<PAGE> 1
As filed with the Securities and Exchange Commission on October 11, 1994
REGISTRATION NO. 33-___________________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
MARINE DRILLING COMPANIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
TEXAS 1381 74-2558926
(State of other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
14141 SOUTHWEST FREEWAY, SUITE 2500
SUGAR LAND, TEXAS 77478
(713) 491-2002
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
WILLIAM H. FLORES
14141 SOUTHWEST FREEWAY, SUITE 2500
SUGAR LAND, TEXAS 77478
(713) 491-2002
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copy to: VINSON & ELKINS L.L.P.
2500 FIRST CITY TOWER
HOUSTON, TEXAS 77002-6760
ATTENTION: SCOTT N. WULFE
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: ( )
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box: (x)
--------------------
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(1) PRICE(1) FEE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,056,000 $4 1/2 $4,752,000 $1,638.62
=============================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(c), the registration fee was computed on
the basis of the average of the high and low prices of the registrant's
Common Stock reported by Automated Quotation System, as of October 7, 1994.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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***************************************************************************
* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any State in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* State. *
* *
***************************************************************************
Subject to Completion, Dated October 11, 1994
P R O S P E C T U S (MARINE DRILLING LOGO)
MARINE DRILLING COMPANIES, INC.
1,056,000 Shares of Common Stock, $.01 par value
--------------------
This Prospectus covers 1,056,000 shares (the "Shares") of Common
Stock, par value $.01 per share ("Common Stock"), of Marine Drilling Companies,
Inc. (the "Company") which are offered hereby for the account of M/V Enterprise
Limited Partnership, a Louisiana limited partnership (the "Selling
Stockholder"). The Company will receive no part of the proceeds of any sales
made hereunder. See "Use of Proceeds."
The Common Stock may be offered from time to time in one or more
transactions (including block transactions) on the Nasdaq Stock Market, in the
over-the-counter market, through negotiated transactions or otherwise, at
market prices prevailing at the time of sale or at negotiated prices. See
"Plan of Distribution."
The Common Stock is traded on the Nasdaq Stock Market. On October 7,
1994, the last reported sale price of the Common Stock on the Nasdaq Stock
Market was $4 5/8 per share.
SEE "INVESTMENT CONSIDERATIONS" FOR CERTAIN CONSIDERATIONS RELEVANT TO
THE INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is October 11, 1994.
<PAGE> 3
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING
STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES COVERED
BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER OR SOLICITATION BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS AT ANY TIME NOR
ANY SALE MADE HEREUNDER SHALL IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational filing requirements of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the SEC's Regional
Offices located at Seven World Trade Center, New York, New York 10048, and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained by mail from the Public Reference Branch of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
material may also be inspected at the offices of the Nasdaq Stock Market, 1735
K Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the SEC under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. Statements contained in
this Prospectus as to the contents of any contract or other document filed as
an exhibit to the Registration Statement are not necessarily complete, and in
each instance reference is hereby made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC (File No.
0-18309) pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993;
2. The Company's Quarterly Reports on Form 10-Q with respect to
the fiscal quarters ended March 31, 1994 and June 30, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Shares shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents which are incorporated herein by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Any such requests
should be directed to Marine Drilling Companies, Inc., 14141 Southwest Freeway,
Suite 2500, Sugar Land, Texas 77478-3435, Attention: Investor Relations
(telephone: 713/491-2002).
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<PAGE> 4
PROSPECTUS SUMMARY
This summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere or incorporated by
reference in this Prospectus.
THE COMPANY
The Company is engaged in contract drilling of offshore oil and gas
wells for independent and major oil and gas companies. The Company operates
twelve mobile offshore jack-up drilling rigs.
On October 3, 1994, the Company entered into an agreement (the
"Agreement") to acquire (the "Acquisition") from the Selling Stockholder a
jack-up drilling rig for total consideration of $5,500,000 consisting of the
Shares offered hereby plus certain additional cash consideration. The
Acquisition involves the MARINE 3 drilling rig which the Company formerly
chartered from the Selling Stockholder.
The Company's principal executive offices are located at 14141
Southwest Freeway, Suite 2500, Sugar Land, Texas 77478-3435 and its telephone
number is (713) 491-2002.
THE OFFERING
This Prospectus covers the proposed secondary offering of 1,056,000
shares of Common Stock by the Selling Stockholder. See "Selling Stockholder."
The Shares will be issued to the Selling Stockholder upon the closing of the
Acquisition.
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<S> <C>
Shares of Common Stock Being Offered . . . . . . . . . 1,056,000
Shares of Common Stock Outstanding:
Before the Acquisition (1) . . . . . . . . . . . . 43,870,131
After the Acquisition . . . . . . . . . . . . . . 44,926,131
Use of Proceeds . . . . . . . . . . . . . . . . . . The Selling Stockholder will
receive all of the net
proceeds from the sale of the
shares of Common Stock offered
hereby. The Company will not
receive any of the proceeds
from the sale of such shares.
</TABLE>
- --------------------
(1) As of October 7, 1994.
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<PAGE> 5
THE COMPANY
The Company, through its predecessors, has been engaged since 1966 in
offshore contract drilling of oil and gas wells for independent and major oil
and gas companies. The Company currently operates in the U.S. Gulf of Mexico
and the Bay of Campeche offshore Mexico. As of the date of this Prospectus,
the Company operated a fleet of twelve mobile offshore jack-up drilling rigs
(all of which, after taking into account the Acquisition, are owned by the
Company), consisting of four independent leg cantilever jack-ups and eight mat
supported jack-ups. At that time, eleven of the Company's twelve rigs were
located in the U.S. Gulf of Mexico and one was in the Bay of Campeche.
The Company was incorporated in Texas in January 1990 and was
significantly restructured and recapitalized in 1992 and early 1993 (the
"Recapitalization"). The principal executive offices of the Company are
located at 14141 Southwest Freeway, Suite 2500, Sugar Land, Texas 77478-3435
and the telephone number of such offices is (713) 491-2002. References to the
"Company" herein include Marine Drilling Companies, Inc. and its subsidiaries
unless the context otherwise requires.
INVESTMENT CONSIDERATIONS
Prospective purchasers of the shares of Common Stock offered hereby
should carefully consider all of the information set forth or incorporated by
reference in this Prospectus, especially the factors described in the following
paragraphs.
INDUSTRY CONDITIONS; COMPETITION
The offshore drilling business is influenced by a number of factors,
including the current and anticipated prices of oil and gas (which affect the
expenditures by oil and gas companies for exploration and production) and the
availability of drilling rigs. In particular, the Company's drilling
operations are dependent upon the level of offshore drilling activity in the
U.S. Gulf of Mexico and the Bay of Campeche offshore Mexico. Despite
occasional improvements, the market for offshore contract drilling and related
services has been depressed for most of the past ten years due primarily to
depressed oil and gas prices and an oversupply of drilling rigs.
The offshore drilling market is highly competitive and no one
competitor is dominant. There has been a prolonged period of intense price
competition during which many rigs have been idle for long periods of time.
Consequently, some drilling contractors have gone out of business, sought
protection under the bankruptcy laws or consolidated with other contractors.
Notwithstanding these events, the industry remains fragmented, and the Company
believes that bidding for drilling contracts will remain highly competitive for
the foreseeable future. Certain of the Company's competitors are larger, or
are subsidiaries of larger companies, and have greater financial resources than
the Company, which may enable them to better withstand industry downturns,
compete on the basis of price, build new rigs or acquire existing rigs that
become available for purchase.
In addition, jack-up rigs are mobile and competitors have moved and
could move additional rigs into the U.S. Gulf of Mexico and the Bay of
Campeche. Further, there are additional non-marketed rigs stacked in the U.S.
Gulf of Mexico which, subject to some expenditure, could be reactivated to meet
an increase in demand for drilling rigs in the Company's markets. Such
movement or reactivation could depress pricing levels and adversely affect the
supply and demand relationship in the U.S. Gulf of Mexico and the Bay of
Campeche.
OPERATING RISKS
Contract drilling operations are subject to various risks, including
blowouts, cratering, fires and explosions, each of which could result in damage
to or destruction of drilling rigs and oil and gas wells, damage to life and
property, suspension of operations, and environmental damage through oil
spillage and extensive uncontrolled fires. The Company currently maintains
insurance coverage it believes to be
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<PAGE> 6
customary in the industry against certain general and marine public
liabilities, including liabilities for personal injuries. Except in limited
circumstances, this insurance does not cover liability for pollution or
environmental damage that originates below the water surface, although the
Company is generally indemnified against such pollution and environmental
liabilities by its customers. There can be no assurance, however, that such
insurance or indemnification will be adequate to protect the Company against
liability from all consequences of well disasters, extensive fire damage or
damage to the environment or that the Company will be able to maintain adequate
insurance in the future at rates it considers reasonable. Such liabilities, if
not covered by insurance or a third party indemnification, could have a
material adverse effect on the Company.
HISTORY OF OPERATING LOSSES
The Company incurred an operating loss for each of the years from 1986
through 1992. As a result of significantly improved industry conditions and
the consummation of the Recapitalization, the Company reported operating income
and net income in 1993 and during the first half of 1994. Continuing
profitability will be dependent upon the Company's ability to maintain
utilization and day rates for its drilling rigs. The Company cannot predict if
such profitability will continue.
CONCENTRATION OF OPERATIONS IN CERTAIN MARKETS
The Company historically has operated its offshore drilling rigs in
the U.S. Gulf of Mexico and the Bay of Campeche offshore Mexico. As of the
date of this Prospectus, eleven of the Company's twelve rigs were located in
the U.S. Gulf of Mexico and one was in the Bay of Campeche. As a result of
this geographic concentration, a decrease in the demand for offshore drilling
rigs in the U.S. Gulf of Mexico and the Bay of Campeche could have a material
adverse effect on the Company even if demand for offshore drilling rigs in
other areas of the world is not adversely affected. Certain of the Company's
rigs could, with certain modifications, be capable of working in other
international markets. However, the Company's rigs are not suitable for those
areas that require hostile environment capabilities, such as the North Sea.
LIMITATIONS ON THE AVAILABILITY OF THE COMPANY'S NET OPERATING LOSS
CARRYFORWARDS
Sales of significant numbers of shares of Common Stock by the Company
or certain significant stockholders of the Company could result in an ownership
change under Section 382 of the Internal Revenue Code of 1986, as amended (the
"Code"). A change in ownership under Section 382 of the Code would limit the
Company's ability to use its remaining net operating losses against its future
net income and could result in the Company owing materially higher federal
income taxes in a given year than it would otherwise have owed. Further, the
Company has taken the position that the Recapitalization did not cause an
ownership change under Section 382 of the Code. There can be no assurance
however, that an ownership change will not be deemed to have occurred as a
result of the Recapitalization. If an ownership change were determined to have
occurred as a result of the Recapitalization, the Company's ability to use its
remaining net operating losses against its future net income would be
substantially limited.
SIGNIFICANT STOCKHOLDERS
As of the date of this Prospectus, of the Company's seven directors,
two were affiliated or associated with Warburg, Pincus Capital Company, L.P.
("Warburg"), one was affiliated or associated with Aeneas Venture Corporation
("Aeneas") and one was affiliated or associated with Capricorn Investors, L.P.
("Capricorn"). In addition, William O. Keyes, Chairman and Chief Executive
Officer of the Company, served as a director. As of the date of this
Prospectus, Warburg, Aeneas, Capricorn and Mr. Keyes owned approximately 25.3%,
12.2%, 5.8% and 3.7%, respectively, of the Company's outstanding Common Stock.
Prior to June 29, 1993, Warburg, Aeneas, Capricorn, Mr. Keyes and The Chase
Manhattan Bank (National Association) ("Chase") were parties to a shareholders'
agreement that, among other things, enabled such shareholders to elect all the
directors of the Company. On June 29, 1993, the shareholders' agreement was
terminated except that Warburg continues to have the right to designate two
nominees to
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the Company's board of directors as long as it owns at least 15% of the
outstanding Common Stock and one nominee as long as it owns at least 5% of the
outstanding Common Stock. Based on their ownership as of the date of this
Prospectus, Warburg, Aeneas, Capricorn and Mr. Keyes will, in all probability
if they act in concert, be able to control the outcome of matters requiring a
shareholder vote, including the election of directors. However, the Company
has been informed that no agreement currently exists among those parties to act
in concert.
DEPENDENCE ON KEY PERSONNEL
The Company believes that its operations are dependent to some degree
upon a relatively small group of its management personnel, the loss of any of
whom could have a material adverse effect on the Company. The Company attempts
to minimize this risk through the use of employment and incentive plans
designed to retain key employees.
DEPENDENCE ON A FEW CUSTOMERS
As is typical in the industry, the Company does business with a
relatively small number of customers at any given time. The loss of any one of
the Company's customers could, at least on a short-term basis, have a material
adverse effect on the Company's profitability. Management believes, however,
that at current levels of activity, the Company would have alternative
customers for its services if it lost any single customer and that the loss of
any one customer would not have a material adverse effect on the Company on a
long-term basis.
SHARES AVAILABLE FOR SALE
The Company is a party to a registration rights agreement (the "Prior
Registration Rights Agreement") dated October 29, 1992 related to the future
sales of Common Stock by certain significant stockholders. Pursuant to the
Prior Registration Rights Agreement, the Company has filed a registration
statement, that is currently effective, covering the future resale by those
stockholders of up to 23,609,375 shares of Common Stock. Those shares of
Common Stock which are available for immediate resale represent approximately
53% of the outstanding shares of Common Stock as of the date of this
Prospectus. Sales of substantial amounts by those or other stockholders could
adversely affect the price of and market for the Common Stock.
LIMITED FOREIGN OWNERSHIP
The Company's Restated Articles of Incorporation contain limitations
upon the percentage of outstanding Common Stock that can be owned by persons
who are not United States citizens within the meaning of certain U.S. statutes
relating to the ownership of U.S. flag vessels. At present, applying the
statutory requirements, the Restated Articles of Incorporation would prohibit
more than 48% of the outstanding Common Stock from being owned by non-U.S.
citizens. These restrictions may at times preclude the transfer or issuance of
Common Stock to non-U.S. citizens and thus restrict the available market for
resales of shares of Common Stock and for the issuance of shares by the
Company.
ENVIRONMENTAL MATTERS
The operations of the Company are subject to numerous federal, state
and local laws and regulations controlling the discharge of materials into the
environment or otherwise relating to the protection of the environment. Such
laws and regulations not only expose the Company to liability for its own
actions but also, under certain circumstances, expose the Company to liability
for the conduct of others or for acts of the Company which were in compliance
with all applicable laws at the time such acts were taken. In addition,
legislative proposals have been introduced which would materially limit or
prohibit offshore drilling in certain environmentally sensitive areas. Some
recent proposals which limit or prohibit drilling in limited parts of the U.S.
Gulf of Mexico and certain other U.S. offshore areas have been enacted into law
and have adversely affected the Company. An Executive Order declaring a
moratorium on oil and gas leasing
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<PAGE> 8
and exploration until the year 2000 in certain areas, including the U.S. Gulf
of Mexico off southern Florida, is currently in effect. If additional laws are
enacted or other governmental action is taken that further restrict or prohibit
offshore drilling in the U.S. Gulf of Mexico or impose environmental protection
requirements that materially increase the costs of offshore exploration,
development or production of oil and gas, the Company could be further affected
in a materially adverse matter.
GOVERNMENTAL REGULATION
The business of the Company is affected by political developments and
by federal, state, foreign and local laws and regulations that relate directly
to the oil and gas industry. The adoption of laws and regulations curtailing
exploration and developmental drilling for oil and gas for economic,
environmental and other policy reasons adversely affects the operations of the
Company by limiting available drilling opportunities for its customers.
RECENT DEVELOPMENT
On October 3, 1994, the Selling Stockholder and the Company entered
into the Agreement providing for the acquisition by the Company of the MARINE
3, an offshore jack-up drilling rig, for total consideration of $5,500,000
consisting of the 1,056,000 shares of Common Stock offered hereby plus certain
additional cash consideration.
The Acquisition will be consummated on the date of this Prospectus, at
which time the Selling Stockholder will receive the Shares. In connection with
the execution and delivery of the Agreement, the Company and the Selling
Stockholder entered into a Registration Rights Agreement dated October 3, 1994
(the "Registration Rights Agreement") whereby the Company agreed, among other
things, to register under the Securities Act the shares of Common Stock issued
to the Selling Stockholder in connection with the Acquisition.
USE OF PROCEEDS
The Selling Stockholder will receive all of the net proceeds from the
sale of the Shares owned and offered hereby. The Company will not receive any
of the proceeds from the sale of the Shares offered hereby.
SELLING STOCKHOLDER
This Prospectus relates to the periodic offers and sales by the
Selling Stockholder of 1,056,000 shares of Common Stock. Other than the
Shares offered hereby, the Selling Stockholder does not own any shares of
Common Stock. Upon consummation of the sale of Common Stock contemplated
hereby, the Selling Stockholder will no longer own any shares of the Common
Stock.
The Company chartered the MARINE 3 from the Selling Stockholder
pursuant to a two-year bareboat charter dated December 21, 1992. The charter
commenced in January 1993 and will be terminated in connection with the
Acquisition. Except for this charter arrangement, the ownership interest of
the Selling Stockholder in the Shares and the contractual relationships
provided in the Acquisition Agreement and the Registration Rights Agreement,
the Selling Stockholder does not have any relationship with the Company.
Pursuant to the Registration Rights Agreement, the Company has agreed
to pay all expenses in connection with the registration and sale of the Shares,
except that fees and expenses of any underwriter, dealer, broker or agent
allocable to sales of the Shares and fees and expenses of counsel for the
Selling Stockholder will be borne by the Selling Stockholder. In addition, the
Company has agreed to indemnify the Selling Stockholder and each such
underwriter against certain liabilities, including liabilities under the
Securities Act. The Registration Rights Agreement is filed as an exhibit to
the Registration Statement of which this Prospectus is a part.
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<PAGE> 9
PLAN OF DISTRIBUTION
The Selling Stockholder may sell any Shares offered hereunder from
time to time in one or more transactions (including block transactions in which
the Selling Stockholder is the seller) on the Nasdaq Stock Market or in the
over-the-counter market. The Selling Stockholder may also sell shares in
special offerings, exchange distributions or secondary distributions in
accordance with the rules of the Nasdaq Stock Market, in negotiated
transactions, including through the writing of options on shares of the Common
Stock (whether such options are listed on an options exchange or otherwise), or
otherwise. The Selling Stockholder may effect such transactions by selling
shares of the Common Stock to or through underwriters, dealers, brokers or
agents. Such underwriters, dealers, brokers or agents may sell such shares to
purchasers in one or more transactions (including block transactions) on the
Nasdaq Stock Market or otherwise. Any sales may be made at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Without limiting the foregoing, brokers may
act as dealers by purchasing any and all shares of the Common Stock covered by
this Prospectus either as agents for others or as principals for their own
accounts and reselling such shares pursuant to this Prospectus. Such brokers
will receive compensation from the Selling Stockholder in the form of
commissions or discounts and may receive compensation from purchasers of the
Common Stock for whom they may act as agent or to whom they may sell as
principal in the form of commissions or discounts. The Selling Stockholder and
any underwriters, dealers, brokers or agents that participate in the sale of
such shares may be deemed to be underwriters, and any profit on the sale of
such shares by the Selling Stockholder and any discounts, commissions or
concessions received by any such underwriter, dealer, broker or agent may be
deemed to be underwriting discounts or commissions under the Securities Act.
There can be no assurances that the Selling Stockholder will sell any
or all of the Shares offered hereunder.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company currently consists of (i)
200,000,000 shares of Common Stock, par value $.01 per share, of which
approximately 44,926,131 shares (after taking into account the Acquisition)
were issued and outstanding as of the date of this Prospectus and (ii)
20,000,000 shares of Preferred Stock, par value $.01 per share, of which no
shares were issued and outstanding as of the date of this Prospectus.
COMMON STOCK
Each share of Common Stock is subject to all rights, privileges,
preferences and priorities of any class of preferred stock of the Company.
Each share of Common Stock has an equal and ratable right to receive dividends
as and when declared by the Board of Directors out of any funds of the
corporation legally available for the payment thereof. The Company currently
has no intention to pay dividends on the shares of Common Stock in the
foreseeable future.
In the event of a liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to share equally and ratably
in the assets available for distribution after payment of all liabilities,
including any liquidation preferences payable to the holders of Preferred Stock
that may at the time be outstanding.
Each share of Common Stock is entitled to one vote in the election of
directors and on all other matters submitted to a vote of stockholders.
Holders of Common Stock have no right to cumulate their vote in the election of
directors.
American Stock Transfer & Trust Company, 40 Wall Street, New York, New
York 10005, acts as the transfer agent and registrar of the Common Stock.
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<PAGE> 10
PREFERRED STOCK
The Preferred Stock may be divided into and issued in one or more
series, each series to be so designated as to distinguish the shares thereof
from the shares of all other series and classes. The Board of Directors is
vested with the authority to establish and designate such series from time to
time, and within the limitations prescribed by law or set forth in the
Company's Restated Articles of Incorporation, to fix and determine the number,
preferences, limitations and relative rights, including voting rights, of the
authorized shares within each such series; provided, however, that the Board of
Directors may not decrease the number of shares within a series below the
number of shares within such series that is then issued. The Board of
Directors shall exercise such authority by the adoption of a resolution or
resolutions as prescribed by law.
The terms of any series of Preferred Stock may be amended without the
consent of the holders of any other series of Preferred Stock or of any class
of junior stock, provided such amendment does not adversely affect the holders
of such other series of Preferred Stock or any class of junior stock. Shares
of any class of Preferred Stock which have been issued and reacquired in any
manner and are not held as treasury shares, including shares redeemed by
purchase (whether through the operations of a retirement or sinking fund or
otherwise), will have the status of authorized and unissued Preferred Stock and
may be reissued as a part of the series of which they were originally a part or
may be reclassified into and reissued as part of a new series.
Issuance of Preferred Stock could involve dilution of the equity of
the holders of Common Stock and restrictions on the rights of such holders to
receive dividends or other distributions.
VOTING
The Company's Restated Articles of Incorporation provide that (i)
action may be taken without a meeting, without prior notice, and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall have been signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take such action at a
meeting of the stockholders, and (ii) the vote required to approve a merger,
share exchange, certain sales of assets, charter amendment or dissolution
involving the Company shall be a majority of each outstanding class of capital
stock entitled to vote thereon.
NO PREEMPTIVE RIGHTS
No holder of shares of the Company, including shares of Common Stock,
shall have any preemptive right or other right to purchase or subscribe for or
receive any shares of any class, or series thereof, of stock of the Company,
whether now or hereafter authorized, or any warrants, options, bonds,
debentures or other securities convertible into, exchangeable for or carrying
any right to purchase any shares of any class, or series thereof, of stock.
FOREIGN OWNERSHIP
The Restated Articles of Incorporation of the Company contain
provisions limiting foreign ownership of the capital stock of the Company.
These provisions are intended to protect the Company's ability to continue to
own its rigs as U.S. flag vessels. Having a rig designated as a U.S. flag
vessel is desirable because, among other things, certain types of financings
are available only for U.S. flag vessels. The Shipping Act of 1916, as amended
(the "Shipping Act"), prohibits the transfer of a U.S. flag vessel or any
interest therein, without the consent of the United States Maritime
Administration, to a person who is not a citizen of the United States. The
penalties for violation of this provision include forfeiture of the vessel. A
corporation is not considered a U.S. citizen for these purposes unless, among
other things, the controlling interest therein is owned by citizens of the
United States. Thus, a transfer of Common Stock which would result in more
than 50% of the outstanding Common Stock being held by non-U.S. citizens could
constitute a transfer of the rigs in violation of the Shipping Act. Under the
provisions of the
9
<PAGE> 11
Company's Restated Articles of Incorporation, (i) shares of any class of
capital stock of the Company are not issuable to and are not registrable upon
transfer in the name of any person who cannot demonstrate to the satisfaction
of the Company that such person is a United States citizen (as defined for
purposes of the Shipping Act and hereinafter referred to as "U.S. citizens")
and is not holding such shares for the account or benefit of any non-U.S.
citizen, if as a result of such issuance or registration of transfer the
percentage of such class owned by non-U.S. citizens would exceed a fixed
percentage (the "Permitted Percentage"), which is equal to 2% less than the
percentage that would prevent the Company from being a U.S. citizen (currently
50%, thus resulting in a Permitted Percentage of 48%), and any such transfer
shall be void and ineffective as against the Company, and (ii) if at any time
non-U.S. ownership of any such class (either record or beneficial) exceeds the
Permitted Percentage, the Company may withhold payment of dividends on such
shares deemed to be in excess of the Permitted Percentage and may suspend the
voting rights of such shares.
Certificates representing the capital stock of the Company bear
legends concerning the restrictions on non-U.S. ownership. In addition, the
Board of Directors is authorized to adopt a bylaw provision for the
establishment of a dual stock certificate system under which different forms of
certificates may be used to indicate whether or not the owner thereof is a U.S.
citizen. To date, the Board of Directors has not deemed it necessary to adopt
such a system.
The restrictions imposed by the Company's Restated Articles of
Incorporation may at times preclude U.S. citizens from transferring their
shares of Common Stock to non-U.S. citizens. This may restrict the available
market for resales of shares of Common Stock and for the issuance of shares by
the Company.
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby will be
passed upon for the Company by Vinson & Elkins L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements and schedules of the Company
included in the Company's Annual Report on Form 10-K as of December 31, 1993
and 1992, and for each of the years in the three-year period then ended have
been audited by KPMG Peat Marwick LLP, independent certified public
accountants, as set forth in their report therein, and are incorporated herein
by reference. Such consolidated financial statements and schedules are
incorporated herein by reference in reliance upon the authority of such firm as
experts in accounting and auditing.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection
with the distribution of the securities covered by this Registration Statement.
All of the expenses will be borne by the Company except as otherwise indicated.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee . . . . . . . . . $ 1,639
Printing Expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Accountants' Fees and Expenses* . . . . . . . . . . . . . . . . . . . 1,000
Legal Fees and Expenses* . . . . . . . . . . . . . . . . . . . . . . . 6,000(1)
Miscellaneous* . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
-----------
Total* . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,639
===========
</TABLE>
- --------------------
* Estimates
(1) Approximately $1,000 of such expenses will be incurred and paid for by the
Selling Stockholder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that any
director or officer of a Texas corporation may be indemnified against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with or in defending any action, suit or
proceeding in which he is a party by reason of his position. A director or
officer may be indemnified only if it is determined that the person (a)
conducted himself in good faith; (b) reasonably believed (i) in the case of
conduct in his official capacity, that his conduct was in the corporation's
best interests; and (ii) in all other cases, that his conduct was at least not
opposed to the corporation's best interests; and (c) in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. If a director or officer is wholly successful, on the merits or
otherwise, in connection with such a proceeding, such indemnification is
mandatory.
The Company's Restated Articles of Incorporation contain provisions
eliminating or limiting liabilities of directors for breaches of their duty of
care. The Company's Bylaws provide for indemnification of officers and
directors of the Company and persons serving at the request of the Company in
such capacities for other business organizations against certain losses, costs,
liabilities and expenses incurred by reason of their positions with the Company
or such other business organizations. The Company also has policies insuring
its officers and directors against certain liabilities for actions taken in
such capacities, including liabilities under the Securities Act.
As Aeneas Venture Corporation's representative to the Company's Board
of Directors, Mr. McMahon is indemnified by Harvard Management Company, Inc.
against certain liabilities Mr. McMahon may incur as a result of his serving as
a director of the Company. As Warburg's representatives to the Company's Board
of Directors, Messrs. Newman and Libowitz are indemnified by Warburg, Pincus
Capital Company, L.P. against certain liabilities Messrs. Newman and Libowitz
may incur as a result of their serving as directors of the Company. As
Capricorn's representative to the Company's Board of Directors, Mr. Winokur is
indemnified by Capricorn Investors, L.P., against certain liabilities Mr.
Winokur may incur as a result of his serving as a director of the Company.
II-1
<PAGE> 13
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
4.1 Restated Articles of Incorporation of Marine Drilling Companies, Inc.
(Incorporated by reference to Exhibit 28.17 to the Current Report on
Form 8-K of the Registrant dated October 30, 1992.)
4.2 Amended and Restated Bylaws of Marine Drilling Companies, Inc.
(Incorporated by reference to Exhibit 28.18 to the Current Report on
Form 8-K of the Registrant dated October 30, 1992.)
*5.1 Opinion of Vinson & Elkins L.L.P. as to the legality of the securities
being registered.
*23.1 Consent of Independent Certified Public Accountants.
23.2 Consent of Vinson & Elkins L.L.P. (see Exhibit 5.1).
*24.1 Powers of attorney.
*99.1 Memorandum of Agreement between M/V Enterprise Limited Partnership and
Marine Drilling Management Company dated October 3, 1994.
*99.2 Registration Rights Agreement dated October 3, 1994 between Marine
Drilling Companies, Inc. and M/V Enterprise Limited Partnership.
</TABLE>
- --------------------
* Filed herewith.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the first three quarters of
1994.
II-2
<PAGE> 14
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such officer, director or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by a final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act, unless such information
required to be included in such post-effective amendment is
contained in periodic reports filed by the Registrant pursuant
to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement, unless such information is contained
in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(c) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 15
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-4
<PAGE> 16
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF SUGAR LAND, STATE OF TEXAS, ON THIS 10TH DAY OF OCTOBER 1994.
MARINE DRILLING COMPANIES, INC.
By William O. Keyes
--------------------------------
William O. Keyes
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
William O. Keyes Chairman of the Board, President October 10, 1994
- ----------------------------------- and Chief Executive Officer
William O. Keyes (Principal Executive Officer)
William H. Flores Senior Vice President, Chief October 10, 1994
- ----------------------------------- Financial Officer and Director
William H. Flores (Principal Financial Officer)
Joan R. Smith Vice President, Controller October 10, 1994
- ----------------------------------- and Secretary
Joan R. Smith (Principal Accounting Officer)
David E. Libowitz* Director October 10, 1994
- -----------------------------------
David E. Libowitz
Christopher M. Linneman* Director October 10, 1994
- -----------------------------------
Christopher M. Linneman
Michael E. McMahon* Director October 10, 1994
- -----------------------------------
Michael E. McMahon
Howard H. Newman* Director October 10, 1994
- -----------------------------------
Howard H. Newman
Herbert S. Winokur, Jr.* Director October 10, 1994
- -----------------------------------
Herbert S. Winokur, Jr.
* By William H. Flores
-------------------------------
William H. Flores
Attorney-in-Fact
Date: October 10, 1994
</TABLE>
II-5
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBITS PAGE
------- -------- ------------
<S> <C> <C>
5.1 Opinion of Vinson & Elkins L.L.P. as to the legality of
the securities being registered.
23.1 Consent of Independent Certified Public Accountants.
24.1 Powers of attorney.
99.1 Memorandum of Agreement between M/V Enterprise
Limited Partnership and Marine Drilling Management Company
dated October 3, 1994.
99.2 Registration Rights Agreement dated October 3, 1994
between Marine Drilling Companies, Inc. and M/V Enterprise
Limited Partnership.
</TABLE>
<PAGE> 1
EXHIBIT 5.1
(VINSON & ELKINS LETTERHEAD)
October 10, 1994
Marine Drilling Companies, Inc.
14141 Southwest Freeway, Suite 2500
Sugar Land, Texas 77478
Gentlemen:
We are acting as counsel for Marine Drilling Companies, Inc., a Texas
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (the "Registration Statement"), together with the Prospectus included
therein, filed by the Company with the Securities and Exchange Commission (the
"SEC") for the purpose of registering under the Securities Act of 1933, as
amended, the offer and sale of 1,056,000 shares of Common Stock (the "Shares").
The Shares are to be sold by M/V Enterprise Limited Partnership, a Louisiana
limited partnership (the "Selling Stockholder"), which will acquire them from
the Company as part of the purchase price to be paid by the Company for a
certain offshore jack-up drilling rig. Capitalized terms used but not defined
herein have the meanings given such terms in the Registration Statement.
Before rendering our opinions, we examined such corporate records of
the Company, resolutions of its Board of Directors and certificates,
instruments and other documents, and we reviewed such questions of law, as we
considered appropriate for purposes of our opinions.
Based upon the foregoing, we are of the opinion that the Shares have
been duly authorized and, when certificates therefor shall have been duly
authenticated and delivered against payment therefor as contemplated by the
Registration Statement, will be validly issued, fully paid and nonassessable.
We hereby consent to the statements with respect to us under the
heading "Legal Opinions" in the Prospectus forming a part of the Registration
Statement and to the filing of this opinion as an exhibit to the Registration
Statement, but we do not admit that we are within the class of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
Vinson & Elkins L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Marine Drilling Companies, Inc.:
We consent to the use of our audit report, incorporated herein by
reference, dated February 18, 1994 on the consolidated financial statements and
schedules of Marine Drilling Companies, Inc. and subsidiaries as of December
31, 1993 and 1992, and for each of the years in the three-year period then
ended and to the reference to our firm under the heading "Experts" in the
prospectus and registration statement.
KPMG PEAT MARWICK LLP
Houston, Texas
October 10, 1994
<PAGE> 1
Exhibit 24.1
MARINE DRILLING COMPANIES, INC.
POWER OF ATTORNEY
WHEREAS, Marine Drilling Companies, Inc., a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement on Form S-3, with such amendment or amendments thereto
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said registration statement;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company, does hereby appoint William H. Flores, his true and lawful attorney
with power to act with full power of substitution and resubstitution, to
execute in his name, place and stead, in his capacity as Director the
registration statement referred to above, together with any and all amendments
thereto as said attorney shall deem necessary or incidental in connection
therewith, and to file the same with the Commission. Such attorney 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 such attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument as
of this 6th day of October 1994.
/s/ David E. Libowitz
--------------------------
David E. Libowitz
<PAGE> 2
Exhibit 24.1
MARINE DRILLING COMPANIES, INC.
POWER OF ATTORNEY
WHEREAS, Marine Drilling Companies, Inc., a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement on Form S-3, with such amendment or amendments thereto
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said registration statement;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company, does hereby appoint William H. Flores, his true and lawful attorney
with power to act with full power of substitution and resubstitution, to
execute in his name, place and stead, in his capacity as Director the
registration statement referred to above, together with any and all amendments
thereto as said attorney shall deem necessary or incidental in connection
therewith, and to file the same with the Commission. Such attorney 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 such attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument as
of this 6th day of October 1994.
/s/ Christopher M. Linneman
----------------------------
Christopher M. Linneman
<PAGE> 3
Exhibit 24.1
MARINE DRILLING COMPANIES, INC.
POWER OF ATTORNEY
WHEREAS, Marine Drilling Companies, Inc., a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement on Form S-3, with such amendment or amendments thereto
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said registration statement;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company, does hereby appoint William H. Flores, his true and lawful attorney
with power to act with full power of substitution and resubstitution, to
execute in his name, place and stead, in his capacity as Director the
registration statement referred to above, together with any and all amendments
thereto as said attorney shall deem necessary or incidental in connection
therewith, and to file the same with the Commission. Such attorney 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 such attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument as
of this 6th day of October 1994.
/s/ Michael E. McMahon
--------------------------
Michael E. McMahon
<PAGE> 4
Exhibit 24.1
MARINE DRILLING COMPANIES, INC.
POWER OF ATTORNEY
WHEREAS, Marine Drilling Companies, Inc., a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement on Form S-3, with such amendment or amendments thereto
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said registration statement;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company, does hereby appoint William H. Flores, his true and lawful attorney
with power to act with full power of substitution and resubstitution, to
execute in his name, place and stead, in his capacity as Director the
registration statement referred to above, together with any and all amendments
thereto as said attorney shall deem necessary or incidental in connection
therewith, and to file the same with the Commission. Such attorney 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 such attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument as
of this 6th day of October 1994.
/s/ Howard H. Newman
--------------------------
Howard H. Newman
<PAGE> 5
Exhibit 24.1
MARINE DRILLING COMPANIES, INC.
POWER OF ATTORNEY
WHEREAS, Marine Drilling Companies, Inc., a Texas corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement on Form S-3, with such amendment or amendments thereto
in each case as may be necessary or appropriate, together with any and all
exhibits and other documents having relation to said registration statement;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company, does hereby appoint William H. Flores, his true and lawful attorney
with power to act with full power of substitution and resubstitution, to
execute in his name, place and stead, in his capacity as Director the
registration statement referred to above, together with any and all amendments
thereto as said attorney shall deem necessary or incidental in connection
therewith, and to file the same with the Commission. Such attorney 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 such attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument as
of this 6th day of October 1994.
/s/ Herbert S. Winokur, Jr.
----------------------------
Herbert S. Winokur, Jr.
<PAGE> 1
EXHIBIT 99.1
MEMORANDUM OF AGREEMENT
Dated October 3, 1994
MV Enterprise Limited Partnership hereinafter called the Sellers, have agreed
to sell, and Marine Drilling Management Company hereinafter called the Buyers,
have agreed to purchase the following vessel --
<TABLE>
<S> <C>
Jackup Drilling Rig "Marine 3"
Classification: ABS + A1 Self Elevating Drilling Unit
Built: 1974 by: Bethlehem Steel Corporation, Beaumont, Texas USA
Flag: USA Place of Registration: Houston, Texas USA
Call sign: WYR 2606 Register tonnage: 4980 Gross
Register number: 560547
</TABLE>
hereinafter referred to as the "Rig" on the following conditions:
1. PRICE
Price: U.S.D. 5,280,000.00
(United States Dollars Five Million, Two
Hundred Eighty Thousand) hereinafter referred
to as the "Total Consideration"
The consideration set forth in this Section is payable as follows --
(a) One million, fifty-six thousand (1,056,000) shares of Marine
Drilling Companies, Inc. ("MDCI") $.01 par value common stock
("Common Stock") that are covered by an effective Registration
Statement pursuant to Section 14. This component of the Total
Consideration is hereinafter referred to as the "Common Stock
Component."
(b) A cash payment equal to the Total Consideration less the value
of the Common Stock Component if the result of said
calculation is a positive number. The value of the Common
Stock Component shall be determined by multiplying 1,056,000
by the average of the closing bid prices as reported by the
NASDAQ Stock Market for the ten trading days ending on and
including the later of (i) November 10, 1994 or (ii) eleventh
day prior to the Closing Date (or if such day is not a
business day the business day immediately preceding such
eleventh day) (the "Average Bid Price").
(c) In the event that the Average Bid Price exceeds five dollars
($5.00), (i) the number of shares of Common Stock to be issued
to Sellers shall be adjusted downward so that the value of the
Common Stock Component is equal to the
<PAGE> 2
Total Consideration and (ii) the cash payment discussed in
Clause 1(b) shall be zero. The Common Stock Component will
also be adjusted for any stock splits, stock dividends,
recapitalizations, and the like occurring on or before the
Closing Date.
(d) Buyers have the right to fund all or any portion of the Total
Consideration in cash and to reduce the Common Stock Component
by a like amount. Buyers shall notify Sellers two business
days prior to Delivery of its intentions in this regard.
2. DEPOSIT
As a security for the correct fulfillment of this contract, the Buyers
shall pay a deposit of USD 550,000 of the Purchase Money within 3 (three)
banking days after the date of this agreement. This amount shall be deposited
with
R.S. Platou (USA), Inc.
ABA# 113000609
Account #018-00063842
and held by them in an account for the Sellers and the Buyers. Interest, if
any, to be credited the Buyers. Any fee charged for holding said deposit shall
be borne equally by the Sellers and the Buyers. The deposit shall be refunded
to Buyers upon the Closing of the transaction contemplated hereby.
3. PAYMENT
The Total Consideration pursuant to Section 1 shall be paid to Sellers
at the Closing.
4. PLACE AND TIME OF DELIVERY
The Rig shall be delivered and taken over at its then current location
in the U.S. Gulf of Mexico on the Closing Date. The Rig shall be deemed
delivered at such location when Sellers have delivered a Bill of Sale to
Buyers.
The closing of the transactions contemplated hereby (the "Closing")
shall be held at the offices of Vinson & Elkins L.L.P. on Monday, November 21,
1994, subject to extension at Buyer's option for a period that ends on the
earlier of (a) the day after the Registration Statement becomes effective (if
it is not effective on or before November 21, 1994) and (b) November 30, 1994
(the "Closing Date"). At the Closing, the Buyers shall deliver the Total
Consideration to, or at the direction of the Sellers (and any cash
consideration shall be transferred in immediately available funds to an account
designated by Sellers), and any and all documents, instruments, or opinions to
be delivered by them pursuant to this Agreement or the Registration Rights
Agreement. At the Closing, Sellers shall be obligated to deliver the Bill of
Sale and U.S. Coast Guard Form 1330 described in Section 5.
-2-
<PAGE> 3
Buyers are currently operating the Rig pursuant to the terms of that
certain Bareboat Charter dated December 21, 1992 (the "Bareboat Charter")
pursuant to which they have agreed to purchase and maintain certain insurance
and have agreed to operate the Rig according to certain standards.
Accordingly, if the Rig becomes a total or constructive total loss before the
Closing Date, the deposit in full shall be released to the Buyers, this
Agreement shall be of no further force and effect and the Buyers' and Sellers'
obligations shall be governed by the Bareboat Charter.
5. DOCUMENTATION
In exchange for payment of the Total Consideration the Sellers shall
furnish the Buyers with a legal Bill of Sale and a US Coast Guard Form 1330
Certificate stating that the Rig is free from registered encumbrances. On
delivery of the Rig, the Buyers shall register the Rig in their name.
The Buyers shall take possession of all classification certificates as
well as all plans etc. which are onboard the Rig. Other technical
documentation which may be in the Sellers' possession shall promptly upon the
Buyers' instructions be forwarded to the Buyers. The Sellers may keep the log
books, but the Buyers to have the right to take copies of same.
6. ENCUMBRANCES
The Sellers warrant that the Rig, on the Closing Date, will be free
from all encumbrances and maritime liens created by Sellers. Should any
encumbrances or liens created by Sellers which have been incurred prior to the
time of delivery be made against the Rig, the Sellers hereby undertake to
indemnify the Buyers against all consequences of such claims.
7. TAXES, ETC.
Any taxes, fees and expenses connected with the purchase and
registration under the Buyers' flag shall be for the Buyers' account, whereas
similar charges connected with the closing of the Sellers' register shall be
for the Sellers' account.
8. CONDITION ON DELIVERY / SALE TO INCLUDE / DISCLAIMER OF WARRANTIES /
BAREBOAT CHARTER
(a) Sale to include all items belonging to the Rig whether on
board or ashore. Sale to exclude leased items.
(b) Buyers or their affiliates have been operating the Rig and
been responsible for its maintenance. As a result, they are
extremely familiar with the condition and operation of the
Rig. Moreover, the Buyers have inspected and are familiar
with all other items (including any and all documentation
relating to the Rig) to be sold or delivered to Buyers
hereunder, have had an opportunity to verify information
following their own inspections, and are not relying on
statements (if any), information made or supplied by Sellers.
Accordingly, the Rig and all other items to be transferred
hereby are sold AS
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<PAGE> 4
IS, WHERE IS, WITH ALL FAULTS. EXCEPT WITH RESPECT TO THE
LIMITED WARRANTY WITH RESPECT TO ENCUMBRANCES AND LIENS, THE
SELLERS MAKE NO WARRANTY OR COVENANT OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, AND ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY AND ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED. THE BUYERS
WAIVE THE PROVISIONS OF CHAPTER XVII, SUBCHAPTER E, SECTION
17.41 THROUGH 17.63 INCLUSIVE (EXCEPT SECTION 17.55), VERNON'S
TEXAS CODE ANNOTATED, BUSINESS AND COMMERCIAL CODE (THE
"DECEPTIVE TRADE PRACTICES ACT") AND REPRESENT AND WARRANT
THAT THEY (i) HAVE ASSETS OF $5,000,000 OR MORE, (ii) HAVE
KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS
THAT ENABLE BUYERS TO EVALUATE THE MERITS AND RISKS OF THIS
TRANSACTION, (iii) ARE NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION RELATIVE TO SELLERS, AND (iv) HAVE BEEN
REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES HERETO AGREE
THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW, TO BE
OPERATIVE, THE LIMITATIONS ON LIABILITY AND DISCLAIMERS OF
CERTAIN WARRANTIES CONTAINED IN THIS PARAGRAPH 8 ARE
"CONSPICUOUS" DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE
LAW, RULE OR ORDER.
(c) If, but only if, the Closing occurs, the Sellers and Buyers
shall be relieved of all obligations, claims, or liabilities
arising under the Bareboat Charter except that (i) all amounts
to be paid pursuant to Section 3 of the Bareboat Charter shall
be paid at Closing, and (ii) the indemnity obligations under
Sections 7 (a), (b) and (c) of the Bareboat Charter shall
continue with respect to matters or events occurring prior to
the Closing, provided, however, that the indemnity obligations
under Section 7(b) shall not limit the disclaimers or waivers
contained in Section 8 hereof. The indemnity rights and
obligations under the Bareboat Charter Agreement may not be
assigned by either party except to an affiliate of such party
or, in the case of Sellers, to its partners.
9. BUYERS DEFAULT; CERTAIN TERMINATION EVENTS
Should the deposit not be paid as aforesaid, the Sellers have the
right to cancel this contract.
(a) Should the Total Consideration not be paid and delivered as
aforesaid at the Closing Date, or should the Buyers breach
their covenants herein or in the
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<PAGE> 5
Registration Rights Agreement in any material respect,
(including, without limitation, the failure to file the
registration statement as provided in paragraph 14) the
Sellers have the right to cancel this contract, in which case
the amount deposited together with interest earned, if any,
shall be delivered to the Sellers and the Sellers shall also
be entitled to all rights and remedies available to Sellers,
at law or in equity.
(b) If the Registration Statement is not effective on or before
the Closing Date or if the Common Stock shall not be admitted
or listed for trading on the NASDAQ Stock Market (unless such
result was caused by Buyers' breach of its covenants herein or
in the Registration Rights Agreement in a material respect),
then the deposit in full shall be returned to Buyers and this
Agreement and the Registration Rights Agreement shall
terminate and be of no further force and effect.
10. SELLERS' DEFAULT
If the Sellers fail to execute a legal transfer as specified in
Section 6 or to deliver the Rig with everything belonging to it in the manner
and within the time specified in Section 4 or otherwise breach their covenants
herein in a material respect, the deposit in full shall be returned to Buyers
and the Buyers shall be entitled to all rights and remedies available to Buyers
at law or in equity.
11. CERTAIN WAIVERS; CHOICE OF FORUM
TO THE FULLEST EXTENT PERMITTED BY LAW, SELLERS AND BUYERS HEREBY
WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY AND WAIVE ANY AND ALL RIGHTS TO
RECOVER EXEMPLARY DAMAGES, TREBLE DAMAGES OR ANY OTHER PENALTY OR PUNITIVE TYPE
OF DAMAGES IN CONNECTION WITH ANY CLAIM, DEMAND, CAUSE OF ACTION, DISPUTE,
CONTROVERSY OR OTHER MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
REGISTRATION RIGHTS AGREEMENT. ANY LEGAL ACTION OR PROCEEDING RELATING IN ANY
WAY TO THIS AGREEMENT OR THE REGISTRATION RIGHTS AGREEMENT SHALL BE BROUGHT AND
ENFORCED ONLY IN THE FEDERAL COURTS OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF TEXAS, AND EACH OF THE SELLERS AND BUYERS ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY, IRREVOCABLY AND UNCONDITIONALLY, THE
JURISDICTION OF EACH SUCH COURT IN RESPECT OF ANY SUCH ACTION OR PROCEEDING;
PROVIDED THAT IF FOR WHATEVER REASON THE FEDERAL COURTS OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF TEXAS WILL NOT OR CANNOT HEAR SUCH ACTION OR
PROCEEDING, SUCH ACTION MUST BE BROUGHT AND ENFORCED IN THE COURTS OF THE STATE
OF TEXAS IN HARRIS COUNTY. THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT IS TO BE
PERFORMED IN HARRIS COUNTY, TEXAS.
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<PAGE> 6
12. CONFIDENTIALITY
Buyers and Sellers agree not to publicly disclose this Agreement
except as required by law.
13. COMMISSIONS
Buyers and Sellers represent and warrant that except for commission
payable to R.S. Platou (USA), Inc. ("Platou") by Sellers upon closing of the
sale, they have made no commitments for any other brokerage commissions
whatsoever. Sellers hereby direct Buyers to pay to Platou at the Closing, and
Buyers agree to pay to Platou, $220,000 in satisfaction of Sellers' obligation
to Platou. The payment to Platou shall be in addition to the Total
Consideration payable to Sellers.
14. REGISTRATION OF COMMON STOCK TO BE RECEIVED BY SELLERS
On the date hereof, Sellers and MDCI have executed and delivered a
Registration Rights Agreement in the form of Exhibit A hereto. Pursuant to the
Registration Rights Agreement, MDCI shall file, as expeditiously as possible
following the date of this Agreement (but in no event later than five business
days following the delivery by Sellers of all information requested by Buyers
necessary to prepare such registration statement within two business days after
the date hereof), with the Securities and Exchange Commission ("SEC") and
relevant state authorities, a registration statement on Form S-3 (the
"Registration Statement"), which Registration Statement shall cover the resale
by Sellers of the Common Stock issued to Sellers and shall use its best efforts
to cause the Registration Statement to be declared effective on or before the
Closing Date, and to maintain the Registration Statement for the periods
specified in the Registration Rights Agreement. If the Registration Statement
does not become effective on or before the Closing Date, the Agreement shall
terminate, the Sellers' shall be relieved of their obligations hereunder, and
the parties shall have the rights and remedies as provided in Section 9.
Sellers agree to provide promptly any information required by MDCI for the
filing and maintenance of the Registration Statement as contemplated by the
Registration Rights Agreement.
15. PRE-CLOSING ACTIVITIES
Sellers agree that prior to the Closing Date it shall not, and it
shall cause its representatives and affiliates not to, engage in marketing
activities with respect to the Common Stock or sell short Common Stock.
Sellers further agree that it shall not, and it shall cause its representatives
and affiliates not to, influence or attempt to influence the market price of
Common Stock prior to the Closing Date.
Buyers agree that, prior to the Closing Date, it will not, and will
cause its affiliates not to, violate any applicable securities laws in any
manner that would affect the price of the Common Stock or that would adversely
affect the registration of the Common Stock contemplated in Section 14.
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<PAGE> 7
16. SELLERS REPRESENTATIONS
Sellers represent that the income and expenditures attributable to the
Rig can be separately established from Sellers' book of accounts and records
and that the Rig represents an identifiable segment of Seller's business.
Sellers represent that (i) it is a limited partnership organized under the laws
of, and with its principal office located in, the State of Louisiana, (ii) it
is an "accredited investor" as such term is defined in Rule 501 promulgated
under the Securities Act of 1933, (iii) it is acquiring Common Stock hereunder
with no intention of distributing, and will not distribute, such Common Stock
in violation of applicable securities laws, (iv) it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the Common Stock to be received hereunder; and (v) the
transactions contemplated by this Agreement do not constitute a transaction or
transactions subject to Rule 145 under the Securities Act of 1933.
17. ENTIRE AGREEMENT; AMENDMENT
This Agreement and the Registration Rights Agreement to be executed
hereunder constitute the entire agreement between the parties pertaining to the
subject matter hereof, and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties
pertaining to the subject matter hereof. This Agreement may be amended or
modified in any respect by the parties by an agreement in writing executed in
the same manner as this Agreement. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by
the party to be bound thereby.
18. CONDITION SUBSEQUENT
If Buyers fail to obtain within 5 business days from the date of this
Agreement appropriate waivers from the required parties under that certain
Registration Rights Agreement to which Marine Drilling Companies, Inc. is
currently a party, then Buyers shall promptly notify Sellers of such failure
and the deposit in full shall be returned to Buyers and this Agreement and the
Registration Rights Agreement shall be of no further force and effect.
19. TRANSFERABILITY OF SHARES
Sellers may transfer the Common Stock to any of its partners, whether
by dissolution or otherwise, if, but only if, such partners have entered into
an agreement in form reasonably satisfactory to Buyers adopting the relevant
provisions of this Agreement and the Registration Rights Agreement.
20. SEVERABILITY
The parties agree that if any provision of this Agreement shall be
held invalid or unenforceable, such provision shall, to the extent possible, be
severed, and the remainder of this Agreement shall remain in full force and
effect.
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<PAGE> 8
For the Sellers: For the Buyers:
MV Enterprise Limited Partnership Marine Drilling Management Company
By:______________________________ By:______________________________
Name:____________________________ Name: William H. Flores
Title:___________________________ Title: Senior Vice President
Marine Drilling Companies, Inc.
By:______________________________
Name: William H. Flores
Title: Senior Vice President
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<PAGE> 1
EXHIBIT 99.2
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
effective as of October 3, 1994, by and between Marine Drilling Companies,
Inc., a Texas corporation (the "Company") and M V Enterprise Limited
Partnership, a Louisiana limited partnership (the "Partnership").
W I T N E S S E T H:
WHEREAS, pursuant to a Memorandum of Agreement (the "Memorandum of
Agreement") entered into on the date hereof among the Company, a subsidiary of
the Company and the Partnership, the Partnership may be issued up to 1,056,000
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock");
WHEREAS, as consideration for the agreement of the Partnership to
acquire and accept the Common Stock, the Company has agreed to grant the such
parties the rights and benefits set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants, terms and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"BUSINESS DAY" means any day other than a Saturday, Sunday or any
other day on which commercial banks are authorized by law to be closed in
Houston, Texas.
"CLOSING" AND "CLOSING DATE" shall have the meanings assigned to such
terms in the Memorandum of Agreement.
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act and the Exchange
Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"HOLDER" means the Partnership and any partner thereof who receives
Registrable Securities from the Partnership and who complies with the
provisions of Section 6(i).
"REGISTRABLE SECURITIES" means (i) the shares of Common Stock acquired
by the Holders pursuant to the Memorandum of Agreement and (ii) any securities
issued or issuable in respect of any Registrable Securities by way of any stock
split or stock dividend or in connection with any combination of shares,
recapitalization, merger,
<PAGE> 2
consolidation, reorganization or otherwise (the "Shares"); provided, however,
that as to any particular Registrable Securities, once issued, such securities
shall cease to be Registrable Securities when such securities shall have been
disposed of by the Holders or on the end of the periods set forth in Section 2.
"REGISTER", including "REGISTERED" and "REGISTRATION", refer to a
registration effected by preparing and filing with the Commission a
registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"UNDERWRITER" means each person (other than the Company and its
officers, directors, agents and advisors) that participates in the offering of
the Registrable Securities, whether pursuant to an underwritten public offering
or otherwise.
2. SHELF REGISTRATION. (a) As soon as practical after the date
hereof, the Company shall file with the Commission a registration statement on
Form S-3 (or other appropriate form) for the purpose of registering the
Registrable Securities for offer and sale by the Holders under the Securities
Act. The Company shall use its best efforts to cause such registration
statement to be declared effective under the Securities Act on or prior to the
Closing Date.
(b) The Company shall use its best efforts to cause such
registration statement to remain effective under the Securities Act until the
earlier of (i) 90 days from the Closing Date (the "Initial Registration
Period"), or (ii) the date on which all Registrable Securities have been sold
by the Holders. If all Registrable Securities have not been sold by the
Holders prior to the expiration of the Initial Registration Period, then the
Partnership shall have the option, by delivering written notice to the Company
at least five business days prior to the end of the Initial Registration
Period, to extend the period during which the Company shall be obligated to use
its best efforts to maintain the effectiveness of the registration statement
for an additional 60 day period (or such shorter period as shall end on the
date on which all of the Registrable Securities have been sold) (the "Option
Period"). In addition, the Partnership shall have the right to require the
Company to use its best efforts to maintain the effectiveness of the
registration statement for one additional 60-day Option Period (or such shorter
period as shall end on the date on which all of the Registrable Securities have
been sold) by delivering written notice to the Company at least five business
days prior to the expiration of the initial Option Period.
(c) Notwithstanding the foregoing, upon a request by the
Partnership for an Option Period as provided in Section 2(b) or at any time
during an Option Period, the
A-2
<PAGE> 3
Company shall be entitled, by written notice to the Holders, to require the
Holders to suspend any sales of Registrable Securities under the registration
statement for a period of up to 90 days, if the Company is in possession of
material information concerning it or its business or affairs, the public
disclosure of which the Company believes would have an adverse effect on the
Company; provided, however, that the Company shall be entitled to require the
Holders to suspend sales pursuant to this Section 2(c) for no more than 90 days
during each Option Period.
(d) In calculating the periods during which the Company is
obligated to use its best efforts to maintain the effectiveness of the
registration statement during either the Initial Registration Period or an
Option Period, the registration statement shall not be deemed to have been
effective during (i) any period for which the Company has requested that the
Holders suspend sales of Registrable Securities pursuant to Section 2(c) plus
15 days, or (ii) twice the number of days included in the period from and
including the date on which the Company gives a notice pursuant to Section
3(a)(iv) until and including the date when the Holders shall have received the
copies of the supplemented or amended prospectus contemplated by Section
3(a)(iv), or (iii) any period during which the registration statement is
materially interfered with by any stop order, injunction or other order of the
Commission or other governmental agency or court, or (iv) any day on which
trading in the Common Stock is halted or suspended on the Nasdaq Stock Market.
(e) If any Holder intends to distribute the Registrable Securities
by means of an underwriting, such Holder shall so advise the Company and
provide the name of the managing underwriter or underwriters that the Holder
proposes to employ in connection with the public offering proposed to be made
pursuant to the registration provided by this Section 2.
(f) The parties acknowledge that the Holders do not intend for the
Registrable Securities to be subject to any "lock- up" agreement, and the
Company will not request that the Holders become a party to any "lock-up"
agreement, except as provided in Section 3(b).
3. REGISTRATION PROCEDURES. (a) The Company will keep the
Holders advised in writing as to the progress of the registration referred to
in Section 2, and in connection with such registration, the Company will as
expeditiously as possible:
(i) notify the Holders of any stop order issued or
threatened by the Commission in connection therewith and take all
actions required to prevent the entry of such stop order or to remove
it if entered;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the registration statement as may be
necessary to keep the registration statement effective for the periods
specified in Section 2; and cause the prospectus to be supplemented by
any required prospectus supplement,
A-3
<PAGE> 4
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act;
(iii) furnish to the Holders such number of copies of the
registration statement and amendments thereto and such number of
copies of the prospectus (including each preliminary prospectus) and
any amendments or supplements thereto, and any documents incorporated
by reference therein, as the Holders or the underwriters, if any, may
request in order to facilitate the disposition of the Registrable
Securities being sold by the Holders (it being understood that the
Company consents to the use of the prospectus and any amendment or
supplement thereto by the Holders and the underwriter or underwriters,
if any, in connection with the offering and sale of the Registrable
Securities covered by such prospectus or any amendment or supplement
thereto);
(iv) notify the Holders at any time when the Company
becomes aware of the happening of any event as a result of which the
prospectus included in such registration statement (as then in effect)
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus or any preliminary
prospectus, in light of the circumstances under which they were made)
not misleading and, as promptly as practicable thereafter, if required
by applicable law, prepare and file with the Commission and furnish a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(v) to the extent not already so listed, use its best
efforts to cause all Registrable Securities included in such
registration statement to be listed, by the date of the first sale of
Registrable Securities pursuant to such registration statement, on the
NASDAQ Stock Market;
(vi) make "generally available to its security holders"
(within the meaning of Rule 158) a consolidated earnings statement
(which need not be audited) satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder;
(vii) if requested by the managing underwriter or
underwriters or the Holders, incorporate in the prospectus or a
prospectus supplement or post-effective amendment such information as
the managing underwriter or underwriters or the Holders, as the case
may be, reasonably requests to be included therein, including, without
limitation, information with respect to the number of Registrable
Securities being sold by the Holders to any underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other terms of an
underwritten offering of
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<PAGE> 5
the Registrable Securities to be sold in such offering, and promptly
make all required filings of such prospectus or supplement or
post-effective amendment;
(viii) as promptly as practicable after filing with the
Commission of any document which is incorporated by reference in a
prospectus contained in a registration statement, deliver a copy of
such document to the Holders;
(ix) on or prior to the date on which the registration
statement is declared effective, use its best efforts to register or
qualify the Registrable Securities, in connection with the
registration or qualification of the Registrable Securities covered by
the registration statement, for offer and sale under the securities or
blue sky laws of each state and other jurisdictions of the United
States as the Holders or the underwriter may reasonably request in
writing, to use its best efforts to keep each such registration or
qualification effective, including through new filings, amendments or
renewals, during the period such registration statement is required to
be kept effective and to do any and all other acts or things necessary
or advisable to enable the disposition in all such jurisdictions of
the Registrable Securities covered by the applicable registration
statement; provided, however, that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to
general service of process or taxation in any such jurisdiction where
it is not then so subject; and
(x) make available for inspection by the Holders, any
underwriter participating in any disposition pursuant to such
registration statement, counsel retained by the Holders, counsel for
the underwriters and any accountant or other agent retained by the
Holders or any such underwriter (collectively, the "Inspectors"), such
financial and other records, pertinent corporate documents and
properties of the Company (the "Records"), as shall be reasonably
necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and
employees to supply all information requested by any such Inspectors
in connection with such registration statement.
(b) The Holders agree that, upon receipt of any notice from the
Company (i) requesting suspension by the Holders of sales of Registrable
Securities under Section 2(c), or (ii) notifying the Holders of the happening
of any event of the kind described in Section 3(a)(iv) hereof, or (iii)
notifying the Holders of the existence of a stop order with respect to the
registration statement under Section 3(a)(i) hereof, the Holders will forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement (A) with respect to a notice described in clause (i) above, until the
Company has notified the Holders that they may resume sales of Registrable
Stock, (B) in the case of a notice described in clause (ii) above, until the
Holders have received copies of the supplemented or amended prospectus
contemplated by Section 3(a)(iv) hereof, and (C) in the case of a notice
described in clause (iii) above, until the stop order is removed.
A-5
<PAGE> 6
(c) Each Holder agrees that it will dispose of the Registrable
Securities in compliance with all applicable laws.
(d) Each Holder agrees that it will provide the Company with
information with respect to the Holders as may be necessary for the Company to
comply with its obligations under this Agreement or any underwriting agreement,
document or instrument executed in connection herewith.
(e) Each Holder agrees that it will promptly notify the Company of
any sales of Registrable Securities, and will notify the Company if it believes
that the distribution of such Registrable Securities has not been completed.
(f) The Company hereby represents and warrants that:
(i) the Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement,
and, except for the Registration Rights Agreement referred to in
Section 18 of the Memorandum of Agreement, the execution, delivery and
performance by the Company of its obligations under this agreement
will not cause a breach of any material agreement to which the Company
is a party, or the Company's charter or bylaws;
(ii) the registration statement referred to in Section 2
and the prospectus included therein and any amendments or supplements
thereto, will, when such documents are filed with the Commission and
declared effective under the Securities Act, comply in all material
respects with the applicable requirements of the Securities Act, and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished to the Company by any Holder expressly for use therein; and
(iii) the documents incorporated by reference in the
prospectus included in the registration statement, will, when such
documents become effective or are filed with the Commission, conform
in all material respects with the applicable requirements of the
Securities Act, and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished to the Company by any Holder expressly for use
therein.
4. REGISTRATION EXPENSES. All fees and expenses incurred in
connection with effecting the registration pursuant to Section 2 hereof,
including, without limitation, all registration, qualification and filing fees,
escrow fees, fees and expenses of compliance
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<PAGE> 7
with state securities or blue sky laws (including fees and disbursements of the
Company's counsel in connection with blue sky qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), the
fees and expenses incurred in connection with the listing of the securities to
be registered on each securities exchange on which similar securities issued by
the Company are then listed, and fees and disbursements of counsel for the
Company and the Company's independent certified public accountants directly
attributable to the registration of securities, including expenses of any
regular or special audits incident to or required by any such registration, the
fees and expenses of any special experts retained by the Company in connection
with such registration, and the fees and expenses of other persons retained by
the Company (all such fees and expenses being herein referred to as
"Registration Expenses") will be borne by the Company. All fees and expenses
incurred in connection with the distribution of the Registrable Securities,
except to the extent listed above, including, without limitation, discounts,
commissions or fees of underwriters, selling brokers, dealer managers or
similar securities industry professionals and legal expenses of such persons
and the Holders, will be borne by the Holders.
5. INDEMNIFICATION AND CONTRIBUTION. (a) If any Registrable
Securities are included in a registration statement pursuant to this Agreement,
the Company will, and hereby does, indemnify and hold harmless each Holder and
its partners, directors and officers, each underwriter and each other person,
if any, who controls such Holder or such underwriter within the meaning of
Section 15 of the Securities Act, against any expenses, losses, claims, damages
or liabilities, joint or several, to which such Holder or any such director or
officer or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such expenses, losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein or filed with the Commission or any amendment or supplement thereto,
(ii) any omission or alleged omission to state in any such registration
statement or amendment a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any omission
or alleged omission to state in any such preliminary prospectus, final
prospectus, summary prospectus or supplement a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading; and the Company shall reimburse such Holder or such
partner, director or officer or underwriter or controlling person for any legal
or any other expenses incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding as such
expenses are incurred; provided, however, that the Company shall not be liable
and shall be entitled to reimbursement in any such case to the extent that any
such loss, claim, damage or liability is finally determined to have arisen out
of or be based upon an untrue
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statement in or omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by such Holder or
an underwriter specifically stating that it is expressly for use therein; and,
provided, further, that the indemnity agreement contained in this subsection
shall not apply to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission in the prospectus included in the registration
statement when the registration statement became effective, if such untrue
statement or alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the prospectus and if, after having
previously been furnished by or on behalf of the Company with a sufficient
number of copies of the prospectus as so amended or supplemented, the such
prospectus as so amended or supplemented was not sent or given prior to or
concurrently with the sale of a Registrable Security by the Holder to the
person asserting such loss, claim, damage or liability who purchased such
Registrable Security which is the subject thereof, and, provided, further, that
the indemnification agreement contained in this subsection shall not apply to
the extent that any such loss, claim, damage or liability arises out of or in
connection with a sale of Registrable Securities made in violation of Section
3(b) hereof. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Holders or such partner,
director or officer or underwriter or controlling person, and shall survive the
transfer of such securities by the Holders.
(b) The Holders each agree to indemnify and hold harmless the
Company, its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act to the same
extent as the foregoing indemnity from the Company to the Holders, but only
with respect to information included in any Registration Statement or
prospectus, or any amendment or supplement thereto, or any preliminary
prospectus in reliance upon and in conformity with written information
furnished to the Company by such Holder or an underwriter specifically stating
that it is expressly for use therein. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers, similar
securities industry professionals and any other person or entity utilized by
the Holders to dispose of Registrable Securities, to the same extent as
provided above with respect to information so furnished in writing by such
persons specifically for inclusion in any prospectus or Registration Statement
or any amendment or supplement thereto, or any preliminary prospectus.
(c) A party from whom indemnity may be sought pursuant to the
provisions of Section 5(a) or (b) shall not be liable for such indemnity with
respect to any claim as to which indemnity is sought unless the party seeking
such indemnity shall have notified such indemnifying party in writing of the
nature of such claim promptly after such indemnified party becomes aware of the
assertion thereof; provided, however, that the failure so to notify such
indemnifying party shall not relieve such party from any liability which it may
have to such indemnified party otherwise than on account of the provisions of
Section 5(a) or (b) or if the failure to give such notice promptly shall not
have been materially prejudicial to such indemnifying party. No indemnifying
party shall be liable
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for any compromise or settlement of any such action effected without its
consent. No indemnifying party, in the defense of any such claim or suit,
shall, except with the consent of each indemnified party, consent to any
compromise or settlement which does not include as an unconditional term
thereof the giving by the claimant to such indemnified party of a release from
all liability in respect of such claim or suit. Any indemnifying party may
participate with counsel reasonably satisfactory to the indemnified party in,
and to the extent that it shall wish (except to the extent set forth below),
may direct and assume at its own expense, either individually or jointly with
any other indemnifying party, the defense of any suit brought to enforce such
claim. Such indemnified party shall have the right to participate in such suit
(but not to control such suit (except to the extent set forth below) unless no
indemnifying party shall have assumed the defense thereof in accordance with
the preceding sentence) and to retain its own counsel, but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall
be at the expense of such indemnified party unless no indemnifying party shall
have assumed the defense thereof in accordance with the preceding sentence or
unless the named parties to any such suit include such indemnified party and
one or more other indemnified parties or indemnifying parties and
representation of such parties by the same counsel would be inappropriate due
to actual or potential differing interests between them (in which case such
indemnified parties shall have the right to control all aspects of such suit
relating to such actual or potential differing interests). It is understood
that no indemnifying party shall, in connection with any such suit, be liable
under this subsection for the fees and expenses of more than one separate firm
(in addition to any local counsel in each jurisdiction) for all indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for above is for any reason
held to be unenforceable although applicable in accordance with its terms, the
Company and each indemnified party shall contribute to the losses, claims,
damages, liabilities and expenses described herein, in such proportions so that
the portion thereof for which any particular indemnified party shall be
responsible shall be limited to the portion determined by a court (or the
parties to any settlement) to be directly attributable to (i) an untrue
statement of a material fact or an omission to state a material fact in a
registration statement, preliminary prospectus, prospectus or amendment or
supplement thereto in specific reliance upon and in conformity with written
information furnished to the Company by such indemnified party's specifically
stating that it is expressly for use therein, and the Company shall be
responsible for the balance and (ii) any failure by such indemnified party to
comply with any provisions of this Agreement. The Company and the Holder agree
that it would not be just and equitable if the respective obligations of the
Company and any indemnified party to contribute were to be determined by pro
rata allocation, by reference to the proceeds realized by them or in any manner
which does not take into account the equitable considerations set forth in this
Section 5(d).
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6. MISCELLANEOUS.
(a) Waivers and Amendments. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits thereof.
This Agreement may not be amended, supplemented or modified at any time without
the written consent of the Company and the Holders.
(b) Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person,
by telecopy or mailed by certified or registered mail, return receipt
requested, as follows:
If to the Company, to: Marine Drilling Companies, Inc.
14141 Southwest Freeway, Suite 2500
Sugar Land, Texas 77478-3435
Attn: William H. Flores
Telefax No. (713) 565-2003
If to the Partnership, to: MV Enterprise Limited Partnership
8114 West Highway 90
Broussard, Louisiana 70518
Attn: Greg Dugas
Telefax No. (318) 365-0037
(c) Successors and Assigns. All representations, covenants and
agreements contemplated in this Agreement by or on behalf of any of the parties
hereto shall be binding upon and inure to the benefit of the parties hereto,
their respective successors and permitted assigns, whether so expressed or not.
Nothing in this Agreement, express or implied, is intended or shall be
construed to confer upon or give any person other than the parties hereto and
their respective successors and permitted assigns, any rights, remedies or
obligations under or by reason of this Agreement.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
(e) Headings. The headings in this Agreement are inserted for
convenience and reference only and shall not affect the construction or
interpretation of any term, provision or covenant of this Agreement.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
(g) Severability. If any term, provision or covenant of this
Agreement shall be declared invalid, void or unenforceable by any judicial or
administrative authority of
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competent jurisdiction, the remainder of the terms, provisions and covenants of
this Agreement shall continue in full force and effect and shall in no way be
affected, impaired or invalidated thereby.
(h) Entire Agreement. This Agreement and the applicable
provisions of the Memorandum of Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, written or oral, among the parties, of any of
them, with respect to such subject matter hereof.
(i) Distribution of Shares by Partnership. The Partnership agrees
that if it wishes to distribute, sell or transfer any Registrable Securities to
its partners, such Registrable Securities shall cease to be Registrable
Securities unless each partner receiving such shares executes an agreement in
form reasonably satisfactory to the Company adopting any relevant provisions of
this Agreement or the Memorandum of Agreement. The Partnership agrees that any
such sale, distribution or transfer shall not violate any securities laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MARINE DRILLING COMPANIES, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
MV ENTERPRISE LIMITED PARTNERSHIP
By: _________________________________
Name: _______________________________
Title: ______________________________
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