because of its significant foreign operations, the Company is exposed to
currency fluctuations and exchange risks. The Company 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, 1997, relate primarily to the
Company's permanent investment in and loans to its United Kingdom
subsidiary. 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.
See Item 1 - "Business - Description of Business - Risks and Insurance."
Results of Operations
Revenues of $369 million for 1997 represented a substantial increase from
revenues of $290 million and $240 million for 1996 and 1995, respectively.
Gross margin of $78 million also compared favorably to $55 million and $49
million for the prior two years. As a percentage of revenue, gross margin
of 21% for 1997 represented a slight increase from the 19% margin for 1996
and compared to a 20% margin for 1995. Gross margins as a percentage of
revenues vary depending upon the mix of the type of contracts (for example,
subcontractor cost components) and may not be indicative of business
trends. Net income of $19.4 million in 1997 was over 50% higher than the
$12.4 million reported for 1996, which was more than double the $5.5
million earned during 1995.
Information on the Company's business segments is shown in Note 6 of the
Notes to Consolidated Financial Statements.
Oilfield Marine Services.
During 1997, Oilfield Marine Services segment revenues increased to $176
million compared to $132 million in 1996 and $106 million in 1995. Income
from operations was $1.9 million in 1997 compared to a loss of $400,000 in
1996 and a loss of $2.5 million in 1995.
Operating cash flow (defined as operating income plus depreciation and
amortization) of $23 million for 1997 represented a significant increase
from the $11 million and $5 million for 1996 and 1995, respectively.
During 1997, in response to continued increasing demand to support
deepwater drilling and identified future construction and production
maintenance work, the Company extended its ROV fleet expansion program
begun in 1996 by announcing plans for a further 23 new ROVs. These new
vehicles are designed for use around the world in water depths to 10,000
feet and in severe weather conditions. Based on a review of actual and
expected operating results, the Company decided to discontinue offering
diving services in the North Sea and in March 1997 reached an agreement to
sell its North Sea diving assets, including a diving support vessel
("DSV"). The sale closed in April 1997 and the sales proceeds approximated
the net book value of the assets sold. The Company believes that there
will be a greater return in focusing on other business lines in the North
Sea area; diving services continue to be offered by the Company in other
areas.
The table below sets out revenues and profitability for the Oilfield Marine
Services segment for 1997, 1996 and 1995.
For the Years Ended March 31,
1997 1996 1995
(in thousands, except percentages)
Revenues $176,395 $132,064 $106,294
Gross Margin 24,139 21,154 19,872
Gross Margin % 14% 16% 19%
Operating Income (loss) 1,853 (369) (2,485)
Operating Income (loss) % 1% 0% (2)%
Revenues increased 34% in 1997 compared to 1996, reflecting increased
activity in all operating areas. Revenues and gross margin contribution
from the ROV fleet increased as requirements for vehicles to support
exploration and development drilling activities from floating drilling rigs
increased and units were added to the fleet. Diving revenues increased but
gross margins were reduced by an impairment adjustment of $8.0 million
which was made in the third quarter of 1997 to reduce the carrying value of
a DSV. Excluding the impairment adjustment, gross margin was 18% in 1997.
The vessel was subsequently sold at approximately its written-down book
value together with the Company's North Sea diving assets.
Revenues increased 24% in 1996 compared to 1995, reflecting increased
activity in all operating areas. The segment benefitted from higher
revenues and gross margins contribution from the ROV fleet as requirements
for vehicles to support exploration and development drilling activities
from floating drilling rigs increased. However, these gains were partially
offset by lower demand for diving services with correspondingly lower gross
margin. In addition, operating results in the North Sea and Gulf of Mexico
areas were negatively impacted by delays in the commissioning of support
vessels which had undergone extensive refurbishment and upgrade during the
year. Revenues and gross margin for 1996 benefited by $1.1 million from
the settlement of a contract dispute which had been provided for in 1995.
This adjustment increased gross margin percentage in 1996 by 1%. Gross
margin was negatively impacted in 1995 by an unfavorable arbitration ruling
relating to a contract executed in 1991 and difficulties experienced in
collecting amounts due under a foreign contract. The provision for the
arbitration ruling decreased gross margin by $1.6 million (1%). The
provision relating to the difficulty in collecting amounts due under a
foreign contract decreased gross margin by $1.1 million (1%). Oilfield
Marine Services gross margin was 21% before the provisions.
Offshore Field Development.
This segment includes FPSO ownership and operations, engineering, design
and project management services for other MOPS-related work, and subsea
products.
The table below sets out revenues and profitability for this segment for
1997, 1996 and 1995.
For the Years Ended March 31,
1997 1996 1995
(in thousands, except percentages)
Revenues $101,028 $80,855 $62,918
Gain on disposition of FPSO 25,047 -- --
Gross Margin 36,861 21,758 13,726
Gross Margin % 36% 27% 22%
Operating Income 30,242 15,567 6,676
Operating Income % 30% 19% 11%
During 1997 the Company completed conversion of a 268,000 dwt tanker into
an FPSO, the ZAFIRO PRODUCER, which was delivered to a customer offshore
West Africa in August 1996 under a three-year contract. The customer had
an option to purchase the vessel at any time during the three-year contract
period and elected to do so in December 1996. The Company recognized a
gain of $25.0 million on the disposition of this asset. Revenues and
margins for 1997 include the results of operations for the ZAFIRO PRODUCER
prior to its purchase by the customer. The Company is continuing to
operate the vessel under a management agreement.
The Company's first FPSO, OCEAN PRODUCER, continued to work offshore West
Africa under a four-year contract expiring in January 2000. During the
third quarter of fiscal 1997, the Company determined that substantial
repairs would be necessary to maintain the unit in operating condition in
compliance with regulatory requirements. These repairs will require a
special drydocking and are expected to be performed in fiscal 1998. The
Company recorded an $8.0 million provision in fiscal 1997 which reduced
gross margin by 8%.
Revenues and gross margin for 1996 were higher than for 1995 as a result of
a large MOPS conversion project which was completed during the year and
improved results in the subsea products business. The large MOPS project
consisted of the conversion of a jackup drilling rig into production
service for a customer. Results for 1996 also included a $2.7 million gain
on the involuntary conversion of the semisubmersible rig, OCEAN DEVELOPER,
which sank in August 1995 while under tow.
The Company expects to continue to invest in other MOPS assets as
profitable opportunities arise.
Advanced Technologies.
The table below sets out revenues and profitability for this segment for
1997, 1996 and 1995.
For the Years Ended March 31,
1997 1996 1995
(in thousands, except percentages)
Revenues $91,350 $76,587 $70,724
Gross Margin 16,972 11,863 15,566
Gross Margin % 19% 15% 22%
Operating Income 9,514 4,988 8,563
Operating Income % 10% 7% 12%
Revenues for search and recovery operations for 1997 were higher than for
1996 as a result of increased activity in U.S. Navy support although gross
margin percentage was lower as a result of a higher component of
reimbursable costs. Subsea telecommunications cable burial activities had
higher revenues than for 1996 and improved gross margins.
Revenues for 1996 increased over 1995 as a result of an increase in subsea
telecommunication cable burial activities, space-related product sales and
marine civil engineering and construction work. Gross margin declined in
1996 compared to 1995 due to reduced utilization of the Company's deep
ocean search and recovery equipment, lower service requirements by the U.S.
Navy and complications experienced on a cable burial project completed in
the fourth quarter.
Other.
Interest income and interest expense for 1997 did not change significantly
from 1996. Interest income increased by $1.2 million in 1996 compared to
1995 as a result of interest earned on the receivable related to the MOPS
conversion project. Interest expense increased by $1.6 million in 1996
compared to 1995 as a result of increased borrowings to finance the MOPS
conversion project and continuing capital expenditures in oilfield marine
services. Interest expense is net of capitalized interest of $1.1 million
for 1997 and $300,000 for 1996.
The Company's effective tax rate increased to 53% in 1997 compared to 38%
in 1996 as a result of provisions made for asset impairment and a special
drydocking in its United Kingdom subsidiary, where the Company derives no
tax benefit as it already has net operating loss carryforwards ("NOLs").
The Company's effective tax rate decreased during 1996 compared to 1995 as
a result of decreased losses in areas, primarily in the United Kingdom tax
jurisdiction, where the Company derives no tax benefit as it already has
NOLs.
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 29, 1997, 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 Shareholder Rights Agreement
dated November 20, 1992 1-10945 8-K Nov. 1992 1
*4.03 Bank Credit Agreement dated
April 12, 1995 1-10945 10-K March 1995 4.04
*4.04 Amended and Restated Bank Credit
Agreement dated June 12, 1996 1-10945 10-K March 1996 4.05
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 1-10945 10-K March 1996 10.02
*10.03 Employment Agreement dated
August 15, 1986 between
John R. Huff and Registrant 0-8418 10-K March 1987 10(l)
*10.04 Addendum to Employment Agreement
dated February 22, 1996 between
John R. Huff and Registrant 1-10945 10-K March 1997 10.04
*10.05 1987 Incentive and Non-
Qualified Stock Option Plan 33-16469 S-1 Sept. 1987 10(o)
*10.06 Oceaneering International, Inc.
Special Incentive Plan 33-16469 S-1 Sept. 1987 10(n)
*10.07 Senior Executive Severance
Plan, as amended 0-8418 10-K March 1989 10(k)
*10.08 Supplemental Senior Executive
Severance Agreements, as
amended 0-8418 10-K March 1989 10(l)
*10.09 Oceaneering International, Inc.
Executive Retirement Plan,
as amended 1-10945 10-K March 1995 10.08
*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 1993 Restricted Stock Award
Incentive Agreements 1-10945 10-K March 1994 10(q)
*10.15 1993 Restricted Stock Award
Incentive Agreement 1-10945 10-K March 1996 10.16
10.16 1997 Bonus Award Plan
*10.17 Amendment No. 1 to the Oceaneering
Retirement Investment Plan 1-10945 10-Q Sept. 1996 10.01
*10.18 1996 Incentive Plan of Oceaneering
International, Inc. 1-10945 10-Q Sept. 1996 10.02
*10.19 1996 Restricted Stock Award Incentive
Agreements between Registrant
and Executive Officers dated
August 23, 1996. 1-10945 10-Q Sept. 1996 10.03
10.20 1997 Bonus Restricted Stock Award
Agreements between Registrant
and Executive Officers dated
April 22, 1997.
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 23, 1997 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 23, 1997
John R. Huff Executive Officer, Director
//s// MARVIN J. MIGURA Senior Vice President, June 23, 1997
Marvin J. Migura Principal Financial Officer
//s// RICHARD V. CHIDLOW Controller, Principal June 23, 1997
Richard V. Chidlow Accounting Officer
CHARLES B. EVANS* Director
DAVID S. HOOKER* Director
D. MICHAEL HUGHES* Director
HARRIS J. PAPPAS* Director
*By: //s// GEORGE R. HAUBENREICH, JR. June 23, 1997
George R. Haubenreich, Jr.
Attorney-in-Fact
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
The 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, 1997 and 1996, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the
period ended March 31, 1997. 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, 1997 and 1996, and the
results of their operations and their cash flows for each of the three
years in the period ended March 31, 1997 in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
May 14, 1997
<PAGE>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
March 31, 1997 March 31, 1996
CURRENT ASSETS:
Cash and cash equivalents $ 23,034 $ 9,351
Accounts receivable, net of
allowances for doubtful accounts
of $962 and $1,201 120,095 96,391
Prepaid expenses and other 5,678 4,733
------- -------
Total current assets 148,807 110,475
------- -------
PROPERTY AND EQUIPMENT, at cost:
Marine services equipment 198,798 187,337
Mobile offshore production
equipment 31,231 56,607
Other 32,915 29,438
------- -------
262,944 273,382
Less accumulated depreciation 161,053 145,105
------- -------
Net property and equipment 101,891 128,277
------- -------
INVESTMENTS AND OTHER ASSETS:
Goodwill, net of amortization of
$3,502 and $2,515 11,402 12,082
Other 6,155 5,262
-------- --------
TOTAL ASSETS $268,255 $256,096
======== ========
See Notes to Consolidated Financial Statements
<PAGE>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 1997 March 31, 1996
CURRENT LIABILITIES:
Accounts payable $27,432 $25,607
Accrued liabilities 58,183 35,823
Income taxes payable 10,230 6,618
------- -------
Total current liabilities 95,845 68,048
------- -------
LONG-TERM DEBT -- 48,000
OTHER LONG-TERM LIABILITIES 15,814 11,921
MINORITY INTERESTS 262 1,029
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common Stock, par value $0.25;
90,000,000 shares authorized;
24,017,046 shares issued 6,004 6,004
Additional paid-in capital 81,153 81,921
Treasury stock; 110,017 and
793,170 shares at cost (986) (6,976)
Retained earnings 76,001 56,556
Cumulative translation adjustments (5,838) (10,407)
------- -------
Total shareholders' equity 156,334 127,098
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $268,255 $256,096
======== ========
See Notes to Consolidated Financial Statements
<PAGE>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data)
For the Years Ended March 31,
1997 1996 1995
REVENUES $368,773 $289,506 $239,936
GAIN ON DISPOSITION OF FPSO 25,047 -- --
COST OF SERVICES 299,888 234,731 190,772
IMPAIRMENT ADJUSTMENT AND PROVISION
FOR SPECIAL DRYDOCKING 15,960 -- --
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 36,363 34,589 36,410
------- ------- -------
Income from operations 41,609 20,186 12,754
INTEREST INCOME 1,358 1,774 547
INTEREST EXPENSE (2,048) (2,286) (695)
OTHER INCOME (EXPENSE), NET (15) 286 (383)
MINORITY INTERESTS 390 (108) 287
------- ------- -------
Income before income taxes 41,294 19,852 12,510
PROVISION FOR INCOME TAXES (21,849) (7,495) (7,014)
------- ------- -------
NET INCOME $ 19,445 $12,357 $ 5,496
======= ======= =======
NET INCOME PER COMMON SHARE
EQUIVALENT $ 0.81 $ 0.53 $ 0.23
======= ======= =======
See Notes to Consolidated Financial Statements
<PAGE>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Years Ended
March 31,
1997 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $19,445 $12,357 $ 5,496
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on dispositions of property and equipment (29,605) -- --
Depreciation and amortization 24,707 20,567 16,232
Impairment adjustment 7,980 -- --
Currency translation adjustments and other 1,718 1,308 1,855
Increase in accounts receivable (23,704) (38,031) (6,797)
Increase in prepaid expenses
and other current assets (945) (120) (1,849)
Increase in other assets (271) (512) (1,986)
Increase in accounts payable 1,825 10,379 1,331
Increase in accrued liabilities 22,360 6,023 4,062
Increase (decrease) in income taxes payable 3,826 (1,125) 951
Increase (decrease) in other long-term
liabilities 3,126 2,542 (1,673)
------ ------ ------
Total adjustments to net income 11,017 1,031 12,126
------ ------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 30,462 13,388 17,622
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (79,599) (57,171) (32,057)
Dispositions of property and equipment 108,253 -- --
Increase in investments (926) -- --
NET CASH (USED IN) PROVIDED BY ------- ------ -------
INVESTING ACTIVITIES 27,728 (57,171) (32,057)
------- ------ -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term bank borrowings 33,000 38,600 9,400
Payments on long-term debt (81,000) (72) (99)
Proceeds from issuance of common stock 3,493 1,741 109
Purchases of treasury stock -- -- (8,596)
------ ------ ------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (44,507) 40,269 814
------ ------ ------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 13,683 (3,514) (13,621)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 9,351 12,865 26,486
------ ------ ------
CASH AND CASH EQUIVALENTS - END OF YEAR $23,034 $ 9,351 $12,865
====== ====== =======
See Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended March 31, 1997, 1996 and 1995
(in thousands)
Common Stock Issued Additional Treasury Retained Cumulative Total
Shares Amount Paid-in Stock Earnings Translation
Capital Adjustment
-------------------- --------- --------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
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
Net Income - - - - 12,357 - 12,357
Translation adjustments - - - - - (3,140) (3,140)
Stock options exercised - - 113 497 - - 610
Restricted Stock plan
compensation expense - - 1,008 62 - - 1,070
Treasury stock issued
to Company Benefit
Plan, at average cost - - - 1,061 - - 1,061
------ ------ ------ ------ ------ ------- -------
Balance, March 31, 1996 24,017 6,004 81,921 (6,976) 56,556 (10,407) 127,098
Net Income - - - - 19,445 - 19,445
Translation adjustments - - - - - 4,569 4,569
Restricted Stock issued - - (2,797) 2,797 - - -
Stock options exercised - - 577 2,264 - - 2,841
Restricted Stock plan
compensation expense - - 1,452 - - - 1,452
Treasury stock issued
to Company Benefit
Plan, at average cost - - - 929 - - 929
------- ------- ------- -------- ------- -------- --------
Balance, March 31, 1997 24,017 $ 6,004 $81,153 $ (986) $76,001 $ (5,838) $156,334
------- ------- ------- -------- ------- -------- --------
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., and its 50% or more owned and controlled subsidiaries
(the "Company"). The Company accounts for its investments in
unconsolidated affiliated companies under the equity method. All
significant intercompany accounts and transactions have been eliminated.
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 $1.5 million and $1.4 million of the
Company's cash at March 31, 1997 and 1996, respectively, was restricted and
is deposited in interest bearing accounts as security 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 as an adjustment to cost of sales.
Goodwill arising from business acquisitions is amortized on the straight-
line method over 15 years.
Management periodically and upon the occurrence of a triggering event,
reviews the realizability of goodwill and other long-term assets and makes
any appropriate impairment adjustments and disclosures required by
generally accepted accounting principles.
Effective April 1, 1996, the Company adopted Statement of Financial
Accounting Standards Board standard number ("SFAS") 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," as required. SFAS 121 requires that certain long-lived
assets be reviewed for impairment whenever events indicate that the
carrying amount of an asset may not be recoverable and that an impairment
loss be recognized under certain circumstances in the amount by which the
carrying value exceeds the fair value of the asset. Initially, the
adoption did not have a material effect on the Company's results of
operations or financial position.
During the third quarter of fiscal 1997 it became apparent that operating
results for the Company's diving support vessel ("DSV") operating in the
North Sea were below expectations. The vessel was originally acquired as a
construction support vessel but changing market conditions necessitated
utilizing the vessel in an inspection and maintenance mode at lower
margins. After review of the first full work season the Company concluded
that the manner in which the vessel was being used had changed
significantly from its originally intended purpose and the recoverability
of the carrying amount of the asset should be assessed. The Company
determined that an impairment loss of $8.0 million should be recorded. The
amount was determined by comparing the carrying value of the vessel with
the net present value of the expected cash flows from the vessel over its
remaining life. The impairment adjustment was recorded and included in the
Company's Oilfield Marine Services business segment. Subsequently, the
vessel along with the other assets used in the North Sea diving operations
were sold and the sales proceeds approximated net book value.
Revenue Recognition
The Company's revenues are primarily 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
The Company accounts for income taxes according to SFAS 109, "Accounting
for Income Taxes".
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. Adjustments arising from these translations are
accumulated in a separate account within Shareholders' Equity. All income
statement accounts are translated at average exchange rates during the
year.
Net Income Per Common Share Equivalent
Net income per common share equivalent ("EPS") has been computed on the
basis of the weighted average number of shares of common stock and common
share equivalents outstanding in each year (24,014,000, 23,258,000 and
24,047,000 in 1997, 1996 and 1995, respectively).
The Financial Accounting Standards Board has issued SFAS 128, "Earnings Per
Share", which establishes standards for computing and presenting earnings
per share. The Company will adopt SFAS 128 in 1998, as required, and
believes that diluted EPS, as defined in SFAS 128, will approximate EPS as
shown in these financial statements.
Other Long-Term Liabilities
At March 31, 1997 and 1996, other long-term liabilities include $8.0
million and $8.3 million, respectively, for self-insurance reserves not
expected to be paid out in the following year and $7.8 and $3.7 million,
respectively, for deferred income taxes.
Reclassifications
Certain amounts from prior years have been reclassified to conform with the
current year presentation.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Property and Equipment
In 1997, a major oil company customer exercised its option to purchase the
Floating Production, Storage and Offloading system ("FPSO"), ZAFIRO
PRODUCER. Upon disposition, the related property and equipment cost and
accumulated depreciation accounts were relieved and the resulting gain of
$25 million was included in the Company's consolidated statement of income
as Gain on Disposition of FPSO.
During the fourth quarter of 1997, the Company reached an agreement to sell
the assets of its North Sea diving business. The sale included its DSV
operating in the North Sea, various saturation and air diving systems and
related equipment. Proceeds of $15 million, which were received after the
year end, are included in accounts receivable. Sales proceeds approximated
net book value and impact on net income was not material.
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 provisions for income taxes for the years ended March 31, 1997, 1996
and 1995 were as follows:
1997 1996 1995
(in thousands)
U.S. federal and state $15,886 $5,443 $5,080
Foreign 5,963 2,052 1,934
------ ----- -----
Total provision $21,849 $7,495 $7,014
------ ----- -----
Current $17,731 $6,448 $9,021
Deferred 4,118 1,047 (2,007)
------ ----- -----
Total provision $21,849 $7,495 $7,014
------ ----- -----
Cash taxes paid $14,119 $7,465 $8,070
------ ----- -----
As of March 31, 1997, the Company had net operating loss carryforwards
("NOLs") of approximately $28 million which are available to reduce future
United Kingdom Corporation Tax which would otherwise be payable.
As of March 31, 1997 and 1996, the Company's worldwide deferred tax assets
and liabilities and related valuation reserves were as follows:
March 31,
1997 1996
(in thousands)
Gross deferred tax assets $14,302 $14,166
Valuation allowance (10,319) (10,183)
------ ------
Net deferred tax assets $ 3,983 $ 3,983
------ ------
Deferred tax liabilities $ 7,784 $ 3,666
------ ------
The Company's deferred tax assets consist primarily of NOLs in its United
Kingdom subsidiary; these NOLs have no expiration date. Deferred tax
liabilities consist of depreciation and amortization and provisions for
income of foreign subsidiaries expected to be repatriated.
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,
1997 1996 1995
(in thousands)
Computed U.S. statutory expense $ 14,316 $ 6,986 $ 4,278
Change in valuation allowances 136 1,039 2,475
Withholding taxes and foreign
earnings taxed at rates different
from U.S. statutory rates 5,696 -- --
State and local taxes and other, net 1,701 (530) 261
------ ------ ------
Total provision for income taxes $ 21,849 $ 7,495 $ 7,014
------ ------ ------
The provision for 1997 includes the effect of provisions made for asset
impairment and special drydocking in its United Kingdom subsidiary, where
the Company derives no tax benefit as it already has NOLs.
3. DEBT
Credit Agreement
On April 12, 1995, the Company and a group of banks signed a credit
agreement in the amount of $75 million (the "Credit Agreement"). As a
result of amendments, the present amount of and availability under this
agreement is $80 million. There is a commitment fee of 0.225% per annum
on the unused portion of the banks' commitment. At March 31, 1997 and
1996, there was $0 and $48 million, respectively, of debt outstanding under
this 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 uncommitted credit agreements with banks totaling $45
million for use for borrowings and letters of credit. As of March 31,
1997, the Company had approximately $7 million in letters of credit
outstanding under these agreements.
Cash interest payments of $3.6 million, $2.2 million and $900,000 were made
in 1997, 1996 and 1995, respectively. Interest charges of $1.1 million in
1997 and $300,000 in 1996 were capitalized as part of construction in
progress.
4. EMPLOYEE BENEFIT PLANS AND STOCKHOLDER RIGHTS PLAN
Retirement Investment Plans
The Company 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 $1,780,000, $1,294,000 and $992,000 for the plan years ended
December 31, 1996, 1995 and 1994, respectively. 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,
$57,000 and $67,000 for the years ended March 31, 1997, 1996 and 1995,
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,
1997, 1996 and 1995, were $135,000, $115,000 and $108,000, 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
100% of that contribution. Company expense related to this plan during the
years ended March 31, 1997, 1996 and 1995, was $457,000, $362,000 and
$287,000, respectively.
Incentive and Stock Option Plans
The Company has in effect shareholder approved nonemployee director stock
option and 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 in 1997, 1996 and 1995
was not material.
In August 1996 the shareholders of the Company approved a 1996 Incentive
Plan under which a total of 1,165,000 shares of Common Stock of the Company
are available for awards to employees and other persons (excluding
nonemployee directors) having an important business relationship or
affiliation with the Company. The 1996 Incentive Plan and a similar
shareholder approved 1990 Incentive Plan ("Incentive Plans") are
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
after the date of grant or five years after the date of 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.
The Company also has in effect three other stock plans under which options
to purchase have been issued to employees and other persons affiliated with
the Company. Since approval of the 1990 Incentive Plan, no further grants
or awards under these three stock plans have been made or can be made or
granted. These stock plans are also 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 1988 to 1992,
are normally exercisable over a 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.
During 1996 and 1997, 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 made in 1997 may be earned each year depending upon the
Company's cumulative Common Stock performance, with any amount earned
subject to vesting in four equal installments over a three or four year
period 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. As of March 31, 1997, the
entire grant made in 1996 has been earned, subject to vesting requirements,
and none of the grant made in 1997 was earned. As of March 31, 1997, a
total of 477,750 shares of restricted stock was outstanding under these and
former, similar, grants, of which 174,750 shares were earned, subject to
vesting requirements. Subsequent to March 31, 1997 certain key executives
also elected to receive restricted Common Stock of the Company totaling
44,968 shares subject to similar vesting requirements and tax assistance
payments in lieu of cash for all or part of their 1997 bonus award. The
numbers and weighted average grant date fair value of restricted stock
granted during 1997 and 1996 were 312,000 and $17.00, and 7,000 and $10.38,
respectively. No restricted stock grants were made in 1995.
The Company accounts for stock options issued under plans under APB Opinion
No. 25, under which no compensation cost has been recognized. Had
compensation cost for these stock options been determined consistent with
SFAS 123 "Accounting for Stock-Based Compensation", the Company's pro forma
net income and earnings per share for 1997 and 1996 would have been $19,170
and $12,357, respectively, and $0.80 and $0.53, respectively. Because the
SFAS 123 method of accounting has not been applied to options issued prior
to April 1 1995, the resulting pro forma compensation cost may not be
representative of that to be expected in future years.
Information regarding these option plans for 1997, 1996 and 1995 is as
follows:
Shares under Weighted Average
Option Exercise Price
Balance at March 31, 1994 1,083,180 $10.43
Granted 399,900 11.81
Exercised (29,150) 5.35
Forfeited (31,850) 11.95
Balance at March 31, 1995 1,422,080 12.07
Granted 68,500 9.63
Exercised (66,500) 8.17
Forfeited (69,250) 11.88
Balance at March 31, 1996 1,354,830 10.82
Granted 304,300 15.60
Exercised (270,950) 8.84
Forfeited (40,800) 11.29
Balance at March 31, 1997 1,347,380 12.23
The weighted average fair value of options granted in 1997 was $8.73. No
significant grants were made in 1996. The fair value of the stock options
granted in 1997 was estimated on the date of grant using the Black-Scholes
option pricing model with the following assumptions: risk-free interest
rate of 6.67%; expected dividend yield of 0%; expected life of six years;
and expected volatility 47.97%.
Options outstanding at March 31, 1997 is composed of the following:
Outstanding Exercisable
-------------------------------------- ---------------------
Range of Number of Weighted Weighted Number of Weighted
Exercise shares at Average Average Shares at Average
Prices March 31, Remaining Exercise March 31, Exercise
1997 Contractual Price 1997 Price
Life (years)
- -------- --------- ------------ -------- --------- ---------
$4.00-
11.37 351,150 4.52 $ 7.84 303,350 $ 7.57
$11.94-
15.75 697,530 6.23 12.94 386,830 13.37
$15.81-
16.94 298,700 7.26 15.83 3,000 16.00
At March 31, 1997, there were 862,600 shares under these plans available
for grant, of which 812,600 could be used for awarding stock options, stock
appreciation rights, stock and cash awards to employees.
Stockholder Rights Plan
On November 20, 1992, the Company's Board of Directors adopted a
Stockholder Rights Plan and, in accordance with such Plan, declared a
dividend of one preferred share purchase right for each outstanding share
of Company common stock. The Plan will cause substantial dilution to a
party that attempts to acquire the Company in a manner or on terms not
approved by the Board of Directors, except pursuant to an offer conditioned
on a substantial number of rights being acquired.
The rights, which do not have voting rights and are not entitled to
dividends until such time as they become exercisable, expire in December
2002.
5. COMMITMENTS AND CONTINGENCIES
Lease Commitments
At March 31, 1997, the Company occupied several facilities under
noncancellable operating leases expiring at various dates through 2065.
Future minimum rentals under these leases are as follows:
(in thousands)
1998 $2,879
1999 1,988
2000 1,435
2001 1,084
2002 413
Thereafter 2,237
------
Total Lease Commitments $10,036
------
Rental expense, which includes hire of vessels, specialized equipment and
real estate rental, was approximately $25 million, $19 million and $13
million for the years ended March 31, 1997, 1996 and 1995, respectively.
Special drydocking expense
During the third quarter of fiscal 1997, the Company determined that
substantial repairs would be necessary to maintain the FPSO OCEAN PRODUCER
in operating condition in compliance with regulatory requirements. The
unit is currently contracted to work offshore West Africa until January
2000. These repairs will require a special drydocking and are expected to
be performed in fiscal 1998. The Company recorded an $8.0 million
provision in the third quarter of fiscal 1997.
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.
The Company determines the level of accruals by reviewing its historical
experience and current year claim activity; accruals are not recorded on a
present value basis. Each claim is reviewed with insurance adjusters and
specific reserves established for all known liabilities. An additional
reserve for incidents incurred but not reported to the Company
is established for each year using management estimates and based on prior
experience. 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, 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 financial position or results of operations of the
Company.
Letters of Credit
The Company had $7.3 million and $7.8 million in letters of credit
outstanding as of March 31, 1997 and 1996, 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 intervention and above-water inspection, maintenance
and repair. 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,
1997 1996 1995
(in thousands)
Revenues
Oilfield Marine Services $176,395 $132,064 $106,294
Offshore Field Development 101,028 80,855 62,918
Advanced Technologies 91,350 76,587 70,724
Total $368,773 $289,506 $239,936
Income from Operations
Oilfield Marine Services $ 1,853 $ (369) $ (2,485)
Offshore Field Development 30,242 15,567 6,676
Advanced Technologies 9,514 4,988 8,563
Total $ 41,609 $ 20,186 $ 12,754
Identifiable Assets
Oilfield Marine Services $135,375 $102,776 $ 86,422
Offshore Field Development 74,455 103,538 53,124
Advanced Technologies 28,135 32,466 28,520
Total $237,965 $238,780 $168,066
Capital Expenditures
Oilfield Marine Services $ 32,951 $ 21,868 $ 25,916
Offshore Field Development 42,696 32,531 1,263
Advanced Technologies 3,952 2,772 4,878
Total $ 79,599 $ 57,171 $ 32,057
Depreciation and Amortization Expenses
Oilfield Marine Services $ 20,682 $ 10,996 $ 7,861
Offshore Field Development 7,510 5,127 4,690
Advanced Technologies 4,495 4,444 3,681
Total $ 32,687 $ 20,567 $ 16,232
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 certain other assets have not
been allocated to particular business segments. Income from operations for
1997 for Oilfield Marine Services is after charging an impairment
adjustment of $7,980 which is included in depreciation and amortization
expense. Income from operations for Offshore Field Development for 1997
includes a $25,047 gain on disposition of an FPSO and an $7,980 provision
for a special drydocking.
Revenues of approximately $44 million in 1997 were from the Mobil
Corporation group of companies and revenues of $34 million in 1995 were
from the Royal Dutch Shell group of companies. No other individual
customer accounted for more than 10% of revenues in 1997, 1996 or 1995.
Geographic Operating Areas
Financial data by geographic area is summarized as follows:
For the Years Ended March 31,
1997 1996 1995
(in thousands)
Revenues
United States $154,613 $122,561 $117,630
North Sea 72,937 53,289 48,934
Africa 62,863 39,747 36,361
Far East 44,620 38,084 22,924
Other 33,740 35,825 14,087
TOTAL $368,773 $289,506 $239,936
Income before Income Taxes and Minority Interests
United States $ 3,327 $ 1,756 $ 2,856
North Sea (4,997) (164) 188
Africa 29,922 9,519 6,582
Far East 5,163 1,342 353
Other 7,489 7,507 2,244
TOTAL $ 40,904 $ 19,960 $12,223
Total Assets
United States $133,728 $152,859 $ 87,405
North Sea 68,512 51,521 52,449
Africa 39,589 29,733 33,374
Far East 17,429 12,185 9,386
Other 8,997 9,798 5,138
TOTAL $268,255 $256,096 $187,752
7. ACCRUED LIABILITIES
Accrued liabilities consisted of the following:
March 31,
1997 1996
(in thousands)
Payroll and related costs $17,831 $14,271
Accrued job costs 28,886 12,651
Other 11,466 8,901
TOTAL ACCRUED LIABILITIES $58,183 $35,823
SELECTED QUARTERLY FINANCIAL DATA
(in thousands, except per share data)
(unaudited)
Year Ended March 31, 1997
Quarter Ended
June 30 Sept. 30 Dec. 31 Mar. 31 Total
Revenues $80,535 $96,764 $94,117 $97,357 $368,773
Gain on disposition
of FPSO -- -- 25,047 -- 25,047
Gross profit 14,850 16,824 30,364 15,934 77,972
Income from operations 5,942 8,508 21,440 5,719 41,609
Net income 3,747 5,080 6,740 3,878 19,445
Earnings per common
share equivalent $ 0.16 $ 0.21 $ 0.28 $ 0.16 $ 0.81
Weighted average number
of shares outstanding 23,591 23,863 24,138 24,463 24,014
Year Ended March 31, 1996
Quarter Ended
June 30 Sept. 30 Dec. 31 Mar. 31 Total
Revenues $71,541 $77,088 $74,236 $66,641 $289,506
Gross profit 13,309 15,964 14,453 11,049 54,775
Income from operations 5,000 7,312 5,661 2,213 20,186
Net income 2,787 4,573 3,528 1,469 12,357
Earnings per common
share equivalent $ 0.12 $ 0.20 $ 0.15 $ 0.06 $ 0.53
Weighted average number
of shares outstanding 23,158 23,224 23,267 23,383 23,258
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 Shareholder Rights Agreement
dated November 20, 1992 1-10945 8-K Nov. 1992 1
*4.03 Bank Credit Agreement dated
April 12, 1995 1-10945 10-K March 1995 4.04
*4.04 Amended and Restated Bank Credit
Agreement dated June 12, 1996 1-10945 10-K March 1996 4.05
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 1-10945 10-K March 1996 10.02
*10.03 Employment Agreement dated
August 15, 1986 between
John R. Huff and Registrant 0-8418 10-K March 1987 10(l)
*10.04 Addendum to Employment Agreement
dated February 22, 1996 between
John R. Huff and Registrant 1-10945 10-K March 1997 10.04
*10.05 1987 Incentive and Non-
Qualified Stock Option Plan 33-16469 S-1 Sept. 1987 10(o)
*10.06 Oceaneering International, Inc.
Special Incentive Plan 33-16469 S-1 Sept. 1987 10(n)
*10.07 Senior Executive Severance
Plan, as amended 0-8418 10-K March 1989 10(k)
*10.08 Supplemental Senior Executive
Severance Agreements, as
amended 0-8418 10-K March 1989 10(l)
*10.09 Oceaneering International, Inc.
Executive Retirement Plan,
as amended 1-10945 10-K March 1995 10.08
*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 1993 Restricted Stock Award
Incentive Agreements 1-10945 10-K March 1994 10(q)
*10.15 1993 Restricted Stock Award
Incentive Agreement 1-10945 10-K March 1996 10.16
10.16 1997 Bonus Award Plan
*10.17 Amendment No. 1 to the Oceaneering
Retirement Investment Plan 1-10945 10-Q Sept. 1996 10.01
*10.18 1996 Incentive Plan of Oceaneering
International, Inc. 1-10945 10-Q Sept. 1996 10.02
*10.19 1996 Restricted Stock Award Incentive
Agreements between Registrant
and Executive Officers dated
August 23, 1996. 1-10945 10-Q Sept. 1996 10.03
10.20 1997 Bonus Restricted Stock Award
Agreements between Registrant
and Executive Officers dated
April 22, 1997.
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 10.16
OCEANEERING INTERNATIONAL, INC.
1997 BONUS AWARD PLAN
The 1997 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 1997 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 FY97 Net Income Result with the Objective 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.
Participants in the 1996 Restrictive Stock Incentive Program have the
option to receive any bonus subsequently awarded by the Compensation
Committee under the 1997 Bonus Award Plan in cash, cash and restricted
stock or restricted stock. Any restricted stock would be awarded
pursuant to all terms and conditions, including vesting and tax
assistance payments of the 1996 Restricted Stock Incentive Program,
except that one-quarter of such restricted amount would vest at the time
of the bonus award and the remainder would rest in equal installments at
the end of each of the following three years in accordance with
agreement.
The 1997 Bonus Award Plan is in effect FY97. A similar plan may or may
not be approved for FY98. It is extremely important that the Company
continue improved results in FY97. 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 1997 Bonus Award Plan is
structured to foster that position.
August 23, 1996
EXHIBIT 10.20
Award No. B-101 16,400 Shares
OCEANEERING INTERNATIONAL, INC.
FY97 BONUS RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is made as of the date set forth on the signature
page hereof, between Oceaneering International, Inc., a Delaware
corporation (the "Company"), and JOHN R. HUFF
(the "Participant"). Except as defined herein, capitalized terms shall
have the same meaning ascribed to them under the 1996 Incentive Plan of
Oceaneering International, Inc., as from time to time amended, a copy
of which is attached hereto and made a part hereof for all purposes (the
"Plan"). To the extent that any provision of this Agreement conflicts
with the express terms of the Plan, it is hereby acknowledged and agreed
that the terms of the Plan shall control and, if necessary, the
applicable provisions of this Agreement shall be hereby deemed amended
so as to carry out the purpose and intent of the Plan.
1. Definitions. As used herein, the terms set forth below
shall have the following respective meanings:
(a) "Change in Control" means, with respect to the Company, if
(i) a third person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, becomes the beneficial owner of
shares of the Company having 30 percent 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 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 of the Company or of any successor to the Company. Without
limiting the foregoing, no "Change of Control" shall be deemed to have
taken place for the purposes of this Agreement, if a person or persons
is appointed or elected as a member(s) of the Board as a result of or
in connection with a Transaction or other event unless item (i) or (ii)
above shall also have occurred.
(b) "Closing Stock Price" means, with respect to common stock
on a particular date, (i) if the shares of common stock are listed on
a national securities exchange, the last sale price per share of common
stock on any such national securities exchange on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported and, (ii) if the
shares of Common Stock are not so listed but are quoted in the NASDAQ
National Market System, the last sale price per share of shares of
common stock reported on the NASDAQ National Market System on that date,
or, if there shall have been no such sale so reported on that date, on
the last preceding date on which such a sale was so reported.
(c) "Disability" means a physical or mental impairment of
sufficient severity that, in the opinion of a physician selected by the
Company, the Participant is unable to fulfill his duties.
2. Award. As an FY97 Bonus Award and in consideration of the
covenants and promises of the Participant herein contained, pursuant to
action taken by the Committee on April 22, 1997 (the "Date of Grant"),
the Company hereby awards to the Participant as of the Date of Grant a
total of 16,400 shares of Common Stock, pursuant to the Plan,
subject to the conditions and restrictions set forth below and in the
Plan (the "Restricted Stock").
3. Restrictions on Transfer. The shares of Restricted Stock
granted hereunder to the Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered from the Date of Grant
until said shares shall have become vested and not otherwise subject to
forfeiture (and restrictions terminated thereon) in accordance with the
provisions of this Paragraph 3. (The period of time between the Date
of Grant and the vesting of shares of Restricted Stock shall be referred
to herein as the "Restricted Period" as to those shares of stock.) The
shares of Restricted Stock shall be treated as described below for
purposes of vesting and other terms and conditions of this Agreement:
(a) Vesting of Common Stock: The shares of the Restricted
Stock shall vest 25% on June 20, 1997, 25% on June 26, 1998, 25% on
June 25, 1999, and 25% on June 23, 2000. Upon termination of a
Participant's employment (with or without cause, voluntary, involuntary
or for any reason whatsoever except as provided in Sections 3(c) and
3(d)), all Restricted Stock for which the conditions of the applicable
provisions of this paragraph (a) have not been satisfied as of the date
of such termination of employment shall be forfeited.
(b) Tax Reimbursement: Within 10 days after the expiration of
the Restricted Period with respect to a particular share of Restricted
Stock, the Company shall pay to the Participant an amount sufficient to
provide for the payment of all United States federal income taxes
imposed with respect to Participant's acquisition of such share, as well
as an amount sufficient to reimburse Participant for the tax obligation
on such amounts so that Participant is paid an amount as a tax
assistance payment by the Company sufficient to fund all of his income
taxes on both the share of Restricted Stock and the tax assistance
payment. In the event the Participant is not at the time a tax
assistance payment is to be made subject to United States income tax,
such tax assistance payment shall be computed by reference to the income
tax of the laws of the country to which the participant is subject;
provided, however, that such tax assistance payment shall not exceed the
amount that would have been payable if the Participant were subject
solely to United States income tax. No United States state (or
equivalent foreign) income taxes will be considered in determining tax
assistance payments. The Committee shall have sole and complete
discretion in the calculation of tax assistance payments, and the
determination of the Committee shall be final and binding on the
Participant except in the case of bad faith or willful misconduct. In
computing the tax assistance payment, it shall be assumed that the
Participant is at the maximum marginal tax rate for individual
taxpayers. Subject to Section 3(c), in the event a Participant sells
any share of Restricted Stock within three years after expiration of the
Restricted Period with respect to such Restricted Stock, the Participant
shall immediately pay to the Company the amount of the tax assistance
payment previously received by the Participant from the Company with
respect to such share.
(c) Effect of Change in Control: In the event a Change in
Control occurs prior to the time that the conditions of paragraph (b)
above have been satisfied with respect to a share of Restricted Stock,
and upon such Change in Control, the requirements of paragraph (b) above
shall be deemed to have been satisfied on the date of such Change of
Control, and tax assistance payments shall be made with respect to such
shares within 10 days thereafter.
(d) Effect of Death or Disability. In the event of the death
or Disability of the Participant while employed by the Company, the
conditions of paragraph (b) above shall be deemed immediately satisfied
and tax assistance payments shall be made by Company to the Participants
with respect to such event within 30 days thereafter.
(e) Dividends: Dividends (other than dividends in capital
stock) with respect to shares of Restricted Stock shall be paid to the
Participant without regard to the restrictions otherwise applicable to
such shares. Dividends in capital stock of the Company shall accumulate
and be associated with the Restricted Stock to which they relate and
shall vest at the time such Restricted Stock vests.
(f) Voting of Common Stock: A Participant shall have the right
to exercise any voting rights appurtenant to Restricted Stock without
regard to any restrictions otherwise imposed by reason of this
Agreement.
4. Code Section 83(b) Election. The Participant shall not
make an election, under Code Section 83(b), to include in income the
fair market value of the Restricted Stock in respect of this award of
Restricted Stock on the Date of Grant.
5. Sale of Restricted Stock. The Participant shall not sell
Restricted Stock except pursuant to an effective registration statement
under the Securities Act of 1933 (or pursuant to an exemption from
registration under such act), and the Participant hereby represents that
he is acquiring the Restricted Stock for his own account and not with
a view to the distribution thereof.
6. Escrow of Certificates. The certificates representing
shares of Restricted Stock shall be registered in the name of the
Participant and deposited, together with a stock power endorsed by the
Participant in blank, with the Corporate Secretary of the Company during
the Restricted Period. Each such certificate shall bear a legend as
provided by the Company, conspicuously referring to the terms,
conditions and restrictions described in the Plan and in this Agreement.
Subject to the provisions of Section 7 below, upon termination of the
Restricted Period with respect to shares of Restricted Stock, a
certificate representing such shares shall be delivered to the
Participant as promptly as practicable following such termination.
7. Withholding of Taxes. No certificates representing the
shares of Restricted Stock shall be delivered to the Participant by the
Company unless the Participant (or Beneficiary, as defined in Section 8
below) remits to the Company the amount of all federal, state and other
governmental withholding tax requirements imposed upon the Company with
respect to the issuance of such shares or unless provisions to so pay
such withholding requirements have been made to the satisfaction of the
Committee.
8. Beneficiary Designations. The Participant may file with
the Corporate Secretary of the Company a designation of one or more
beneficiaries (each a "Beneficiary") to whom shares otherwise due the
Participant shall be distributed in the event of the death of the
Participant while in the employ of the Company. The Participant shall
have the right to change the Beneficiary or Beneficiaries from time to
time; provided, however, that any change shall not become effective
until received in writing by the Corporate Secretary of the Company.
If any designated Beneficiary survives the Participant but dies before
receiving all of his benefits hereunder, any remaining benefits due him
shall be distributed to the deceased Beneficiary's estate. If there is
no effective Beneficiary designation on file at the time of the
Participant's death, or if the designated Beneficiary or Beneficiaries
have all predeceased such Participant, the payment of any remaining
benefits shall be made to the Participant's estate. In the event of any
dispute, the Company shall be fully protected and discharged of its
obligations under this Agreement if it delivers the shares otherwise due
a Participant to the probate court administering his estate.
9. Limitation of Rights. Nothing in this Agreement or the
Plan shall be construed to:
(a) give the Participant any right to be awarded any Restricted
Stock other than in the sole discretion of the Committee;
(b) give the Participant or any other person any interest in
any fund or in any specified asset or assets of the Company or any
affiliate of the Company; or
(c) confer upon the Participant the right to continue in the
employment or service of the Company or any affiliate of the Company,
or affect the right of the Company or any affiliate of the Company to
terminate the employment or service of the Participant at any time or
for any reason.
The Committee shall have the discretion to make determinations
under this Agreement and Plan, and such determinations shall be final
and binding on the Participant except in the case of bad faith and
willful misconduct.
10. Nonalienation of Benefits. Except as contemplated by
Section 8 above, no right or benefit under this Agreement shall be
subject to transfer, anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, whether voluntary, involuntary, or by operation
of law, and any attempt to transfer, anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such benefits.
If the Participant or his Beneficiary hereunder shall become bankrupt
or attempt to transfer, anticipate, alienate, assign, sell, pledge,
encumber or charge any right or benefit hereunder, other than as
contemplated by Section 8 above, or if any creditor shall attempt to
subject the same to a writ of garnishment, attachment, execution,
sequestration, or any other form of process or involuntary lien or
seizure, then such right or benefit shall cease and terminate.
11. Prerequisites to Benefits. Neither the Participant, nor
any person claiming through the Participant, shall have any right or
interest in the Restricted Stock awarded hereunder, unless and until all
the terms, conditions and provisions of this Agreement and the Plan
which affect the Participant or such other person shall have been
complied with as specified herein.
12. Rights as a Stockholder. Subject to the limitations and
restrictions contained herein, the Participant (or Beneficiary) shall
have all rights as a stockholder with respect to the shares of
Restricted Stock once such shares have been registered in his name
hereunder.
13. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Participant, the
Company and their respective permitted successors and assigns (including
personal representatives, heirs and legatees), except that the
Participant may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted
herein.
14. The Committee shall have sole and complete discretion in
the interpretation of this Agreement and the determination of the
Committee shall be final and binding on the Participant except in the
case of bad faith or willful misconduct.
15. Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of
Delaware.
16. Gender and Number. Whenever the context requires or
permits, the gender and number of words shall be interchangeable.
This Agreement is executed and delivered, in duplicate, pursuant
to the Plan, the provisions of which are incorporated herein by
reference.
Dated: April 22, 1997.
OCEANEERING INTERNATIONAL, INC.
By //s//
George R. Haubenreich, Jr.
Vice President,
General Counsel and Secretary
The undersigned Participant accepts
the Restricted Stock subject to all
the terms of this Agreement.
//s//
JOHN R. HUFF
<PAGE>
Award No. B-102 8,204 Shares
OCEANEERING INTERNATIONAL, INC.
FY97 BONUS RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is made as of the date set forth on the signature
page hereof, between Oceaneering International, Inc., a Delaware
corporation (the "Company"), and T. JAY COLLINS
(the "Participant"). Except as defined herein, capitalized terms shall
have the same meaning ascribed to them under the 1996 Incentive Plan of
Oceaneering International, Inc., as from time to time amended, a copy
of which is attached hereto and made a part hereof for all purposes (the
"Plan"). To the extent that any provision of this Agreement conflicts
with the express terms of the Plan, it is hereby acknowledged and agreed
that the terms of the Plan shall control and, if necessary, the
applicable provisions of this Agreement shall be hereby deemed amended
so as to carry out the purpose and intent of the Plan.
1. Definitions. As used herein, the terms set forth below
shall have the following respective meanings:
(a) "Change in Control" means, with respect to the Company, if
(i) a third person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, becomes the beneficial owner of
shares of the Company having 30 percent 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 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 of the Company or of any successor to the Company. Without
limiting the foregoing, no "Change of Control" shall be deemed to have
taken place for the purposes of this Agreement, if a person or persons
is appointed or elected as a member(s) of the Board as a result of or
in connection with a Transaction or other event unless item (i) or (ii)
above shall also have occurred.
(b) "Closing Stock Price" means, with respect to common stock
on a particular date, (i) if the shares of common stock are listed on
a national securities exchange, the last sale price per share of common
stock on any such national securities exchange on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported and, (ii) if the
shares of Common Stock are not so listed but are quoted in the NASDAQ
National Market System, the last sale price per share of shares of
common stock reported on the NASDAQ National Market System on that date,
or, if there shall have been no such sale so reported on that date, on
the last preceding date on which such a sale was so reported.
(c) "Disability" means a physical or mental impairment of
sufficient severity that, in the opinion of a physician selected by the
Company, the Participant is unable to fulfill his duties.
2. Award. As an FY97 Bonus Award and in consideration of the
covenants and promises of the Participant herein contained, pursuant to
action taken by the Committee on April 22, 1997 (the "Date of Grant"),
the Company hereby awards to the Participant as of the Date of Grant a
total of 8,204 shares of Common Stock, pursuant to the Plan,
subject to the conditions and restrictions set forth below and in the
Plan (the "Restricted Stock").
3. Restrictions on Transfer. The shares of Restricted Stock
granted hereunder to the Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered from the Date of Grant
until said shares shall have become vested and not otherwise subject to
forfeiture (and restrictions terminated thereon) in accordance with the
provisions of this Paragraph 3. (The period of time between the Date
of Grant and the vesting of shares of Restricted Stock shall be referred
to herein as the "Restricted Period" as to those shares of stock.) The
shares of Restricted Stock shall be treated as described below for
purposes of vesting and other terms and conditions of this Agreement:
(a) Vesting of Common Stock: The shares of the Restricted
Stock shall vest 25% on June 20, 1997, 25% on June 26, 1998, 25% on
June 25, 1999, and 25% on June 23, 2000. Upon termination of a
Participant's employment (with or without cause, voluntary, involuntary
or for any reason whatsoever except as provided in Sections 3(c) and
3(d)), all Restricted Stock for which the conditions of the applicable
provisions of this paragraph (a) have not been satisfied as of the date
of such termination of employment shall be forfeited.
(b) Tax Reimbursement: Within 10 days after the expiration of
the Restricted Period with respect to a particular share of Restricted
Stock, the Company shall pay to the Participant an amount sufficient to
provide for the payment of all United States federal income taxes
imposed with respect to Participant's acquisition of such share, as well
as an amount sufficient to reimburse Participant for the tax obligation
on such amounts so that Participant is paid an amount as a tax
assistance payment by the Company sufficient to fund all of his income
taxes on both the share of Restricted Stock and the tax assistance
payment. In the event the Participant is not at the time a tax
assistance payment is to be made subject to United States income tax,
such tax assistance payment shall be computed by reference to the income
tax of the laws of the country to which the participant is subject;
provided, however, that such tax assistance payment shall not exceed the
amount that would have been payable if the Participant were subject
solely to United States income tax. No United States state (or
equivalent foreign) income taxes will be considered in determining tax
assistance payments. The Committee shall have sole and complete
discretion in the calculation of tax assistance payments, and the
determination of the Committee shall be final and binding on the
Participant except in the case of bad faith or willful misconduct. In
computing the tax assistance payment, it shall be assumed that the
Participant is at the maximum marginal tax rate for individual
taxpayers. Subject to Section 3(c), in the event a Participant sells
any share of Restricted Stock within three years after expiration of the
Restricted Period with respect to such Restricted Stock, the Participant
shall immediately pay to the Company the amount of the tax assistance
payment previously received by the Participant from the Company with
respect to such share.
(c) Effect of Change in Control: In the event a Change in
Control occurs prior to the time that the conditions of paragraph (b)
above have been satisfied with respect to a share of Restricted Stock,
and upon such Change in Control, the requirements of paragraph (b) above
shall be deemed to have been satisfied on the the date of such Change
of Control, and tax assistance payments shall be made with respect to
such shares within 10 days thereafter.
(d) Effect of Death or Disability. In the event of the death
or Disability of the Participant while employed by the Company, the
conditions of paragraph (b) above shall be deemed immediately satisfied
and tax assistance payments shall be made by Company to the Participants
with respect to such event within 30 days thereafter.
(e) Dividends: Dividends (other than dividends in capital
stock) with respect to shares of Restricted Stock shall be paid to the
Participant without regard to the restrictions otherwise applicable to
such shares. Dividends in capital stock of the Company shall accumulate
and be associated with the Restricted Stock to which they relate and
shall vest at the time such Restricted Stock vests.
(f) Voting of Common Stock: A Participant shall have the right
to exercise any voting rights appurtenant to Restricted Stock without
regard to any restrictions otherwise imposed by reason of this
Agreement.
4. Code Section 83(b) Election. The Participant shall not
make an election, under Code Section 83(b), to include in income the
fair market value of the Restricted Stock in respect of this award of
Restricted Stock on the Date of Grant.
5. Sale of Restricted Stock. The Participant shall not sell
Restricted Stock except pursuant to an effective registration statement
under the Securities Act of 1933 (or pursuant to an exemption from
registration under such act), and the Participant hereby represents that
he is acquiring the Restricted Stock for his own account and not with
a view to the distribution thereof.
6. Escrow of Certificates. The certificates representing
shares of Restricted Stock shall be registered in the name of the
Participant and deposited, together with a stock power endorsed by the
Participant in blank, with the Corporate Secretary of the Company during
the Restricted Period. Each such certificate shall bear a legend as
provided by the Company, conspicuously referring to the terms,
conditions and restrictions described in the Plan and in this Agreement.
Subject to the provisions of Section 7 below, upon termination of the
Restricted Period with respect to shares of Restricted Stock, a
certificate representing such shares shall be delivered to the
Participant as promptly as practicable following such termination.
7. Withholding of Taxes. No certificates representing the
shares of Restricted Stock shall be delivered to the Participant by the
Company unless the Participant (or Beneficiary, as defined in Section 8
below) remits to the Company the amount of all federal, state and other
governmental withholding tax requirements imposed upon the Company with
respect to the issuance of such shares or unless provisions to so pay
such withholding requirements have been made to the satisfaction of the
Committee.
8. Beneficiary Designations. The Participant may file with
the Corporate Secretary of the Company a designation of one or more
beneficiaries (each a "Beneficiary") to whom shares otherwise due the
Participant shall be distributed in the event of the death of the
Participant while in the employ of the Company. The Participant shall
have the right to change the Beneficiary or Beneficiaries from time to
time; provided, however, that any change shall not become effective
until received in writing by the Corporate Secretary of the Company.
If any designated Beneficiary survives the Participant but dies before
receiving all of his benefits hereunder, any remaining benefits due him
shall be distributed to the deceased Beneficiary's estate. If there is
no effective Beneficiary designation on file at the time of the
Participant's death, or if the designated Beneficiary or Beneficiaries
have all predeceased such Participant, the payment of any remaining
benefits shall be made to the Participant's estate. In the event of any
dispute, the Company shall be fully protected and discharged of its
obligations under this Agreement if it delivers the shares otherwise due
a Participant to the probate court administering his estate.
9. Limitation of Rights. Nothing in this Agreement or the
Plan shall be construed to:
(a) give the Participant any right to be awarded any Restricted
Stock other than in the sole discretion of the Committee;
(b) give the Participant or any other person any interest in
any fund or in any specified asset or assets of the Company or any
affiliate of the Company; or
(c) confer upon the Participant the right to continue in the
employment or service of the Company or any affiliate of the Company,
or affect the right of the Company or any affiliate of the Company to
terminate the employment or service of the Participant at any time or
for any reason.
The Committee shall have the discretion to make determinations
under this Agreement and Plan, and such determinations shall be final
and binding on the Participant except in the case of bad faith and
willful misconduct.
10. Nonalienation of Benefits. Except as contemplated by
Section 8 above, no right or benefit under this Agreement shall be
subject to transfer, anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, whether voluntary, involuntary, or by operation
of law, and any attempt to transfer, anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such benefits.
If the Participant or his Beneficiary hereunder shall become bankrupt
or attempt to transfer, anticipate, alienate, assign, sell, pledge,
encumber or charge any right or benefit hereunder, other than as
contemplated by Section 8 above, or if any creditor shall attempt to
subject the same to a writ of garnishment, attachment, execution,
sequestration, or any other form of process or involuntary lien or
seizure, then such right or benefit shall cease and terminate.
11. Prerequisites to Benefits. Neither the Participant, nor
any person claiming through the Participant, shall have any right or
interest in the Restricted Stock awarded hereunder, unless and until all
the terms, conditions and provisions of this Agreement and the Plan
which affect the Participant or such other person shall have been
complied with as specified herein.
12. Rights as a Stockholder. Subject to the limitations and
restrictions contained herein, the Participant (or Beneficiary) shall
have all rights as a stockholder with respect to the shares of
Restricted Stock once such shares have been registered in his name
hereunder.
13. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Participant, the
Company and their respective permitted successors and assigns (including
personal representatives, heirs and legatees), except that the
Participant may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted
herein.
14. The Committee shall have sole and complete discretion in
the interpretation of this Agreement and the determination of the
Committee shall be final and binding on the Participant except in the
case of bad faith or willful misconduct.
15. Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of
Delaware.
16. Gender and Number. Whenever the context requires or
permits, the gender and number of words shall be interchangeable.
This Agreement is executed and delivered, in duplicate, pursuant
to the Plan, the provisions of which are incorporated herein by
reference.
Dated: April 22, 1997.
OCEANEERING INTERNATIONAL, INC.
By //s//
George R. Haubenreich, Jr.
Vice President,
General Counsel and Secretary
The undersigned Participant accepts
the Restricted Stock subject to all
the terms of this Agreement.
//s//
T. JAY COLLINS
<PAGE>
Award No. B-103 4,000 Shares
OCEANEERING INTERNATIONAL, INC.
FY97 BONUS RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is made as of the date set forth on the signature
page hereof, between Oceaneering International, Inc., a Delaware
corporation (the "Company"), and MARVIN J. MIGURA (the
"Participant"). Except as defined herein, capitalized terms shall have
the same meaning ascribed to them under the 1996 Incentive Plan of
Oceaneering International, Inc., as from time to time amended, a copy of
which is attached hereto and made a part hereof for all purposes (the
"Plan"). To the extent that any provision of this Agreement conflicts
with the express terms of the Plan, it is hereby acknowledged and agreed
that the terms of the Plan shall control and, if necessary, the
applicable provisions of this Agreement shall be hereby deemed amended
so as to carry out the purpose and intent of the Plan.
1. Definitions. As used herein, the terms set forth below shall
have the following respective meanings:
(a) "Change in Control" means, with respect to the Company, if
(i) a third person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, becomes the beneficial owner of
shares of the Company having 30 percent 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 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 of the Company or of any successor to the Company. Without
limiting the foregoing, no "Change of Control" shall be deemed to have
taken place for the purposes of this Agreement, if a person or persons
is appointed or elected as a member(s) of the Board as a result of or in
connection with a Transaction or other event unless item (i) or (ii)
above shall also have occurred.
(b) "Closing Stock Price" means, with respect to common stock
on a particular date, (i) if the shares of common stock are listed on a
national securities exchange, the last sale price per share of common
stock on any such national securities exchange on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported and, (ii) if the
shares of Common Stock are not so listed but are quoted in the NASDAQ
National Market System, the last sale price per share of shares of
common stock reported on the NASDAQ National Market System on that date,
or, if there shall have been no such sale so reported on that date, on
the last preceding date on which such a sale was so reported.
(c) "Disability" means a physical or mental impairment of
sufficient severity that, in the opinion of a physician selected by the
Company, the Participant is unable to fulfill his duties.
2. Award. As an FY97 Bonus Award and in consideration of the
covenants and promises of the Participant herein contained, pursuant to
action taken by the Committee on April 22, 1997 (the "Date of Grant"),
the Company hereby awards to the Participant as of the Date of Grant a
total of 4,000 shares of Common Stock, pursuant to the Plan,
subject to the conditions and restrictions set forth below and in the
Plan (the "Restricted Stock").
3. Restrictions on Transfer. The shares of Restricted Stock
granted hereunder to the Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered from the Date of Grant
until said shares shall have become vested and not otherwise subject to
forfeiture (and restrictions terminated thereon) in accordance with the
provisions of this Paragraph 3. (The period of time between the Date of
Grant and the vesting of shares of Restricted Stock shall be referred to
herein as the "Restricted Period" as to those shares of stock.) The
shares of Restricted Stock shall be treated as described below for
purposes of vesting and other terms and conditions of this Agreement:
(a) Vesting of Common Stock: The shares of the Restricted Stock
shall vest 25% on June 20, 1997, 25% on June 26, 1998, 25% on June 25,
1999, and 25% on June 23, 2000. Upon termination of a Participant's
employment (with or without cause, voluntary, involuntary or for any
reason whatsoever except as provided in Sections 3(c) and 3(d)), all
Restricted Stock for which the conditions of the applicable provisions
of this paragraph (a) have not been satisfied as of the date of such
termination of employment shall be forfeited.
(b) Tax Reimbursement: Within 10 days after the expiration of
the Restricted Period with respect to a particular share of Restricted
Stock, the Company shall pay to the Participant an amount sufficient to
provide for the payment of all United States federal income taxes
imposed with respect to Participant's acquisition of such share, as well
as an amount sufficient to reimburse Participant for the tax obligation
on such amounts so that Participant is paid an amount as a tax
assistance payment by the Company sufficient to fund all of his income
taxes on both the share of Restricted Stock and the tax assistance
payment. In the event the Participant is not at the time a tax
assistance payment is to be made subject to United States income tax,
such tax assistance payment shall be computed by reference to the income
tax of the laws of the country to which the participant is subject;
provided, however, that such tax assistance payment shall not exceed the
amount that would have been payable if the Participant were subject
solely to United States income tax. No United States state (or
equivalent foreign) income taxes will be considered in determining tax
assistance payments. The Committee shall have sole and complete
discretion in the calculation of tax assistance payments, and the
determination of the Committee shall be final and binding on the
Participant except in the case of bad faith or willful misconduct. In
computing the tax assistance payment, it shall be assumed that the
Participant is at the maximum marginal tax rate for individual
taxpayers. Subject to Section 3(c), in the event a Participant sells
any share of Restricted Stock within three years after expiration of the
Restricted Period with respect to such Restricted Stock, the Participant
shall immediately pay to the Company the amount of the tax assistance
payment previously received by the Participant from the Company with
respect to such share.
(c) Effect of Change in Control: In the event a Change in
Control occurs prior to the time that the conditions of paragraph (b)
above have been satisfied with respect to a share of Restricted Stock,
and upon such Change in Control, the requirements of paragraph (b) above
shall be deemed to have been satisfied on the the date of such Change of
Control, and tax assistance payments shall be made with respect to such
shares within 10 days thereafter.
(d) Effect of Death or Disability. In the event of the death
or Disability of the Participant while employed by the Company, the
conditions of paragraph (b) above shall be deemed immediately satisfied
and tax assistance payments shall be made by Company to the Participants
with respect to such event within 30 days thereafter.
(e) Dividends: Dividends (other than dividends in capital
stock) with respect to shares of Restricted Stock shall be paid to the
Participant without regard to the restrictions otherwise applicable to
such shares. Dividends in capital stock of the Company shall accumulate
and be associated with the Restricted Stock to which they relate and
shall vest at the time such Restricted Stock vests.
(f) Voting of Common Stock: A Participant shall have the right
to exercise any voting rights appurtenant to Restricted Stock without
regard to any restrictions otherwise imposed by reason of this
Agreement.
4. Code Section 83(b) Election. The Participant shall not make
an election, under Code Section 83(b), to include in income the fair
market value of the Restricted Stock in respect of this award of
Restricted Stock on the Date of Grant.
5. Sale of Restricted Stock. The Participant shall not sell
Restricted Stock except pursuant to an effective registration statement
under the Securities Act of 1933 (or pursuant to an exemption from
registration under such act), and the Participant hereby represents that
he is acquiring the Restricted Stock for his own account and not with a
view to the distribution thereof.
6. Escrow of Certificates. The certificates representing
shares of Restricted Stock shall be registered in the name of the
Participant and deposited, together with a stock power endorsed by the
Participant in blank, with the Corporate Secretary of the Company during
the Restricted Period. Each such certificate shall bear a legend as
provided by the Company, conspicuously referring to the terms,
conditions and restrictions described in the Plan and in this Agreement.
Subject to the provisions of Section 7 below, upon termination of the
Restricted Period with respect to shares of Restricted Stock, a
certificate representing such shares shall be delivered to the
Participant as promptly as practicable following such termination.
7. Withholding of Taxes. No certificates representing the
shares of Restricted Stock shall be delivered to the Participant by the
Company unless the Participant (or Beneficiary, as defined in Section 8
below) remits to the Company the amount of all federal, state and other
governmental withholding tax requirements imposed upon the Company with
respect to the issuance of such shares or unless provisions to so pay
such withholding requirements have been made to the satisfaction of the
Committee.
8. Beneficiary Designations. The Participant may file with the
Corporate Secretary of the Company a designation of one or more
beneficiaries (each a "Beneficiary") to whom shares otherwise due the
Participant shall be distributed in the event of the death of the
Participant while in the employ of the Company. The Participant shall
have the right to change the Beneficiary or Beneficiaries from time to
time; provided, however, that any change shall not become effective
until received in writing by the Corporate Secretary of the Company. If
any designated Beneficiary survives the Participant but dies before
receiving all of his benefits hereunder, any remaining benefits due him
shall be distributed to the deceased Beneficiary's estate. If there is
no effective Beneficiary designation on file at the time of the
Participant's death, or if the designated Beneficiary or Beneficiaries
have all predeceased such Participant, the payment of any remaining
benefits shall be made to the Participant's estate. In the event of any
dispute, the Company shall be fully protected and discharged of its
obligations under this Agreement if it delivers the shares otherwise due
a Participant to the probate court administering his estate.
9. Limitation of Rights. Nothing in this Agreement or the Plan
shall be construed to:
(a) give the Participant any right to be awarded any Restricted
Stock other than in the sole discretion of the Committee;
(b) give the Participant or any other person any interest in any
fund or in any specified asset or assets of the Company or any affiliate
of the Company; or
(c) confer upon the Participant the right to continue in the
employment or service of the Company or any affiliate of the Company, or
affect the right of the Company or any affiliate of the Company to
terminate the employment or service of the Participant at any time or
for any reason.
The Committee shall have the discretion to make determinations
under this Agreement and Plan, and such determinations shall be final
and binding on the Participant except in the case of bad faith and
willful misconduct.
10. Nonalienation of Benefits. Except as contemplated by
Section 8 above, no right or benefit under this Agreement shall be
subject to transfer, anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, whether voluntary, involuntary, or by operation
of law, and any attempt to transfer, anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such benefits.
If the Participant or his Beneficiary hereunder shall become bankrupt or
attempt to transfer, anticipate, alienate, assign, sell, pledge,
encumber or charge any right or benefit hereunder, other than as
contemplated by Section 8 above, or if any creditor shall attempt to
subject the same to a writ of garnishment, attachment, execution,
sequestration, or any other form of process or involuntary lien or
seizure, then such right or benefit shall cease and terminate.
11. Prerequisites to Benefits. Neither the Participant, nor any
person claiming through the Participant, shall have any right or
interest in the Restricted Stock awarded hereunder, unless and until all
the terms, conditions and provisions of this Agreement and the Plan
which affect the Participant or such other person shall have been
complied with as specified herein.
12. Rights as a Stockholder. Subject to the limitations and
restrictions contained herein, the Participant (or Beneficiary) shall
have all rights as a stockholder with respect to the shares of
Restricted Stock once such shares have been registered in his name
hereunder.
13. Successors and Assigns. This Agreement shall bind and inure
to the benefit of and be enforceable by the Participant, the Company and
their respective permitted successors and assigns (including personal
representatives, heirs and legatees), except that the Participant may
not assign any rights or obligations under this Agreement except to the
extent and in the manner expressly permitted herein.
14. The Committee shall have sole and complete discretion in the
interpretation of this Agreement and the determination of the Committee
shall be final and binding on the Participant except in the case of bad
faith or willful misconduct.
15. Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of
Delaware.
16. Gender and Number. Whenever the context requires or
permits, the gender and number of words shall be interchangeable.
This Agreement is executed and delivered, in duplicate, pursuant
to the Plan, the provisions of which are incorporated herein by
reference.
Dated: April 22, 1997.
OCEANEERING INTERNATIONAL, INC.
By //s//
George R. Haubenreich, Jr.
Vice President,
General Counsel and Secretary
The undersigned Participant accepts
the Restricted Stock subject to all
the terms of this Agreement.
//s//
MARVIN J. MIGURA
<PAGE>
Award No. B-105 6,152 Shares
OCEANEERING INTERNATIONAL, INC.
FY97 BONUS RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is made as of the date set forth on the signature
page hereof, between Oceaneering International, Inc., a Delaware
corporation (the "Company"), and GEORGE R. HAUBENREICH, JR.
(the "Participant"). Except as defined herein, capitalized terms shall
have the same meaning ascribed to them under the 1996 Incentive Plan of
Oceaneering International, Inc., as from time to time amended, a copy of
which is attached hereto and made a part hereof for all purposes (the
"Plan"). To the extent that any provision of this Agreement conflicts
with the express terms of the Plan, it is hereby acknowledged and agreed
that the terms of the Plan shall control and, if necessary, the
applicable provisions of this Agreement shall be hereby deemed amended
so as to carry out the purpose and intent of the Plan.
1. Definitions. As used herein, the terms set forth below shall
have the following respective meanings:
(a) "Change in Control" means, with respect to the Company, if
(i) a third person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, becomes the beneficial owner of
shares of the Company having 30 percent 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 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 of the Company or of any successor to the Company. Without
limiting the foregoing, no "Change of Control" shall be deemed to have
taken place for the purposes of this Agreement, if a person or persons
is appointed or elected as a member(s) of the Board as a result of or in
connection with a Transaction or other event unless item (i) or (ii)
above shall also have occurred.
(b) "Closing Stock Price" means, with respect to common stock
on a particular date, (i) if the shares of common stock are listed on a
national securities exchange, the last sale price per share of common
stock on any such national securities exchange on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported and, (ii) if the
shares of Common Stock are not so listed but are quoted in the NASDAQ
National Market System, the last sale price per share of shares of
common stock reported on the NASDAQ National Market System on that date,
or, if there shall have been no such sale so reported on that date, on
the last preceding date on which such a sale was so reported.
(c) "Disability" means a physical or mental impairment of
sufficient severity that, in the opinion of a physician selected by the
Company, the Participant is unable to fulfill his duties.
2. Award. As an FY97 Bonus Award and in consideration of the
covenants and promises of the Participant herein contained, pursuant to
action taken by the Committee on April 22, 1997 (the "Date of Grant"),
the Company hereby awards to the Participant as of the Date of Grant a
total of 6,152 shares of Common Stock, pursuant to the Plan,
subject to the conditions and restrictions set forth below and in the
Plan (the "Restricted Stock").
3. Restrictions on Transfer. The shares of Restricted Stock
granted hereunder to the Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered from the Date of Grant
until said shares shall have become vested and not otherwise subject to
forfeiture (and restrictions terminated thereon) in accordance with the
provisions of this Paragraph 3. (The period of time between the Date of
Grant and the vesting of shares of Restricted Stock shall be referred to
herein as the "Restricted Period" as to those shares of stock.) The
shares of Restricted Stock shall be treated as described below for
purposes of vesting and other terms and conditions of this Agreement:
(a) Vesting of Common Stock: The shares of the Restricted Stock
shall vest 25% on June 20, 1997, 25% on June 26, 1998, 25% on June 25,
1999, and 25% on June 23, 2000. Upon termination of a Participant's
employment (with or without cause, voluntary, involuntary or for any
reason whatsoever except as provided in Sections 3(c) and 3(d)), all
Restricted Stock for which the conditions of the applicable provisions
of this paragraph (a) have not been satisfied as of the date of such
termination of employment shall be forfeited.
(b) Tax Reimbursement: Within 10 days after the expiration of
the Restricted Period with respect to a particular share of Restricted
Stock, the Company shall pay to the Participant an amount sufficient to
provide for the payment of all United States federal income taxes
imposed with respect to Participant's acquisition of such share, as well
as an amount sufficient to reimburse Participant for the tax obligation
on such amounts so that Participant is paid an amount as a tax
assistance payment by the Company sufficient to fund all of his income
taxes on both the share of Restricted Stock and the tax assistance
payment. In the event the Participant is not at the time a tax
assistance payment is to be made subject to United States income tax,
such tax assistance payment shall be computed by reference to the income
tax of the laws of the country to which the participant is subject;
provided, however, that such tax assistance payment shall not exceed the
amount that would have been payable if the Participant were subject
solely to United States income tax. No United States state (or
equivalent foreign) income taxes will be considered in determining tax
assistance payments. The Committee shall have sole and complete
discretion in the calculation of tax assistance payments, and the
determination of the Committee shall be final and binding on the
Participant except in the case of bad faith or willful misconduct. In
computing the tax assistance payment, it shall be assumed that the
Participant is at the maximum marginal tax rate for individual
taxpayers. Subject to Section 3(c), in the event a Participant sells
any share of Restricted Stock within three years after expiration of the
Restricted Period with respect to such Restricted Stock, the Participant
shall immediately pay to the Company the amount of the tax assistance
payment previously received by the Participant from the Company with
respect to such share.
(c) Effect of Change in Control: In the event a Change in
Control occurs prior to the time that the conditions of paragraph (b)
above have been satisfied with respect to a share of Restricted Stock,
and upon such Change in Control, the requirements of paragraph (b) above
shall be deemed to have been satisfied on the the date of such Change of
Control, and tax assistance payments shall be made with respect to such
shares within 10 days thereafter.
(d) Effect of Death or Disability. In the event of the death
or Disability of the Participant while employed by the Company, the
conditions of paragraph (b) above shall be deemed immediately satisfied
and tax assistance payments shall be made by Company to the Participants
with respect to such event within 30 days thereafter.
(e) Dividends: Dividends (other than dividends in capital
stock) with respect to shares of Restricted Stock shall be paid to the
Participant without regard to the restrictions otherwise applicable to
such shares. Dividends in capital stock of the Company shall accumulate
and be associated with the Restricted Stock to which they relate and
shall vest at the time such Restricted Stock vests.
(f) Voting of Common Stock: A Participant shall have the right
to exercise any voting rights appurtenant to Restricted Stock without
regard to any restrictions otherwise imposed by reason of this
Agreement.
4. Code Section 83(b) Election. The Participant shall not make
an election, under Code Section 83(b), to include in income the fair
market value of the Restricted Stock in respect of this award of
Restricted Stock on the Date of Grant.
5. Sale of Restricted Stock. The Participant shall not sell
Restricted Stock except pursuant to an effective registration statement
under the Securities Act of 1933 (or pursuant to an exemption from
registration under such act), and the Participant hereby represents that
he is acquiring the Restricted Stock for his own account and not with a
view to the distribution thereof.
6. Escrow of Certificates. The certificates representing
shares of Restricted Stock shall be registered in the name of the
Participant and deposited, together with a stock power endorsed by the
Participant in blank, with the Corporate Secretary of the Company during
the Restricted Period. Each such certificate shall bear a legend as
provided by the Company, conspicuously referring to the terms,
conditions and restrictions described in the Plan and in this Agreement.
Subject to the provisions of Section 7 below, upon termination of the
Restricted Period with respect to shares of Restricted Stock, a
certificate representing such shares shall be delivered to the
Participant as promptly as practicable following such termination.
7. Withholding of Taxes. No certificates representing the
shares of Restricted Stock shall be delivered to the Participant by the
Company unless the Participant (or Beneficiary, as defined in Section 8
below) remits to the Company the amount of all federal, state and other
governmental withholding tax requirements imposed upon the Company with
respect to the issuance of such shares or unless provisions to so pay
such withholding requirements have been made to the satisfaction of the
Committee.
8. Beneficiary Designations. The Participant may file with the
Corporate Secretary of the Company a designation of one or more
beneficiaries (each a "Beneficiary") to whom shares otherwise due the
Participant shall be distributed in the event of the death of the
Participant while in the employ of the Company. The Participant shall
have the right to change the Beneficiary or Beneficiaries from time to
time; provided, however, that any change shall not become effective
until received in writing by the Corporate Secretary of the Company. If
any designated Beneficiary survives the Participant but dies before
receiving all of his benefits hereunder, any remaining benefits due him
shall be distributed to the deceased Beneficiary's estate. If there is
no effective Beneficiary designation on file at the time of the
Participant's death, or if the designated Beneficiary or Beneficiaries
have all predeceased such Participant, the payment of any remaining
benefits shall be made to the Participant's estate. In the event of any
dispute, the Company shall be fully protected and discharged of its
obligations under this Agreement if it delivers the shares otherwise due
a Participant to the probate court administering his estate.
9. Limitation of Rights. Nothing in this Agreement or the Plan
shall be construed to:
(a) give the Participant any right to be awarded any Restricted
Stock other than in the sole discretion of the Committee;
(b) give the Participant or any other person any interest in any
fund or in any specified asset or assets of the Company or any affiliate
of the Company; or
(c) confer upon the Participant the right to continue in the
employment or service of the Company or any affiliate of the Company, or
affect the right of the Company or any affiliate of the Company to
terminate the employment or service of the Participant at any time or
for any reason.
The Committee shall have the discretion to make determinations
under this Agreement and Plan, and such determinations shall be final
and binding on the Participant except in the case of bad faith and
willful misconduct.
10. Nonalienation of Benefits. Except as contemplated by
Section 8 above, no right or benefit under this Agreement shall be
subject to transfer, anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, whether voluntary, involuntary, or by operation
of law, and any attempt to transfer, anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such benefits.
If the Participant or his Beneficiary hereunder shall become bankrupt or
attempt to transfer, anticipate, alienate, assign, sell, pledge,
encumber or charge any right or benefit hereunder, other than as
contemplated by Section 8 above, or if any creditor shall attempt to
subject the same to a writ of garnishment, attachment, execution,
sequestration, or any other form of process or involuntary lien or
seizure, then such right or benefit shall cease and terminate.
11. Prerequisites to Benefits. Neither the Participant, nor any
person claiming through the Participant, shall have any right or
interest in the Restricted Stock awarded hereunder, unless and until all
the terms, conditions and provisions of this Agreement and the Plan
which affect the Participant or such other person shall have been
complied with as specified herein.
12. Rights as a Stockholder. Subject to the limitations and
restrictions contained herein, the Participant (or Beneficiary) shall
have all rights as a stockholder with respect to the shares of
Restricted Stock once such shares have been registered in his name
hereunder.
13. Successors and Assigns. This Agreement shall bind and inure
to the benefit of and be enforceable by the Participant, the Company and
their respective permitted successors and assigns (including personal
representatives, heirs and legatees), except that the Participant may
not assign any rights or obligations under this Agreement except to the
extent and in the manner expressly permitted herein.
14. The Committee shall have sole and complete discretion in the
interpretation of this Agreement and the determination of the Committee
shall be final and binding on the Participant except in the case of bad
faith or willful misconduct.
15. Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of
Delaware.
16. Gender and Number. Whenever the context requires or
permits, the gender and number of words shall be interchangeable.
This Agreement is executed and delivered, in duplicate, pursuant
to the Plan, the provisions of which are incorporated herein by
reference.
Dated: April 22, 1997.
OCEANEERING INTERNATIONAL, INC.
By //s//
John R. Huff, President
The undersigned Participant accepts
the Restricted Stock subject to all
the terms of this Agreement.
//s//
GEORGE R. HAUBENREICH, JR.
<PAGE>
Award No. B-106 1,000 Shares
OCEANEERING INTERNATIONAL, INC.
FY97 BONUS RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT is made as of the date set forth on the signature
page hereof, between Oceaneering International, Inc., a Delaware
corporation (the "Company"), and RICHARD V. CHIDLOW (the
"Participant"). Except as defined herein, capitalized terms shall have
the same meaning ascribed to them under the 1996 Incentive Plan of
Oceaneering International, Inc., as from time to time amended, a copy of
which is attached hereto and made a part hereof for all purposes (the
"Plan"). To the extent that any provision of this Agreement conflicts
with the express terms of the Plan, it is hereby acknowledged and agreed
that the terms of the Plan shall control and, if necessary, the
applicable provisions of this Agreement shall be hereby deemed amended
so as to carry out the purpose and intent of the Plan.
1. Definitions. As used herein, the terms set forth below
shall have the following respective meanings:
(a) "Change in Control" means, with respect to the Company, if
(i) a third person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, becomes the beneficial owner of
shares of the Company having 30 percent 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 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 of the Company or of any successor to the Company. Without
limiting the foregoing, no "Change of Control" shall be deemed to have
taken place for the purposes of this Agreement, if a person or persons
is appointed or elected as a member(s) of the Board as a result of or in
connection with a Transaction or other event unless item (i) or (ii)
above shall also have occurred.
(b) "Closing Stock Price" means, with respect to common stock
on a particular date, (i) if the shares of common stock are listed on a
national securities exchange, the last sale price per share of common
stock on any such national securities exchange on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported and, (ii) if the
shares of Common Stock are not so listed but are quoted in the NASDAQ
National Market System, the last sale price per share of shares of
common stock reported on the NASDAQ National Market System on that date,
or, if there shall have been no such sale so reported on that date, on
the last preceding date on which such a sale was so reported.
(c) "Disability" means a physical or mental impairment of
sufficient severity that, in the opinion of a physician selected by the
Company, the Participant is unable to fulfill his duties.
2. Award. As an FY97 Bonus Award and in consideration of the
covenants and promises of the Participant herein contained, pursuant to
action taken by the Committee on April 22, 1997 (the "Date of Grant"),
the Company hereby awards to the Participant as of the Date of Grant a
total of 1,000 shares of Common Stock, pursuant to the Plan,
subject to the conditions and restrictions set forth below and in the
Plan (the "Restricted Stock").
3. Restrictions on Transfer. The shares of Restricted Stock
granted hereunder to the Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered from the Date of Grant
until said shares shall have become vested and not otherwise subject to
forfeiture (and restrictions terminated thereon) in accordance with the
provisions of this Paragraph 3. (The period of time between the Date of
Grant and the vesting of shares of Restricted Stock shall be referred to
herein as the "Restricted Period" as to those shares of stock.) The
shares of Restricted Stock shall be treated as described below for
purposes of vesting and other terms and conditions of this Agreement:
(a) Vesting of Common Stock: The shares of the Restricted Stock
shall vest 25% on June 20, 1997, 25% on June 26, 1998, 25% on June 25,
1999, and 25% on June 23, 2000. Upon termination of a Participant's
employment (with or without cause, voluntary, involuntary or for any
reason whatsoever except as provided in Sections 3(c) and 3(d)), all
Restricted Stock for which the conditions of the applicable provisions
of this paragraph (a) have not been satisfied as of the date of such
termination of employment shall be forfeited.
(b) Tax Reimbursement: Within 10 days after the expiration of
the Restricted Period with respect to a particular share of Restricted
Stock, the Company shall pay to the Participant an amount sufficient to
provide for the payment of all United States federal income taxes
imposed with respect to Participant's acquisition of such share, as well
as an amount sufficient to reimburse Participant for the tax obligation
on such amounts so that Participant is paid an amount as a tax
assistance payment by the Company sufficient to fund all of his income
taxes on both the share of Restricted Stock and the tax assistance
payment. In the event the Participant is not at the time a tax
assistance payment is to be made subject to United States income tax,
such tax assistance payment shall be computed by reference to the income
tax of the laws of the country to which the participant is subject;
provided, however, that such tax assistance payment shall not exceed the
amount that would have been payable if the Participant were subject
solely to United States income tax. No United States state (or
equivalent foreign) income taxes will be considered in determining tax
assistance payments. The Committee shall have sole and complete
discretion in the calculation of tax assistance payments, and the
determination of the Committee shall be final and binding on the
Participant except in the case of bad faith or willful misconduct. In
computing the tax assistance payment, it shall be assumed that the
Participant is at the maximum marginal tax rate for individual
taxpayers. Subject to Section 3(c), in the event a Participant sells
any share of Restricted Stock within three years after expiration of the
Restricted Period with respect to such Restricted Stock, the Participant
shall immediately pay to the Company the amount of the tax assistance
payment previously received by the Participant from the Company with
respect to such share.
(c) Effect of Change in Control: In the event a Change in
Control occurs prior to the time that the conditions of paragraph (b)
above have been satisfied with respect to a share of Restricted Stock,
and upon such Change in Control, the requirements of paragraph (b) above
shall be deemed to have been satisfied on the the date of such Change of
Control, and tax assistance payments shall be made with respect to such
shares within 10 days thereafter.
(d) Effect of Death or Disability. In the event of the death
or Disability of the Participant while employed by the Company, the
conditions of paragraph (b) above shall be deemed immediately satisfied
and tax assistance payments shall be made by Company to the Participants
with respect to such event within 30 days thereafter.
(e) Dividends: Dividends (other than dividends in capital
stock) with respect to shares of Restricted Stock shall be paid to the
Participant without regard to the restrictions otherwise applicable to
such shares. Dividends in capital stock of the Company shall accumulate
and be associated with the Restricted Stock to which they relate and
shall vest at the time such Restricted Stock vests.
(f) Voting of Common Stock: A Participant shall have the right
to exercise any voting rights appurtenant to Restricted Stock without
regard to any restrictions otherwise imposed by reason of this
Agreement.
4. Code Section 83(b) Election. The Participant shall not make
an election, under Code Section 83(b), to include in income the fair
market value of the Restricted Stock in respect of this award of
Restricted Stock on the Date of Grant.
5. Sale of Restricted Stock. The Participant shall not sell
Restricted Stock except pursuant to an effective registration statement
under the Securities Act of 1933 (or pursuant to an exemption from
registration under such act), and the Participant hereby represents that
he is acquiring the Restricted Stock for his own account and not with a
view to the distribution thereof.
6. Escrow of Certificates. The certificates representing
shares of Restricted Stock shall be registered in the name of the
Participant and deposited, together with a stock power endorsed by the
Participant in blank, with the Corporate Secretary of the Company during
the Restricted Period. Each such certificate shall bear a legend as
provided by the Company, conspicuously referring to the terms,
conditions and restrictions described in the Plan and in this Agreement.
Subject to the provisions of Section 7 below, upon termination of the
Restricted Period with respect to shares of Restricted Stock, a
certificate representing such shares shall be delivered to the
Participant as promptly as practicable following such termination.
7. Withholding of Taxes. No certificates representing the
shares of Restricted Stock shall be delivered to the Participant by the
Company unless the Participant (or Beneficiary, as defined in Section 8
below) remits to the Company the amount of all federal, state and other
governmental withholding tax requirements imposed upon the Company with
respect to the issuance of such shares or unless provisions to so pay
such withholding requirements have been made to the satisfaction of the
Committee.
8. Beneficiary Designations. The Participant may file with the
Corporate Secretary of the Company a designation of one or more
beneficiaries (each a "Beneficiary") to whom shares otherwise due the
Participant shall be distributed in the event of the death of the
Participant while in the employ of the Company. The Participant shall
have the right to change the Beneficiary or Beneficiaries from time to
time; provided, however, that any change shall not become effective
until received in writing by the Corporate Secretary of the Company. If
any designated Beneficiary survives the Participant but dies before
receiving all of his benefits hereunder, any remaining benefits due him
shall be distributed to the deceased Beneficiary's estate. If there is
no effective Beneficiary designation on file at the time of the
Participant's death, or if the designated Beneficiary or Beneficiaries
have all predeceased such Participant, the payment of any remaining
benefits shall be made to the Participant's estate. In the event of any
dispute, the Company shall be fully protected and discharged of its
obligations under this Agreement if it delivers the shares otherwise due
a Participant to the probate court administering his estate.
9. Limitation of Rights. Nothing in this Agreement or the Plan
shall be construed to:
(a) give the Participant any right to be awarded any Restricted
Stock other than in the sole discretion of the Committee;
(b) give the Participant or any other person any interest in any
fund or in any specified asset or assets of the Company or any affiliate
of the Company; or
(c) confer upon the Participant the right to continue in the
employment or service of the Company or any affiliate of the Company, or
affect the right of the Company or any affiliate of the Company to
terminate the employment or service of the Participant at any time or
for any reason.
The Committee shall have the discretion to make determinations
under this Agreement and Plan, and such determinations shall be final
and binding on the Participant except in the case of bad faith and
willful misconduct.
10. Nonalienation of Benefits. Except as contemplated by
Section 8 above, no right or benefit under this Agreement shall be
subject to transfer, anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, whether voluntary, involuntary, or by operation
of law, and any attempt to transfer, anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities or torts of the person entitled to such benefits.
If the Participant or his Beneficiary hereunder shall become bankrupt or
attempt to transfer, anticipate, alienate, assign, sell, pledge,
encumber or charge any right or benefit hereunder, other than as
contemplated by Section 8 above, or if any creditor shall attempt to
subject the same to a writ of garnishment, attachment, execution,
sequestration, or any other form of process or involuntary lien or
seizure, then such right or benefit shall cease and terminate.
11. Prerequisites to Benefits. Neither the Participant, nor any
person claiming through the Participant, shall have any right or
interest in the Restricted Stock awarded hereunder, unless and until all
the terms, conditions and provisions of this Agreement and the Plan
which affect the Participant or such other person shall have been
complied with as specified herein.
12. Rights as a Stockholder. Subject to the limitations and
restrictions contained herein, the Participant (or Beneficiary) shall
have all rights as a stockholder with respect to the shares of
Restricted Stock once such shares have been registered in his name
hereunder.
13. Successors and Assigns. This Agreement shall bind and inure
to the benefit of and be enforceable by the Participant, the Company and
their respective permitted successors and assigns (including personal
representatives, heirs and legatees), except that the Participant may
not assign any rights or obligations under this Agreement except to the
extent and in the manner expressly permitted herein.
14. The Committee shall have sole and complete discretion in the
interpretation of this Agreement and the determination of the Committee
shall be final and binding on the Participant except in the case of bad
faith or willful misconduct.
15. Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of
Delaware.
16. Gender and Number. Whenever the context requires or
permits, the gender and number of words shall be interchangeable.
This Agreement is executed and delivered, in duplicate, pursuant
to the Plan, the provisions of which are incorporated herein by
reference.
Dated: April 22, 1997.
OCEANEERING INTERNATIONAL, INC.
By //s//
George R. Haubenreich, Jr.
Vice President,
General Counsel and Secretary
The undersigned Participant accepts
the Restricted Stock subject to all
the terms of this Agreement.
//s//
RICHARD V. CHIDLOW
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 A/S 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 100% 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
Stolt-Comex Seaway Tecnologia Submarina S.A. 20% Brazil
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 20, 1997
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, 1997 ("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, MARVIN J. MIGURA 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 22nd day of April, 1997.
//s//
D. Michael Hughes
<PAGE>
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, 1997 ("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, MARVIN J. MIGURA 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 22nd day of April, 1997.
//s//
Charles B. Evans
<PAGE>
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, 1997 ("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, MARVIN J. MIGURA 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 22nd day of April, 1997.
//s//
David S. Hooker
<PAGE>
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, 1997 ("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, MARVIN J. MIGURA 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 22nd day of April, 1997.
//s//
John R. Huff
<PAGE>
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, 1997 ("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, MARVIN J. MIGURA 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 22nd day of April, 1997.
//s//
Harris J. Pappas
<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> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 23,034
<SECURITIES> 0
<RECEIVABLES> 121,057
<ALLOWANCES> 962
<INVENTORY> 0
<CURRENT-ASSETS> 148,807
<PP&E> 262,944
<DEPRECIATION> 161,053
<TOTAL-ASSETS> 268,255
<CURRENT-LIABILITIES> 95,845
<BONDS> 0
0
0
<COMMON> 6,004
<OTHER-SE> 150,330
<TOTAL-LIABILITY-AND-EQUITY> 268,255
<SALES> 368,773
<TOTAL-REVENUES> 368,773
<CGS> 290,801
<TOTAL-COSTS> 290,801
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,048
<INCOME-PRETAX> 41,294
<INCOME-TAX> 21,849
<INCOME-CONTINUING> 19,445
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,445
<EPS-PRIMARY> .81
<EPS-DILUTED> .81
</TABLE>
