UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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.)
11911 FM 529
Houston, Texas 77041
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(713) 329-4500
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 June 9,1999 based upon the
closing sale price of the Common Stock on the New York Stock
Exchange: $377,992,000
Number of shares of Common Stock outstanding at June 9, 1999:
22,399,535
Documents Incorporated by Reference:
Portions of the proxy statement relating to the registrant's 1999
annual meeting of shareholders, to be filed on or before July 29,
1999 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.
PART I
ITEM 1. BUSINESS.
General Development of Business
Oceaneering International, Inc. is an advanced applied technology
company that provides
engineered services and hardware to customers
who operate in marine, space and other harsh environments. We
supply a comprehensive range
of integrated technical services to a wide
array of industries and are one of the world's largest underwater
services contractors. We
provide most of our services to the oil and gas
industry. These services include drilling support, subsea
construction, design, lease and
operation of 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 our establishment, we have
concentrated on the development and marketing of underwater
services requiring the use of
advanced deepwater technology. We operate
in the United States and 26 other countries. Our international
operations, principally in the North
Sea, Africa and Far East, accounted for
approximately 48% of our 1999 revenues, or $194 million. Our
business segments are Oilfield
Marine Services, Offshore Field
Development and Advanced Technologies.
In each of our segments, we have been concentrating on
expanding our capabilities to provide
technical solutions to customers
operating in harsh environments.
Oilfield Marine Services. In the last few years, the focus of
our Oilfield Marine Services
segment has been toward increasing our asset
base for servicing deepwater projects. Prior to 1996, we
purchased most of our remotely
operated vehicles ("ROVs"), which are
submersible vehicles operated from the surface and widely used in
the offshore oil and gas
industry. We also designed and built
specialized systems in-house. In response to increased demand
for more powerful systems
operating in deeper water, we expanded our
capabilities and established a dedicated facility to design and
build ROVs to meet the continued
expansion of our ROV fleet. We have
delivered over 50 ROV systems and all new ROVs entering our fleet
are being produced at this
facility.
In addition to the ROV expansion, we also committed to the
construction of two dynamically
positioned multiservice vessels
("MSVs"), the first of which went into service in November 1998.
These vessels can carry and
install significant lengths of coiled tubing
or umbilicals for tying back subsea completions. They have been
designed for use in pipeline or
flowline tie-ins, pipeline crossings,
subsea hardware interventions and riser and jumper spool
installations.
Offshore Field Development. Through our Multiflex unit
("Multiflex"), we are the world's
largest provider of subsea hydraulic and
electrohydraulic thermoplastic umbilicals. These umbilicals are
the means by which offshore
operators control subsea wellhead
hydrocarbon flow rates. We entered this market in March 1994
through our purchase of the
operating subsidiaries of Multiflex
International Inc. During the fiscal year ended March 31, 1999,
we relocated, modernized and
increased the capabilities of our umbilical
manufacturing facility in Scotland and constructed a new
umbilical plant in Brazil.
In November 1995, we contracted with a major oil company for
the provision of a floating
production, storage and offloading
system ("FPSO"). We converted a crude oil tanker and delivered
the FPSO to its first
operational location off West Africa in August 1996.
In December 1996, the customer exercised an option to purchase
the FPSO. We continue to
participate as a member of the customer's
integrated team to operate and enhance the FPSO's production facilities.
We own two mobile offshore
production systems ("MOPS"), the PB SAN
JACINTO, acquired in December 1997, and the FPSO OCEAN PRODUCER,
initially placed in service in
December 1991. Both are currently
operating under contract.
Advanced Technologies. In 1992 and 1993, we purchased two
businesses which formed the
basis of our Advanced Technologies
segment ("ADTECH"). The first business designed, developed and
operated robotic systems and
ROVs specializing in the non-oilfield
market. This business is the basis for our expansion into
telecommunications cable laying and
burial and commercial theme park
animation. The second business designed, developed and
fabricated spacecraft hardware and
high temperature insulation products.
We intend to continue our strategy of acquiring, as
opportunities arise, additional assets or
businesses, either directly through
merger, consolidation or purchase, or indirectly through joint
ventures. We are also applying our
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. We are
continually seeking opportunities for business
combinations to improve our market position or expand into
related service and product lines.
Unless the context indicates otherwise, references to years
indicate fiscal years. For example,
1999 would refer to the twelve month
period ended March 31, 1999.
Financial Information about Industry Segments
The table presenting revenues, income from operations,
identifiable assets, capital expenditures,
and depreciation and amortization by
business segment for the years ended March 31, 1999, 1998 and
1997 is incorporated herein by
reference from Note 6 of the Notes to
Consolidated Financial Statements.
Description of Business
OILFIELD MARINE SERVICES
Our Oilfield Marine Services business consists of underwater
intervention, maintenance and
repair as well as above-water inspection
services. We provide these services to customers separately or
on an integrated basis along with
services or products from our Offshore
Field Development segment.
Underwater Intervention Services. We provide underwater support
services for all phases of
offshore oil and gas operations -
exploration, development and production. During the exploration
phase, we provide positioning,
placement and monitoring of subsea
exploration equipment, collect data on seafloor characteristics
at proposed drilling sites and assist
with the navigational positioning of
drilling rigs. During the development phase, we assist with the
installation of production
platforms and the connection of subsea pipelines.
During the production phase, we inspect, maintain and repair
offshore platforms, pipelines and
subsea equipment.
We use ROVs or divers to perform underwater intervention
services. We use ROVs at depths
or in situations in which diving would
be uneconomical or infeasible. We believe that we operate the
largest and most technically
advanced fleet of work class ROVs in the
world, with a market share of over 25%. We are the industry
leader in providing ROV services
on deepwater wells, which are the most
technically demanding. We use ROVs for a variety of underwater
tasks including drilling
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. We currently own approximately 100
work-class ROVs.
When a project requires manned intervention, we use 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. We do not use divers
(as distinguished from ADS operators) to perform functions in
water depths greater than 1,000 feet.
We also provide 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.
We perform underwater services using all these techniques from
drilling rigs, platforms, barges
and vessels.
Above-Water Inspection Services. Through our Solus Schall
division ("Solus Schall"), we offer
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. We focus on the inspection
of pipelines and onshore
fabrication of offshore facilities for the oil and
gas industry. 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.
OFFSHORE FIELD DEVELOPMENT
Mobile Offshore Production Systems. We provide engineering,
procurement, construction, installation and operation of MOPS
to customers for marginal and remote field production and
extended well testing. We have 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 have served as prime contractor
on an extended well testing
project in the North Sea. Our first FPSO,
the OCEAN PRODUCER, has been operating offshore West Africa since
December 1991. In
December 1997, we purchased a production
barge, the PB SAN JACINTO, which is under contract offshore
Indonesia. The ZAFIRO PRODUCER,
which we acquired in 1996 and converted to
an FPSO, 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 exercised its option to purchase
the FPSO in December 1996.
We continue our involvement with the
FPSO ZAFIRO PRODUCER as a member of the customer's integrated
team to operate and enhance its
production facilities. Additionally, we
own four out-of-service offshore rigs and a tanker, each capable
of conversion to a MOPS unit.
Subsea Products. Our Oceaneering Intervention Engineering
("OIE"), Multiflex and the Pipeline
Repair Systems units comprise our
Subsea Products division. OIE provides subsea intervention
services, designs and fabricates
ROV interface tooling, including ROV
replaceable and ROV operable valves, and designs and fabricates
subsea control systems.
Multiflex, with manufacturing facilities in the Houston,
Texas, Edinburgh, Scotland and Rio de
Janeiro, Brazil areas, 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
ADTECH provides underwater intervention, topside inspection and
engineering services to meet
a variety of non-oilfield industrial
requirements, including ship husbandry, search and recovery,
subsea telecommunications cable
installation, maintenance and repair, civil
works projects and commercial theme park animation. 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 in underwater or other
environments. ADTECH provides
deep ocean search and recovery services for governmental bodies,
including the U.S. Navy. 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. ADTECH also
maintains and operates
deepwater cable lay and maintenance vehicles.
ADTECH designs and operates ROVs that are designed for work in
water depths to 25,000
feet. Our other specialized equipment
includes ROV cable lay and maintenance equipment rated to 5,000
feet and deep tow, side scan
sonar systems designed for use in 20,000
feet. Our deep tow systems have been used to locate 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 and Thermal Systems
("OSTS") directs our efforts
towards applying undersea technology
and experience in the space industry. We have worked with the
National Aeronautics and Space
Administration ("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. OSTS also supports 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. The activities of OSTS are substantially dependent
on continued government funding
for space programs.
MARKETING
Oilfield Marine Services. We market our oilfield marine services
primarily to international and
foreign national oil and gas companies.
We also provide services as a subcontractor to other oilfield
service companies operating as
prime contractors. Customers for these
services typically award contracts on a competitive bid basis.
These contracts are typically
short-term in duration.
Offshore Field Development. We market both our mobile offshore
production systems and our
subsea products primarily to international
and foreign national oil and gas companies, and use our Oilfield
Marine Services administrative
structure to identify potential business
opportunities. We offer an integrated service consisting of
design, engineering, project
management and provision of hardware. We offer
MOPS for extended well testing, early production and development
of marginal fields and
prospects in areas lacking pipelines and
processing infrastructure. MOPS contracts are typically awarded
on a competitive basis,
generally for periods of one or more years. We
own two MOPS units and operate a third. We intend to add further
equipment to these
operations as profitable opportunities arise. We
also own equipment which is capable of being converted to MOPS.
Advanced Technologies. We market our marine services and related
engineering services to
government agencies, major defense
contractors, NASA subcontractors and telecommunications,
construction and other industrial
customers outside the energy sector. We also
market to insurance companies, salvage associations and other
customers who have requirements
for specialized operations in deep water.
Major Customers. Five of our customers accounted for
approximately 25%, 26% and 33% of
our consolidated revenues in 1999, 1998
and 1997, respectively. No single customer accounted for more
than 10% of our consolidated
revenues in 1999 or 1998. One customer
accounted for over 10% of our consolidated revenues in 1997, and
we do not believe that the loss
of any individual customer would have a
material adverse effect on us.
COMPETITION
Our businesses are highly competitive.
Oilfield Marine Services. We believe we are one of five
companies that provide underwater
services on a worldwide basis. We compete
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 that
equipment, quality of service and price. The relative importance
of these factors can vary from
year to year based on market conditions.
The ability to develop improved equipment and techniques and to
attract and retain skilled
personnel is also an important competitive
factor in our markets. The number of our competitors is
inversely correlated with water depth, as
less sophisticated equipment and
technology is needed 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 us.
We believe that our ability to provide a wide range of
underwater services, including
technological applications in deeper water
(greater than 1,000 feet) on a worldwide basis, should enable us 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 we believe we
have a competitive advantage, may be
postponed or suspended during periods when overall exploration
and production spending is
reduced. In some areas, our ability to obtain
contracts depends on our ability to charter vessels for use as
work platforms. We occasionally
bid jointly with vessel owners for service
contracts.
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. We
believe that our 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 us to compete effectively in our selected
inspection services market segments.
Frequently, oil and gas companies use 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. We believe we are well positioned to
compete in the offshore field
development market through our 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 our extensive operational
experience worldwide. We are one of many
companies that offer leased MOPS units.
Although there are many competitors offering either
specialized products or operating in
limited geographic areas, we believe we are
one of two companies that compete on a worldwide basis for the
provision of subsea control
umbilical cables.
Advanced Technologies. We believe that our specialized ROV
assets and experience in
deepwater operations give us a competitive
advantage in obtaining contracts in water depths greater than
5,000 feet. The number of our
competitors is inversely correlated with water
depth, due to the advanced technical knowledge and sophisticated
equipment required for
deepwater operations.
Engineering services is a very broad market with a large
number of competitors. We compete
in specialized areas in which we can
combine our extensive program management experience, engineering
services and the capability
to continue the development of
conceptual project designs into the manufacture of prototype
equipment.
We also use the administrative and operational support
structures of the Oilfield Marine Services business to identify
opportunities in foreign countries and to provide additional local
support for services provided to non-oil and gas customers.
SEASONALITY, BACKLOG AND RESEARCH AND DEVELOPMENT
A material amount of our consolidated revenues is generated from
contracts for marine services
in the Gulf of Mexico and North Sea,
which are usually more active from April through November
compared to the rest of the year.
However, our exit from the diving sector in
the North Sea in early 1998 and the substantial number of
multi-year ROV contracts we entered
into since 1997 has reduced the
seasonality of our Oilfield Marine Services operations. Revenues
in our 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, 1999 and 1998 were approximately
$179 million and $180 million, respectively. Of these amounts,
$102 million and $59 million,
respectively, were not expected to be
performed within the year following those respective dates. At
March 31, 1999 and 1998, we
had approximately $29 million and $51
million, respectively, in backlog for Offshore Field Development.
Of these amounts, less than
$1 million and $10 million, respectively,
were not expected to be performed within the year following those
respective dates. At March
31, 1999 and 1998, we had approximately
$48 million and $37 million, respectively, in backlog for
Advanced Technologies. Of these
amounts, $8 million and $2 million,
respectively, were not expected to be performed within the year
following such respective dates.
No material portion of our business is subject to
renegotiation of profits or termination of
contracts by the United States government.
Our research and development expenditures were approximately
$5 million, $4 million and $4
million during 1999, 1998 and 1997,
respectively. These amounts do not include, nor are we able to
determine, the expenditures by
others in connection with joint research
activities in which we participated or expenditures we incurred
in connection with research
conducted during the course of performing our
operations.
REGULATION
Our 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. Those
developments may directly or indirectly affect our operations and
those of our 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
our capital expenditures, earnings
or competitive position.
While not a formal requirement, within our Oilfield Marine
Services segment we maintain a
quality management system covering
the full range of subsea and topside services offered in the
United Kingdom and Norway. Our
quality management system in the United
Kingdom is certified to the British Standard BS EN ISO 9001:1994
and our Norway office is
certified to the Norwegian Standard NS EN
ISO 9001:1994. Both of these standards are the equivalent of ISO
9001. The quality
management systems of OIE, Multiflex-US and
Multiflex-UK units of our Offshore Field Development segment are
each certified to ISO 9001
for their products and services. The quality
systems of both the OSTS and Oceaneering Technologies units of
ADTECH are also certified to
ISO 9001.
RISKS AND INSURANCE
Our 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.
We insure our real and personal property and equipment. Our
vessels are insured against damage
or loss including war and pollution risks.
We also carry workers' compensation, maritime employer's
liability, general liability, including
third-party pollution, and other insurance
customary in our businesses. We carry our insurance at levels of
coverage and deductibles which
we consider financially prudent. On
some contracts, we may have certain risks for loss or damage to
the customer's facilities or for
unexpected weather delays, which we may
cover by special insurance when we deem it advisable. In some
jurisdictions, legal pleadings in
personal injury actions against us may
include claims for amounts of punitive damages that may not be
covered by insurance.
The primary industry that we serve, oil and gas exploration
and production, is a cyclical
industry and remains volatile, resulting in
potentially large fluctuations in demand for our primary
services, which could result in
significant changes in our revenues and profits.
Although this industry continues to be our principal market, we
also perform services for
government agencies, and firms in the
telecommunications, aerospace, and civil engineering and
construction industries.
We operate primarily as a services company under dayrate
contracts. However, we also own
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.
We conduct a significant part of our operations outside the
United States. For the years ended
March 31, 1999, 1998 and 1997,
foreign operations accounted for 48%, 51% and 58% of our
consolidated 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. Certain of the countries in
which we operate have enacted exchange controls to regulate
foreign currency exchange.
Exchange controls in some of the countries in
which we operate 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. Typically, we are 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 our expense
requirements in local currencies.
EMPLOYEES
As of March 31, 1999, we had approximately 2,600 employees. Our
work force varies
seasonally and peaks during the summer months.
Approximately 3% of our employees are represented by unions. We
consider our relations with
our employees to be satisfactory.
Foreign and Domestic Operations and Export Sales
The table presenting revenues and assets attributable to each of
our geographic areas for the years
1999, 1998 and 1997 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 and manufacturing facilities used in
providing our services and
products.
We maintain office, shop and yard facilities in various parts of
the world to support our
operations. We consider these facilities, described
below, to be suitable for their intended use. In these
locations, we typically lease or own office
facilities for our 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. All sites are available
to support any of our business
segments as the need arises. The groupings
which follow associate our significant offices with the primary
business segment they serve.
Oilfield Marine Services. The largest location is in Morgan
City, Louisiana and consists of ROV
manufacturing and training facilities,
open and covered storage space and offices. The Morgan City
facilities primarily support
operations in the United States. The regional
support offices for our North Sea and Southeast Asia operations
are located in Aberdeen,
Scotland and Singapore, respectively. We also
have operational bases in various other locations, the most
significant of which are in the United
Arab Emirates, Nigeria and Norway.
Offshore Field Development. We use workshop and office space in
Houston, Texas in our
Offshore Field Development business
segment. Our manufacturing facilities are located in the
Houston, Texas, Edinburgh, Scotland
and Rio de Janeiro, Brazil areas.
Operations of the FPSO OCEAN PRODUCER and PB SAN JACINTO are
supported through our Oilfield
Marine Services regional offices in
Aberdeen and Singapore, respectively.
Advanced Technologies. ADTECH's primary facilities are offices
and workshops in Upper
Marlboro, Maryland, which support our
services for the U.S. Navy and our commercial theme park
animation activities. We also
maintain facilities in Houston, Texas which
primarily support OSTS and our subsea telecommunications
installation activities.
ITEM 3. LEGAL PROCEEDINGS.
In the ordinary course of business, we are subject to actions for
damages alleging personal injury
under the general maritime laws of the
United States, including the Jones Act, for alleged negligence.
We report actions for personal
injury to our insurance carriers and believe
that the settlement or disposition of such suits will not have a
material effect on our 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, 1999.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT.
Executive Officers. The following information relates to our
executive officers as of June 1,
1999:
NAME AGE POSITIONS OFFICER SINCE EMPLOYEE SINCE
John R. Huff 53 Chairman of the Board and 1986 1986
Chief Executive Officer
T. Jay Collins 52 President and
Chief Operating Officer 1993 1993
Marvin J. Migura 48 Senior Vice President and 1995 1995
Chief Financial Officer
Bruce L. Crager 46 Senior Vice President 1988 1988
M. Kevin McEvoy 48 Senior Vice President 1990 1979
George R. Haubenreich, Jr.
51 Senior Vice President, 1988 1988
General Counsel and Secretary
John L. Zachary 45 Controller and Chief 1998 1988
Accounting Officer
Each executive officer serves at the discretion of our Chief
Executive Officer and our 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 joined Oceaneering as a
director, President and Chief
Executive Officer in 1986. He was elected
Chairman of the Board in August 1990. 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. He
is a director of BJ Services
Company, Suncor Energy Inc. and Triton
Energy Limited.
T. Jay Collins, President and Chief Operating Officer, joined
Oceaneering in October 1993 as
Senior Vice President and Chief Financial
Officer. In May 1995, he was appointed Executive Vice President
- - Oilfield Marine Services and
held that position until attaining his
present position in November 1998. 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 that, he spent twelve years with
Sonat, Inc., serving as Senior Vice President of Finance of Sonat
Offshore Drilling and President
of Houston Systems Manufacturing. He
is a director of Friede Goldman International Inc.
Marvin J. Migura, Senior Vice President and Chief Financial
Officer, joined Oceaneering 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.
Bruce L. Crager, Senior Vice President, joined Oceaneering in
1988 as Vice President -
Offshore Production Systems. Since 1994, he
also has had responsibility for various subsea product groups.
He was appointed Senior Vice
President - Production Systems in May 1997.
From 1983 until 1988 he held various positions, including General
Manager, with Hughes
Offshore which merged with Vetco Gray during
this period. Prior to that he spent three years with Seaflo
Systems and five years with The
Offshore Company.
M. Kevin McEvoy, Senior Vice President, joined Oceaneering in
1984 when we acquired Solus
Ocean Systems, Inc. ("SOSI"). Since
1984, he has held various senior management positions in each of
our operating groups and
geographic areas. He was appointed a Vice
President in 1990 and Senior Vice President in November 1998.
Prior to joining SOSI, he spent
four years in the U.S. Navy as a salvage
and diving officer.
George R. Haubenreich, Jr., Senior Vice President, General
Counsel and Secretary, joined
Oceaneering in 1988. From 1979 until 1988, 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.
John L. Zachary, Controller and Chief Accounting Officer, joined
Oceaneering in 1988 as
Controller for the Advanced Technologies and
MOPS divisions. From 1993 until 1998, he was Controller for the
Americas Region and was
appointed to his present position in October
1998. He has over 20 years of finance and accounting-related
experience.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Oceaneering's Common Stock, par value $0.25 per share, is listed
on the New York Stock
Exchange (symbol OII). The following table
sets forth, for the periods indicated, the high and low sales
prices for Oceaneering's Common
Stock as reported on the New York Stock
Exchange (consolidated transaction reporting system) (the"NYSE"):
Fiscal 1999 Fiscal 1998
High Low High Low
For the quarter ended:
June 30 $ 24 $ 17 3/8 $ 18 7/8 $ 14
September 30 18 1/8 8 3/4 24 7/8 18 5/16
December 31 15 3/4 10 11/16 27 5/16 17 3/16
March 31 15 3/4 9 1/2 20 3/16 15 3/16
On May 28, 1999, there were 544 holders of record of our
Common Stock. On that date, the
closing sales price, as quoted on the
NYSE, was $15 7/16. We have not made any Common Stock dividend
payments since 1977 and we currently have no plans to pay cash
dividends. Our credit agreements contain restrictions on the
payment of dividends. See Note 3 to Notes to Consolidated
Financial Statements.
ITEM 6. SELECTED FINANCIAL DATA.
Results of Operations:
Years Ended March 31,
(in thousands, except per share figures)
1999 1998 1997 1996 1995
Revenues $400,322 $358,121 $368,773 $289,506 $239,936
Cost of services (1) 314,638 282,830 290,801 234,731 190,772
Gross margin 85,684 75,291 77,972 54,775 49,164
Selling, general and
administrative expenses 41,328 39,009 36,363 34,589 36,410
Income from operations $ 44,356 $ 36,282 $ 41,609 $ 20,186 $ 12,754
Net income $ 25,707 $ 22,001 $ 19,445 $ 12,357 $ 5,496
Diluted earnings per share 1.12 0.93 0.81 0.53 0.23
Depreciation and
amortization (2) 29,961 23,176 32,687 20,567 16,232
Capital expenditures 102,014 94,413 79,599 57,171 32,057
Other Financial Data:
As of March 31,
(in thousands, except ratios)
1999 1998 1997 1996 1995
Working capital ratio 1.47 1.52 1.55 1.62 1.44
Cash and cash
equivalents $ 8,367 $ 9,064 $ 23,034 $ 9,351 $ 12,865
Working capital 41,398 44,890 52,962 42,427 23,106
Total assets 387,343 316,543 268,255 256,096 187,752
Long-term debt 100,312 54,626 -- 48,000 9,472
Total debt 100,618 54,919 -- 48,183 9,590
Shareholders' equity 179,439 160,322 156,334 127,098 115,140
(1) 1997 includes a $25,047 gain on the disposition of FPSO, a
$7,980 impairment adjustment and a $7,980 provision for special drydocking.
(2) 1997 includes a $7,980 impairment adjustment.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND
RESULTS OF OPERATION.
All statements in this Form 10-K, other than statements of
historical facts, including, without
limitation, statements regarding our 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. We use
a variety of internal and
external data and management judgment in order
to develop such forward-looking information. Although we
believe 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
we operate, we can give no assurance that those expectations will
prove to have been correct.
Accordingly, evaluation of our future
prospects must be made with caution when relying on
forward-looking information.
Liquidity and Capital Resources
We consider our liquidity and capital resources adequate to
support our operations and internally
generated growth initiatives. At March
31, 1999, we had working capital of $41 million, including $8
million of unrestricted cash.
Additionally, we had all of our $80 million
credit facility available and $20 million was unused under
uncommitted lines of credit.
We expect operating cash flow to meet our ongoing annual cash
requirements, including debt
service. Net income plus depreciation
and amortization (commonly referred to as cash flow from
operations) was $56 million for 1999
compared to $45 million and $52 million
for 1998 and 1997, respectively.
Working capital at the end of 1999 was $41 million, compared
to $45 million at the end of
1998 and $53 million at the end of 1997.
The cash flow and higher working capital in 1997 included the
results of the disposition of the
FPSO ZAFIRO PRODUCER.
Capital expenditures for the years ended March 31, 1999, 1998
and 1997 were $102 million,
$94 million and $80 million,
respectively. Capital expenditures in 1999 consisted of
additions to our ROV fleet, construction
costs for the two dynamically positioned
multiservice support vessels ("MSVs"), one of which was in
progress at March 31, 1999, a new
umbilical plant in Brazil and the relocation
and upgrading of the umbilical plant in Scotland.
Capital expenditures in 1998 consisted of additions to our ROV
fleet, construction costs for the
two MSVs in progress, the purchase
of a production barge operating in Southeast Asia, a tanker for
possible future conversion to
production systems use, two out-of-service
offshore rigs for potential conversion to production systems or
alternative service, and
expenditures on leasehold improvements related to
the relocation and consolidation of some of our office and
workshop facilities in the U.S. Capital
expenditures in 1997 included $38
million to complete the conversion of the ZAFIRO PRODUCER. Other
expenditures consisted of
additions to our ROV fleet and the purchase of
two support vessels.
Commitments for capital expenditures at the close of 1999
totaled approximately $13 million
for completion of MSV construction
and subsea product manufacturing facilities expansion.
In 1996, we contracted with a major oil company to provide an
FPSO under a dayrate lease
arrangement with an initial term of three
years which commenced on delivery of the FPSO in August 1996. We
purchased and converted
an existing crude oil tanker into the FPSO
ZAFIRO PRODUCER at a capital cost of $68 million. The contract
provided the customer with the
option to purchase the vessel and terminate
the lease at any time during the initial three-year period and
the customer exercised its purchase
option in December 1996. We used part
of the proceeds to repay the debt we incurred in converting the
vessel.
In April 1997, we approved a plan to purchase up to a maximum
of 3 million shares of our
Common Stock and 2.2 million shares
were purchased under this plan through March 31, 1999, at a total
cost of $32 million. We
expect to fund any additional purchases from
existing resources and operating cash flows.
At March 31, 1999, we had long-term debt of $100 million which
equated to a 36% debt to
total capitalization ratio. In September
1998, we issued $100 million of 6.72% Senior Notes. We used the
proceeds to repay the then
outstanding indebtedness under our prior
revolving credit facility, which had been incurred in the funding
of capital expenditures and
treasury stock purchases. In October 1998,
we replaced that revolving credit agreement with a new five-year
$80 million revolving credit
facility. Our debt to total capitalization ratio
will vary from time to time depending primarily upon the level of
capital spending.
Because of our significant foreign operations, we are exposed
to currency fluctuations and
exchange risks. We generally minimize
these risks primarily through matching, to the extent possible,
revenues and expenses in the
various currencies in which we operate.
However, due to the weakness in certain Asian currencies during
1998, we recognized $1.0
million of losses as Other Expense.
Cumulative translation adjustments as of March 31, 1999 relate
primarily to our permanent
investments in and loans to our foreign
subsidiaries. Inflation has not had a material effect on us 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
Our revenues were $400 million for 1999 compared to $358 million
for 1998 and $369 million
for 1997. Our gross margins were $86
million for 1999 compared to $75 million for 1998 and $78 million
for 1997. Our gross margin
for 1997 included a gain on disposal of
the FPSO ZAFIRO PRODUCER of $25 million, an impairment adjustment
of $8 million and a
provision for special drydocking of $8 million.
As a percentage of revenue, gross margin for each of the three
years was 21%. Our net income
in 1999 was $25.7 million, an increase of
17% over our net income of $22.0 million in 1998, which was over
13% higher than the $19.4
million we reported for 1997.
Information on our business segments is shown in Note 6 of the
Notes to Consolidated
Financial Statements.
Oilfield Marine Services.
Revenues for our Oilfield Marine Services segment for 1999 were
$198 million compared to
$182 million in 1998 and $176 million in
1997. This segment's income from operations for 1999 increased
to $18.0 million compared to
$16.3 million in 1998 and $1.9 million in
1997.
During 1997, in response to (1) continued increasing demand to
support deepwater drilling and
(2) identified future construction and
production maintenance work, we extended our ROV fleet expansion
program by announcing
plans for over 30 additional new ROVs.
These new vehicles are designed for use around the world in water
depths to 10,000 feet and in
severe weather conditions. This expansion
program was further extended in 1998 with our announcement of
plans to construct an additional
25 new ROVs. We have added over 50
ROVs to our fleet during the last three years and we plan to add
additional vehicles at a rate
dependent on market demand.
In 1997, we decided to discontinue offering diving services in
the North Sea. Based on a
review of actual and expected operating
results, we concluded that we would generate greater returns by
focusing on other business lines
in the North Sea area. In March 1997 we
entered into an agreement to sell our 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. We continue to
provide diving services in other areas.
The table below sets out revenues and profitability for the
Oilfield Marine Services segment for
1999, 1998 and 1997.
For the Years Ended March 31,
(dollars in thousands) 1999 1998 1997
Revenues $197,752 $181,800 $176,395
Gross Margin 42,438 40,064 24,139
Gross Margin % 21% 22% 14%
Operating Income 18,003 16,263 1,853
Operating Income % 9% 9% 1%
For 1999, Oilfield Marine Services segment revenues increased
9% due to the expansion of the
ROV fleet and improved demand for
diving services. Margins improved in line with the volume
increase as margin percentages
remained flat. The increases were partially
offset by decreases in revenue and gross margins from survey
services.
For 1998, increased revenues in the U.S. were partially offset
by lower revenues in the North
Sea, which was impacted by our exit
from the diving business in that market, resulting in an overall
3% increase in revenues. Gross
margins increased to 22% in 1998
compared to 14% in 1997. Gross margins in 1997 were reduced by
an impairment adjustment of
$8.0 million which was made to reduce
the carrying value of the DSV we sold in March 1997. Excluding
the impairment adjustment,
gross margin was 18% in 1997. The
increase for 1998 reflected continued strong demand for ROV
services. Additionally, diving
profits improved on lower revenues.
We anticipate improved revenues and margins in 2000 for the
Oilfield Marine Services
segment from the continued expansion of
the ROV fleet and an increased contribution from the MSV Ocean
Intervention, which we placed
in service in November 1998.
Offshore Field Development.
Our Offshore Field Development 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 1999, 1998 and 1997.
For the Years Ended March 31
(dollars in thousands) 1999 1998 1997
Revenues $103,583 $ 90,508 $101,028
Gain on disposition of FPS -- -- 25,047
Gross Margin 25,319 15,981 36,861
Gross Margin % 24% 18% 36%
Operating Income 15,610 7,595 30,242
Operating Income % 15% 8% 30%
Revenues and margins for 1999 were higher as a result of
increased product sales and MOPS
operations, including a full fiscal year
of results from a production barge we purchased in December 1997.
Revenues and margins for 1998 were lower than 1997 as a result
of the sale of the FPSO ZAFIRO
PRODUCER, partially offset by higher
project management revenues and product sales. Revenues and
margins for 1997 include the
results of operations for the ZAFIRO PRODUCER
prior to its purchase by the customer. During 1997, we completed
conversion of a crude oil
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. We recognized a gain of
$25.0 million on the disposition of this asset. We continue as a
member of the customer's
integrated team to operate and enhance the
production facilities of the FPSO.
In December 1997, we purchased a production barge which is
contracted for work offshore
Indonesia until October 1999. We also
own a tanker and four out-of-service offshore rigs that we are
marketing for production systems
or other alternative uses.
Our first FPSO, the OCEAN PRODUCER, continued to work offshore
West Africa under a four-year
contract expiring in January 2000.
During 1997, we determined that substantial repairs would be
necessary to maintain the unit in
operating condition in compliance with
regulatory requirements. These repairs required a special
drydocking which was completed in
1998. We recorded an $8.0 million
provision in 1997, which reduced gross margin by 8%.
During 2000, we expect a slightly lower gross margin from the
Offshore Field Development
segment, with a decline in engineering and
project management-related work being offset by higher revenues
and margins from increased
umbilical sales.
We intend 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 1999, 1998 and 1997.
For the Years Ended March 31,
(dollars in thousands) 1999 1998 1997
Revenues $98,987 $85,813 $91,350
Gross Margin 17,927 19,246 16,972
Gross Margin % 18% 22% 19%
Operating Income 10,743 12,424 9,514
Operating Income % 11% 14% 10%
Revenues for this segment in 1999 increased from higher
activity in subsea
telecommunications cable services and the design and
assembly of large, dynamic, animated figures for theme parks.
Margins for this segment in 1999
declined due to lower profitability from
search and recovery projects and space-related product and
service activities.
Revenues for this segment in 1998 declined as a result of
lower telecommunications and civil
projects compared to 1997, partially
offset by higher engineering services activity. Gross margins
for this segment improved in 1998
compared to 1997 reflecting improved
profitability on search and recovery operations and higher demand
for engineering services.
We anticipate improved results from ADTECH in the next fiscal
year based on increased
subsea telecommunications cable activity,
increased work for the U.S. Navy and improved profitability in
OSTS.
Other. Our interest income declined in 1998 compared to 1997 as
a result of lower cash balances
available for investment. Interest
expense increased in 1999 compared to 1998 as a result of our
increased borrowings to fund
capital expenditures. Interest expense
declined in 1998 as a result of lower average borrowings and
lower interest rates. Interest
expense is net of capitalized interest of $2.5
million for 1999, $800,000 for 1998 and $1.1 million for 1997.
Our effective tax rate was 38%, 38% and 53% in 1999, 1998 and
1997, respectively. The rate
for 1997 was higher as a result of
provisions made for asset impairment and a special drydocking in
our United Kingdom
subsidiary, where we derive no tax benefit as we
already have net operating loss carryforwards ("NOLs").
Year 2000. The Year 2000 ("Y2K") issue is the result of using
computer programs which were
written using two digits rather than four
to define the applicable year. Programs that have date-sensitive
software may recognize "00" as
the year 1900 rather than the year 2000.
The problem can arise in computer programs and in equipment with
embedded processors.
We have conducted a review of our computer systems to identify
the potential areas of risk and
have contacted vendors and customers with
whom we have a significant business relationship to assess their
progress with regard to Y2K
readiness. We are continuing our review of
both internal and third-party systems, but based on current
information, we are not aware of any
Y2K issues which would have a material
impact on our business.
Much of our computer hardware and software has been replaced in
recent years with Y2K compliant hardware and software as part of regular
system and equipment upgrades. Costs
incurred have not been material and we do not expect the final
cost of compliance to have a
material effect on our financial position,
results of operations or liquidity.
We rely on the representations and public statements of key third
parties and, although there is
currently no indication that these parties
will fail to achieve Y2K compliance, there can be no assurance
that such failures will not occur
or that we will not experience Y2K
problems.
We expect to complete our review of systems considered critical
during the first quarter of fiscal
2000, will continue to monitor those
systems thereafter, and will develop contingency plans as
necessary.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
We are currently exposed to certain market risks arising from
transactions we have entered into
in the normal course of business. These
risks relate to interest rate changes and fluctuations in foreign
exchange rates. We do not believe
these risks are material. We manage our
exposure to interest rate changes through the use of a
combination of fixed and floating rate debt.
See Note 3 to Consolidated Financial
Statements for a description of our long-term debt agreements,
interest rates and maturities. We
believe that significant interest rate
changes will not have a material near-term impact on our future
earnings or cash flows. We
manage our exposure to changes in foreign
exchange rates primarily through arranging compensation in U.S.
dollars or freely convertible
currency and, to the extent possible, by
limiting compensation received in other currencies to amounts
necessary to meet obligations
denominated in those currencies. We believe
that a significant fluctuation in the foreign exchange rates
would not have a material near-term
effect on our future earnings or cash flows.
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.
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information with respect to the directors and nominees for
election to our Board of Directors
is incorporated by reference from our
definitive proxy statement relating to our 1999 Annual Meeting of
Shareholders to be filed on or
before July 29, 1999 pursuant to
Regulation 14A under the Securities Exchange Act of 1934. The
information with respect to our
executive officers 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 Note Purchase Agreement dated
as of September 8,1998 relating to
$100,000,000 6.72% Senior Notes due
September 8, 2010 1-10945 10-Q Sept. 1998 4.01
*4.04 Loan Agreement ($80,000,000
Revolving Credit Facility) dated as
of October 23, 1998 1-10945 10-Q Sept. 1998 4.02
10 Material contracts
*10.01+ Oceaneering Retirement
Investment Plan, as amended 1-10945 10-K March 1996 10.02
*10.02+ Employment Agreement dated
August 15, 1986 between
John R. Huff and Oceaneering 0-8418 10-K March 1987 10(l)
*10.03+ Addendum to Employment
Agreement dated February 22, 1996
between John R. Huff and Oceaneering 1-10945 10-K March 1997 10.04
*10.04+ 1987 Incentive and Non-Qualified
Stock Option Plan 33-16469 S-1 Sept. 1987 10(o)
*10.05+ Oceaneering International,
Inc. Special Incentive Plan 33-16469 S-1 Sept. 1987 10(n)
*10.06+ Senior Executive Severance Plan,
as amended 0-8418 10-K March 1989 10(k)
*10.07+ Supplemental Senior Executive
Severance Agreements, as amended 0-8418 10-K March 1989 10(l)
*10.08+ Oceaneering International, Inc.
Executive Retirement Plan, as amended 1-10945 10-K March 1995 10.08
*10.09+ 1990 Long-Term Incentive Plan 33-36872 S-8 Sept. 1990 4(f)
*10.10+ 1990 Nonemployee Directors
Stock Option Plan 33-36872 S-8 Sept. 1990 4(g)
*10.11+ Indemnification Agreement
between Registrant and its Directors 0-8418 10-Q Sept. 1991 10(a)
*10.12+ 1993 Restricted Stock Award
Incentive Agreements 1-10945 10-K March 1994 10(q)
*10.13+ 1993 Restricted Stock Award
Incentive Agreement 1-10945 10-K March 1996 10.16
*10.14+ 1996 Incentive Plan of
Oceaneering International, Inc. 1-10945 10-Q Sept. 1996 10.02
*10.15+ 1996 Restricted Stock Award
Incentive Agreements dated
August 23, 1996. 1-10945 10-Q Sept. 1996 10.03
*10.16+ 1997 Bonus Restricted Stock
Award Agreements dated April 22, 1997 1-10945 10-K March 1997 10.20
*10.17+ Amendment No. 1 to the Oceaneering
Retirement Investment Plan 1-10945 10-Q Sept. 1996 10.01
10.18+ 1999 Bonus Award Plan
10.19+ Amendment No. 1 to 1990 Nonemployee
Director Stock Option Plan
10.20+ 1998 Bonus Restricted Stock
Award Agreements
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.
+ Indicates management contract or compensatory plan or
arrangement required to be filed as an Exhibit pursuant to the
requirements of Item 14(c) of this Annual Report on Form 10-K.
(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 28, 1999 By: JOHN R. HUFF
John R. Huff
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 Principal Executive Officer, June 28, 1999
John R. Huff Director
//s// MARVIN J. MIGURA Senior Vice President, June 28, 1999
Marvin J. Migura Principal Financial Officer
//s// JOHN L. ZACHARY Controller, Principal June 28, 1999
John L. Zachary 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 28, 1999
George R. Haubenreich, Jr.
Attorney-in-Fact
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
All schedules for which provision is made in the applicable
regulations of the Securities and
Exchange Commission have been omitted
because they are not required under the relevant instructions or
because the required information
is included in the financial statements
included herein or in the 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, 1999 and 1998, and the related
consolidated statements of income,
cash flows and shareholders' equity for
each of the three years in the period ended March 31, 1999.
These consolidated 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 consolidated financial statements referred to
above present fairly, in all
material respects, the financial position of
Oceaneering International, Inc. and subsidiaries as of March 31,
1999 and 1998, and the results
of their operations and their cash flows
for each of the three years in the period ended March 31, 1999,
in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
May 14, 1999
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data) March 31, 1999 March 31, 1998
ASSETS
Current Assets:
Cash and cash equivalents $ 8,367 $ 9,064
Accounts receivable, net of
allowances for doubtful accounts
of $398 and $240 103,838 114,923
Prepaid expenses and other 16,859 7,077
Total current assets 129,064 131,064
Property and Equipment, at cost:
Marine services equipment 285,964 221,311
Mobile offshore production equipment 53,808 52,856
Other 72,960 44,542
412,732 318,709
Less accumulated depreciation 170,993 149,874
Net property and equipment 241,739 168,835
Investments and Other Assets:
Goodwill, net of amortization
of $5,478 and $4,490 9,426 10,414
Other 7,114 6,230
Total Assets $387,343 $316,543
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 23,481 $ 26,071
Accrued liabilities 54,608 51,385
Income taxes payable 9,271 8,425
Current portion of long-term debt 306 293
Total current liabilities 87,666 86,174
Long-term Debt, net of current portion 100,312 54,626
Other Long-term Liabilities 19,926 15,421
Commitments and Contingencies
Shareholders' Equity:
Common Stock, par value $0.25 per share;
90,000,000 shares authorized;
24,017,046 shares issued 6,004 6,004
Additional paid-in capital 82,421 81,442
Treasury stock; 1,653,922 and
1,075,303 shares at cost (22,803) (17,634)
Retained earnings 123,709 98,002
Accumulated other comprehensive income (9,892) (7,492)
Total shareholders' equity 179,439 160,322
Total Liabilities and Shareholders' Equity$387,343 $316,543
The accompanying Notes are an integral part of these Consolidated
Financial Statements.
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended March 31,
(in thousands, except per share data) 1999 1998 1997
Revenues $400,322 $358,121 $368,773
Gain on Disposition of FPSO -- -- 25,047
Cost of Services 314,638 282,830 299,888
Impairment Adjustment and Provision for
Special Drydocking -- -- 15,960
Selling, General and
Administrative Expenses 41,328 39,009 36,363
Income from operations 44,356 36,282 41,609
Interest Income 846 877 1,358
Interest Expense, Net (3,425) (637) (2,048)
Other Income (Expense), Net (447) (886) (15)
Minority Interests 163 (41) 390
Income before income taxes 41,493 35,595 41,294
Provision for Income Taxes (15,786) (13,594) (21,849)
Net Income $ 25,707 $ 22,001 $ 19,445
Basic Earnings per Share $ 1.13 $ 0.95 $ 0.82
Diluted Earnings per Share $ 1.12 $ 0.93 $ 0.81
Weighted average number of
common shares 22,708 23,233 23,651
Incremental shares from stock options 180 313 303
Weighted average number of common shares
and equivalents 22,888 23,546 23,954
The accompanying Notes are an integral part of these Consolidated
Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended March 31,
(in thousands)
1999 1998 1997
Cash Flows from Operating Activities:
Net income $ 25,707 $ 22,001 $ 19,445
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on dispositions of property
and equipment -- -- (29,605)
Depreciation and amortization 29,961 23,176 24,707
Impairment adjustment -- -- 7,980
Currency translation
adjustments and other (3,067) 5,090 1,718
Decrease (increase) in
accounts receivable 11,085 5,172 (23,704)
Increase in prepaid expenses
and other current assets (9,782) (1,399) (945)
Increase in other assets (571) (85) (271)
Increase (decrease) in
accounts payable (2,590) (1,068) 1,825
Increase (decrease) in
accrued liabilities 3,223 (6,798) 22,360
Increase (decrease) in
income taxes payable 849 (792) 3,826
Increase (decrease) in
other long-term liabilities 4,505 (655) 3,126
Total adjustments to net income 33,613 22,641 11,017
Net Cash Provided by Operating
Activities 59,320 44,642 30,462
Cash Flows from Investing Activities:
Purchases of property
and equipment (102,014) (94,413) (79,599)
Dispositions of property
and equipment 2,207 -- 108,253
Decrease (increase)
in investments 1,058 -- (926)
Net Cash (Used in) Provided by
Investing Activities (98,749) (94,413) 27,728
Cash Flows from Financing Activities:
Proceeds from long-term
borrowings, net of costs 98,537 54,626 33,000
Payments on revolving credit
and other long-term debt (54,301) -- (81,000)
Proceeds from issuance of
common stock 3,026 4,515 3,493
Purchases of treasury stock (8,530) (23,340) --
Net Cash Provided by (Used in)
Financing Activities 38,732 35,801 (44,507)
Net Increase (Decrease) in Cash
and Cash Equivalents (697) (13,970) 13,683
Cash and Cash Equivalents -
Beginning of Year 9,064 23,034 9,351
Cash and Cash Equivalents -
End of Year $ 8,367 $ 9,064 $ 23,034
The accompanying Notes are an integral part of these Consolidated
Financial Statements.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended March 31, 1999, 1998 and 1997
Additional Cumulative
Common Stock Issued Paid-in Treasury Retained Translation
(in thousands) Shares Amount Capital Stock Earnings Adjustment Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1996 24,017 $6,004 $81,921 $ (6,976) $ 56,556 $(10,407) $127,098
Comprehensive Income:
Net Income -- -- -- -- 19,445 -- 19,445
Translation adjustments -- -- -- -- -- 4,569 4,569
Total Comprehensive Income -- -- -- -- 19,445 4,569 24,014
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
Comprehensive Income:
Net Income -- -- -- -- 22,001 -- 22,001
Translation adjustments -- -- -- -- -- (1,654) (1,654)
Total Comprehensive Income -- -- -- -- 22,001 (1,654) 20,347
Restricted Stock issued -- -- (641) 496 -- -- (145)
Stock options exercised -- -- (587) 4,626 -- -- 4,039
Restricted Stock plan
compensation expense -- -- 1,517 -- -- -- 1,517
Treasury Stock purchases -- -- -- (23,340) -- -- (23,340)
Treasury Stock issued
to Company Benefit
Plan, at average cost -- -- -- 1,570 -- -- 1,570
Balance, March 31, 1998 24,017 6,004 81,442 (17,634) 98,002 (7,492) 160,322
Comprehensive Income:
Net Income -- -- -- -- 25,707 -- 25,707
Translation adjustments -- -- -- -- -- (2,400) (2,400)
Total Comprehensive Income -- -- -- -- 25,707 (2,400) 23,307
Restricted Stock issued -- -- (289) 289 -- -- --
Stock options exercised -- -- (42) 250 -- -- 208
Restricted Stock plan
compensation expense -- -- 1,310 -- -- -- 1,310
Treasury Stock purchases -- -- -- (8,530) -- -- (8,530)
Treasury Stock issued
to Company Benefit
Plan, at average cost -- -- -- 2,822 -- -- 2,822
Balance, March 31, 1999 24,017 $6,004 $82,421 $(22,803) $123,709 $ (9,892) $179,439
</TABLE>
The accompanying Notes are an integral part of these Consolidated
Financial Statements.
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 ("Oceaneering"). Oceaneering
accounts for its investments in
unconsolidated affiliated
companies under the equity method. All significant intercompany
accounts and transactions
have been eliminated.
Unless the context indicates otherwise, references to years
indicate Oceaneering's fiscal years.
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. At March 31, 1998,
approximately $1.5 million of
Oceaneering's cash was
restricted and was deposited in interest bearing accounts as
security in connection with legal
proceedings. Such legal
proceedings were settled in 1999 and the restriction was removed.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets include spare parts of
$8.4 million and $3.1 million as
of March 31, 1999 and
1998, respectively, primarily for Oceaneering's fleet of remotely
operated vehicles.
Depreciation and Amortization
Oceaneering provides for depreciation of Property and Equipment
primarily on the straight-line
method over estimated
useful lives of 3 to 20 years for marine services equipment, 10
years for mobile offshore
production equipment and 3 to 25
years for buildings, improvements and other equipment.
Goodwill arising from business acquisitions is amortized
on the straight-line method over 15 years.
The costs of repair and maintenance of Property and Equipment
are charged to operations as
incurred, while the
costs of improvements are capitalized. Interest is capitalized
on assets where the construction
period is anticipated to be
more than three months. Oceaneering does not allocate general
administrative costs to capital
projects. 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
services.
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 Statement of
Financial Accounting Standards Board Standard Number ("SFAS")
121, "Accounting for the
Impairment of Long-Lived
Assets and Long-Lived Assets to Be Disposed Of." During the
third quarter of 1997 it became
apparent that operating
results for Oceaneering's diving support vessel operating in the
North Sea were below
expectations. After review of the
first full work season Oceaneering 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. After comparing the carrying value of the vessel with
the net present value of the
expected cash flows from the
vessel over its remaining life, Oceaneering recorded an
impairment loss of $8.0 million in the
Oilfield Marine Services
business segment. The vessel and the other assets used in the
North Sea diving operations were
subsequently sold and the
sales proceeds approximated net book value.
Revenue Recognition
Oceaneering'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
Oceaneering accounts for income taxes in accordance with SFAS
109, "Accounting for Income
Taxes."
Foreign Currency Translation
The functional currency for many of Oceaneering's foreign
subsidiaries is the applicable local
currency. Results of
operations for foreign subsidiaries with functional currencies
other than the U.S. dollar are
translated into U.S. dollars
using average exchange rates during the period. Assets and
liabilities of these foreign
subsidiaries are translated into U.S.
dollars using the exchange rates in effect at the balance sheet
date, and the resulting translation
adjustments are
accumulated as other comprehensive income, a component of
Shareholders' Equity. All foreign
currency transaction gains
and losses are recognized currently in the Consolidated
Statements of Income.
Earnings Per Share
Oceaneering has computed earnings per share in accordance with
SFAS 128, "Earnings Per
Share", which became
effective in the third quarter of 1998. Prior period comparative
figures have been restated.
Other Long-term Liabilities
At March 31, 1999 and 1998 Other Long-term Liabilities include
$8.1 million and $7.2 million,
respectively, for
self-insurance reserves not expected to be paid out in the
following year and $10.1 and $7.2
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,
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.
Gain on Disposition of FPSO
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
Oceaneering's Consolidated
Statement of Income as Gain on Disposition of FPSO.
New Accounting Pronouncements
The Financial Accounting Standards Board has issued SFAS 130,
"Reporting Comprehensive
Income," and SFAS 131,
"Disclosures about Segments of an Enterprise and Related
Information." SFAS 130 establishes
standards for reporting
and displaying comprehensive income and its components. The
primary component of other
comprehensive income for
Oceaneering is the foreign currency translation adjustment
accounted for under SFAS 52. SFAS
131 establishes standards
for the way that public business enterprises report information
about operating segments in
interim and annual financial
statements. Oceaneering adopted SFAS 130 and SFAS 131 in
1999.
2. INCOME TAXES
Oceaneering and its domestic subsidiaries, including acquired
companies from their respective
dates of acquisition, file a
consolidated U.S. federal income tax return. Oceaneering
conducts its international operations in
a number of locations
which have varying codes and regulations with regard to income
and other taxes, some of which
are subject to
interpretation. On a geographic basis, income before minority
interests and income taxes
attributable to the United States
was $18.4 million, $14.7 million and $3.3 million for 1999, 1998
and 1987, respectively.
Income taxes are provided at
the appropriate tax rates in accordance with Oceaneering'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 jurisdictions.
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. Oceaneering'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,
1999, 1998 and 1997 were as follows:
(in thousands) 1999 1998 1997
U.S. federal and state $12,205 $11,721 $15,886
Foreign 3,581 1,873 5,963
Total provision $15,786 $13,594 $21,849
Current $13,040 $13,548 $17,731
Deferred 2,746 46 4,118
Total provision $15,786 $13,594 $21,849
Cash taxes paid $12,191 $14,340 $14,119
As of March 31, 1999, Oceaneering's United Kingdom subsidiary
had net operating loss
carryforwards ("NOLs") of
approximately $21 million which are available to reduce future
United Kingdom Corporation
Tax which would otherwise
be payable.
As of March 31, 1999 and 1998, Oceaneering's worldwide
deferred tax assets and liabilities
and related valuation
reserves were as follows:
March 31,
(in thousands) 1999 1998
Gross deferred tax assets $13,858 $14,832
Valuation allowance (10,384) (11,441)
Net deferred tax assets $ 3,474 $ 3,391
Deferred tax liabilities $10,067 $ 7,238
Oceaneering's deferred tax assets consist primarily of NOLs in
its United Kingdom subsidiary,
which have no
expiration date, and insurance claim reserves for which a tax
deduction has not yet been allowed.
Deferred tax liabilities
consist primarily of depreciation and amortization and provisions
for income of foreign
subsidiaries expected to be
repatriated.
Oceaneering has established a valuation allowance for deferred
tax assets after taking into
account factors that are
likely to affect Oceaneering's ability to utilize the tax assets.
In particular, Oceaneering conducts
its business through
several foreign subsidiaries and, although Oceaneering 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, 1996, 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,
(in thousands) 1999 1998 1997
Computed U.S. statutory expense $14,466 $12,473 $ 14,316
Change in valuation allowances (1,057) 1,122 136
Withholding taxes and foreign
earnings taxed at rates different
from U.S. statutory rates 1,172 (467) 5,696
State and local taxes and other, net 1,205 466 1,701
Total provision for income taxes $15,786 $13,594 $21,849
The provision for 1997 included the effect of provisions made
for asset impairment and special
drydocking in
Oceaneering's United Kingdom subsidiary, where Oceaneering
derived no tax benefit as it
already had NOLs.
3. DEBT
Long-term Debt consisted of the following:
March 31,
(in thousands) 1999 1998
6.72% Senior Notes $100,000 --
Revolving credit agreement -- 54,000
Capital lease 618 919
Long-term Debt 100,618 54,919
Current portion (306) (293)
Long-term Debt, net of current portion $100,312 $ 54,626
In September 1998, Oceaneering issued $100 million aggregate
principal amount of 6.72%
Senior Notes due 2010. The
net proceeds were $98.6 million after issuance costs and were
used to retire existing debt. The
notes have an average life
of ten years and are scheduled to be paid in five equal annual
installments beginning September
2006.
In October 1998, Oceaneering entered into a new $80 million
revolving credit facility (the
"Credit Agreement") to
replace its prior one. There is a commitment fee ranging from
.20% to .25% per annum,
depending on Oceaneering's debt
to capitalization ratio, on the unused portion of the banks'
commitment. Principal maturity is in
October 2003. Under the
Credit Agreement, Oceaneering has the option to borrow dollars at
the London Interbank Offered
Rate ("LIBOR") plus a
margin ranging from .50% to 1.00%, depending on Oceaneering's
debt to capitalization ratio, or
at the agent bank's prime
rate.
Both debt agreements contain similar restrictive covenants as
to minimum net worth, debt to
capitalization ratio,
fixed charge coverage, interest coverage and restricted payments.
Restricted payments, which
include dividends and
treasury stock purchases, are limited from April 1, 1998 on a net
basis, to the sum of $25 million
plus 50% of
Oceaneering's consolidated net income after April 1, 1998, plus
cash proceeds from the sale of
common stock.
Oceaneering has uncommitted credit agreements with banks
totaling $30 million for use for
borrowings and letters of
credit. As of March 31, 1999, Oceaneering had approximately $10
million in letters of credit
outstanding under these
agreements.
Cash interest payments of $5.7 million, $1.2 million and $3.6
million were made in 1999, 1998
and 1997,
respectively. Interest charges of $2.5 million in 1999,
$800,000 in 1998 and $1.1 million in
1997 were capitalized as part
of construction in progress.
4. EMPLOYEE BENEFIT PLANS AND STOCKHOLDER RIGHTS PLAN
Retirement Investment Plans
Oceaneering has three 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
Oceaneering to contribute the
deferred amount to the plan.
Oceaneering matches a portion of the deferred compensation.
Oceaneering's contributions to the
plan were $2,508,000,
$1,960,000 and $1,780,000 for the plan years ended December 31,
1998, 1997 and 1996,
respectively. The second plan is
the Oceaneering International Services Pension Scheme for
employees in the United Kingdom.
Under this plan,
employees may contribute a portion of their gross monthly salary.
Oceaneering also contributes
an amount equal to a
portion of the participant's gross monthly salary. The plan
assets exceed vested benefits and are
not material to the assets
of Oceaneering. Company contributions to this plan for the years
ended March 31, 1999, 1998
and 1997 were $34,000,
$160,000 and $202,000, respectively.
The third plan was the Oceaneering International, Inc.
Executive Retirement Plan, which
covered selected key
management employees and executives of Oceaneering. The
participants in this plan contributed
a portion of their gross
monthly salary and Oceaneering matched 100% of that contribution.
Expense related to this plan
during the years ended
March 31, 1998 and 1997 was $576,000 and $457,000, respectively.
Effective June 30, 1997,
the plan was terminated and
replaced by the Supplemental Executive Retirement Plan. This
plan also covers selected key
management employees and
executives of Oceaneering as approved by the Compensation
Committee of Oceaneering's Board
of Directors (the
"Compensation Committee"). Oceaneering accrues a portion of the
participants' gross monthly
salary and the amounts
accrued are treated as if they are invested in one or more
investment vehicles pursuant to this
plan. Expense related to this
plan during the years ended March 31, 1999 and 1998 was $980,000
and $668,000, respectively.
Incentive and Stock Option Plans
Oceaneering has in effect shareholder-approved nonemployee
director stock option and incentive
plans. Under the 1990
Nonemployee Director Stock Option Plan, as amended,
options to purchase up to an
aggregate of 100,000 shares of Oceaneering's Common Stock could
have been granted through
1998 to nonemployee
directors of Oceaneering. Each director of Oceaneering was
automatically granted an option to
purchase 2,000 shares of
Common Stock on the date the director became a nonemployee
director of Oceaneering 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 was
granted. Since 1998, each nonemployee director is instead
granted an option to purchase 10,000
shares of Common Stock
at an exercise price per share equal to 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 Oceaneering.
Expense is recorded related to
options which have
an exercise price less than fair market value on the date the
option is granted. Expense in 1999,
1998 and 1997 was not
material.
In August 1996, the shareholders of Oceaneering approved the
1996 Incentive Plan under
which a total of 1,165,000
shares of Common Stock of Oceaneering were made available for
awards to employees and other
persons (excluding
nonemployee directors) having an important business relationship
or affiliation with
Oceaneering. The 1996 Incentive
Plan and a similar shareholder-approved 1990 Incentive Plan (the
"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 of
five or 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, or 25% per year for four
years beginning one year
after grant.
During 1997 and 1999, the Compensation Committee granted to
certain key executives of
Oceaneering restricted
Common Stock of Oceaneering designed (i) to make a material
portion of their potential future
compensation contingent
on performance of Oceaneering's Common Stock and (ii) to retain
their employ with
Oceaneering. In 1998, no such
restricted stock grants were made. These grants are subject to
earning requirements on the basis
of a percentage change
between the price of the Common Stock of Oceaneering versus the
average of the common
stock price of a peer group of
companies over three- and one-year time periods, respectively.
Up to one-third of the total grant
made in 1997 may be
earned each year depending upon Oceaneering's cumulative Common
Stock performance, with
any amount earned subject
to vesting in four equal installments over a four-year period
conditional upon continued
employment. All of the total grant
made in 1999 may be similarly earned at the end of one year,
subject to vesting. At the time of
each vesting, a participant
receives a tax assistance payment for which the participant must
reimburse Oceaneering if the
vested Common Stock is
sold by the participant within three years after the vesting
date. As of March 31, 1999,
two-thirds of the grant made in
1997 was earned, subject to vesting requirements, and none of the
grant made in 1999 was
earned. As of March 31, 1999,
a total of 287,000 shares of restricted stock was outstanding
under these and former, similar
grants, of which 211,250
shares were earned, subject to vesting requirements. The numbers
and weighted average grant
date fair value of restricted
stock granted during 1999 and 1997 were 9,000 and $16.83 and
312,000 and $17.00,
respectively. In April 1997 and June
1998 certain key executives also elected to receive restricted
Common Stock of Oceaneering
totaling 44,968 and 35,920
shares with grant date fair values of $14.63 and $17.94 per
share, respectively, subject to similar
vesting requirements and
tax assistance payments, in lieu of cash for all or part of their
1997 and 1998 bonus awards.
Oceaneering accounts for stock options issued under plans
under APB Opinion No. 25, under
which no
compensation cost is recognized unless options are granted at an
option price below the fair
market value of the stock at
the date of the grant. Had compensation cost for these stock
options been determined consistent
with SFAS 123
"Accounting for Stock-Based Compensation," Oceaneering's pro
forma net income and diluted
earnings per share for
1999, 1998 and 1997 would have been $24,735,000, $21,373,000 and
$19,170,000, respectively,
and $1.08, $0.92 and
$0.80, respectively.
Information regarding these option plans for 1999, 1998 and
1997 is as follows:
Shares under Weighted Average
Option Exercise Price
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
Granted 390,700 18.64
Exercised (367,140) 10.51
Forfeited (87,600) 14.20
Balance at March 31, 1998 1,283,340 14.56
Granted 481,900 10.43
Exercised (18,090) 12.63
Forfeited (61,980) 15.40
Balance at March 31, 1999 1,685,170 $13.37
The weighted average fair value of options granted in 1999,
1998 and 1997 was $5.86, $9.20
and $8.73, respectively.
The fair value of the stock options granted was estimated on the
date of grant using the
Black-Scholes option pricing
model with the following assumptions:
1999 1998 1997
Risk-free interest rate 5.34% 6.47% 6.67%
Expected dividend yield 0% 0% 0%
Expected life 6 years 6 years 6 years
Expected volatility 42.27% 38.48% 47.97%
Options outstanding at March 31, 1999 are composed of the following:
Outstanding Exercisable
Weighted
Number of Average Weighted Number of Weighted
Range of Shares at Remaining Average Shares at Average
Exercise March 31, Contractual Exercise March 31, Exercise
Prices 1999 Life (years) Price 1999 Price
$4.72 - 10.22 598,000 4.23 $ 9.76 188,700 $ 8.75
$10.25 - 14.50 477,000 4.40 12.62 444,800 12.75
$14.70 - 20.34 610,170 4.85 17.50 183,000 17.25
At March 31, 1999, there were 79,282 shares under these plans
available for grant, of which
77,282 could be used for
awarding stock options, stock appreciation rights, stock and cash
awards to employees.
Stockholder Rights Plan
On November 20, 1992, Oceaneering's Board of Directors adopted a
Stockholder Rights Plan
and, in accordance with the
plan, declared a dividend of one preferred share purchase right
for each outstanding share of
Oceaneering's Common
Stock. The plan will cause substantial dilution to a party that
attempts to acquire Oceaneering 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, 1999, Oceaneering occupied several facilities under
noncancellable operating
leases expiring at various
dates through 2023. Future minimum rentals under these leases
are as follows:
(in thousands)
2000 $ 4,243
2001 3,878
2002 2,842
2003 2,040
2004 2,088
Thereafter 9,390
Total Lease Commitments $ 24,481
Rental expense, which includes hire of vessels, specialized
equipment and real estate rental,
was approximately $18
million, $19 million and $25 million for the years ended March
31, 1999, 1998 and 1997,
respectively.
Insurance
Oceaneering 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.
Oceaneering 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 are
established for all known liabilities.
An additional reserve for
incidents incurred but not reported to Oceaneering 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 Oceaneering, 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 Oceaneering.
Letters of Credit
Oceaneering had $10 million and $8 million in letters of credit
outstanding as of March 31, 1999
and 1998, respectively,
as guarantees in force for self insurance requirements and
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 Oceaneering to
concentrations of credit risk are
primarily cash and cash
equivalents, long-term, bank and other 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 or the short-term
duration of the associated interest rate periods. Accounts
receivable are generated from a broad
and diverse group of
customers primarily from within the energy industry, which is
Oceaneering's major source of
revenues. Oceaneering
maintains an allowance for doubtful accounts based upon expected
collectibility.
Oceaneering estimated the fair value of its $100 million of 6.72%
Senior Notes (see Note 3) to be
$95 million as of March
31, 1999.
6. OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA
Business Segment Information
Oceaneering 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. Oceaneering's
Oilfield Marine Services business
consists of underwater
intervention and above-water inspection, maintenance and repair.
Oceaneering'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. Oceaneering'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,
(in thousands) 1999 1998 1997
Revenues
Oilfield Marine Services $197,752 $181,800 $176,395
Offshore Field Development 103,583 90,508 101,028
Advanced Technologies 98,987 85,813 91,350
Total $400,322 $358,121 $368,773
Income from Operations
Oilfield Marine Services $ 18,003 $ 16,263 $ 1,853
Offshore Field Development 15,610 7,595 30,242
Advanced Technologies 10,743 12,424 9,514
Total $ 44,356 $ 36,282 $ 41,609
Assets
Oilfield Marine Services $192,912 $155,456 $135,375
Offshore Field Development 126,450 114,306 74,455
Advanced Technologies 47,488 30,180 28,135
Total $366,850 $299,942 $237,965
Capital Expenditures
Oilfield Marine Services $ 67,311 $53,352 $ 32,951
Offshore Field Development 27,805 33,168 42,696
Advanced Technologies 6,898 7,893 3,952
Total $102,014 $ 94,413 $ 79,599
Depreciation and Amortization Expenses
Oilfield Marine Services $ 17,916 $13,640 $ 20,682
Offshore Field Development 7,631 6,140 7,510
Advanced Technologies 4,414 3,396 4,495
Total $ 29,961 $ 23,176 $ 32,687
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.
No individual customer accounted for more than 10% of revenues
in 1999 or 1998. Revenues
of approximately $44
million in 1997 were from one customer, with revenue in the
Oilfield Marine Services and
Offshore Field Development
segments.
Geographic Operating Areas
Financial data by geographic area is summarized as follows:
For the Years Ended March 31,
(in thousands) 1999 1998 1997
Revenues
United States $206,703 $173,878 $154,613
Europe 71,776 57,029 74,488
Africa 50,033 60,180 62,863
Asia 52,604 39,631 50,036
Other 19,206 27,403 26,773
TOTAL $400,322 $358,121 $368,773
Long-Lived Assets
United States $156,457 $117,896 $ 69,221
Europe 44,043 20,789 13,759
Africa 17,167 20,472 21,993
Asia 21,625 22,398 6,515
Other 15,547 1,743 5,443
TOTAL $254,839 $183,298 $116,931
7. ACCRUED LIABILITIES
Accrued liabilities consisted of the following:
March 31,
(in thousands) 1999 1998
Payroll and related costs $18,629 $19,042
Accrued job costs 16,846 18,159
Other 19,133 14,184
Total Accrued Liabilities $54,608 $51,385
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(in thousands, except per share data)
Year Ended March 31, 1999
Quarter Ended June 30 Sept. 30 Dec. 31 Mar. 31 Total
Revenues $98,911 $110,042 $98,275 $93,094 $400,322
Gross profit 21,487 23,532 21,493 19,172 85,684
Income from operations 11,126 13,227 11,154 8,849 44,356
Net income 6,575 7,895 6,351 4,886 25,707
Diluted earnings per share $0.28 $ 0.34 $ 0.28 $ 0.22 $ 1.12
Weighted average number of
common shares and equivalents 23,282 22,987 22,722 22,562 22,888
Year Ended March 31, 1998
Quarter Ended June 30 Sept. 30 Dec. 31 Mar. 31 Total
Revenues $95,163 $90,578 $86,234 $86,146 $358,121
Gross profit 18,933 20,632 18,285 17,441 75,291
Income from operations 9,656 11,052 8,488 7,086 36,282
Net income 5,964 6,714 4,995 4,328 22,001
Diluted earnings per share $ 0.25 $ 0.28 $ 0.21 $ 0.19 $ 0.93
Weighted average number of
common shares and equivalents 23,494 23,812 23,748 23,130 23,546
EXHIBIT 21
SUBSIDIARIES OF OCEANEERING INTERNATIONAL, INC.
Percentage of Ownership Jurisdiction
by Oceaneering of
Subsidiary International, Inc. Organization
Eastport International, Inc. 100% Delaware
Marine Production Systems do Brasil Ltda. 100% Brazil
Marine Production Systems, Ltd. 100% Delaware
Marine Production Systems Servicos Ltda. 100% Brazil
Multiflex, Inc. 100% Texas
Multiflex Limited 100% Scotland
Norsk Subsea Cable A/S 49% Norway
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 FSC, Inc. 100% Barbados
Oceaneering International AG 100% Switzerland
Oceaneering International (M) Sdn. Bhd. 100% Malaysia
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 Technologies, Inc. 100% Delaware
Oceaneering Underwater GmbH 100% Switzerland
Oceanteam A/S 50% Norway
Oil Industry Engineering, Inc. 100% Texas
P. T. Calmarine 50% Indonesia
Solus Emirates 49% U.A.E.
Solus Ocean Systems, Inc. 100% Delaware
Solus Oceaneering (Malaysia) Sdn. Bhd. 49% Malaysia
Solus Schall Limited 100% England
Solus Schall (Nigeria) Limited 50% Nigeria
Specialty Wire and Cable Company, Inc. 100% Texas
Steadfast Oceaneering, Inc. 100% Virginia
UEC 789 Limited 100% Scotland
Monocean Oceaneering Engenharia Submarina Ltda. 100% Brazil
Ocean Systems do Brasil Servicos Subacquaticos, Ltda. 100% Brazil
Solus Offshore, Ltd. 100% Cayman
Islands
Oceaneering do Brasil Servicos Submarinos, Ltda. 100% Brazil
Servicos Marinos Oceaneering Chile Ltda. 100% Chile
Oceaneering Space Systems, Inc. 100% Delaware
Oceaneering Survey, Inc. 100% Delaware
Oceaneering International (Netherlands) B.V. 100% Netherlands
Oceaneering Services (Nigeria) Limited 100% Nigeria
Oceaneering Geoscience Ltd. 100% England
(1) The names of certain subsidiaries have been omitted since the unnamed
subsidiaries considered in the aggregate would not constitute a
significant subsidiary as defined by Item 601(b)(21).
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation our
reports included in this Form 10-K, into the Company's previously filed Form
S-8 Registration Statements
File No. 33-36872 and No. 333-35225.
ARTHUR ANDERSEN LLP
Houston, Texas
June 24, 1999
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, 1999 ("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
21st day of May, 1999.
//s//
D. Michael Hughes
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission")
under the Securities Exchange Act of 1934, as amended ("Act"), an Annual Report
on
Form 10-K for the fiscal year ended March 31, 1999 ("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
21st
day of May, 1999.
//s//
Charles B. Evans
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, 1999 ("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
21st day of May, 1999.
//s//
David S. Hooker
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission")
under the Securities Exchange Act of 1934, as amended ("Act"), an Annual Report
on
Form 10-K for the fiscal year ended March 31, 1999 ("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
21st day of May, 1999.
//s//
John R. Huff
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission")
under the Securities Exchange Act of 1934, as amended ("Act"), an Annual Report
on Form 10-K for the fiscal year ended March 31, 1999 ("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
21st day of May, 1999.
//s//
Harris J. Pappas
EXHIBIT 10.18
OCEANEERING INTERNATIONAL, INC.
1999 BONUS AWARD PLAN
The 1999 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 1999 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 FY99
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.
As authorized by the Compensation Committee, participants in the 1996
Restrictive Stock
Incentive Program have the option
to receive any bonus subsequently awarded by the Compensation Committee under
the 1999 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 1999 Bonus Award Plan is in effect FY99. A similar plan may or may not be
approved for FY00. It is extremely important that the Company continue
improved results in FY99. 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 1999 Bonus Award Plan is structured to foster that position.
June 18, 1998
Exhibit 10.19
AMENDMENT NO. 1 TO 1990 NONEMPLOYEE
DIRECTOR STOCK OPTION PLAN
Effective June 19, 1998, with respect to all stock options issued
from that date, the
1990 Nonemployee Director Stock Option Plan of Oceaneering International, Inc.,
is amended as follows:
Paragraph 3 - Designation of Participants; Automatic Grant of Options:
Delete third and fourth sentences (Each Optionee shall...of the
Company." and
substitute:
"Effective the date of the Annual Shareholders Meeting
(August 21, 1998), each
Optionee is granted options to purchase 10,000 shares of Common Stock
(subject
to adjustment as provided in Paragraph 9)."
Paragraph 5 - Optionee Price, subparagraph (a):
Delete "fifty per cent (50%)" and substitute "one hundred per cent
(100%)".
Paragraph 6 - Option Period:
Delete "ten years" and substitute "five years".
Exhibit 10.20
Award No. B-109 11,148 Shares
OCEANEERING INTERNATIONAL, INC.
FY98 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 FY98 Bonus Award and in consideration of the
covenants and
promises of the Participant herein contained, pursuant to action taken by the
Committee on June
18, 1998 (the "Date of Grant"), the Company hereby awards to the Participant as
of the Date of
Grant a total of 11,148 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 26, 1998, 25% on June 25, 1999, 25% on June 23, 2000 and 25% on
June 22, 2001.
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: June 18, 1998.
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
Award No. B-110 7,804 Shares
OCEANEERING INTERNATIONAL, INC.
FY98 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.
17. 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.
18. Award. As an FY98 Bonus Award and in consideration of the
covenants and
promises of the Participant herein contained, pursuant to action taken by the
Committee on June
18, 1998 (the "Date of Grant"), the Company hereby awards to the Participant as
of the Date of
Grant a total of 7,804 shares of Common Stock, pursuant to the Plan,
subject to the
conditions and restrictions set forth below and in the Plan (the "Restricted
Stock").
19. 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 26, 1998, 25% on June 25, 1999, 25% on June 23, 2000 and 25% on June
22, 2001.
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.
20. 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.
21. 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.
22. 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.
23. 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.
24. 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.
25. 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.
26. 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.
27. 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.
28. 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.
29. 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.
30. 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.
31. Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware.
32. 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: June 18, 1998.
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
Award No. B-112 3,624 Shares
OCEANEERING INTERNATIONAL, INC.
FY98 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
M. KEVIN McEVOY (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.
33. 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.
34. Award. As an FY98 Bonus Award and in consideration of the
covenants and
promises of the Participant herein contained, pursuant to action taken by the
Committee on June
18, 1998 (the "Date of Grant"), the Company hereby awards to the Participant as
of the Date of
Grant a total of 3,624 shares of Common Stock, pursuant to the Plan,
subject to the
conditions and restrictions set forth below and in the Plan (the "Restricted
Stock").
35. 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 26, 1998, 25% on June 25, 1999, 25% on June 23, 2000 and 25% on June
22, 2001.
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.
36. 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.
37. 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.
38. 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.
39. 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.
40. 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.
41. 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.
42. 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.
43. 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.
44. 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.
45. 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.
46. 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.
47. Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware.
48. 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: June 18, 1998.
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//
M. KEVIN McEVOY
Award No. B-111 1,200 Shares
OCEANEERING INTERNATIONAL, INC.
FY98 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.
49. 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.
50. Award. As an FY98 Bonus Award and in consideration of the
covenants and
promises of the Participant herein contained, pursuant to action taken by the
Committee on June
18, 1998 (the "Date of Grant"), the Company hereby awards to the Participant as
of the Date of
Grant a total of 1,200 shares of Common Stock, pursuant to the Plan,
subject to the
conditions and restrictions set forth below and in the Plan (the "Restricted
Stock").
51. 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 26, 1998, 25% on June 25, 1999, 25% on June 23, 2000 and 25% on June
22, 2001.
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.
52. 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.
53. 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.
54. 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.
55. 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.
56. 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.
57. 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.
58. 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.
59. 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.
60. 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.
61. 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.
62. 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.
63. Governing Law. This Agreement shall be governed by, construed
and
enforced in accordance with the laws of the State of Delaware.
64. 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: June 18, 1998.
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
Award No. B-113 3,344 Shares
OCEANEERING INTERNATIONAL, INC.
FY98 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.
65. 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.
66. Award. As an FY98 Bonus Award and in consideration of the
covenants and
promises of the Participant herein contained, pursuant to action taken by the
Committee on June
18, 1998 (the "Date of Grant"), the Company hereby awards to the Participant as
of the Date of
Grant a total of 3,344 shares of Common Stock, pursuant to the Plan,
subject to the
conditions and restrictions set forth below and in the Plan (the "Restricted
Stock").
67. 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 26, 1998, 25% on June 25, 1999, 25% on June 23, 2000 and 25% on
June 22, 2001.
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.
68. 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.
69. 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.
70. 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.
71. 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.
72. 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.
73. 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.
74. 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.
75. 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.
76. 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.
77. 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.
78. 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.
79. Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Delaware.
80. 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: June 18, 1998.
OCEANEERING INTERNATIONAL, INC.
By //s//
John R. Huff
President and Chief Executive Officer
The undersigned Participant accepts
the Restricted Stock subject to all
the terms of this Agreement.
//s//
GEORGE R. HAUBENREICH, JR.
<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>
<CIK> 0000073756
<NAME> R MINGOIA
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 8,367
<SECURITIES> 0
<RECEIVABLES> 104,236
<ALLOWANCES> 398
<INVENTORY> 0
<CURRENT-ASSETS> 129,064
<PP&E> 412,732
<DEPRECIATION> 170,993
<TOTAL-ASSETS> 387,343
<CURRENT-LIABILITIES> 87,666
<BONDS> 100,312
0
0
<COMMON> 6,004
<OTHER-SE> 173,435
<TOTAL-LIABILITY-AND-EQUITY> 387,343
<SALES> 400,322
<TOTAL-REVENUES> 400,322
<CGS> 314,638
<TOTAL-COSTS> 314,638
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,425
<INCOME-PRETAX> 41,493
<INCOME-TAX> 15,786
<INCOME-CONTINUING> 25,707
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,707
<EPS-BASIC> 1.13
<EPS-DILUTED> 1.12
</TABLE>
