-105-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant To Section 13 or 15(d) of The Securities Exchange
Act of 1934
For the fiscal year ended March 31, 1998
Transition Report Pursuant to Section 13 or 15(d) of the Securities Ex
change Act of 1934
For the Transition period from to
Commission File Number 2-56600
Global Industries, Ltd.
(Exact name of registrant as specified in its Charter)
LOUISIANA 72-1212563
(State or other jurisdiction (I.R.S. Employer
of incorporation of Identification Number)
organization)
107 Global Circle 70596-1936
P.O. Box 61936, Lafayette, (Zip Code)
Louisiana
(Address of principal
executive offices)
Registrant's telephone number, including area code: (318) 989-0000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
None registered
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($0.01 par value)
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
X YES NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of May 31, 1998 was $1,365,676,697 based on the last
reported sales price of the Common Stock on May 31, 1998, as reported on
the NASDAQ\NMS.
The number of shares of the registrant's Common Stock outstanding as
of May 31, 1998 was 91,884,991.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on August 5, 1998 are incorporated by reference
into Part III hereof.
GLOBAL INDUSTRIES, LTD.
INDEX - FORM 10-K
PART I
Item 1. Business 3
Item 2. Properties 14
Item 3. Legal Proceedings 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item(unnumbered). Executive Officer of the Registrant 19
PART II
Item 5. Market for the Registrant's Common Equity and
Related Shareholder Matters 21
Item 6. Selected Financial Data 22
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 23
Item 8. Financial Statements and Supplementary Data 30
Global Industries, Ltd. and Consolidated
Subsidiaries:
Independent Auditors' Report 30
Consolidated Balance Sheets - March 31, 1998
and 1997 31
Consolidated Statements of Operations -
Three Years Ended March 31, 1998 32
Consolidated Statements of Shareholders'
Equity - Three Years Ended March 31, 1998 33
Consolidated Statements of Cash Flows -
Three Years Ended March 31, 1998 34
Notes to Consolidated Financial Statements 35
Item 9. Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure 51
PART III
Item 10. Directors and Executive Officers of the Registrant 51
Item 11. Executive Compensation 51
Item 12. Security Ownership of Certain Beneficial
Owners and Management 51
Item 13. Certain Relationships and Related Transactions 51
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 51
Signatures 56
PART I
ITEM 1. BUSINESS
Global Industries, Ltd. provides construction services, including
pipeline construction, platform installation and removal, diving services,
and construction support to the offshore oil and gas industry in the United
States Gulf of Mexico (the "Gulf of Mexico") and in select international
areas. Unless the context herein indicates otherwise,all references to the
"Company" or "Global" refer to Global Industries, Ltd. and its subsidiaries.
The Company began as a provider of diving services to the offshore oil
and gas industry 25 years ago and has used selective acquisitions, new
construction, and upgrades to expand its operations and assets. Global has
generated substantial growth during the last six years through
acquisitions. Through the combination of domestic and international
acquisitions and internal growth, the Company has increased its revenues
from $80.6 million in fiscal 1994 to $379.9 million in fiscal 1998, while
improving its net income from $10.7 million to $57.3 million over the same
period. The Company has the largest number of offshore construction
vessels currently available in the Gulf of Mexico and its worldwide fleet
includes 19 barges that have various combinations of pipelay, pipebury, and
derrick capabilities. The Company's fleet includes 46 manned vessels that
were available for service at the beginning of fiscal 1998 and 21 vessels
purchased during the fiscal year, including 17 purchased from Sub Sea
International, Inc. Construction continued on the upgrade of the Hercules,
including addition of dynamic positioning and pipelay capabilities, with an
estimated total cost of $104 million.
During fiscal 1998 the Company acquired certain business operations
and assets of Sub Sea International, Inc. and certain of its subsidiaries
("Sub Sea Acquisition"). The major assets acquired in the transaction
included three construction barges, four liftboats, and one dive support
vessel ("DSV") based in the United States, four offshore support vessels
("OSV") in the Middle East, and DSVs, OSVs, and remotely operated vehicles
("ROV") based in the Far East and Asia Pacific. Also during fiscal 1998,
the Company purchased the Seminole (formerly the GAL 900), a 440 foot long
self-propelled combination pipelay and derrick barge with an 800 ton lifting
capacity and capable of laying up to 48 inch diameter pipe. The Seminole
is currently based in the Middle East.
During fiscal 1998 the Company began construction of a deepwater
support facility and pipebase on 625 acres near Carlyss, Louisiana and
adjacent to the Calcasieu Ship Channel ("Carlyss facility"). The Company
plans to replace the existing facilities in Houma and Amelia, Louisiana
with the Carlyss facility. When completed the Carlyss Facility will
include a pipe assembly rack (almost one mile in length) used for welding
and assembly of pipe for spooling onto the Chickasaw and the Hercules, a
barge slip dedicated to pipe spooling operations, a large general purpose
barge slip, as well as office buildings, mechanic's shops, and storage
facilities. Estimated completion is in the second quarter of fiscal 2000
at a cost of approximately $37 million, $28 million of which has been
financed with Port Improvement Revenue Bonds.
In April 1998, the Company again added to its fleet with the
completion of the announced acquisition of the pipelay/derrick barges DLB
332 (Teknik Perdana) and DLB 264 (Teknik Padu) from TL Marine Sdn. Bhd.
These two vessels are currently based in Asia Pacific. The purchase price
was $47.3 million and was funded from the Company's bank line of credit.
The DLB 332 is 352 feet by 100 feet, has an 800 ton lift capacity, and can
be outfitted to lay up to 60 inch diameter pipe. The DLB 264 is 400 feet
by 100 feet, has an 1,100 ton lift capacity, and is capable of laying up to
60 inch diameter pipe. Each of these vessels is currently committed by a
short-term bare boat charter agreement with Hydro Marine Services, Inc., an
affiliate of J. Ray McDermott S.A., to allow for completion of certain
contractual commitments. The barges should be available for use in the
Company's construction services work in the Fall of 1998.
Global recently reached agreement in principal with its partner to
restructure its joint venture in Mexico, CCC Fabricaciones y
Construcciones, S.A. de C.V. ("CCC"), to sell or spin-off to its partner
CCC's onshore construction and fabrication business and assets. Expected
to be completed in the near future, this restructuring will permit CCC to
focus on its offshore construction business. Global has a 49% ownership
interest in CCC and charters vessels and other equipment to CCC.
DESCRIPTION OF OPERATIONS
Offshore Marine Construction Services
The Company is equipped to provide offshore marine construction
services over the full life of an oil and gas property, from installation
of platforms and pipelines, through inspection and repairs, and ultimately
to abandonment and site restoration.
The Company categorizes offshore marine construction projects into
three classes: ultra-deep water (over 1,000 feet of water), deepwater (200
feet to 1,000 feet), and shallow water. In recent years the Company has
generally focused on projects in deepwater, which require larger barges
with greater lifting capacity, more sophisticated technology, and
experienced personnel, and which generally provide greater operating
margins than shallow water projects. With 11 barges in the Gulf of Mexico
that are capable of operating in deepwater, the Company believes it has
more deepwater capability in the Gulf of Mexico than any of its
competitors. Capital expenditure programs for fiscal 1994 through fiscal
1998 have included investments to develop the Company's ability to compete
in water depths over 1,000 feet.
The Company also currently has two barges in West Africa, one in the
Middle East, and two in Asia Pacific that are capable of operating in
deepwater. Additionally, CCC is capable of working in deepwater with the
Company's vessels.
Pipeline Services
The Company has laid pipelines with a diameter of up to 24 inches and
has installed smaller diameter pipelines in water depths up to 5,300 feet.
The Company installed approximately 734 miles of pipe of various sizes in
various water depths in fiscal 1998, including 35 miles offshore West
Africa.
The Company is capable of installing pipe by either the conventional
or the reel method of pipelaying. With the conventional method, 40-foot
segments of pipe are welded together, coated, and tested on the deck of the
pipelay barge. Each segment is then connected to the prior segment and is
submerged in the water as the barge is moved forward 40 feet by its anchor
winches or tug boats. The process is then repeated. Using the
conventional pipelay method, the Company's barges can install approximately
200 feet per hour of small diameter pipe in shallow water under good
weather conditions. Larger diameter pipe, deeper water, and less favorable
weather conditions all reduce the speed of pipeline installation.
With the reel method, the Company performs the welding, testing, and
coating onshore, and then spools the pipe onto a pipe reel in one
continuous length. Once the reel barge is in position, the pipe is
unspooled onto the ocean floor as the barge is moved forward. The
Company's dedicated reel pipelay barge, the Chickasaw, is capable of
spooling as much as 45 miles of 4.5-inch pipe or 3.8 miles of 12.75-inch
pipe in one continuous length. Concrete coated pipe or pipe with a
diameter greater than 12.75 inches cannot be installed using the
Chickasaw's reel. Global has successfully operated the Chickasaw since
1987. The Company believes that its reel method pipelay capability often
provides it with a competitive advantage because of its faster installation
rates and reduced labor expense when compared to the conventional pipelay
method. The Chickasaw can install small diameter pipe in shallow water at
rates averaging 2,000 feet per hour. The Chickasaw's faster lay rate is
even more significant during the winter months, when pipelay operations
must be suspended frequently because of adverse weather conditions. The
Chickasaw's faster installation rate allows much more progress, or even
completion of a project, with fewer costly weather delays. The reel method
reduces labor costs by permitting much of the welding, x-raying, coating,
and testing to be accomplished onshore, where labor costs are generally
lower than comparable labor costs offshore. This method also enables the
Company to perform a substantial portion of its work onshore, a more stable
and safer work environment.
The current upgrade of the Hercules includes a reel system similar in
design to the Chickasaw's, but with much greater capacity. Current
engineering indicates that when completed, the Hercules reel will be
capable of spooling 83 miles of 6 5/8 inch diameter pipe, 23 miles of 12
3/4 inch diameter pipe, or 11 miles of 18 inch diameter pipe. The
Hercules will also be capable of providing pipelay services to 8,000 feet.
To facilitate the spooling capabilities of the Hercules, the Company has
begun construction of a new spool base and barge slips facility in Carlyss,
Louisiana.
In addition to its pipelay services, the Company believes that it has
the equipment and expertise necessary for its customers to comply with
regulations of the United States Department of Interior Minerals Management
Service ("MMS") that require all offshore oil and gas pipelines greater
than 8 3/4 inches in diameter located in water depths of 200 feet or less
to be buried three feet below the sea floor. Regulations also require that
these pipelines be periodically inspected, repaired, and, if necessary,
reburied. Inspection requires extensive diving services, and rebury
requires either hand-jetting by divers or use of one of the Company's large
jet sleds and a bury barge. With the acquisition of Norman Offshore
Pipelines, Inc. in fiscal 1997, the Company obtained the Mudbug technology
and patents. The Mudbug is used to simultaneously lay and bury pipelines,
a significant competitive advantage over the conventional method which
requires a second trip over the pipeline with the barge to bury the pipe.
Derrick Services
All 23 of the Company's barges are equipped with cranes designed to
lift and place platforms, structures, or equipment into position for
installation. In addition, they can be used to disassemble and remove
platforms and prepare them for salvage or refurbishment. The Hercules is
equipped to make lifts up to 2,000 tons. During fiscal 1998, the Company
performed derrick services in the Gulf of Mexico and offshore West Africa.
The Company expects demand for Gulf of Mexico abandonment services to
increase as more platforms are removed due to MMS regulations relating to
the abandonment of wells and removal of platforms. According to MMS, at
the end of 1998 there were approximately 3,856 platforms in Federal waters
of the Gulf of Mexico.
In May 1995, Global and Halliburton Energy Services signed an alliance
agreement to offer a total package of abandonment services to oil and gas
operators in the Gulf of Mexico. The alliance, named Total Abandonment
Services ("TAS"), performs all facets of the abandonment process, including
engineering, project management, wellbore plug and abandonment, structure
removal and site clearance.
Diving Services
Demand for diving services covers the full life of an offshore oil and
gas property, including supporting exploration and drilling, installing
pipelines for production and transportation, periodic inspection, repair
and maintenance of fixed platforms and pipelines and, ultimately, salvage
and site clearance. The Company's pipelay and derrick operations create
large captive demand for deepwater diving services, for which divers are
more highly compensated, and which enables the Company to attract and
retain qualified and experienced divers. In fiscal 1998, approximately 58%
of the Company's diving services were performed for subsidiaries of the
Company compared to 54% in fiscal 1997.
The MMS requires that all offshore structures have extensive and
detailed inspections for corrosion, metal thickness, and structural damage
every five years. As the age of the offshore infrastructure increases, the
Company anticipates that demand for inspections and repairs will increase.
MMS regulations require platforms to be promptly removed once production
ceases and that the site be restored to meet stringent standards.
For diving projects involving long-duration deepwater and ultra deep
dives to 1,500 feet, the Company uses saturation diving systems which
maintain an environment for the divers at the subsea water pressure at
which they are working until the job is completed. Saturation diving
permits divers to make repeated dives without decompressing, which reduces
the time necessary to complete the job and reduces the divers' exposure to
the risks associated with frequent decompression. Two of the Company's
largest saturation diving systems are capable of maintaining an
environment simulating subsea water pressures to 1,500 feet. The Company
has recorded the deepest wet working dive in the Gulf of Mexico at 1,075
feet.
The Company believes it has been a leader in the development of many
underwater welding techniques and has more qualified diver/welders in the
Gulf of Mexico than any of its competitors. Welded repairs are made by two
methods, dry hyperbaric welding and wet welding. In dry hyperbaric
welding, a customized, watertight enclosure is engineered and fabricated to
fit the specific requirements of the structural joint or pipeline requiring
repairs. The enclosure is lowered into the water, attached to the
structure, and then the water is evacuated, allowing divers to enter the
chamber and to perform dry welding repairs. Wet welding is accomplished
while divers are in the water, using specialized welding rods. Wet welding
is less costly because it eliminates the need to construct an expensive,
customized, single-use enclosure, but historically often resulted in
repairs of unacceptable quality. The Company believes it has been a leader
in improving wet welding techniques and it has satisfied the technical
specifications for customers' wet welded repairs in water depths to 325
feet. The Company's Research and Development Center is an important part
of a research and development consortium led by the Company and the
Colorado School of Mines that conducts research on underwater welding
techniques for major offshore oil and gas operators. The Research and
Development Center includes a hyperbaric facility capable of simulating wet
or dry welding environments for water depths of up to 1,200 feet, where the
specific metals and water depths are simulated so that the welds can be
performed and tested to assure compliance with the customer's technical
specifications.
In December 1996, the Company began diving and ROV operations in Asia
Pacific through its acquisition of certain assets and business of Divcon
International Pty ("Divcon"). The Sub Sea Acquisition increased Global's
diving and ROV capacity in that region. The Sub Sea Acquisition also
established diving and ROV operations for the Company in the Middle East.
Liftboats
Liftboats, also called "jackup boats", are self-propelled, self-
elevating work platforms complete with legs, cranes, and living
accommodations. Once on location, a liftboat hydraulically lowers its legs
until they are seated on the ocean floor and then "jacks up" until the work
platform is elevated above the wave action. Once positioned, the
stability, open deck area, crane capacity, and relatively low cost of
operation makes liftboats ideal work platforms for a wide range of offshore
support services. In addition, the capability to reposition at a work
site, or to move to another location within a short time adds to their
versatility. While the Company continues to time charter the liftboats to
the offshore service industry, it is also using the liftboats in its
pipeline construction and repair, platform installation, inspection,
maintenance, removal, and diving services.
In the fourth quarter of fiscal 1998, Global's liftboat Kingfish
became partially submerged during rough weather in the Gulf of Mexico. The
Company has salvaged the vessel and repair has begun. The Company expects
the Kingfish to be ready for service in the third quarter of fiscal 1999.
Global has begun plans for the construction of a new liftboat. The
Company projects the cost to be approximately $12 million and expects
construction to be complete in the first quarter of fiscal 2000.
Customers
The Company's customers are primarily oil and gas producers and
pipeline companies operating in the Gulf of Mexico and in select
international areas. During fiscal 1998, the Company provided offshore
marine construction services to approximately 215 customers. The Company's
revenues are not dependent on any one customer. Its largest single
customer in any of the three fiscal years ended March 31, 1998, accounted
for 21% of revenues. The level of construction services required by any
particular customer depends on the size of that customer's capital
expenditure budget devoted to construction plans in a particular year.
Consequently, customers that account for a significant portion of revenues
in one fiscal year may represent an immaterial portion of revenues in
subsequent fiscal years. The Company's contracts are typically of short
duration, being completed in one to five months.
Competition
The offshore marine construction industry is highly competitive.
Contracts for work in the Gulf of Mexico are typically awarded on a
competitive bid basis with customers usually requesting bids on projects
one to three months prior to commencement. However, for projects in water
depths greater than 1,000 feet, particularly subsea development projects
and "turnkey" bids (where the Company is responsible for the project from
engineering through hook-up), the elapsed time from bid request to
commencement of work may exceed one year. The Company's professional
marketing staff contacts offshore operators known to have projects
scheduled to insure that the Company has an opportunity to bid for the
projects. Most contracts are awarded on a fixed-price basis, but the
Company also performs work on a cost-plus or day-rate basis, or on a
combination of such bases. The Company attempts to minimize unexpected
costs by excluding from its contract price the costs of unexpected
difficulties and the costs of weather related delays during the winter
months.
Competition for work in the Gulf of Mexico has historically been based
on the location and type of equipment available, ability to deploy such
equipment, the quality of service, safety, and price. In recent years,
price has been the most important factor in obtaining contracts; however,
the ability to deploy improved equipment and techniques, to attract and
retain skilled personnel, and to demonstrate a good safety record have also
been important competitive factors.
Competition for deepwater and ultra-deep water projects in the Gulf of
Mexico is limited primarily to the Company, J. Ray McDermott, S.A.,
Heerema, and Allseas Marine Contractors, S.A, International. With
increasing frequency, international competitors bid and compete for
projects in the Gulf of Mexico. The Company's competitors for shallow water
projects include many small companies, some operating only one barge, who
often compete based solely on price.
Competition for diving or ROV projects in the Gulf of Mexico and Asia
Pacific regions usually involves the Company, Ceanic, Inc., Oceaneering
International, Inc., Cal Dive International, Inc. and a number of smaller
competitors. To compete more effectively, the Company has carefully
developed its reputation as a quality diving and ROV contractor and has
taken a leading role in developing industry-wide diving safety standards.
Competition offshore West Africa and the Middle East includes J. Ray
McDermott, S.A., ETPM, and Saipem. Smaller, shallow water, and inland
swamp and marsh projects may also attract additional West African based
competitors and the very large projects may attract North Sea and worldwide
competitors.
Backlog
As of May 31, 1998, the Company's backlog of construction contracts
supported by written agreements amounted to approximately $175.9 million,
compared to the Company's backlog at May 31, 1997, of $51.9 million. The
Company does not include in its backlog amounts relating to vessel charter
agreements, primarily the charters to CCC, or any portion of contracts to
be performed by CCC, an unconsolidated subsidiary. Management expects
substantially all of its backlog to be performed within twelve months. The
Company does not consider its relative backlog amounts to be a reliable
indicator of future revenues. Most of the Company's projects in the past
several years were awarded and performed within a relatively short period
of time. However, as the Company moves into deeper waters and into
international areas larger backlog amounts are expected because these
projects have longer lead time and earlier awards.
Government Regulation
Many aspects of the offshore marine construction industry are subject
to extensive governmental regulation. In the United States the Company is
subject to the jurisdiction of the United States Coast Guard, the National
Transportation Safety Board and the Customs Service, as well as private
industry organizations such as the American Bureau of Shipping. The Coast
Guard and the National Transportation Safety Board set safety standards and
are authorized to investigate vessel accidents and recommend improved
safety standards, and the Customs Service is authorized to inspect vessels
at will.
The Company is required by various governmental and quasi-governmental
agencies to obtain certain permits, licenses, and certificates with respect
to its operations. The kinds of permits, licenses, and certificates
required in the operations of the Company depend upon a number of factors.
The Company believes that it has obtained or can obtain all permits,
licenses, and certificates necessary to the conduct of its business.
In addition, the Company depends on the demand for its services from
the oil and gas industry and, therefore, the Company's business is affected
by laws and regulations, as well as changing taxes and policies relating to
the oil and gas industry generally. In particular, the exploration and
development of oil and gas properties located on the Outer Continental
Shelf of the United States is regulated primarily by the MMS.
The operations of the Company also are affected by numerous federal,
state, and local laws and regulations relating to protection of the
environment, including, in the United States, the Outer Continental Shelf
Lands Act, the Federal Water Pollution Control Act of 1972, and the Oil
Pollution Act of 1990. The technical requirements of these laws and
regulations are becoming increasingly complex and stringent, and compliance
is becoming increasingly difficult and expensive. However, the Company does
not believe that compliance with current environmental laws and regulations
is likely to have a material adverse effect on the Company's business or
financial statements. Certain environmental laws provide for "strict
liability" for remediation of spills and releases of hazardous substances
and some provide liability for damages to natural resources or threats to
public health and safety. Sanctions for noncompliance may include
revocation of permits, corrective action orders, administrative or civil
penalties, and criminal prosecution. The Company's compliance with these
laws and regulations has entailed certain changes in operating procedures
and approximately $200,000 in expenditures in fiscal 1998. It is possible
that changes in the environmental laws and enforcement policies thereunder,
or claims for damages to persons, property, natural resources, or the
environment could result in substantial costs and liabilities to the
Company. The Company's insurance policies provide liability coverage for
sudden and accidental occurrences of pollution and/or clean-up and
containment of the foregoing in amounts which the Company believes are
comparable to policy limits carried in the marine construction industry.
Because the Company engages in certain activities that may constitute
"coastwise trade" within the meaning of federal maritime regulations, it is
also subject to regulation by the United States Maritime Administration
(MARAD), Coast Guard, and Customs Services. Under these regulations, only
vessels owned by United States citizens that are built and registered under
the laws of the United States may engage in "coastwise trade." Furthermore,
the foregoing citizenship requirements must be met in order for the Company
to continue to qualify for financing guaranteed by MARAD, which currently
exists with respect to certain of its vessels. Certain provisions of the
Company's Articles of Incorporation are intended to aid in compliance with
the foregoing requirements regarding ownership by persons other than United
States citizens.
Factors Influencing Future Results and Accuracy of Forward-Looking
Statements
In this Annual Report and in the normal course of its business, the
Company, in an effort to help keep its shareholders and the public informed
about the Company's operations, may from time to time issue or make certain
statements, either in writing or orally, that are or contain forward-
looking statements, as that term is defined in the U.S. federal securities
laws. Generally, these statements relate to business plans or strategies,
projected or anticipated benefits or other consequences of such plans or
strategies, projected or anticipated benefits from acquisitions made by or
to be made by the Company, or projections involving anticipated revenues,
earnings, or other aspects of operating results. The words "expect,"
"believe," "anticipate," "project," "estimate," and similar expressions are
intended to identify forward-looking statements. The Company cautions
readers that such statements are not guarantees of future performance or
events and are subject to a number of factors that may tend to influence
the accuracy of the statements and the projections upon which the
statements are based, including but not limited to those discussed below.
As noted elsewhere in this report, all phases of the Company's operations
are subject to a number of uncertainties, risks, and other influences, many
of which are outside the control of the Company, and any one of which, or a
combination of which, could materially affect the results of the Company's
operations and whether forward-looking statements made by the Company
ultimately prove to be accurate.
The following discussion outlines certain factors that could affect
the Company's consolidated results of operations for fiscal 1999 and beyond
and cause them to differ materially from those that may be set forth in
forward-looking statements made by or on behalf of the Company.
No Assurance of Successful Management and Maintenance of Growth
The Company has experienced rapid growth, largely through
acquisitions. The Company's future financial results and prospects depend
in large part on its ability to successfully manage and improve the
operating efficiencies and productivity of these acquired operations and
assets. In particular, whether the anticipated benefits of acquired
operations and assets are ultimately achieved will depend on a number of
factors, including the ability of combined companies to achieve
administrative cost savings, general economies of scale, and the ability of
the Company, generally, to capitalize on its combined asset base and
strategic position. Moreover, the ability of Global to continue to grow
will depend on a number of factors, including competition, availability of
attractive acquisition opportunities, ability to obtain and retain
necessary personnel, availability of working capital, and ability to
maintain margins.
Dependence on Activity in the Oil and Gas Industry
The demand for the Company's construction services depends on the
condition of the oil and gas industry, and particularly the capital
expenditures of oil and gas companies in the Gulf of Mexico and in the
other regions it serves. These capital expenditures are influenced by
prevailing oil and gas prices, expectations about future prices, the cost
of exploring for, producing, and delivering oil and gas, the sale and
expiration dates of offshore leases in the United States and overseas, the
discovery rate of new oil and gas reserves in offshore areas, local and
international political and economic conditions, and the ability of oil and
gas companies to access or to generate capital. In recent years, oil and
natural gas prices and the level of offshore drilling and exploration
activity have been extremely volatile. A prolonged decline in such activity
could have a material adverse effect on the Company's revenues and
profitability.
Operating Risks
Offshore construction involves a high degree of operational risk and
is increasingly dependent on large, expensive, special purpose vessels and
equipment. Hazards, such as vessels capsizing, sinking, grounding,
colliding, and sustaining damage from severe weather conditions are
inherent in offshore operations. These hazards can cause personal injury or
loss of life, severe damage to and destruction of property and equipment,
pollution or environmental damage, and suspension of operations. Litigation
arising from such an occurrence may result in the Company being named as a
defendant in lawsuits asserting large claims. The Company maintains such
insurance protection as it deems prudent, including hull insurance on its
vessels. There can be no assurance that any such insurance will be
sufficient or effective under all circumstances or against all hazards to
which the Company may be subject. A successful claim for which the Company
is not fully insured could have a material adverse effect on the Company.
Moreover, no assurance can be given that the Company will be able to
maintain adequate insurance in the future at rates that it considers
reasonable.
International Operations
International operations accounted for approximately 25% and 33% of
the Company's revenues and operating income, respectively, during fiscal
1997 and approximately 23% and 10%, respectively, during fiscal 1998. With
the CCC, Divcon, and Sub Sea acquisitions and the possible relocation of
certain vessels to international markets, the percentage of the Company's
revenues and operating income that is derived from international operations
may increase. The Company's international operations are subject to a
number of risks inherent in any business operating in foreign countries,
including political, social and economic instability, potential vessel
seizure, nationalization of assets, currency restrictions and exchange rate
fluctuations, nullification, modification or renegotiation of contracts,
import-export quotas, and other forms of public and governmental
regulation, all of which are beyond the control of the Company.
Historically, the Company's operations have not been affected materially by
such conditions or events, but as the Company's international operations
expand, the exposure to these risks will also increase. Additionally, the
ability of the Company to compete in international markets may be adversely
affected by foreign governmental regulations that favor or require the
awarding of contracts to local contractors, or by regulations requiring
foreign contractors to employ citizens of, or purchase supplies from, a
particular jurisdiction. Furthermore, the Company's foreign subsidiaries
may face governmentally imposed restrictions from time to time on their
ability to transfer funds to the Company. No predictions can be made as to
what foreign governmental regulations applicable to the Company's
operations may be enacted in the future. Although it is impossible to
predict the nature and the likelihood of any events of these types, if such
an event should occur, it could have a material adverse effect on the
Company's financial condition and results of operations.
During fiscal 1998, the Asia Pacific region experienced widespread
currency devaluation in relation to the United States Dollar. The change in
exchange rates had no significant impact on reporting the financial results
of the region. However, if the Company settles intercompany balances from
the region or sells or liquidates part of a business in the region, the
Company may recognize significant losses on such transactions.
Dependence on Significant Customers and Vessels
As construction activity moves into deeper water in the Gulf of
Mexico, construction projects tend to be larger and more complex than
shallow water projects. As a result, the Company's revenues and profits are
increasingly dependent on a smaller number of contracts with fewer
customers and on its large barges, including the Chickasaw and the
Hercules. In each of the last three fiscal years, one customer has
accounted for 12% or more of the Company's revenues, and the Company has
derived an average of 9% of its annual revenues from pipeline construction
services employing the Chickasaw. While the Company currently insures its
vessels, including the Chickasaw and the Hercules, against property loss
due to a catastrophic marine disaster, mechanical failure, or collision,
the loss of the Chickasaw, the Hercules, or another of the Company's large
barges as a result of such an event, or the loss of a significant customer
due to a sustained decline in deepwater pipelay activities, or competitive
factors, could result in a substantial loss of revenues, increased costs,
and other liabilities and could have material adverse effect on the
Company's operating performance.
Risks of Acquisition Strategy
The Company's growth strategy has emphasized the acquisition of other
offshore marine construction businesses and assets. There can be no
assurance, however, that the Company will be able to continue to identify
attractive acquisition opportunities, obtain financing for acquisitions on
satisfactory terms, or acquire identified targets. In addition, no
assurance can be given that the Company will be successful in integrating
acquired businesses into its existing operations, and such integration may
result in unforeseen operational difficulties or require a disproportionate
amount of management's attention. Future acquisitions may result in the
incurrence of additional indebtedness or the issuance of Common Stock.
Furthermore, there can be no assurance that competition for acquisition
opportunities in the industry will not escalate, thereby increasing the
cost to the Company of making further acquisitions or causing the Company
to refrain from making further acquisitions.
Vessel Construction
Delays in completion of vessel construction and upgrades are not
uncommon and vessel construction involves various other risks including
increases in costs due to unforeseen circumstances or changes in
governmental regulations and contract disputes with the contractor. To the
extent that the Company's strategy relies upon the construction of new
vessels and significant modifications of existing vessels, implementation
of that strategy will be subject to such risks.
Seasonality
Although the Company continues to expand its international operations,
approximately 77% of the Company's revenues in fiscal 1998 were derived
from work performed in the Gulf of Mexico. The offshore construction
industry in the Gulf of Mexico is highly seasonal as a result of weather
conditions and the timing of capital expenditures by oil and gas companies.
Historically, a substantial portion of the Company's services has been
performed during the period from June through November. As a result, a
disproportionate amount of the Company's revenue, gross profit, and net
income has historically been earned during the second (July through
September) and third (October through December) quarters of its fiscal
year. Because of seasonality, full year results are not likely to be a
direct multiple of any particular quarter or combination of quarters. For
example, weighted average revenues earned, gross profit, and net income
contributed during the second and third quarters of each of the past three
fiscal years were 58%, 60%, and 61%, respectively. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Contract Bidding Risks
Due to the nature of the offshore construction industry, a significant
portion of the Company's projects are performed on a fixed-price basis. The
revenue, costs, and gross profit realized on a contract will often vary
from the estimated amount because of changes in offshore job conditions and
variations in labor and equipment productivity from the original estimates.
In addition, during the summer construction season, the Company typically
bears the risk of delays caused by adverse weather conditions, other than
for "named storms." These variations and the risks inherent in the marine
construction industry may result in reduced profitability or losses on
projects.
Percentage-of Completion Accounting
Most of the Company's contracts are completed within 30 days of being
awarded; however, because the Company's revenues are recognized on a
percentage-of-completion basis, based on the ratio of costs incurred to the
total estimated costs at completion, revenues and gross profits for a
project may be adjusted in subsequent reporting periods from those
originally reported in prior periods. To the extent that these adjustments
result in a reduction or elimination of previously reported profits, the
Company would recognize a charge against current earnings that may be
significant depending on the size of the project or the adjustment. See
the Consolidated Financial Statements and Notes thereto included elsewhere
herein.
Dependence on Key Personnel; Hiring and Retention of Employees
The Company's success depends on the continued active participation of
William J. Dore', the Company's founder, Chairman of the Board, President,
and Chief Executive Officer, and certain of the Company's other officers
and key operating personnel. The loss of the services of any one of these
persons could have a material adverse effect on the Company. See
"Executive Officers of Registrant."
The market for skilled workers to meet the Company's expanding needs
has become increasingly tight during the last year as the growth in
offshore exploration and international expansion among exploration and
production companies, drillers, and oil field service firms has continued.
The availability and costs of skilled labor as well as the Company's
ability to retain its current employees as competitors and other businesses
increase their efforts to hire skilled workers could adversely impact the
Company's ability to continue to expand its operations and its
profitability.
Substantial Control by Principal Shareholder
William J. Dore', Chairman of the Board, President and Chief Executive
Officer, beneficially owns approximately 29.9% of the outstanding Common
Stock. As a result, Mr. Dore' is able to exercise substantial influence on
the outcome of certain matters requiring a shareholder vote, including the
election of directors. This may have the effect of delaying, deferring, or
preventing a change in control of the Company.
Competition
The Company's business is highly competitive. Offshore construction
companies operating in the Gulf of Mexico and in the international regions
where the Company operates compete intensely for available projects.
Contracts for the Company's services are generally awarded on a competitive
bid basis, and while customers may consider, among other things, the
availability and capabilities of equipment, and the reputation and
experience of the contractor, intense price competition is a primary factor
in determining which qualified contractor is awarded the job. As the
Company increases the portion of its operations conducted in deeper waters
and internationally, it is encountering additional competitors, many of
whom have greater experience than the Company in such markets. Several of
the Company's competitors and potential competitors are larger and have
greater financial and other resources than the Company. In addition,
increased activity levels in the Gulf of Mexico may attract additional
competitors and equipment to the Gulf of Mexico market.
Regulatory and Environmental Matters
The Company's vessels and operations are subject to and affected by
various types of governmental regulation, including numerous federal,
state, and local environmental protection laws and regulations, which are
becoming increasingly complex, stringent, and expensive. Significant fines
and penalties may be imposed for non-compliance, and certain environmental
laws impose joint and several "strict liability" for remediation of spills
and releases of oil and hazardous substances rendering a person liable for
environmental damage, without regard to negligence or fault on the part of
such person. Such laws and regulations may expose the Company to liability
for the conduct of or conditions caused by others, or for acts of the
Company that were in compliance with all applicable laws at the time such
acts were performed. The Company does not believe that compliance with
current environmental laws or regulations is likely to have a material
adverse effect on the Company's business or financial condition.
Limitation on Foreign Ownership
The Company's Articles of Incorporation contain limitations on the
percentage of outstanding Common Stock and other classes of voting
securities that can be owned by persons who are not United States citizens
within the meaning of certain statutes relating to the ownership of United
States flagged vessels. At present, applying the statutory requirements,
the Articles of Incorporation would prohibit more than 23% of the
outstanding Common Stock from being owned by persons other than United
States citizens. The restrictions imposed by the Company's Articles of
Incorporation may at times preclude United States citizens from
transferring their Common Stock to persons other than United States
citizens. This may restrict the available market for resale of shares of
Common Stock and for the issuance of shares by the Company.
Patents
The Company owns or is the licensee of a number of patents in the
United States and Great Britain. The Company relies on a combination of
patents and trade secrets to protect its proprietary technologies. In the
1987 acquisition of Sea-Con Services, Inc. pipelaying assets, the Company
acquired the patents to certain pipe burying technology and an exclusive
license to certain wet welding technology. Patents under which the Company
is a non-exclusive licensee protect certain features of the Chickasaw, and
the Company's portable reels. In the fiscal 1997 acquisition of Norman
Offshore Pipelines, Inc. the Company acquired the patents to certain pipe
burying technology, called the Mudbug, which permits pipelay and bury to
complete in a single pass. The licenses continue until the expiration of
the underlying patents, which will occur at various times to 2007. In
addition, the Company has developed certain proprietary underwater welding
techniques and materials.
The Company believes that its customer relationships, reputation,
technical knowledge, experience, and quality equipment are more important
to its competitive position than its patents and licenses. The Company's
business is not materially dependent on any one or more of its licenses or
patents, although the loss of license or patent protection for the
Company's reel barge, its seaplow, or its pipeburying technology could have
a material adverse effect on the Company's competitive position.
Employees
The Company's work force varies based on the Company's workload at any
particular time. During fiscal 1998 the number of Company employees ranged
from a low of 1,132 to a high of 1,580, and as of May 31, 1998, the Company
had 1,563 employees. None of the Company's employees are covered by a
collective bargaining agreement. The Company believes that its relationship
with its employees is satisfactory. In addition, many workers are hired on
a contract basis and are available to the Company on short notice.
ITEM 2. PROPERTIES
The Company owns a fleet of 23 construction barges, 22 liftboats, 24
DSVs and OSVs, and six other support vessels. Nineteen of the Company's
construction barges (including the Hercules currently being upgraded to
include pipelay capability) are designed to perform more than one type of
construction project which enables these combination barges to sustain a
higher utilization rate. A listing of the Company's significant vessels
along with a brief description of the capabilities of each is presented on
page 17.
The Company acquired the Hercules, a 400-foot barge with a 2,000 ton
crane capable of performing revolving lifts up to approximately 1,600 tons,
for $10.9 million in late November, 1995. The Company began an upgrade of
the Hercules into a combination heavy lift and deepwater pipelay vessel in
November 1996. Scheduled completion for conventional pipelay and reel
pipelay capabilities is June 1998 and December 1998, respectively. The
current estimated costs of the full upgrade is $104.0 million.
In addition to the dedicated pipelay reel on the Chickasaw, which has
a capacity ranging from 45 miles of 4.5-inch diameter pipe to 3.8 miles of
12.75-inch diameter pipe, the Company owns four portable pipelay reels,
which can be mounted on the deck of its barges for pipelay by the reel
method or used as additional capacity on the Chickasaw. The upgrade of the
Hercules includes a reel system similar in design to the Chickasaw's, but
with much greater capacity. Based upon current engineering, when
completed, the Hercules reel will be capable of spooling up to 83 miles of
6 inch diameter pipe, 23 miles of 12 inch diameter pipe, or 11 miles of 18
inch pipe. The Company owns and operates two bury plows, which are capable
of burying pipe up to 18 inches in diameter, and four jetting sleds, which
are capable of burying pipe up to 36 inches in diameter, and three Mudbugs,
for burying pipe simultaneous with the pipeline installation.
Global's Pioneer is a SWATH (Small Waterplane Area Twin Hull) vessel
that provides support services in water depths to 8,000 feet. Use of the
Pioneer design reduces weather sensitivity, allowing the vessel to
continue operating in up to 12 foot seas and remain on site in up to 20
foot seas. The vessel is able to install, maintain, and service subsea
completions, has saturation diving capabilities, and is equipped for
abandonment operations, pipeline installation support, and other services
beyond the capabilities of conventional DSVs. The Pioneer's current base
is the Gulf of Mexico.
During fiscal 1998, the major assets acquired in the Sub Sea
Acquisition included three construction barges, four liftboats, and one
dive support vessel based in the United States, four support vessels in the
Middle East, and support vessels and remotely operated vehicles ("ROV")
based in Asia Pacific. Also during fiscal 1998, the Company purchased the
Seminole (formerly the GAL 900), a 440 foot long self-propelled combination
pipelay and derrick barge. The Seminole's current base is in the Middle
East.
In April 1998, the Company again added to its fleet with the
acquisition of the pipelay/derrick barges DLB 332 (Teknik Perdana) and DLB
264 (Teknik Padu) from TL Marine Sdn. Bhd. The purchase price was $47.3
million. The DLB 332 is 352 feet by 100 feet, has an 800 ton lift capacity,
and is capable of being outfitted to lay up to 60 inch diameter pipe. The
DLB 264 is 400 feet by 100 feet, has an 1,100 ton lift capacity, and is
capable of laying up to 60 inch diameter pipe. Asia Pacific is the current
base for these two vessels.
The Company operates 22 liftboats, 16 acquired in 1994, two
constructed in fiscal 1997 and four included in the Sub Sea acquisition.
Liftboats are self-propelled, self-elevating vessels which can efficiently
support offshore construction and other services, including dive support
and salvage operations in water depths up to 180 feet. The liftboat,
Kingfish is currently out of service for repairs but is expected to be back
in service during the third quarter of fiscal 1999.
All of the Company's barges and vessels are owned by the Company, and
seven are subject to ship mortgages. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources." Under governmental regulations, the Company's
insurance policies, and certain of the Company's financing arrangements,
the Company is required to maintain its barges and vessels in accordance
with standards of seaworthiness and safety set by government regulations or
classification organizations. The Company maintains its fleet to the
standards for seaworthiness, safety, and health set by the American Bureau
of Shipping.
The Company also owns 11 operational saturation diving systems. One
of the units is installed in the New Iberia Research and Development Center
and used to support welding research as well as offshore operations. The
Company's saturation systems range in capacity from four to fourteen
divers. Two of the saturation systems are capable of supporting dives as
deep as 1,500 feet. Each saturation system consists of a diving bell for
transporting the divers to the sea floor and pressurized living quarters.
The systems have surface controls for measuring and mixing the specialized
gasses that the divers breathe and connecting hatches for entering the
diving bell and providing meals and supplies to the divers.
In the normal course of its operations, the Company also leases or
charters other vessels, such as tugboats, cargo barges, utility boats, and
dive support vessels.
The Company's corporate headquarters are located in Lafayette,
Louisiana, in an office building of approximately 27,800 square feet owned
by the Company. In addition, the Company has a training facility of
approximately 4,000 square feet on approximately 25 acres of land just
south of Lafayette, which are leased through December 1998 from the
Company's principal shareholder, Mr. William J. Dore'. The lease also
includes an office building of approximately 10,000 square feet and a
storage facility of approximately 7,000 square feet.
The Company leases approximately 44,950 square feet of office space in
Houston, Texas. The offices house the Company's international,
engineering, and marketing headquarters, and other administrative
functions. The lease expires in 2003.
The Company owns approximately 65 acres of land on the Houma
Navigational Channel near Houma, Louisiana, which serves as the
headquarters for the Company's pipeline and derrick services and includes a
facility for welding, coating, testing, and handling increments of 1,700-
foot continuous lengths of pipe for spooling the Chickasaw. The Company
purchased this property in June 1998, pursuant to a lease agreement.
The Company also leases approximately 32 acres in Amelia, Louisiana,
which serves as the operations facility for the Company's derrick
operations. The facility has bulkheaded water frontage for the Company's
derrick barges. The lease for this facility expires in April 1999.
The Company's diving, special services, coastal and transportation
operations are headquartered on approximately 36 acres at the Port of
Iberia, near New Iberia, Louisiana, owned by the Company. Additional
bulkheads, work shops, storage space and offices were added during fiscal
1996 to this facility which provides direct access to the Gulf of Mexico
for the Company's liftboat and dive support vessels. The New Iberia
location includes the Company's Research and Development Center, which
houses a hyperbaric welding facility and a conference and training
facility.
The Company also leases an office in New Orleans, Louisiana and
leases other offices and facilities for support of its operations in West
Africa, the Middle East, and Asia Pacific.
The Company owns 625 acres near Carlyss, Louisiana and is constructing
a deepwater support facility and pipebase. When completed, the location
will serve as the headquarters of the Company's offshore construction
operations. The facility will be capable of accommodating the Company's
deep-waterdraft vessels and pipe-spooling for the Chickasaw and Hercules.
The Company plans to replace the existing facilities in Houma and Amelia,
Louisiana with the Carlyss facility. Estimated completion is in the second
quarter of fiscal 2000 at a total cost of approximately $37 million, $28
million of which has been financed with Port Improvement Revenue Bonds.
Global Industries, Ltd.
Listing of Construction Barges and Swath Vessel
<TABLE>
<CAPTION>
Pipelay
Derrick Max Max
Max. Pipe Water Calendar Living
Length Lift Dia. Depth Year Quarter
Vessel Type (Feet)(Tons)(Inches)(Feet)Acquired Capacity
----------- -------------------------------------------
Construction
Barges:
<S> <C> <C> <C> <C> <C> <C> <C>
Seminole Pipelay/derrick 424 800 48.00 1,500 1997 220
Comanche Pipelay/derrick 400 1,000 48.00 1,500 1996 223
Shawnee(1) Pipelay/derrick 400 860 48.00 1,500 1996 272
Hercules(2) Derrick 400 2,000 -- -- 1995 191
Iroquis(1)(3)(5) Pipelay/derrick 400 250 60.00 1,000 1997 259
Cheyenne Pipelay/bury/derrick 350 800 36.00 1,500 1992 190
DB-3 Derrick 350 800 -- -- 1992 100
Cherokee Pipelay/derrick 350 925 36.00 1,500 1990 183
Sara Maria(6) Derrick/accommodation 350 550 -- -- 1996 100
Mohawk(1) Pipelay/bury/derrick 320 600 48.00 700 1996 200
Seneca(1)(4)(5) Pipelay/bury 290 150 42.00 1,000 1997 126
Chickasaw Pipelay reel/derrick 275 160 12.75 6,000 1990 70
Delta 1 Pipelay/bury/derrick 270 25 14.00 200 1996 70
Tonkawa Derrick/bury 250 175 -- 400 1990 73
Sea Constructor Pipelay/bury/derrick 250 200 24.00 400 1987 75
Navajo Pipelay/derrick 240 150 10.00 600 1992 129
SubSea
Contructor(5) Pipelay/bury 240 150 16.00 150 1997 64
G/P 37 Pipelay/bury/derrick 188 140 16.00 300 1981 58
Pipeliner V Pipelay/bury/derrick 180 25 14.00 200 1996 60
G/P 35 Pipelay/bury/derrick 164 100 16.00 200 1978 46
Mad II Pipelay/bury/derrick 135 45 22.00 50 1975 33
DLB 332(7) Pipelay/derrick 351 750 60.00 1,000 1998 208
DLB 264(7) Pipelay/derrick 397 1,000 60.00 1,000 1998 220
SWATH Vessel:
Pioneer Multi-task 200 50 -- -- 1996 57
</TABLE>
(1) Currently chartered to CCC.
(2) Currently being equipped for conventional and reel method pipelay.
Completion for conventional pipelay scheduled for June of 1998.
Completion for reel method pipelay scheduled for December of 1998.
(3) Formerly, DLB 323.
(4) Formerly, LB 278.
(5) Acquired as part of the acquisition of assets from Sub Sea
International, Inc.
(6) Owned and operated by CCC.
(7) Acquired April 1998 subsequent to fiscal year end.
ITEM 3. LEGAL PROCEEDINGS
The Company's operations are subject to the inherent risks of offshore
marine activity including accidents resulting in the loss of life or
property, environmental mishaps, mechanical failures, and collisions. The
Company insures against these risks at levels consistent with industry
standards. The Company believes its insurance should protect it against,
among other things, the cost of replacing the total or constructive total
loss of its vessels. The Company also carries workers' compensation,
maritime employer's liability, general liability, and other insurance
customary in its business. All insurance is carried at levels of coverage
and deductibles that the Company considers financially prudent.
The Company's services are provided in hazardous environments where
accidents involving catastrophic damage or loss of life could result, and
litigation arising from such an event may result in the Company being named
a defendant in lawsuits asserting large claims. To date, the Company has
only been involved in one such catastrophic occurrence when a platform
owned by a customer exploded while the Company was doing underwater
construction work. The settlements related to the accident totaled more
than $23.0 million, but the Company's uninsured expenditure on the
settlements was insignificant. Although there can be no assurance that the
amount of insurance carried by Global is sufficient to protect it fully in
all events, management believes that its insurance protection is adequate
for the Company's business operations. A successful liability claim for
which the Company is underinsured or uninsured could have a material
adverse effect on the Company.
The Company is involved in various routine legal proceedings primarily
involving claims for personal injury under the General Maritime Laws of the
United States and Jones Act as a result of alleged negligence. The Company
believes that the outcome of all such proceedings, even if determined
adversely, would not have a material adverse effect on its business or
financial statements.
In the first quarter of fiscal 1998, the Company filed a demand for
arbitration of its disputes with a shipyard. The demand concerns a
contract for modification and conversion of the Hercules. The arbitration
demand includes disputes over the claims and change orders for extra work
by the shipyard. The Company is seeking damages approximating $4.0 million
for the shipyard's failure to perform the work timely. The shipyard has
filed a counterclaim seeking an additional $5.0 million for the original
contract and change order work, and approximately $4.0 million in damages
for unabsorbed overhead, disruption, delay, and post-termination costs.
The Company does not believe the shipyard's claims are valid and intends to
vigorously defend against them and seek recovery of all amounts that it may
recover. Management does not believe that the ultimate resolution of the
claims will have a material adverse impact on the Company's consolidated
financial statements. However, the dispute has resulted in delays in
completion of the modification and reconstruction and increased
expenditures for the completion.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM (Unnumbered). EXECUTIVE OFFICERS OF THE REGISTRANT
(Provided pursuant to General Instruction G)
All executive officers named below, in accordance with the By-Laws,
are elected annually and hold office until a successor has been duly
elected and qualified. The executive officers of the Company as of June 1,
1998, follow:
Name Age Position
William J. Dore' 55 Chairman of the Board of Directors,
President and Chief Executive Officer
James J. Dore' 44 Vice President, Global Industries
Offshore, Diving and Special Services
R. Clay Etheridge 43 Vice President, Global Offshore
International, Operations
Michael J. McCann 51 Vice President, Chief Financial
Officer, and Director
Lawrence C. McClure 43 Vice President, Global Industries
Offshore, Operations
Andrew L. Michel 55 Vice President, Global Industries
Offshore, Deepwater Technology
Mr. William J. Dore', the Company's founder, has been Chairman of the
Board of Directors, President, and Chief Executive Officer since 1973. Mr.
Dore' has over twenty-five years of experience in the diving and marine
construction industry, is a past President of the Association of Diving
Contractors, and serves on the executive committee of the Board of
Directors of the National Ocean Industry Association. Mr. Dore' also serves
as a director for Noble Drilling Corporation.
Mr. James Dore', with over seventeen years of service with the Company,
is Vice President, Global Industries Offshore - Diving and Special
Services. He held a number of manager positions with responsibility for
marketing, contracts and estimating, and diving operations. Mr. Dore' was
named Vice President, Marketing in March 1993, Vice President, Special
Services in November 1994 and Vice President, Diving and Special Services
in February 1996. Mr. Dore' is the brother of Mr. William J. Dore'.
Mr. Etheridge joined the Company in March of 1997 as Vice President,
Global Offshore International, Operations. He was employed as Vice
President of Marine Operations for Offshore Pipelines, Inc. from July 1987
until OPI was purchased by J. Ray McDermott S.A. at which time he became
Vice President and General Manager - Far East Division.
Mr. McCann was named Vice President, Chief Financial Officer and
Treasurer in February, 1998. In February, 1998 Mr. McCann was also
appointed as a Director of the Company. He joined the Company in July,
1996 as Vice President and Chief Administrative Officer. Prior to joining
Global, he served 18 years with Sub Sea International, Inc. where he was
most recently the Chief Financial Officer and Controller.
Mr. McClure joined the Company in January 1989 as Assistant Operations
Manager and was promoted to Manager of Estimating and Engineering in
February 1992. In February 1995 he was named Vice President, Estimating
and Engineering. Mr. McClure was named Vice President, Offshore
Construction, in February 1996. Mr. McClure has over eighteen years of
experience in the offshore construction business.
Mr. Michel joined the Company as Vice President, Global Industries
Offshore - Deepwater Technology in December 1995 in connection with the
Company's acquisition of ROV Technologies, Inc. Mr. Michel founded ROV
Technologies in 1986 and served as its only President. Mr. Michel has 30
years of experience in underwater electronics and remote intervention
services.
PART II
ITEM 5.MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
The Company's common stock is traded on the Nasdaq National Market
System under the symbol "GLBL". The following table presents for the
periods indicated, the high and low sales prices per share of the Company's
Common Stock (adjusted to give retroactive effect for the two-for-one
common stock splits effective August 28, 1996 and October 27, 1997).
High Low
Fiscal Year 1998
First quarter $ 11.688 $ 8.938
Second quarter 20.688 11.563
Third quarter 23.500 13.000
Fourth quarter 21.438 11.375
Fiscal Year 1997
First quarter $ 8.500 $ 5.250
Second quarter 9.125 6.125
Third quarter 10.375 7.625
Fourth quarter 12.938 8.625
As of May 31, 1998, there were approximately 1,026 holders of record
of Common Stock.
The Company has never paid cash dividends on its Common Stock and does
not intend to pay cash dividends in the foreseeable future. The Company
currently intends to retain earnings, if any, for the future operation and
growth of its business. Certain of the Company's financing arrangements
restrict the payment of cash dividends under certain circumstances. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data presented below for the five fiscal years
ended March 31, 1998, should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
and the Consolidated Financial Statements and Notes to Consolidated
Financial Statements included elsewhere in this Annual Report.
Year Ended March 31,
1998(1) 1997 1996 1995 1994
------- ---- ---- ---- ----
(in thousands, except per share data)
Revenues $379,901 $229,142 $148,376 $122,704 $80,646
Gross profit 114,656 63,253 41,015 38,072 24,227
Net income 57,303 33,932 20,993 19,355 10,735
Net income per
share (2)(3)
Basic 0.63 0.44 0.28 0.28 0.17
Diluted 0.61 0.42 0.27 0.27 0.17
Weighted average
common shares
outstanding (2)(3)
Basic 91,110 77,746 75,624 70,343 62,278
Diluted 93,872 80,747 76,751 70,923 62,611
Total assets (4) 625,367 422,687 202,526 160,228 80,392
Working capital(4) 77,472 103,727 34,264 54,557 23,160
Long-term debt,
total (4) 146,993 43,213 22,192 22,822 2,182
________________
(1) On July 31, 1997, the Company acquired certain business operations and
assets of Sub Sea International, Inc. and certain of its subsidiaries
("Sub Sea"). The results of operation of the Sub Sea Acquisition are
included from the date of the acquisition. See Note 13 of the Notes
to Consolidated Financial Statements.
(2) All amounts have been adjusted for all stock splits effected through
October 27, 1997.
(3) The Company adopted SFAS 128 and restated prior years' net income per
share amounts as required. See Note 1 of the Notes to Consolidated
Financial Statements.
(4) As of the end of the period.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion of the Company's financial condition, results
of operations, liquidity, and capital resources should be read in
conjunction with the Consolidated Financial Statements and the Notes to
Consolidated Financial Statements included elsewhere in this Annual Report.
Although the Company has been expanding its international operations,
approximately 73% of the Company's revenues in fiscal 1997 and 77% in
fiscal 1998 were derived from work performed in the Gulf of Mexico. The
offshore marine construction industry in the Gulf of Mexico is highly
seasonal as a result of weather conditions and the timing of capital
expenditures by oil and gas companies. Historically, a substantial portion
of the Company's services has been performed during the period from June
through November. As a result, a disproportionate portion of the Company's
revenues, gross profit, and net income generally is earned during the
second (July through September) and third (October through December)
quarters of its fiscal year. Because of seasonality, full year results are
not likely to be a direct multiple of any particular quarter or combination
of quarters. The following table documents the seasonal nature of the
Company's operations by presenting the percentage of annual revenues,
gross profit, and net income contributed during each fiscal quarter for the
past three fiscal years and the three year weighted average for such
periods.
Quarter Ended
June 30, Sept. 30, Dec. 31, March 31,
-------- --------- -------- ---------
Revenues:
Fiscal 1998 16% 29% 32% 23%
Fiscal 1997 22 31 25 22
Fiscal 1996 21 31 22 26
Three year weighted 19 30 28 23
average
Gross profit:
Fiscal 1998 18% 33% 28% 21%
Fiscal 1997 20 34 24 22
Fiscal 1996 21 38 23 18
Three year weighted 19 35 25 21
average
Net income:
Fiscal 1998 18% 34% 29% 19%
Fiscal 1997 19 37 24 20
Fiscal 1996 20 39 20 21
Three year weighted 19 37 24 20
average
Results of Operations
The following table sets forth, for the periods indicated, statement
of operations data expressed as a percentage of revenues.
Fiscal
1998 1997 1996
------ ------ ------
Revenues 100.0% 100.0% 100.0%
Cost of revenues (69.8) (72.4) (72.4)
------ ------ ------
Gross profit 30.2 27.6 27.6
Equity in net earnings
(loss) of unconsolidated
affiliate (0.4) -- --
Selling, general and
administrative expenses (5.9) (6.6) (8.2)
------ ------ ------
Operating income 23.9 21.0 19.4
Interest expense (0.6) (0.6) (0.1)
Other income, net 0.9 0.7 1.0
------ ------ ------
Income before income taxes 24.2 21.1 20.3
Provision for income taxes (9.1) (6.3) (6.2)
------ ------ ------
Net income 15.1 14.8 14.1
====== ====== ======
The Company's results of operations reflect the level of offshore
construction activity in the Gulf of Mexico and West Africa for all years
and the Company's expansion through acquisitions in Asia Pacific and the
Middle East during fiscal 1997 and 1998. The results also reflect the
Company's ability to win jobs through competitive bidding and manage won
jobs to successful completion. The level of offshore construction activity
is principally determined by three factors: first, the oil and gas
industry's ability to economically justify placing discoveries of oil and
gas reserves on production; second, the oil and gas industry's need to
clear all structures from the lease once the oil and gas reserves have been
depleted; and third, weather events such as major hurricanes.
Fiscal 1998 Compared to Fiscal 1997
Revenues. Revenues for fiscal 1998 of $379.9 million were 66% higher than
fiscal 1997 revenues of $229.1 million. The increase in revenues largely
resulted from stronger domestic activity and pricing and the Company's
expansion through acquisitions, and was partially offset by lower revenues
from West Africa. Recent acquisitions that contributed to increased fiscal
1998 revenues included (i) Norman Offshore Pipelines, Inc. in June 1996,
(ii) the assets and business of Divcon in Asia Pacific in December 1996,
(iii) two large combination pipelay and derrick barges from J. Ray
McDermott, S. A. in December 1996, and (iv) certain business operations and
assets of Sub Sea International, Inc. in the Gulf of Mexico, Asia Pacific,
and the Middle East in July 1997. Barge days employed during fiscal 1998
improved to 2,875 compared to 1,783 days employed in the prior fiscal year.
The increase was largely due to increased domestic pipelay activity levels,
barge days relating to the charters to CCC, and activities of acquired
barges in the Gulf of Mexico and the Middle East. Liftboat, DSV, and OSV
days employed in fiscal 1998 of 9,186 days were significantly higher than
the 5,374 days employed in fiscal 1997. Increased domestic activity and the
acquisition of 13 DSVs and OSVs and four liftboats during the year (all
included in the Sub Sea Acquisition) resulted in the increase. Diver days
employed improved from 23,936 days in fiscal 1997 to 44,121 days in fiscal
1998. The diver day increase was a result of higher domestic activity
combined with additional days resulting from the Divcon and Sub Sea
acquisitions.
Depreciation and Amortization. Depreciation and amortization, including
amortization of drydocking costs, for fiscal 1998 was $29.6 million
compared to the $17.7 million recorded in fiscal 1997. The 67% increase
was principally attributable to increased employment of the Company's
larger construction barges (depreciated on a units-of-production basis) and
increases in the Company's fleet through construction, upgrades, and
acquisitions, and was partially offset by lower employment of the Cheyenne
and the Hercules (both depreciated on a units-of-production basis).
Gross Profit. For fiscal 1998, the Company had gross profit of $114.7
million compared with $63.3 million for fiscal 1997. The increase was
largely the result of increased domestic activity and higher pricing and
the Company's expansion through acquisitions, and was partially offset by
lower gross profit from West Africa. Gross profit as a percentage of
revenues in fiscal 1998 was 30.2% compared to the gross profit percentage
earned during fiscal 1997 of 27.6%. Higher fiscal 1998 margins in the Gulf
of Mexico were partially offset by lower gross profit margins earned in
Asia Pacific and the Middle East. Cost of revenues for fiscal 1998 includes
an accrual of $3.5 million for retirement and incentive compensation
expense, as compared to a provision of $2.5 million a year earlier.
Selling, General, and Administrative Expenses. While selling, general, and
administrative expenses for fiscal 1998 of $22.5 million were 49% higher
than the $15.1 million reported in fiscal 1997, as a percentage of revenues
they decreased to 5.9% from 6.6%. The increase is primarily due to the
Company's business expansion including expansion to the Asia Pacific and
Middle East regions. The fiscal 1998 expense provision for retirement and
incentive compensation plan was $5.0 million, of which $1.5 million was
included in selling, general, and administrative expenses. In the prior
year, the Company provided for $3.6 million of such expenses with $1.1
million included in selling, general, and administrative expenses.
Interest Expense and Other Income and Expense. Interest expense was $2.2
million net of capitalized interest in fiscal 1998, compared to $1.4
million in fiscal 1997 principally due to higher average balances
outstanding. Other income in fiscal 1998 was $3.4 million compared to the
$1.7 million reported in fiscal 1997.
Net Income. Net income for fiscal 1998 of $57.3 million was 69% higher
than the $33.9 million recorded for fiscal 1997. Diluted net income per
share of $0.61 increased 45% from fiscal 1997 net income per share of
$0.42, as average diluted shares increased 16%. The Company's effective
tax rate for fiscal 1998 was 37.5%, compared to 30.0 % for fiscal 1997,
reflecting lower profits from low-tax international areas, and thus, a
higher effective tax rate.
Fiscal 1997 Compared to Fiscal 1996
Revenues. Revenues for fiscal 1997 of $229.1 million were 54% higher than
fiscal 1996 revenues of $148.4 million, with strong contributions from
international operations, diving, liftboats, derrick services and coastal
pipelay. Revenues from West Africa improved to $57.4 million, up from
$33.6 million in nine months of fiscal 1996. In the Gulf of Mexico,
pipeline construction activity increased from the prior year, and, largely
due to the addition of coastal pipeline services and the Norman Offshore
Pipelines, Inc. acquisition, barge days employed improved 55%, from 1,150
days in fiscal 1996 to 1,783 days in fiscal 1997. Competition continued to
intensify as additional barges relocated to the Gulf of Mexico and competed
for pipeline installation projects. Liftboat, DSV, and OSV days employed
in fiscal 1997 of 5,374 days were significantly higher than the 4,076 days
employed in fiscal 1996, as a result of increased activity and the addition
of two DSV's and two liftboats during the year. Diver days employed
improved 118%, from 10,982 days in fiscal 1996 to 23,936 days in fiscal
1997, as higher activity was combined with additional days resulting from
the Norman and Divcon acquisitions.
Depreciation and Amortization. Depreciation and amortization, including
amortization of drydocking costs, for fiscal 1997 was $17.7 million
compared to the $11.1 million recorded in fiscal 1996. The increase of 59%
was principally attributable to depreciation on the Cheyenne and the
Hercules (both of which are depreciated on a units-of-production basis),
and higher dry-dock amortization amounts.
Gross Profit. Gross profit, the excess of revenues over the cost of
revenues, including depreciation and amortization charges, for fiscal 1997
of $63.3 million was 54% higher than the $41.0 million reported for fiscal
1996. Expressed as a percentage of revenues, gross profit in fiscal 1997
of 27.6% was the same as that reported in fiscal 1996, as improved margins
from higher activity levels were offset by the cost burden of building the
operating infrastructure to support additions to the operating fleet and by
lower margins on fabrication and procurement portions of turnkey contracts
in West Africa.
Selling, General, and Administrative Expenses. While selling, general, and
administrative expenses for fiscal 1997 of $15.1 million were 24% higher
than the $12.2 million reported in fiscal 1996, as a percentage of revenues
it decreased to 6.6% from 8.2%. Most of the increase in selling, general,
and administrative expense was attributable to staff additions made to
support expanding operations. Fiscal 1997 operating results include a $3.6
million provision relating to the Company's incentive compensation and
employee retirement plan, the same as in fiscal 1996. Of the fiscal 1997
and fiscal 1996 provisions, $2.5 million was charged to cost of revenues
and $1.1 million included in selling, general, and administrative expenses.
Interest Expense and Other Income and Expense. Interest expense was $1.4
million net of capitalized interest in fiscal 1997, compared to $0.2
million in fiscal 1996. Other income in fiscal 1997 of $1.7 million was
comparable to the $1.5 million reported in fiscal 1996. The changes in
interest expense and interest income occurred as heavy capital expenditures
in fiscal 1997 reduced the surplus funds available for short-term
investments during part of the year, while the net proceeds of an equity
offering completed in February 1997 added to surplus funds available for
the remainder of the year.
Net Income. Net income for fiscal 1997 of $33.9 million was 61% higher
than the $21.0 million recorded for fiscal 1996, while diluted net income
per share of $0.42 increased 56% from fiscal 1996 diluted net income per
share of $0.27, as average shares outstanding increased 5%. The Company's
effective tax rate for fiscal 1997 remains substantially consistent with
fiscal 1996.
Liquidity And Capital Resources
The Company's operations generated cash flow of $91.3 million during
fiscal 1998. Cash from operations, together with $106.2 million provided
by financing activities, funded investing activities of $242.1 million.
Investing activities consisted principally of (i) capital expenditures,
(ii) the Sub Sea Acquisition, (iii) net receipts on advances to CCC, (iv)
dry-docking costs, and (v) the placement of Lake Charles Harbor and
Terminal District Port Improvement Revenue Bonds proceeds in Escrow, offset
by the release from escrow of the 1996 MARAD-guaranteed Title XI bond
proceeds. Funds provided by financing activities principally represent
proceeds from the sale of the Port Improvement Revenue Bonds and net
borrowings under the Company's credit agreement with a syndicate of
commercial banks. Working capital decreased $26.2 million during fiscal
1998 from $103.7 million at March 31, 1997, to $77.5 million at March 31,
1998.
Capital expenditures during fiscal 1998 aggregated $122.3 million and
included the acquisition of the Seminole (previously the GAL 900),
continued construction on the upgrade of the Hercules, and the start of
construction of the Carlyss deepwater support facility and pipebase. Also
during the fiscal year, the Company settled the previously disclosed
litigation with Aker Gulf Marine on the construction of the Pioneer. The
settlement costs have been included in the cost of the vessel with no
current charge to earnings. The Company does not expect the additional
cost of the vessel to have a significant impact on future results.
The Company estimates that the cost to complete capital expenditure
projects in progress at March 31, 1998, will be approximately $60 million
all of which is expected to be incurred during fiscal 1999. Scheduled
completion of the addition of conventional pipelay capability and dynamic
positioning to the Hercules is during June of 1998. The scheduled
completion of the addition of reel pipelay capability to the Hercules is
during the Fall of 1998. The estimated costs to complete the Hercules
upgrades are approximately $25 million, which is in addition to the
approximately $78.5 million incurred through March 31, 1998.
The Company is constructing a deepwater support facility and pipebase
near Carlyss, Louisiana. The Company plans to replace the existing
facilities in Houma and Amelia, Louisiana with the Carlyss facility.
Estimated completion is the second quarter of fiscal 2000 at a cost of
approximately $37 million, including approximately $8.5 million incurred
through March 31, 1998. Tax exempt revenue bonds issued by the Lake
Charles Harbor and Terminal District will finance approximately $28 million
of the construction. The bonds bear interest at a variable rate, which was
3.8% at March 31, 1998, and mature on November 1, 2027.
Long-term debt outstanding at March 31, 1998, (including current
maturities), includes $40.0 of Title XI bonds, the $28.0 million of Lake
Charles Harbor and Terminal District bonds, and $78.0 million drawn against
the Company's revolving line of credit.
The Company's Title XI bonds mature in 2003, 2005, 2020, and 2022.
The bonds carry interest rates of 9.15%, 8.75%, 8.30% and 7.25% per annum,
respectively, and require aggregate semi-annual payments of $0.9 million,
plus interest. The agreements pursuant to which the Title XI bonds were
issued contain certain covenants, including the maintenance of minimum
working capital and net worth requirements. If not met, additional
covenants result that restrict the operations of the Company and its
ability to pay cash dividends. The Company is currently in compliance with
these covenants.
The Company maintains a revolving line of credit under a loan
agreement ("Restated Credit Agreement") with a syndicate of commercial
banks. Effective April 8, 1998, an amendment to the Restated Credit
Agreement increased the available credit from $160.0 million to $200.0
million. The revolving credit facility is available until June 30, 2000, at
which time the amount available reduces to zero over two years. Borrowings
under the facility bear interest at fluctuating rates, are payable on July
30, 2002, and have subsidiary guarantees and stock pledges as security.
The amount of available credit decreases by (i) borrowings outstanding
($78.0 million at March 31, 1998), (ii) outstanding letters of credit issued
under the Restated Credit Agreement ($29.9 million at March 31, 1998). and (iii)
amounts outstanding under a separate credit agreement between the banks and
CCC, limited to a maximum of $35.0 million ($27.4 million at March 31,
1998). For continuing access to the revolving line of credit, the Company
must remain in compliance with the covenants of the the Restated Credit
Agreement, including covenants relating to the maintenance of certain
financial ratios. The Company is currently in compliance with these
covenants. At May 31, 1998, $113.0 million was outstanding under the
Restated Credit Agreement.
The Company has guaranteed certain indebtedness and commitments of CCC
approximating $27.4 million at March 31, 1998. The Company has also given
performance and currency guarantees banks for CCC debt totaling $22.0 million
at March 31, 1998, related to project financings. Under the terms of the
performance and currency guarantees, the banks may enforce the guarantees
(i) if the customer does not pay CCC because neither CCC nor the guarantors
performed the contracts that define the projects or (ii) if, after
converting contract payments from Mexican Pesos to United States Dollars,
funds from the project are insufficient to pay the sums due. Separately and
subsequent to March 31, 1998, the Company gave a contingent guarantee to a
finance company whereby, contingent upon CCC forfeiting contracts to
Mexico's national oil company due to cancellation or non-renewal, the
Company's guarantee becomes effective. The contingent guaranty amount is
$17.5 million.
Global recently reached agreement in principal with its partner to
restructure its joint venture in Mexico, CCC Fabricaciones y
Construcciones, S.A. de C.C. ("CCC"), to sell or spin-off to its partner
CCC's onshore construction and fabrication business and assets. Expected
to be completed in the near future, this restructuring will permit CCC to
focus on its offshore construction business. Global has a 49% ownership
interest in CCC and charters vessels and other equipment to CCC.
In the first quarter of fiscal 1998, the Company filed a demand for
arbitration of its disputes with a shipyard. The demand concerns a
contract for modification and conversion of the Hercules. The arbitration
demand includes disputes over the claims and change orders for extra work
by the shipyard. The Company is seeking damages approximating $4.0 million
for the shipyard's failure to perform the work timely. The shipyard has
filed a counterclaim seeking an additional $5.0 million for the original
contract and change order work, and approximately $4.0 million in damages
for unabsorbed overhead, disruption, delay, and post-termination costs.
The Company does not believe the shipyard's claims are valid and intends to
vigorously defend against them and seek recovery of all amounts in that it
may recover. Management does not believe that the ultimate resolution of
the claims will have a material adverse impact on the Company's
consolidated financial statements. However, the dispute has resulted in
delays in completion of the modification and reconstruction and increased
expenditures for the completion.
During April 1998, the Company completed the announced acquisition of
the pipelay/derrick barges DLB 332 (Teknik Perdana) and DLB 264 (Teknik
Padu) from TL Marine Sdn. Bhd. The purchase price, funded with borrowings
under the Restated Credit Agreement, was $47.3 million.
The Company expects funds available under the Restated Credit
Agreement, proceeds from tax exempt revenue bonds issued by the Lake
Charles Harbor and Terminal District, available cash, and cash generated
from operations to be sufficient to fund the Company's operations,
scheduled debt retirement, and planned capital expenditures for the next
twelve months.
Recent Accounting Pronouncements
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. Reclassification of financial statements for earlier periods,
provided for comparative purposes, is required. The Company does not
believe that the adoption of this new accounting standard will have a
material effect on its consolidated financial statements. The Company will
adopt this accounting standard effective April 1, 1998, as required.
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131"), which will be effective for the Company
beginning April 1, 1998. SFAS 131 redefines how operating segments are
determined and requires disclosure of certain financial and descriptive
information about a Company's operating segments. Management believes that
implementation of SFAS 131 will not have a material impact on the
presentation of the Companies financial statements but may require
additional disclosures.
Year 2000
The Company's has begun assessing its major information and computing
systems and is updating or replacing, in the normal course of business, any
applications that are not year 2000 compliant. The Company has also begun
assessing both the costs of addressing and the costs or consequences of
incomplete or untimely resolution of the Year 2000 issue. Based upon
assessments to date, the Company believes that its estimated costs related
to the year 2000 issue will not be material to the Company's business,
operations, or financial condition.
In addition, the Company has initiated a program to determine the
extent to which the Company is vulnerable to its significant suppliers' and
customers' failure to remedy their Year 2000 issues. The Company cannot
guarantee that other companies will convert their systems on time or that a
failure to convert by another company would not have a material adverse
effect on the Company. However, the Company does not currently foresee any
material affects to its business, operations, or financial condition
resulting from any suppliers' and customers' deficiency.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
of Global Industries, Ltd.
We have audited the accompanying consolidated balance sheets of Global
Industries, Ltd. and subsidiaries as of March 31, 1998 and 1997, and the
related consolidated statements of operations, shareholders' equity, and
cash flows for each of the three years in the period ended March 31, 1998.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Global Industries, Ltd.
and subsidiaries at March 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period
ended March 31, 1998, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
June 12, 1998
Global Industries, Ltd.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
March 31,
1998 1997
---- ----
ASSETS
Current Assets:
Cash $ 18,693 $ 63,981
Escrowed funds (Notes 1 and 3) 6,907 19,112
Receivables 97,156 51,762
Advances to unconsolidated affiliate 22,852 13,913
(Note 12)
Prepaid expenses and other 7,002 2,874
-------- --------
Total current assets 152,610 151,642
-------- --------
Escrowed Funds (Notes 1 and 3) 22,478 1,447
Property and Equipment,net -------- --------
(Notes 2, 3 and 6) 432,224 243,915
-------- --------
Other Assets:
Deferred charges, net (Note 1) 12,139 6,469
Investment in and advances to
unconsolidated affiliate (Note 12) 1,878 15,071
Other 4,038 4,143
-------- --------
Total other assets 18,055 25,683
-------- --------
Total $625,367 $422,687
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term
debt (Note 3) 2,168 2,266
Accounts payable 55,016 29,828
Accrued liabilities 11,418 9,453
Accrued profit-sharing (Note 5) 4,126 3,566
Insurance payable 2,410 2,802
-------- --------
Total current liabilities 75,138 47,915
-------- --------
Long-Term Debt (Note 3) 144,825 40,947
-------- --------
Deferred Income Taxes (Note 4) 36,471 21,598
-------- --------
Commitments and Contingencies (Note 6)
Shareholders' Equity (Note 7):
Preferred stock -- --
Common stock, issued and outstanding,
91,597,114 shares in 1998 and 90,556,750
shares in 1997 915 906
Additional paid-in capital 208,911 201,331
Translation adjustments (8,178) --
Retained earnings 167,285 109,990
-------- --------
Total shareholders' equity 368,933 312,227
-------- --------
Total $625,367 $422,687
======== ========
See notes to consolidated financial statements.
Global Industries, Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, except per share data)
Year Ended March 31,
1998 1997 1996
---- ---- ----
Revenues (Note 8) $379,901 $229,142 $148,376
Cost of Revenues 265,245 165,889 107,361
-------- -------- --------
Gross Profit 114,656 63,253 41,015
Equity in Net Earnings
(Loss) of
Unconsolidated Affiliate (1,654) -- --
Selling, General and
Administrative Expenses 22,492 15,080 12,233
Operating Income 90,510 48,173 28,782
-------- -------- --------
Other Income (Expense):
Interest Expense (2,245) (1,358) (170)
Other 3,420 1,660 1,516
-------- -------- --------
1,175 302 1,346
-------- -------- --------
Income before Income Taxes 91,685 48,475 30,128
Provision for Income Taxes
(Note 4) 34,382 14,543 9,135
-------- -------- --------
Net Income $57,303 $33,932 $20,993
======== ======== ========
Net Income Per Share (Note7)
Basic $ 0.63 $ 0.44 $ 0.28
Diluted $ 0.61 $ 0.42 $ 0.27
======== ======== ========
See notes to consolidated financial statements.
Global Industries, Ltd.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in Thousands)
Additional
Common Stock Paid-in Transl- Retained
ation
Shares Amount Capital Adjust- Earnings Total
ments
------ ------ ------- ------ -------- -----
Balance at April
1, 1995 75,560,072 $ 756 $58,166 $ -- $55,139 $114,061
Net income -- -- -- -- 20,993 20,993
Amortization of
unearned stock
compensation -- -- 318 -- -- 318
Restricted stock
issues, net 1,064 -- -- -- -- --
Exercise of stock
options 175,020 2 302 -- (2) 302
Other 8,000 -- 20 -- -- 20
---------- ----- ------- ----- ------- --------
Balance at March
31, 1996 75,744,156 758 58,806 -- 76,130 135,694
Net income -- -- -- -- 33,932 33,932
Amortization of
unearned stock
compensation -- -- 281 -- -- 281
Restricted stock
issues, net 6,956 -- -- -- -- --
Exercise of stock
options 798,882 8 1,446 -- (2) 1,452
Tax effect of
exercise of stock
options -- -- 1,300 -- -- 1,300
Sale of common
stock net of
underwriting
discounts and
commissions of
$7,350 14,000,000 140 139,580 -- (70) 139,650
Other 6,756 -- (82) -- -- (82)
---------- ---- ------- ------ ------- -------
Balance at March
31, 1997 90,556,750 906 201,331 -- 109,990 312,227
Net income -- -- -- -- 57,303 57,303
Amortization of
unearned stock
compensation -- -- 179 -- -- 179
Restricted stock
issues, net 94,340 -- -- -- -- --
Exercise of stock
options 903,328 9 2,581 -- (8) 2,582
Tax effect of
exercise of stock
options -- -- 4,474 -- -- 4,474
Common stock issued 39,088 -- 428 -- -- 428
Foreign currency
translation
adjustments -- -- -- (8,178) -- (8,178)
Other 3,608 -- (82) -- -- (82)
---------- ------- -------- ------- -------- --------
Balance at March
31, 1998 91,597,114 $ 915 $208,911 $(8,178) $167,285 $368,933
========== ======= ======== ======== ======== ========
See notes to consolidated financial statements.
Global Industries, Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Year Ended March 31,
1998 1997 1996
---- ---- ----
Cash Flows From Operating
Activities:
Net Income $57,303 $33,932 $20,993
Adjustments to reconcile net
income to net
cash provided by operating
activities:
Depreciation and amortization 29,576 18,003 11,422
(Gain) loss on sale of (72) (11) 66
property and equipment
Deferred income taxes 14,873 6,700 3,926
Equity in net (earnings) loss
of unconsolidated affiliate 1,654 -- --
Other (989) 69 21
Changes in operating assets
and liabilities (net
of acquisitions):
Receivables (30,256) (7,800) (27,079)
Prepaid expenses and other (3,242) 1,549 (2,767)
Accounts payable and accrued 21,933 11,753 16,616
liabilities
Accrued profit-sharing 560 101 753
------ ------ ------
Net cash provided by
operating activities 91,340 64,296 23,951
------ ------ ------
Cash Flows From Investing
Activities:
Short-term investments, net -- -- 45,840
Proceeds from sale of
equipment 349 16 323
Decrease (increase) in
escrowed funds, net (8,826) 398 498
Acquisition of businesses,
net of cash acquired (103,805) (5,990) --
Acquisition of equity
interest in and (net
advances to) repayment
of advances to
unconsolidated affiliate 2,593 (25,784) --
Additions to property and
equipment (122,320) (124,868) (63,758)
Additions to deferred charges (10,076) (4,277) (5,524)
Other (54) (1,146) 864
-------- ------- ------
Net cash used in investing
activities (242,139) (161,651) (21,757)
-------- ------- -------
Cash Flows From Financing
Activities:
Repayment of long-term debt (27,220) (2,193) (630)
Proceeds from long-term debt 131,000 20,328 --
Payment of short-term borrowings -- (3,200) --
Proceeds from sale of common
stock, net 2,445 140,971 302
------- ------- ------
Net cash provided by (used
in) financing activities 106,225 155,906 (328)
------- ------- ------
Effect of Exchange Rate Change
on Cash (714) -- --
Cash:
Increase (Decrease) (45,288) 58,551 1,866
Beginning of Year 63,981 5,430 3,564
------- ------- -------
End of Year $18,693 $63,981 $ 5,430
======= ======= =======
See notes to consolidated financial statements.
Global Industries, Ltd.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization And Summary Of Significant Accounting Policies
Organization and Basis of Presentation - Global Industries, Ltd. (the
"Company") provides construction services, including pipeline construction,
platform installation and removal, construction support and diving
services, primarily to the offshore oil and gas industry in the United
States Gulf of Mexico and in selected international areas. Most work is
performed on a fixed-price basis, but the Company also performs services on
a cost-plus or day-rate basis, or on a combination of such bases. The
Company's contracts are typically of short duration, being completed in one
to five months.
Principles of Consolidation - The consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated.
Effective December 23, 1996, the Company acquired a 49% ownership interest
in CCC Fabricaciones y Construcciones, S.A. de C.V. ("CCC") (see Note 12)
which is accounted for by the equity method.
Cash - Cash includes cash on hand, demand deposits, repurchase
agreements having maturities less than three months, and money market funds
with banks.
Escrowed Funds - Escrowed funds totaled $29.4 million and $20.6
million at March 31, 1998 and 1997, respectively. These amounts represent
funds available for reimbursement to the Company for amounts expended or
the Company expects to expend on certain capital construction projects.
Under the terms of the financing agreement with the Lake Charles Harbor and
Terminal District, proceeds from the issuance of $28.0 million Port
Improvement Revenue Bonds remain in a Construction Fund for payment of
related bond issuance costs and certain costs of construction and
improvement of a deepwater support facility and pipebase in Carlyss,
Louisiana (see Note 3). The Company also has unreimbursed funds from the
sale of U. S. Government Guaranteed Financing Bonds deposited into an
escrow account with MARAD. The funds on deposit with MARAD are available
for reimbursement to the Company for certain vessel construction costs.
Substantially all of the escrowed funds are invested in U. S. Treasury
Bills. At March 31, 1998, and 1997, the Company estimated $6.9 million and
$19.1 million, respectively, were currently reimbursable from the escrowed
funds for amounts expended on the related construction projects.
Property and Equipment - Property and equipment is generally stated at
cost. Expenditures for property and equipment and items which substantially
increase the useful lives of existing assets are capitalized at cost and
depreciated. Routine expenditures for repairs and maintenance are expensed
as incurred. Except for certain barges which are depreciated on the units-
of-production method over estimated barge operating days, depreciation is
provided utilizing the straight-line method over the estimated useful lives
of the assets. Amortization of leasehold improvements is provided
utilizing the straight-line method over the estimated useful lives of the
assets or the lives of the leases, whichever is shorter. Leasehold
improvements relating to leases from the Company's principal shareholder
are amortized over their expected useful lives (and beyond the term of
lease) because it is expected that the leases will be renewed.
The periods used in determining straight-line depreciation and
amortization follow:
Marine barges, vessels and related equipment 10 - 25 years
Machinery and equipment 5 - 12 years
Furniture and fixtures 5 - 12 years
Buildings 15 - 30 years
Leasehold improvements 5 - 15 years
Depreciation and amortization expense of property and equipment
approximated $24.9 million, $14.4 million, and $9.7 million for the three
years ended March 31, 1998, respectively.
Deferred Charges - Deferred charges consist principally of drydocking
costs which are capitalized at cost and amortized on the straight-line
method through the date of the next scheduled drydocking. Amortization
expense approximated $4.4 million, $3.3 million and $1.4 million for the
three years ended March 31, 1998, respectively.
Contracts in Progress and Revenue Recognition - Revenues from
construction contracts, which are typically of short duration, are
recognized on the percentage-of-completion method, measured by relating the
actual cost of work performed to date to the current estimated total cost
of the respective contract. Contract costs include all direct material and
labor costs and those indirect costs related to contract performance, such
as indirect labor, supplies, and repairs. Provisions for estimated losses,
if any, on uncompleted contracts are made in the period in which such
losses are determined. Selling, general, and administrative costs are
charged to expense as incurred.
Stock-Based Compensation - Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation", ("SFAS 123")
encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has
chosen to continue to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," ("APB 25") and related
interpretations and has adopted the disclosure-only provisions of SFAS 123.
Accordingly, compensation cost for restricted stock awards and stock
options is measured as the excess, if any, of the quoted market price of
the Company's stock at the date of the grant over the amount an employee
must pay to acquire the stock. See Note 7.
Fair Value of Financial Instruments - The carrying value of the
Company's financial instruments, including cash, escrowed funds,
receivables, advances to unconsolidated affiliates, accounts payable, and
certain accrued liabilities approximate fair market value due to their
short-term nature. The fair value of the Company's long-term debt at March
31, 1998 and 1997 based upon available market information, approximated
$150.0 million and $43.2 million, respectively.
Concentration of Credit Risk - The Company's customers are primarily
major oil companies, independent oil and gas producers, and transportation
companies operating in the Gulf of Mexico and selected international areas.
The Company performs ongoing credit evaluation of its customers and
requires posting of collateral when deemed appropriate. The Company
provides allowances for possible credit losses when necessary.
Basic and Diluted Net Income Per Share - In accordance with Statement
of Financial Accounting Standards No. 128, "Earnings Per Share"
("SFAS128"), the Company changed its method of calculating net income per
share during the third quarter of fiscal 1998. All prior period net income
per share amounts have been restated to give effect of this requirement.
See Note 7. The weighted average number of common shares has been adjusted
to give retroactive effect to all stock splits effected through October 27,
1997.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Foreign Currency Translation - The financial statements of
subsidiaries in which United States dollars are not the functional currency
use the local currency as the functional currency. The translation
calculation for the income statement uses the average exchange rates during
the year. The translation calculation for the balance sheet, except for
equity, uses the current exchange rate as of the last day of the fiscal
year. Equity amounts translate using historical rates. The resulting
balancing translation adjustment is a separate component of shareholders'
equity.
Recent Accounting Pronouncements - In June 1997, the FASB issued
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS 130"). SFAS 130 requires that all items that
are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. Reclassification of
financial statements for earlier periods, provided for comparative
purposes, is required. The Company does not believe that the adoption of
this new accounting standard will have a material effect on its
consolidated financial statements. The Company will adopt this accounting
standard effective April 1, 1998, as required.
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131"), which will be effective for the Company
beginning April 1, 1998. SFAS 131 redefines how operating segments are
determined and requires disclosure of certain financial and descriptive
information about a Company's operating segments. Management believes that
implementation of SFAS 131 will not have a material impact on the
presentation of the Company's financial statement but may require
additional disclosure.
2. Property And Equipment
Property and equipment at March 31, 1998 and 1997 is summarized as
follows:
March 31,
1998 1997
---- ----
(in thousands)
Marine barges and vessels $330,673 $205,024
Machinery and equipment 43,491 29,484
Transportation equipment 2,978 2,610
Furniture and fixtures 4,724 2,952
Buildings and leasehold improvements 9,073 6,586
Land 8,809 8,022
Construction in progress 109,522 41,877
-------- --------
509,720 296,555
Less accumulated depreciation and
amortization (77,046) (52,640)
Property and equipment - net $432,224 $243,915
======== ========
Interest costs for the construction of certain long-term assets are
capitalized and amortized over the related assets' estimated useful lives.
Interest costs incurred during fiscal 1998, 1997, and 1996 amounted to $6.2
million, $3.9 million, and $1.9 million, respectively, of which $4.0
million, $2.6 million, and $1.7 million, respectively, were capitalized.
In April 1998, the Company acquired two pipelay/derrick barges for
$47.3 million. The purchase price was funded with borrowings under the
Restated Credit Agreement.
3. Financing Arrangements
Long-term debt at March 31, 1998 and 1997 consisted of the following:
March 31,
1998 1997
---- ----
(in thousands)
United States Government
Guaranteed Ship
Financing Bonds, 1994 Series
dated September
27, 1994, payable in 49 semi-
annual installments
commencing January 15, 1996 of
$418,000 with
final installment of $370,000,
plus interest at
8.30%, maturing July 15, 2020,
collateralized by
the Pioneer vessel and related
equipment with a net
book value of $37.1 million at
March 31, 1998 $18,762 $19,598
United States Government
Guaranteed Ship
Financing Bonds, 1996 Series
dated August
15, 1996, payable in 49 semi-
annual installments
commencing January 15, 1998, of
$407,000 with
final installment of $385,000,
plus interest at
7.25%, maturing July 15, 2022,
collateralized by
escrowed funds and four vessels
and related
equipment with a net book value
of $23.7 million
at March 31, 1998 19,921 20,328
Obligation to service Lake Charles
Harbor and
Terminal District Port
Improvement Revenue Bonds,
dated November 1, 1998, interest
payable monthly at
prevailing market rates (3.8% at
March 31,1998),
maturing November 1, 2027,
collateralized by $28.4
dollar irrevocable letter of credit 28,000 --
Revolving line of credit with a
syndicate of commercial
banks, interest payable at
variable rates 78,000 --
Other obligations 2,310 3,287
------- ------
146,993 43,213
Less current maturities 2,168 2,266
-------- -------
Long-term debt, less current maturities $144,825 $40,947
======== =======
Annual maturities of long-term debt for each of the five fiscal years
following March 31, 1998 and in total thereafter follow (in thousands):
1999 $ 2,168
2000 2,195
2001 2,199
2002 1,862
2003 79,862
Thereafter 58,707
--------
Total $146,993
========
In accordance with the United States Government Guaranteed Ship
Financing Bond agreements, the Company is required to comply with certain
covenants, including the maintenance of minimum working capital and net
worth requirements, which if not met, result in additional covenants
including restrictions on the payment of dividends. The Company is
currently in compliance with these covenants.
The Lake Charles Harbor and Terminal District's Port Improvement
Revenue Bonds (the "Bonds") are subject to optional redemption, generally
without premium, in whole or in part on any business day prior to maturity
at the direction of the Company. Interest accrues at varying rates as
determined from time to time by the remarketing agent based on (i)
specified interest rate options available to the Company over the life of
the Bonds and (ii) prevailing market conditions at the date of such
determination. The interest rate on borrowings outstanding at March 31,
1998 was 3.8%. Under the terms of the financing, proceeds from the
issuance of the Bonds were placed in a Construction Fund for the payment of
issuance related costs and the costs of acquisition, construction, and
improvement of a deepwater support facility and pipebase in Carlyss,
Louisiana and are included in the accompanying 1998 balance sheet under the
caption "Escrowed Funds."
On April 17, 1997, the Company entered into a loan agreement
("Restated Credit Agreement") with a syndicate of commercial banks which
replaced the Company's previous credit facility. Effective April 8, 1998,
an amendment to the Restated Credit Agreement increased the available
credit from $160.0 million to $200.0 million. The revolving credit facility
is available until June 30, 2000, at which time the amount available
reduces to zero over two years. Borrowings under the facility bear interest
at fluctuating rates (weighted average of 7.2% at March 31, 1998), are
payable on July 30, 2002, and have subsidiary guarantees and stock pledges
as security. The amount of available credit decreases by (i) borrowings
outstanding ($78.0 million at March 31, 1998), (ii) outstanding letters of
credit issued under the Restated Credit Agreement ($29.9 million at March 31,
1998). and (iii) amounts outstanding under a separate credit agreement
between the banks and CCC, limited to a maximum of $35.0 million ($27.4
million at March 31, 1998). For continuing access to the revolving line of
credit, the Company must remain in compliance with the covenants of the
Restated Credit Agreement, including covenants relating to the maintenance
of certain financial ratios, limitations on the incurrence of new
indebtedness, and the payment of dividends. The Company is currently in
compliance with these covenants. At March 31, 1998, the amount available
under the credit agreement approximated $24.7 million. At May 31, 1998,
$113.0 million was outstanding under the Restated Credit Agreement.
4. Income Taxes
The Company has provided for income taxes as follows:
March 31,
1998 1997 1996
---- ---- ----
(in thousands)
U.S. Federal and State:
Current $18,465 $6,189 $3,309
Deferred 14,873 6,700 3,926
Foreign:
Current 1,044 1,654 1,900
------- ------ ------
Total $34,382 $14,543 $9,135
======= ======= ======
State income taxes included above are not significant for any of the
years presented.
Income before income taxes consisted of the following:
March 31,
1998 1997 1996
---- ---- ----
(in thousands)
United States $87,839 $34,417 $18,847
Foreign 3,846 14,058 11,281
------- ------- -------
Total $91,685 $48,475 $30,128
======= ======= =======
The provision for income taxes varies from the Federal statutory
income tax rate due to the following:
March 31,
1998 1997 1996
---- ---- ----
(in thousands)
Taxes at Federal
statutory rate of 35% $32,090 $16,966 $10,545
Foreign income taxes at
different rates 1,044 (3,266) (2,048)
Other 1,248 843 638
------- ------- -------
Total $34,382 $14,543 $ 9,135
======= ======= =======
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
The tax effects of significant items comprising the Company's net deferred
tax balance as of March 31, 1998 and 1997, are as follows:
March 31,
1998 1997
---- ----
(in thousands)
Deferred Tax
Liabilities:
Excess book over tax
basis of property and equipment $33,091 $20,567
Deferred charges 3,447 1,598
Other 1,384 474
Deferred Tax Assets:
Reserves not currently deductible (1,451) (1,041)
------- -------
Net deferred tax liability $36,471 $21,598
======= =======
5. Employee Benefits
The Company sponsors a defined contribution profit-sharing and 401(k)
plan that covers all employees who meet certain eligibility requirements.
Company contributions to the plan are made at the discretion of the Board
of Directors and may not exceed 15% of the annual compensation of each
participant. Retirement plan expense was $2.5 million, $2.1 million and
$1.6 million, respectively, for the three fiscal years ended March 31,
1998, 1997, and 1996, respectively.
In addition, the Company has an incentive compensation plan which
rewards employees when the Company's financial results meet or exceed
budgets. For fiscal 1998, 1997 and 1996, the Company recorded incentive
compensation expense of $2.5 million (distributable to 1,482 employees),
$1.5 million (distributed to 918 employees), and $2.0 million (distributed
to 711 employees), respectively.
6. Commitments And Contingencies
Leases - The Company leases real property and equipment in the normal
course of business under varying operating leases, including leases with
its principal shareholder and chief executive officer. Rent expense for the
years ended March 31, 1998, 1997, and 1996, was $1,224,000, $723,000 and
$660,000, respectively, (of which $47,000 in each year was related party
rental expense). The lease agreements, which include both non-cancelable
and month-to-month terms, generally provide for fixed monthly rentals and,
for certain real estate leases, renewal and purchase options.
Minimum rental commitments under leases having an initial or remaining
non-cancelable term in excess of one year for each of the five years
following March 31, 1998 and in total thereafter follow (in thousands):
1999 $1,271
2000 1,068
2001 898
2002 840
2003 840
Thereafter 382
------
Total $5,299
======
Subsequent to March 31, 1998, the Company exercised its option to
purchase property leased in Houma, Louisiana. The above rental commitments
do not include lease payments after the purchase date.
Legal Proceedings -The Company has filed a demand for arbitration of
its disputes with a shipyard. The demand concerns a contract for
modification and conversion of the Hercules. The arbitration demand
includes disputes over the claims and change orders for extra work by the
shipyard. The Company is seeking damages approximating $4.0 million for
the shipyard's failure to perform the work timely. The shipyard has filed
a counterclaim seeking an additional $5.0 million for the original contract
and change order work, and approximately $4.0 million in damages for
unabsorbed overhead, disruption, delay, and post-termination costs. The
Company does not believe the shipyard's claims are valid and intends to
vigorously defend against them and recover all amounts in which it may
recover. Management does not believe that the ultimate resolution of the
claims will have a material adverse impact on the Company's consolidated
financial statements.
The Company is a party in legal proceedings and potential claims
arising in the ordinary course of its business. Management does not
believe these matters will materially effect the Company's consolidated
financial statements.
Construction and Purchases in Progress - The Company estimates that
the cost to complete capital expenditure projects in progress at March 31,
1998 approximated $60.0 million.
Guarantees - The Company has guaranteed certain indebtedness and
commitments of CCC (see Note 12) approximating $27.4 million at March 31,
1998. The Company has also given performance and currency guarantees to
banks for CCC debt totaling $22.0 million at March 31, 1998, related to
project financings. Under the terms of the performance and currency
guarantees, the banks may enforce the guarantees (i) if the customer does
not pay CCC because neither CCC nor the guarantors performed the contracts
that define the projects or (ii) if, after converting contract payments
from Mexican Pesos to United States Dollars, funds from the project are
insufficient to pay the sums due. Separately and subsequent to March 31,
1998, the Company gave a contingent guarantee to a finance company whereby,
contingent upon CCC forfeiting contracts to Mexico's national oil
company due to cancellation or non-renewal, the Company's guarantee
becomes effective. The contingent guaranty amount is $17.5 million.
Letters of Credit - In the normal course of its business activities,
the Company is required to provide letters of credit to secure the
performance and/or payment of obligations, including the payment of
worker's compensation obligations. Additionally, the Company has issued
letters of credit in connection with arbitration proceedings relating to
construction of the derrick barge Hercules and as collateral for $28.0
million of Port Improvement Revenue Bonds. Outstanding letters of credit
at March 31, 1998 approximated $40.6 million.
7. Shareholders' Equity
Authorized Stock - The Company has authorized 30,000,000 shares of
$0.01 par value preferred stock and 150,000,000 shares of $0.01 par value
common stock.
Restricted Stock Awards - The Company's Restricted Stock Plan adopted
in February 1993, provides for awards of shares of restricted stock to
employees approved by a committee of the Board of Directors. As of March
31, 1998, 1997, and 1996, 712,000 shares of Common Stock, adjusted for the
two-for-one common stock splits, have been reserved for issuance under the
plan, of which 591,460, 594,620, and 588,464 were granted at March 31,
1998, 1997, and 1996, respectively. Shares granted under the plan vest 33
1/3% on the third, fourth, and fifth anniversary date of grant. During
fiscal 1998, 1997, and 1996, 249 employees vested in 151,646 shares, 272
employees vested in 158,284 shares, and 286 employees vested in 168,712
shares, respectively.
Effective February 1998, the Company adopted a new 1998 Restricted
Stock Plan which provides for awards of shares of restricted stock to
employees approved by a committee of the Board of Directors. As of March
31, 1998, 500,000 shares of Common Stock have been reserved for issuance
under the plan, of which 97,500 shares were granted at March 31, 1998.
Shares granted under the plan vest 33 1/3% on the third, fourth and fifth
anniversary date of the grant. In May 1998, the Board of Directors
approved an amendment to the 1998 Restricted Stock Plan. This amendment,
which is subject to shareholder approval, would change the name of the plan
to the 1998 Equity Incentive Plan and permit the granting of both stock
option awards and restricted stock awards under the plan. Additionally,
the amended plan would authorize the Chief Executive Officer to grant stock
options and restricted stock awards to non-officer employees.
The fair market value of shares awarded under the plans are recorded
as unearned stock compensation and included in the accompanying financial
statements as a charge against Additional Paid-in Capital. The unearned
stock compensation is amortized over the vesting period of the awards and
amounted to approximately $137,000, $171,000 and $228,000 for fiscal 1998,
1997, and 1996, respectively.
Stock Option Plan - The 1992 Stock Option Plan provides for grants of
incentive and nonqualified options to employees approved by a committee of
the Board of Directors. Options granted under the plan have a maximum term
of ten years and are exercisable, subject to continued employment, under
terms and conditions set forth by the committee. As of March 31, 1998, the
number of shares reserved for issuance under the plan was 9,600,000 of
which 2,586,344 were available for grant. Changes in options outstanding
under the plan for each of the years ended March 31, 1998, 1997, and 1996
follow:
At 85% of Market At Market
Shares Avg. Shares Avg.
Price Price
--------- ------ --------- ------
Outstanding on
April 1, 1995 1,541,168 $1.671 1,907,200 $2.236
Granted 184,000 2.193 1,364,000 3.197
Surrendered (99,736) 1.753 (172,000) 2.461
Exercised (128,620) 1.542 (46,400) 2.233
--------- ------ --------- ------
Outstanding on
March 31, 1996 1,496,812 1.741 3,052,800 2.653
Granted 64,000 6.481 625,000 7.654
Surrendered (84,628) 1.970 (363,960) 3.001
Exercised (169,802) 1.805 (469,280) 2.090
--------- ------ --------- -----
Outstanding on
March 31, 1997 1,306,382 1.950 2,844,560 3.800
Granted 28,000 14.602 2,244,900 17.943
Surrendered (32,460) 2.319 (264,900) 10.019
Exercised (335,060) 1.658 (412,980) 3.177
--------- ------ --------- ------
Outstanding on
March 31, 1998 966,862 $2.405 4,411,580 $10.682
========= ====== ========= =======
Exercisable at
March 31, 1998 747,182 $1.700 818,260 $ 3.124
========= ====== ========= =======
The excess of the fair market value of shares subject to options
granted under the plan has been recorded as unearned stock compensation and
is included in the accompanying financial statements as a charge against
Additional Paid-in Capital. The unearned stock compensation is being
amortized to operations over the vesting period of the options and amounted
to approximately $42,000, $90,000, and $110,000 for fiscal 1998, 1997, and
1996, respectively.
The following table summarizes information about stock options
outstanding at March 31, 1998:
OPTIONS OUTSTANDING OPTIONS
EXERCISABLE
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Out- Contractual Exercise Exercis Exercise
Prices standing Life Price able Price
-------- -------- ----------- -------- ------- --------
$1.5413- 1.5413 659,142 4.88 $1.5413 659,142 $1.5413
1.6875- 2.2188 223,960 6.48 1.9393 122,520 1.8498
2.2344- 2.3750 655,900 6.50 2.3670 341,020 2.3689
2.4688- 3.0000 263,020 6.99 2.7216 96,300 2.7117
3.0313- 3.1094 568,800 7.58 3.1052 183,200 3.1053
3.1250- 7.8750 722,020 8.03 5.5415 135,460 5.1360
7.9375-15.4375 555,500 9.17 11.9840 27,800 9.0045
15.5625-19.9375 478,000 9.83 16.7788 -- --
20.1875-20.1875 1,250,100 9.50 20.1875 -- --
20.6250-21.9375 2,000 9.59 21.2813 -- --
- --------------- --------- ---- ------- --------- -------
$1.5413-21.9375 5,378,442 7.91 $9.1927 1,565,442 $2.4444
=============== ========= ==== ======= ========= =======
Unearned Stock Compensation - The balance of Unearned Stock
Compensation to be amortized in future periods was $2.2 million, $0.3
million, and $0.4 million at March 31, 1998, 1997, and 1996, respectively.
Non-Employee Director Stock Plan - The Non-Employee Director Stock
Plan provides that each director of the Company who is not an employee
shall automatically receive 4,000 shares of Common Stock on August 1 of
each year, subject to an annual limitation that the aggregate fair market
value of shares transferred may not exceed 75% of such director's cash
compensation for services rendered with respect to the immediately
preceding twelve-month period. The plan specifies that a maximum of 80,000
shares of Common Stock may be issued under the plan. During fiscal years
ended March 31, 1998, 1997, and 1996, 3,608, 6,756, and 8,000 shares were
issued under the plan. As of March 31, 1998, 52,036, shares, were
available for award under the plan. Non-employee director stock
compensation expense was $55,000, $50,000, and $20,000 for fiscal years
1998, 1997, and 1996, respectively.
1995 Employee Stock Purchase Plan - Effective April 1, 1995, the
Company adopted the Global Industries, Ltd. 1995 Employee Stock Purchase
Plan ("Purchase Plan") which provides a method whereby substantially all
employees may voluntarily purchase a maximum of 2,400,000 shares of the
Company's Common Stock at favorable terms. Under the Purchase Plan,
eligible employees may authorize payroll deductions that are used at the
end of the Option Period to acquire shares of Common Stock at 85% of the
fair market value on the first or last day of the Option Period, whichever
is lower. In August 1997, shareholders approved an amendment to the plan
whereby the plan has two Option Periods. A twelve-month Option Period
begins April 1 of each year and a six-month Option Period begins October 1
of each year. For the year ended March 31, 1998, 662 employees purchased
184,065 shares at a weighted average cost of $10.225 per share. For the
year ended March 31, 1997, 213 employees purchased 153,720 shares at a
weighted average cost of $4.582 per share. For the year ended March 31,
1996, 145 employees purchased 200,076 shares at a weighted average cost of
$2.365 per share.
Proforma Disclosure - In accordance with APB 25, compensation cost has
been recorded in the Company's financial statements based on the intrinsic
value (i.e., the excess of the market price of stock to be issued over the
exercise price) of restricted stock awards and shares subject to options.
Additionally, under APB 25, the Company's employee stock purchase plan is
considered noncompensatory and, accordingly, no compensation cost has been
recognized in the financial statements. Had compensation cost for the
Company's grants under stock-based compensation arrangements for the years
ended March 31, 1998, 1997, and 1996 been determined consistent with SFAS
123, the Company's net income and net income per share amounts for the
respective years would approximate the following proforma amounts (in
thousands, except per share data):
Year Ended March 31,
1998 1997 1996
------------------ ------------------ ------------------
As As As
Reported Proforma Reported Proforma Reported Proforma
Net income $57,303 $55,474 $33,932 $32,950 $20,993 $20,295
======= ======= ======= ======= ======= =======
Net income
per share
Basic $ 0.63 $ 0.61 $0.44 $ 0.42 $ 0.28 $ 0.27
Diluted $ 0.61 $ 0.59 $0.42 $ 0.41 $ 0.27 $ 0.26
======= ======= ======= ======= ======= =======
The weighted average fair value of options granted during the year
ended March 31, 1998 was $10.26. The fair value of each option granted is
estimated on the date of the grant using the Black-Scholes option pricing
model with the following assumptions: (i) dividend yield of 0%, (ii)
expected volatility of 48.5%, (iii) risk-free interest rate of 6.30%, and
(iv) expected life of 6.50 years.
The weighted average fair value of options granted during the years
ended March 31, 1997 and 1996 was $7.81 and $3.20, respectively. The fair
value of each option granted is estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions: (i)
dividend yield of 0%, (ii) expected volatility of 18.94%, (iii) risk-free
interest rate of 6.89%, and (iv) expected life of 7.75 years.
Basic and Diluted Net Income Per Share - In accordance with Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128"), the Company changed its method of calculating net income per share
during the third quarter of fiscal 1998. All prior period net income per
share amounts have been restated to give effect of this requirement. The
diluted net income per share calculation uses the weighted average number
shares outstanding adjusted for the incremental shares attributed to
outstanding options to purchase common stock. The following table presents
the reconciliation between basic shares and diluted shares (in thousands,
except per share data):
Weighted Average Shares Earnings Per
Share
--------------------------------------- --------------
Fiscal Years Ended: Net Income Basic Incremental Diluted Basic Diluted
---------- ----- ----------- ------- ----- -------
March 31, 1998 $57,303 91,110 2,762 93,872 $0.63 $0.61
March 31, 1997 33,932 77,746 3,001 80,747 0.44 0.42
March 31, 1996 20,993 75,624 1,127 76,751 0.28 0.27
Options to purchase 1,859,100 shares of common stock, at an exercise
price range of $15.3750 to $21.9375 per share, were outstanding during
fiscal 1998, but were not included in the computation of diluted EPS
because the options' exercise prices were greater than the average market
price of the common shares.
Options to purchase 56,500 shares of common stock, at an exercise
price range of $8.8125 per share to $11.1875 per share were outstanding
during fiscal 1997, but were not included in the computation of diluted EPS
because the options' exercise prices were greater than the average market
price of the common shares.
Options to purchase 22,705 shares of common stock, at an exercise
price range of $3.6094 per share to $5.0313 were outstanding during fiscal
1996, but were not included in the computation of diluted EPS because the
options' exercise prices were greater than the average market price of the
common shares.
8. Major Customers
Sales to various customers for the years ended March 31, 1998, 1997,
and 1996, which amount to 10% or more of the Company's revenues, follows:
Year Ended March 31,
1998 1997 1996
---- ---- ----
Amt. % Amt. % Amt. %
---- --- ----- --- ---- ---
(dollars in thousands)
Customer A $77,945 21% $44,773 20% $17,508 12%
Customer B -- -- 26,766 12% -- --
Customer C 44,557 12% -- -- -- --
9. Industry Segment and Geographic Information
The Company operates primarily in the offshore oil and gas
construction industry. Geographic information relating to the Company's
operations follows:
Year Ended March 31,
1998 1997 1996
---- ---- ----
(in thousands)
Revenues:
Domestic $294,209 $166,183 $114,807
West Africa 27,348 57,419 33,569
Asia Pacific 30,289 4,403 --
Middle East 18,549 1,137 --
Latin America 9,506 -- --
-------- -------- --------
Total $379,901 $229,142 $148,376
======== ======== ========
Operating Income
(Loss):
Domestic $ 81,345 $ 33,172 $ 17,547
West Africa 5,125 15,781 11,235
Asia Pacific 317 (790) --
Middle East 695 -- --
Latin America 3,028 10 --
-------- -------- --------
Total $ 90,510 $ 48,173 $ 28,782
======== ======== ========
Identifiable Assets:
Domestic $366,407 $281,337 $160,729
West Africa 53,061 48,606 36,367
Asia Pacific 60,636 10,292 --
Middle East 47,328 -- --
Latin America 39,423 18,471 --
Corporate 58,512 63,981 5,430
-------- -------- --------
Total $625,367 $422,687 $202,526
======== ======== ========
10. Supplemental Disclosures of Cash Flow Information
Supplemental cash flow information for the three years ended March 31,
1998 follows:
Year Ended March 31,
1998 1997 1996
---- ---- ----
(in thousands)
Cash Paid For:
Interest, net of amount capitalized $ 2,252 $ 1,267 $ 176
Income taxes 15,948 4,400 5,615
Non-cash investing and Financing
Activities:
In connection with acquisitions,
liabilities assumed were as follows:
Fair value of assets acquired,net of
cash acquired $114,931 $ 13,829 --
Cash paid for net assets (103,805) (5,990) --
Note payable issued to seller in
connection with acquisition -- (1,100) --
-------- -------- -------
Fair value of liabilities assumed $ 11,126 $ 6,739 --
======== ======== =======
Short-term debt issued
for acquisitions -- $ 4,700 --
Other Non-Cash Transactions:
In fiscal 1998 and 1997, the tax effect of the exercise of stock
options resulted in an increase in additional paid-in capital and
reductions to income taxes payable of $4.5 million and $1.3 million,
respectively.
11. Quarterly Financial Information (Unaudited)
The offshore marine construction industry in the Gulf of Mexico is
highly seasonal as a result of weather conditions and the timing of capital
expenditures by oil and gas companies. Historically, a substantial portion
of the Company's services has been performed during the period from June
through November. As a result, historically a disproportionate portion of
the Company's revenues and net income is earned during the second (July
through September) and third (October through December) quarters of its
fiscal year. The following is a summary of consolidated quarterly
financial information for fiscal 1998 and 1997:
Quarter Ended
June 30, Sept. 30, Dec. 31, March 31,
-------- --------- -------- ---------
(in thousands, except per share amounts)
Fiscal 1998
Revenues $63,176 $108,772 $120,435 $87,518
Gross profit 20,839 37,857 32,217 23,743
Net income 10,119 19,335 16,867 10,982
Net income per
share
Basic 0.11 0.21 0.18 0.12
Diluted 0.11 0.21 0.18 0.12
Fiscal 1997
Revenues $50,332 $72,431 $56,776 $49,603
Gross profit 12,353 21,784 15,280 13,836
Net income 6,643 12,517 8,072 6,700
Net income per
share
Basic 0.09 0.16 0.11 0.08
Diluted 0.08 0.16 0.10 0.08
12. Investment in and Advances to Unconsolidated Affiliate
On December 23, 1996, the Company acquired from a subsidiary of J. Ray
McDermott, S.A. a 49% ownership interest in CCC Fabricaciones y
Construcciones, S.A. de C.V., a leading provider of offshore construction
services in Mexico, as well as the DB-21, a 400-foot combination pipelay
derrick barge, a crawler crane, a saturation diving system and
approximately 21 acres of land located adjacent to the Company's facility
in New Iberia, Louisiana (the "CCC Acquisition"). The Company also
acquired from a subsidiary of J. Ray McDermott, S.A. the DB-15, a 400-foot
combination pipelay derrick barge currently chartered to CCC. The total
purchase price for the CCC Acquisition was $38.0 million. In addition, the
Company (i) loaned $23.0 million to CCC to repay $15.0 million of existing
indebtedness and for working capital needs and (ii) provided performance
guarantees supporting approximately $50.0 million of CCC's existing
indebtedness primarily relating to construction projects in progress at the
date of acquisition. The Company's investment in CCC is accounted for
under the equity method. In fiscal 1997, the Company's equity in the
operating results of CCC from the date of acquisition was not material.
Pro forma net income for the years ended March 31, 1997 and 1996,
assuming the acquisition of the 49% ownership interest in CCC had occurred
as of April 1, 1995, amounted to $32,389,000 ($.40 diluted net income per
share) and, $15,033,000 ($.20 diluted net income per share), respectively.
Following is a summary of the financial position of CCC as of December
31, 1997 and 1996 and its results of operations for the year then ended (in
thousands):
December 31,
1997 1996
---- ----
Current assets $63,819 $109,268
Noncurrent assets, net 19,991 19,626
------- --------
Total $83,810 $128,894
======= ========
Current liabilities $65,681 $105,185
Noncurrent liabilities 21,788 23,993
------- --------
Total $87,469 $129,178
======= ========
December 31,
1997 1996
---- ----
Revenues $150,482 $156,854
Gross profit 24,595 24,560
Net income (loss) (3,375) (2,129)
During fiscal 1998 and 1997, the Company advanced funds to CCC (under
interest bearing and non-interest bearing arrangements), provided barge
charters, diving and other construction support services to CCC and was
reimbursed for expenditures paid on behalf of CCC. Included in the
accompanying 1998 and 1997 balance sheets are advances to CCC totaling
$22.9 million and $25.4 million, respectively. Revenues and expense
reimbursements relating to transactions with CCC approximated $13.0 million
and $15.1 million, respectively, for the year ended December 31, 1998 ($1.2
million and $23.6 million, respectively, for 1997). Interest income
related to advances to CCC approximated $0.4 million and $0.7 million,
respectively, for fiscal 1998 and 1997. Additionally, the Company is a
guarantor of certain indebtedness and other obligations of CCC as described
in Note 6.
Subsequent to March 31, 1998, the Company has negotiated the
separation of CCC's onshore construction business into a separate company
owned by Global's partner and in which Global will have no ownership
interest. The Company expects the separation to be complete within fiscal
1999.
13. Business Acquisition
On July 31, 1997, the Company completed the acquisition of certain
business operations and assets of Sub Sea International, Inc. and certain
of its subsidiaries. The major assets acquired in the transaction included
three construction barges, four liftboats and one dive support vessel based
in the United States, four support vessels based in the Middle East, and
support vessels and ROVs based in the Far East and Asia Pacific. The
transaction was accounted for by the purchase method and, accordingly, the
acquisition cost of $103.8 million (consisting of the purchase price of
$102.0 million, and directly related acquisition costs of $1.8 million) was
allocated to the net assets acquired based on their estimated fair market
value. The results of operations of the acquired business operations and
assets are included in the accompanying 1998 financial statements since the
date of acquisition.
The following unaudited pro forma income statement data for the years
ended March 31, 1998 and 1997 reflects the effect of the acquisition
assuming it occurred effective as of the beginning of each year presented:
Year Ended
March 31,
1998 1997
---- ----
(in thousands, except per share data)
Revenues $415,257 $337,790
Net income 55,533 27,265
Net income per share:
Basic $ 0.61 $ 0.35
Diluted 0.59 0.34
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this Item is incorporated by reference to
the Company's definitive Proxy Statement to be filed pursuant to Regulation
14A under the Securities Act of 1934 in connection with the Company's 1998
Annual Meeting of Shareholders. See also "Item (Unnumbered) Executive
Officers of the Registrant" appearing in Part I of this Annual Report.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item is incorporated by reference to
the Company's definitive Proxy Statement to be filed pursuant to Regulation
14A under the Securities Act of 1934 in connection with the Company's 1998
Annual Meeting of Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this Item is incorporated by reference to
the Company's definitive Proxy Statement to be filed pursuant to Regulation
14A under the Securities Act of 1934 in connection with the Company's 1998
Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item is incorporated by reference to
the Company's definitive Proxy Statement to be filed pursuant to Regulation
14A under the Securities Act of 1934 in connection with the Company's 1998
Annual Meeting of Shareholders.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements
The following financial statements included on pages 30 through
50 in this Annual Report are for the fiscal year ended March 31,
1998.
Independent Auditors' Report.
Consolidated Balance Sheets as of March 31, 1998 and 1997.
Consolidated Statements of Operations for the Years Ended
March 31, 1998, 1997 and 1996.
Consolidated Statements of Shareholders' Equity for the Years
Ended March 31, 1998, 1997 and 1996.
Consolidated Statements of Cash Flows for the Years Ended
March 31, 1998, 1997 and 1996.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules
All financial statement schedules are omitted because the
information is not required or because the information required
is in the financial statements or notes thereto.
3. Exhibits.
Pursuant to Item 601(B)(4)(iii), the Registrant agrees to
forward to the commission, upon request, a copy of any instrument
with respect to long-term debt not exceeding 10% of the total
assets of the Registrant and its consolidated subsidiaries.
The following exhibits are filed as part of this Annual Report:
Exhibit
Number
3.1 - Amended and Restated
Articles of Incorporation of Registrant as
amended, incorporated by reference to
Exhibits 3.1 and 3.3 to the Form S-1
Registration Statement filed by the
Registrant (Reg. No 33-56600).
3.2 - Bylaws of Registrant,
incorporated by reference to Exhibit 3.2 to
the Form S-1 filed by Registrant (Reg. No.
33-56600).
4.1 - Form of Common Stock
certificate, incorporated by reference to
Exhibit 4.1 to the Form S-1 filed by
Registrant (Reg. No. 33-56600).
10.1 + - Global Industries, Ltd.
1992 Stock Option Plan, incorporated by
reference to Exhibit 10.1 to the Form S-1
filed by Registrant (Reg. No. 33-56600).
10.2 + - Global Industries, Ltd.
Profit Sharing and Retirement Plan, as
amended, incorporated by reference to Exhibit
10.2 to the Form S-1 filed by Registrant
(Reg. No. 33-56600).
10.3 + - Global Industries, Ltd.
Non-Employee Director Stock Plan, as amended
incorporated by reference to Exhibit 10.3 to
the Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1996.
10.4 - Agreement of Lease dated
May 1, 1992, between SFIC Gulf Coast
Properties, Inc. and Global Pipelines PLUS,
Inc., incorporated by reference to Exhibit
10.6 to the Form S-1 filed by Registrant
(Reg. No. 33-56600).
10.7 - Lease Extension and
Amendment Agreement dated January 1, 1996,
between Global Industries, Ltd. and William
J. Dore' relating to the Lafayette office and
adjacent land incorporated by reference to
Exhibit 10.7 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
March 31, 1996.
10.11 - Agreement between
Global Divers and Contractors, Inc. and
Colorado School of Mines, dated October 15,
1991, incorporated by reference to Exhibit
10.20 to the Form S-1 filed by Registrant
(Reg. No. 33-56600).
10.12 - Sublicense Agreement
between Santa Fe International Corporation
and Global Pipelines PLUS, Inc. dated May 24,
1990, relating to the Chickasaw's reel
pipelaying technology, incorporated by
reference to Exhibit 10.21 to the Form S-1
filed by Registrant (Reg. No. 33-56600).
10.13 - Non-Competition
Agreement and Registration Rights Agreement
between the Registrant and William J. Dore',
incorporated by reference to Exhibit 10.23 to
the Form S-1 filed by Registrant (Reg. No.
33-56600).
10.14 + - Global Industries,
Ltd. Restricted Stock Plan, incorporated by
reference to Exhibit 10.25 to the Form S-1
filed by Registrant (Reg. No. 33-56600).
10.15 - Capital Construction
Fund Agreement by and between the United
States of America, represented by the
Secretary of Transportation, acting by and
through the Maritime Administrator and Global
Industries, Ltd., incorporated by reference
to Exhibit 10.18 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
March 31, 1994.
10.16 + - Second Amendment to
the Global Industries, Ltd. Profit Sharing
Plan, incorporated by reference to Exhibit
10.19 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 33-81322).
10.17 + - Global Industries,
Ltd. 1995 Employee Stock Purchase Plan
incorporated by reference to Exhibit 10.20 to
the Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1995.
10.18 - Trust Indenture
relating to United States Government
Guaranteed Ship Financing Obligations between
Global Industries, Ltd., shipowner, and
Hibernia National Bank, Indenture Trustee,
dated as of September 27, 1994 incorporated
by reference to Exhibit 10.22 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended March 31, 1995.
10.19 + - Amendment to Global
Industries, Ltd. 1992 Stock Option Plan
incorporated by reference to Exhibit 10.23 to
the Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1996.
10.20 - Restated Credit
Agreement dated as of April 17, 1997 by, and
Among Bank One, National Association, as
agent for lenders Global Industries, Ltd. and
its Subsidiaries, incorporated by reference
to Exhibit 10.20 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
March 31, 1997.
10.21 - Trust Indenture
relating to United States Government
Guaranteed Ship Financing Obligations between
Global Industries, Ltd., shipowner, and First
National Bank of Commerce, Indenture Trustee,
dated as of August 15, 1996, incorporated by
reference to Exhibit 10.21 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997.
10.22 - Form of Indemnification
Agreement between the Registrant and each of
the Registrant's directors, incorporated by
reference to Exhibit 10.22 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997.
10.23 - Asset Purchase
Agreement between Global Industries, Ltd. and
J. Ray McDermott, Inc. dated as of December
23, 1996 incorporated by reference to Exhibit
2.1 to the Registrant's Current Report on
Form 8-K dated February 12, 1997.
10.24 - Barge and Crane
Purchase Agreement between Global Industries,
Ltd. and Hydro Marine Services, Inc. dated as
of December 23, 1996 incorporated by
reference to Exhibit 2.2 to the Registrant's
Current Report on Form 8-K dated February 12,
1997.
10.25 - Barge Purchase
Option Agreement between Global Industries
Ltd. and Hydro Marine Services, Inc. dated as
of December 23, 1996 incorporated by
reference to Exhibit 2.3 to the Registrant's
Current Report on Form 8-K dated February 12,
1997.
10.26 + - 1996 Amendment to
Global Industries, Ltd. 1995 Employee Stock
Purchase Plan, incorporated by reference to
Exhibit 10.26 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
March 31, 1997.
10.27 - Amendment Assignment
and Assumption of Authorization Agreement
relating to United States Government Ship
Financing obligations between Global
Industries, Ltd., shipowner, and First
National Bank of Commerce, Indenture Trustee,
dated as of October 23, 1996, incorporated
by reference to Exhibit 10.27 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997.
* 10.28 + - Global
Industries, Ltd.1998 Equity Incentive Plan.
* 10.29 + - First Amendment to
Restated Credit Agreement dated as of June
23, 1997 by and among the Registrant, certain
of its subsidiaries, Bank One, Louisiana,
National Association and the other lenders
named therein; Second Amendment to Restated
Credit Agreement dated as of November 18,
1997 by and among the Registrant, certain of
its subsidiaries, Bank One, Louisiana,
National Association and the other lenders
named therein; and Third Amendment to
Restated Credit Agreement dated as of April
8, 1998 by and among the Registrant, certain
of its subsidiaries, Bank One, Louisiana,
National Association and the other lenders
named therein.
10.31 - Acquisition Agreement
among the Registrant Sub Sea International
and Dresser Industries, dated, June 24, 1997,
incorporated by reference to Exhibit 21 to
the Registrant current report on Form 8-K
dated August 8, 1997.
10.32 - Facilities
Agreement (related to Carlyss Facility) by
and between the Registrant and Lake Charles
Harbor and Terminal District dated as of
November 1, 1997, incorporated by reference
to Exhibit 10.2 to Registrant's Quarterly
Report on Form 10-Q for the quarterly period
ended December 31, 1997.
10.33 - Ground Lease
and Lease-Back Agreement (related to Carlyss
Facility) by and between the Registrant and
Lake Charles Harbor and Terminal District
dated as of November 1, 1997, incorporated by
reference to Exhibit 10.3 to Registrant's
Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 1997.
10.34 - Trust Indenture
(related to Carlyss Facility) by and between
Lake Charles Harbor and Terminal District and
First National Bank of Commerce, as Trustee,
dated as of November 1, 1997, incorporated by
reference to Exhibit 10.4 to Registrant's
Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 1997.
10.35 - Pledge and
Security Agreement (related to Carlyss
Facility) by and between Registrant and Bank
One, Louisiana, National Association, dated
as of November 1, 1997, incorporated by
reference to Exhibit 10.5 to Registrant's
Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 1997.
* 21.1 - Subsidiaries of the
Registrant.
* 23.1 - Consent of Deloitte & Touche LLP.
* 27 - Financial Data Schedule
*Filed herewith.
+Management Compensation Plan or Agreement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
GLOBAL INDUSTRIES, LTD.
By: /s/ MICHAEL J. MCCANN
_______________________________________
Michael J. McCann
Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
June 25, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ WILLIAM J. DORE'
- -----------------------
William J. Dore' Chairman of the Board, President, June 25, 1998
Chief Executive Officer and
Director
/s/ JAMES C. DAY
- ------------------------ Director June 25, 1998
James C. Day
/s/ MYRON J. MOREAU
- ------------------------ Director June 25, 1998
Myron J. Moreau
/s/ EDWARD P. DJEREJIAN
- ------------------------ Director June 25, 1998
Edward P. Djerejian
/s/ MICHAEL J. POLLOCK
- ------------------------ Director June 25, 1998
Michael J. Pollock
/s/ MICHAEL J. MCCANN
- ------------------------ Vice President, Chief Financial June 25, 1998
Michael J. McCann Officer and Director
Exhibit 10.28
GLOBAL INDUSTRIES, LTD.
1998 EQUITY INCENTIVE PLAN
I. PURPOSE
The purpose of the Global Industries, Ltd. 1998 EQUITY INCENTIVE PLAN
is to provide a means through which Global Industries, Ltd. and its
subsidiaries may attract able persons to enter the employ of the Company
(as defined below) or its Subsidiaries, and to provide a means whereby
those individuals upon whom the responsibilities of the successful
administration and management of the Company and its Subsidiaries rest, and
whose present and potential contributions to the welfare of the Company and
its Subsidiaries are of importance, can acquire and maintain stock
ownership, thereby strengthening their concern for the welfare of the
Company and its subsidiaries. A further purpose of the Plan is to provide
such individuals with additional incentive and reward opportunities
designed to enhance the profitable growth of the Company and its
Subsidiaries. Accordingly, the Plan provides that the Company may grant to
certain employees shares of Restricted Stock, or the option to purchase
shares of Common Stock, as hereinafter set forth. Options granted under
the Plan may be either Incentive Stock Options or options that do not
constitute Incentive Stock Options.
II. DEFINITIONS
The following definitions (including any plural thereof) shall be
applicable throughout the Plan unless specifically modified by any Section:
(a) "ADMINISTRATOR" means (i) in the context of Awards made to, or
the administration (or interpretation of any provision) of the Plan as it
relates to, any person who is subject to Section 16 of the Exchange Act
(including any successor section to the same or similar effect,
"Section 16"), the Committee, or (ii) in the context of Awards made to, or
the administration (or interpretation of any provision) of the Plan as its
relates to, any person who is not subject to Section 16, the Committee or
the Chief Executive Officer of the Company if the Chief Executive Officer
is a Director.
(b) "AWARD" means an Option or grant of Restricted Stock.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include
any amendments or successor provisions to such section and any regulations
promulgated under such section.
(e) "COMMITTEE" means a committee of the Board comprised solely of
two or more outside Directors (within the meaning of the term "outside
directors" as used in Section 162(m) of the Code and applicable
interpretive authority thereunder and so long as the Company is subject to
Section 16 of the Exchange Act within the meaning of "Non-Employee
Director" as defined in Rule 16b-3). Such committee shall be the
Compensation Committee of the Board unless and until the Board designates
another committee of the Board to serve as the Committee as described in
the Plan.
(f) "COMMON STOCK" means the common stock, $.01 par value, of the
Company, or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Section IX(b).
(g) "COMPANY" shall mean Global Industries, Ltd., a Louisiana
corporation, or any successor thereto.
(h) "DIRECTOR" means an individual elected to the Board by the
shareholders of the Company or by the Board under applicable corporate law
who is serving on the Board on the date the Plan is adopted by the Board or
is elected to the Board after such date.
(i) "DISABILITY" means any permanent and total disability as defined
in section 22(e)(3) of the Code.
(j) "EMPLOYEE" means any person (which may include a Director) in an
employment relationship with the Company or with respect to Incentive Stock
Options, any parent or subsidiary corporation as defined in section 424 of
the Code, or with respect to Awards that do not constitute an Incentive
Stock Option, any Subsidiary of the Company.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(l) "INCENTIVE STOCK OPTION" means an incentive stock option within
the meaning of section 422 of the Code.
(m) "MARKET VALUE PER SHARE" means, as of any specified date, the
closing sale price of the Common Stock on that date (or, if there are no
sales on that date, the last preceding date on which there was a sale) in
the principal securities market in which the Common Stock is then traded.
If the Common Stock is not publicly traded at the time a determination of
"Market Value per Share" is required to be made hereunder, the
determination of such amount shall be made by the Administrator in such
manner as it deems appropriate.
(n) "OPTION" means an option to purchase Common Stock granted under
Section VII of the Plan and includes both Incentive Stock Options and
Options that do not constitute Incentive Stock Options.
(o) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee with respect to, and evidencing the grant of, an Option.
(p) "OPTIONEE" means an employee who has been granted an Option.
(q) "PLAN" means the Global Industries, Ltd. 1998 Equity Incentive
Plan, as amended from time to time.
(r) "RESTRICTED STOCK" means shares of Common Stock granted pursuant
to Section VIII of the Plan as to which neither the substantial risk of
forfeiture nor the restriction on transfers referred to therein has
expired.
(s) "RESTRICTED STOCK AGREEMENT" means a written agreement between
the Company and a recipient of Restricted Stock with respect to, and
evidencing the grant of, Restricted Stock.
(t) "RULE 16B-3" means Rule 16b-3 under the Exchange Act, as such
rule may be amended from time to time, any successor rule, regulation or
statute fulfilling the same or similar function.
(u) "SUBSIDIARY" means any entity other than the Company (whether a
partnership, trust, corporation, limited liability company or other) with
respect to which the Company, directly or indirectly through one or more
other entities, owns equity interests possessing 25 percent or more of the
total combined voting power of all equity interests of such entity
(excluding voting power that arises only upon the occurrence of one or more
specified events).
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective upon the date of its adoption by the
Board; provided, that the Plan is approved by the shareholders of the
Company within twelve months thereafter. Notwithstanding any provision of
the Plan or of any Option Agreement or Restricted Stock Agreement, no
Option shall be exercisable, and no shares of Restricted Stock shall vest,
prior to such shareholder approval. No further Options or Restricted Stock
may be granted under the Plan after ten years from the date the Plan is
adopted by the Board. The Plan shall remain in effect until all Options
granted under the Plan have been satisfied or expired, and all shares of
Restricted Stock granted under the Plan have vested or been forfeited.
IV. ADMINISTRATION
(a) ADMINISTRATOR. The Plan shall be administered by the
Administrator, so that Awards made to, and the administration (or
interpretation of any provision) of the Plan as it relates to, any person
who is subject to Section 16, shall be made or effected by the Committee,
and Awards made to, and the administration (or interpretation of any
provision) of the Plan as it relates to, any person who is not subject to
Section 16, shall be made or effected by either the Committee or the Chief
Executive Officer of the Company if the Chief Executive Officer is a
Director.
(b) POWERS. Subject to the express provisions of the Plan, the
Administrator shall have authority, in its discretion, to determine which
employees or Directors shall receive an Award, the time or times when such
Award shall be granted, whether an Incentive Stock Option or nonqualified
Option shall be granted, and the number of shares to be subject to each
Award. In making such determinations, the Administrator shall take into
account the nature of the services rendered by the respective employees or
Directors, their present and potential contribution to the Company's
success and such other factors as the Administrator in its discretion shall
deem relevant. Subject to the express provisions of the Plan, the
Administrator shall also have the power to construe the Plan and the
respective agreements executed hereunder, to prescribe rules and
regulations relating to the Plan, and to determine the terms, restrictions
and provisions of the Option Agreements and the Restricted Stock
Agreements, including such terms, restrictions and provisions as shall be
requisite in the judgment of the Administrator to cause designated Options
to qualify as Incentive Stock Options, and to make all other determinations
necessary or advisable for administering the Plan. The Administrator may
correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any agreement relating to an Award in the manner and to the
extent it shall deem expedient to carry it into effect. The determination
of the Administrator on the matters referred to in this Section IV shall be
conclusive; provided, however, that in the event of any conflict in any
such determination as between the Committee and the Chief Executive Officer
of the Company, each acting in capacity as Administrator of the Plan, the
determination of the Committee shall be final and conclusive. All
decisions and determinations of the Committee shall be made by a majority
of the members thereof.
V. SHARES SUBJECT TO THE PLAN; GRANT OF OPTIONS;
GRANT OF RESTRICTED STOCK
(a) SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided in
Section IX(b), the aggregate number of shares of Common Stock that may be
issued under the Plan shall not exceed 3,200,000 shares. Shares shall be
deemed to have been issued under the Plan only to the extent actually
issued and delivered pursuant to an Option or a grant of Restricted Stock.
To the extent that an Option or a grant of Restricted Stock lapses or the
rights of the recipient with respect thereto terminate, any shares of
Common Stock then subject to such Option or grant of Restricted Stock shall
again be available for grant under the Plan. Notwithstanding any provision
in the Plan to the contrary, the maximum number of shares of Common Stock
that may be subject to Options granted to any one individual during any
calendar year may not exceed (i)100,000 shares and (ii) may be granted as
Restricted Stock, may not exceed 100,000 shares(in each case subject to
adjustment as provided in Section IX(b)). The limitation set forth in the
preceding sentence shall be applied in a manner which will permit
compensationgenerated in connection with Options (and grants of Restricted
Stock)awarded under the Plan by the Committee that is intended to
constitute "performance based" compensation for purposes of section 162(m) of
the Code to so qualify, including, without limitation, counting against such
maximum number of shares, to the extent required under section 162(m) of the
Code and applicable interpretive authority thereunder, any shares subject
to Options that are canceled or repriced.
(b) GRANT OF OPTIONS. The Administrator may from time to time grant
Options to one or more Employees or Directors determined by it to be
eligible for participation in the Plan in accordance with the terms of this
Plan.
(c) GRANT OF RESTRICTED STOCK. The Administrator may from time to
time grant Restricted Stock to one or more Employees or Directors
determined by it to be eligible for participation in the Plan in accordance
with the terms of this Plan.
(d) STOCK OFFERED. Subject to the limitations set forth in
Section V(a) above, the stock to be offered pursuant to an Award may be
authorized but unissued Common Stock or Common Stock previously issued and
outstanding and reacquired by the Company. All authorized and unissued
shares issued as Common Stock in accordance with the Plan, Option
Agreements and Restricted Stock Agreements hereunder shall be fully paid
and non-assessable shares. Any of such shares which remain unissued and
which are not subject to outstanding Awards at the termination of the Plan
shall cease to be subject to the Plan but, until termination of the Plan,
the Company shall at all times make available a sufficient number of shares
to meet the requirements of the Plan.
VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are
Employees or Directors. An Award may be granted on more than one occasion
to the same person and, subject to the limitations set forth in the Plan,
Awards consisting of Options may include an Incentive Stock Option or an
Option that is not an Incentive Stock Option or any combination thereof,
and Awards may consist of any combination of Options and Restricted Stock.
VII. STOCK OPTIONS
(a) OPTION PERIOD. The term of each Option shall be as specified by
the Administrator at the date of grant.
(b) LIMITATIONS ON EXERCISE OF OPTION. An Option shall be
exercisable in whole or in such installments and at such times as
determined by the Administrator at the date of grant.
(c) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. An Incentive
Stock Option may be granted only to an individual who is an Employee. To
the extent that the aggregate Market Value per Share (determined at the
time the respective Incentive Stock Option is granted) of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time
by an individual during any calendar year under all incentive stock option
plans of the Company and its parent and Subsidiary corporations exceeds
$100,000, such Incentive Stock Options shall be treated as Options which do
not constitute Incentive Stock Options. The Administrator shall determine,
in accordance with applicable provisions of the Code, Treasury Regulations
and other administrative pronouncements, which of an Optionee's Incentive
Stock Options will not constitute Incentive Stock Options because of such
limitation and shall notify the Optionee of such determination as soon as
practicable after such determination. No Incentive Stock Option shall be
granted to an individual if, at the time the Option is granted, such
individual owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent or Subsidiary
corporation, within the meaning of section 422(b)(6) of the Code, unless
(i) at the time such Option is granted the option price is at least 110% of
the Market Value per Share of the Common Stock subject to the Option and
(ii) such Option by its terms is not exercisable after the expiration of
five years from the date of grant. An Incentive Stock Option shall not be
transferable otherwise than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only
by such Optionee or the Optionee's guardian or legal representative.
(d) OPTION AGREEMENT. Each Option may be exercisable for such
periods (not to exceed 10 years from the date of grant thereof) and shall
be evidenced by an Option Agreement in such form and containing such
provisions, terms and conditions not inconsistent with the provisions of
the Plan as the Administrator from time to time shall approve, including,
without limitation, provisions to qualify an Incentive Stock Option under
section 422 of the Code. Each Option Agreement shall specify the effect of
termination of (i) employment, or (ii) membership on the Board, as
applicable, on the exercisability of the Option. An Option Agreement may
provide for the payment of the option price, in whole or in part, by
delivery of a number of shares of Common Stock (plus cash if necessary)
having a Market Value per Share equal to such option price. Moreover, an
Option Agreement may provide for a "cashless exercise" of the Option
pursuant to procedures established by the Administrator with respect
thereto. The terms and conditions of the respective Option Agreements need
not be identical.
(e) OPTION PRICE AND PAYMENT. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be set forth in the
Option Agreement and shall be determined by the Administrator but, subject
to adjustment as provided in Section IX(b), such purchase price shall not
be less than the Market Value per Share of a share of Common Stock on the
date such Option is granted in the case of an Incentive Stock Option and
85% of the Market Value per Share of a share of Common Stock on the date
such Option is granted in the case of an Option that is not an Incentive
Stock Option. The Option or any portion thereof may be exercised by
delivery of an irrevocable notice of exercise to the Company, as specified
by the Administrator. The purchase price of the Option or portion thereof
shall be paid in full in the manner specified by the Administrator.
Separate stock certificates shall be issued by the Company for those shares
acquired pursuant to the exercise of an Incentive Stock Option and for
those shares acquired pursuant to the exercise of any Option that does not
constitute an Incentive Stock Option.
(f) SHAREHOLDER RIGHTS AND PRIVILEGES. The Optionee shall be
entitled to all the privileges and rights of a shareholder only with
respect to such shares of Common Stock as have been purchased under the
Option and for which certificates representing such Common Stock have been
registered in the Optionee's name.
(g) OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER
CORPORATIONS. Options may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by corporations
who become employees as a result of a merger or consolidation or other
business combination of the employing corporation with the Company or any
Subsidiary.
VIII. RESTRICTED STOCK
(a) OWNERSHIP OF RESTRICTED STOCK. Upon receipt by the Company of an
executed Restricted Stock Agreement, each grant of Restricted Stock will
constitute an immediate transfer of record and beneficial ownership of the
shares of Restricted Stock to the recipient of the grant in consideration
of the performance of services by such recipient (or other consideration
determined by the Administrator), entitling the recipient to all voting and
other ownership rights, but subject to the restrictions hereinafter
referred or contained in the related Restricted Stock Agreement. Each
grant may, in the discretion of the Administrator, limit the recipient's
dividend rights during the period in which the shares of Restricted Stock
are subject to a substantial risk of forfeiture and restrictions on
transfer. In the event that, as the result of a stock split or stock
dividend or combination of shares or any other change, or exchange for
other securities, by reclassification, reorganization, merger,
consolidation, recapitalization or otherwise, the recipient shall, as the
owner of Common Stock subject to restrictions hereunder, be entitled to new
or additional shares of stock or securities, the certificate or
certificates for, or other evidences of, such new or additional or
different shares or securities, shall also be subject to all provisions of
the Plan and the applicable Restricted Stock Agreement relating to
substantial risk of forfeiture, restrictions and lapse of restrictions to
the extent applicable to the shares with respect to which they were
distributed; provided, however, that if the recipient shall receive rights,
warrants or fractional interests in respect of any of such Common Stock,
such rights or warrants may be held, exercised, sold or otherwise disposed
of, and such fractional interests may be settled, by the recipient free and
clear of the restrictions hereafter set forth.
(b) SUBSTANTIAL RISK OF FORFEITURE AND RESTRICTIONS ON TRANSFER.
Each grant of Restricted Stock will provide that (i) the shares covered
thereby will be subject, for a period or periods (which may be based upon
achievement of performance standards) determined by the Administrator at
the date of grant, to one or more restrictions, including, without
limitation, a restriction that constitutes a "substantial risk of
forfeiture" within the meaning of section 83 of the Code and applicable
interpretive authority thereunder, and (ii) during such period or periods
during which such restrictions are to continue, the transferability of the
Restricted Stock subject to such restrictions will be prohibited or
restricted in a manner and to the extent prescribed by the Administrator at
the date of grant, including prohibitions on sale, assignment, pledge or
hypothecation of the shares.
(c) RESTRICTED STOCK HELD IN TRUST. Shares of Common Stock awarded
pursuant to a grant of Restricted Stock will be held in trust by the
Company for the benefit of the recipient until such time as the applicable
restriction on transfer thereof shall have expired or otherwise lapsed, at
which time certificates representing such Common Stock will be delivered to
the recipient. Certificates representing Common Stock issued pursuant to
the Plan shall be imprinted with a legend to the effect that the shares
represented thereby may not be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of except in accordance with the terms
of this Plan and the Restricted Stock Agreement and applicable securities
laws, and each transfer agent for the Common Stock shall be instructed to
like effect in respect of such shares. In aid of such restrictions, the
Company may require the recipient to execute and deliver to the Company a
stock power in blank with respect to the shares and may, in its sole
discretion, determine to retain possession of the certificates for shares
with respect to which the restrictions have not lapsed. The Company shall
have the right, in its sole discretion, to exercise such stock power in the
event that the Company becomes entitled to shares pursuant to the
provisions of the Plan or the Restricted Stock Agreement related to such
shares. In the event of the termination of the Participant's employment
with the Company, the Participant shall be obligated, for no consideration,
to forfeit and surrender such shares, to the extent then subject to
restrictions, to the Company. The restrictions shall be binding upon and
enforceable against any transferee.
(d) RESTRICTED STOCK AGREEMENT; CONSIDERATION. (i) Each grant of
Restricted Stock shall be evidenced by a Restricted Stock Agreement in such
form and containing such provisions not inconsistent with the provisions of
the Plan as the Administrator from time to time shall approve. The terms
and conditions of the respective Restricted Stock Agreements need not be
identical. Each grant of Restricted Stock may be made without additional
consideration or in consideration of a payment by the recipient that is
less than the Market Value per Share on the date of grant, as determined by
the Administrator.
(ii) As a condition to the issuance of shares of Common Stock to
a recipient, such recipient must consent to the provisions of this Plan as
then in effect and the Restricted Stock Agreement by executing a copy of
the Restricted Stock Agreement and returning such executed copy to the
Company. The failure by a recipient to execute and return a copy of such
Restricted Stock Agreement within 30 days of its issuance shall constitute
grounds for the forfeiture of any right to receive the shares of Common
Stock potentially issuable pursuant to such Restricted Stock Agreement, in
the discretion of the Administrator.
IX. RECAPITALIZATION, REORGANIZATION AND CHANGE IN CONTROL
(a) NO EFFECT ON RIGHT OR POWER. The existence of the Plan and the
Awards granted hereunder shall not affect in any way the right or power of
the Board or the shareholders of the Company or any Subsidiary to make or
authorize any adjustment, recapitalization, reorganization or other change
in the Company's or any Subsidiary's capital structure or its business, any
merger or consolidation of the Company or any Subsidiary, any issue of debt
or equity securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any Subsidiary or
any sale, lease, exchange or other disposition of all or any part of its
assets or business or any other corporate act or proceeding.
(b) CHANGES IN COMMON STOCK. The provisions of Section V(a) imposing
limits on the numbers of shares of Common Stock covered by Awards granted
under the Plan, as well as the number or type of shares or other property
subject to outstanding Options and Restricted Stock grants and the
applicable option prices per share, shall be adjusted appropriately by the
Committee in the event of stock dividends, spin offs of assets or other
extraordinary dividends, stock splits, combinations of shares,
recapitalization, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants, conversion or exchange of the Common Stock
for a different number or kind of shares of stock or securities of the
Company or another entity and similar transactions or events. If any such
adjustment shall result in a fractional share, such fraction shall be
disregarded.
(c) CHANGE IN CONTROL. As used in the Plan, the term "Change in
Control" shall mean:
(aa) any person (within the meaning of Section 13(d) or 14(d)
under the Exchange Act, including any group (within the meaning of
Section 13(d)(3) under the Exchange Act), a "Person") except an
underwriter or group of underwriters in connection with a public
offering of the Common Stock, is or becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company (such
Person being referred to as an "Acquiring Person") representing 50% or
more of the combined voting power of the Company's outstanding securities
other than beneficial ownership by (i) the Company or any Subsidiary
of the Company, (ii) any employee benefit plan of the Company or any
Person organized, appointed or established pursuant to the terms of
any such employee benefit plan (unless such plan or Person is a party
to or is utilized in connection with a transaction led by Outside
Persons), or (iii) William J. Dore' or any Person controlling,
controlled by or under common control with Dore' (Persons referred to
in clauses (i) and (ii) hereof are hereinafter referred to as
"Excluded Persons"); or
(bb) individuals who constituted the Board as of May 30, 1998
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a
director subsequent to May 30, 1998 whose appointment to fill a
vacancy or to fill a new Board position or whose nomination for
election by the Company's shareholders was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board; or
(cc) the Company mergers with or consolidates into or engages in
a reorganization or similar transaction with another entity pursuant
to a transaction in which the Company is not the "Controlling
Corporation"; or
(dd) the Company sells, leases or otherwise disposes of all or
substantially all of its assets, other than to Excluded Persons, or is
dissolved or liquidated.
For purposes of clause (aa) above, if at any time there exist
securities of different classes entitled to vote separately in the election
of directors, the calculation of the proportion of the voting power held by
a beneficial owner of the Company's securities shall be determined as
follows: first, the proportion of the voting power represented by
securities held by such beneficial owner of each separate class or group of
classes voting separately in the election of directors shall be determined,
provided that securities representing more than 50% of the voting power of
securities of any such class or group of classes shall be deemed to
represent 100% of such voting power; second, such proportion shall then be
multiplied by a fraction, the numerator of which is the number of directors
which such class or classes is entitled to elect and the denominator of
which is the total number of directors elected to membership on the Board
at the time; and third, the product obtained for each such separate class
or group of classes shall be added together, which sum shall be the
proportion of the combined voting power of the Company's outstanding
securities held by such beneficial owner.
For purposes of clause (aa) above, the term "Outside Persons" means
any Persons other than Persons described in clauses (aa) (i) or (iii) above
(as to Persons described in clause (aa) (iii) above, while they are
Excluded Persons) or members of senior management of the Company in office
immediately prior to the time the Acquiring Person acquires the beneficial
ownership described in clause (aa).
For purposes of clause (cc) above, the Company shall be considered to
be the Controlling Corporation in any merger, consolidation, reorganization
or similar transaction unless either (1) the shareholders of the Company
immediately prior to the consummation of the transaction (the "Old
Shareholders") would not, immediately after such consummation, beneficially
own, directly or indirectly, securities of the resulting entity entitled to
elect a majority of the members of the Board of Directors or other
governing body of the resulting entity or (2) those persons who were
directors of the Company immediately prior to the consummation of the
proposed transaction would not, immediately after such consummation,
constitute a majority of the directors of the resulting entity, provided
that (I) there shall be excluded from the determination of the voting power
of the Old Shareholders securities in the resulting entity beneficially
owned, directly or indirectly, by the other party to the transaction and
any such securities beneficially owned, directly or indirectly, by any
Person acting in concert with the other party to the transaction (unless
such other party or such Person is William J. Dore', (II) there shall be
excluded from the determination of the voting power of the Old Shareholders
securities in the resulting entity acquired in any such transaction other
than as a result of the beneficial ownership of Company securities prior to
the transaction and (III) persons who are directors of the resulting entity
shall be deemed not to have been directors of the Company immediately prior
to the consummation of the transaction if they were elected as directors of
the Company within 90 days prior to the consummation of the transaction.
Upon the occurrence of a Change in Control, with respect to each
recipient of an Option hereunder, the Committee, acting in its sole
discretion without the consent or approval of any optionee, shall effect
one or more of the following alternatives, which may vary among individual
Optionees: (1) accelerate the time at which Options then outstanding may
be exercised so that such Options may be exercised in full for a limited
period of time on or before a specified date (before or after such Change
of Control) fixed by the Committee, after which specified date all
unexercised Options and all rights of Optionees thereunder shall terminate,
(2) require the mandatory surrender to the Company by selected Optionees of
some or all of the outstanding Options held by such Optionees (irrespective
of whether such options are then exercisable under the provisions of the
Plan) as of a date, before or after such Change of Control, specified by
the Committee, in which event the Committee shall thereupon cancel such
options and the Company shall pay to each optionee an amount of cash per
share equal to the excess of the amount calculated in the next sentence
(the "Change of Control Value") of the shares subject to such option over
the exercise price(s) under such Options for such shares, (3) make such
adjustments to options then outstanding as the Committee may determine in
its sole discretion (provided, however, in its sole discretion the
Committee may determine that no adjustment is necessary to Options then
outstanding) or (4) provide that thereafter upon any exercise of an option
theretofore granted the optionee shall be entitled to purchase under such
option, in lieu of the number of shares of Common Stock then covered by
such option, the number and class of shares of stock or other securities or
property to which the optionee would have been entitled pursuant to the
terms of the agreement of merger, consolidation or sale of assets and
dissolution if, immediately prior to such merger, consolidation or sale of
assets and dissolution the optionee had been the holder of record of the
number of shares of Common Stock then covered by such option. "Change of
Control Value" shall equal the amount determined in clause (i), (ii) or
(iii), whichever is applicable, as follows: (i) the per share price
offered to shareholders of the Company in any such merger, consolidation,
reorganization, sale of assets or dissolution transaction, (ii) the price
per share offered to shareholders of the Company in any tender offer or
exchange offer whereby a Change of Control takes place, or (iii) if such
Change of Control occurs other than pursuant to a tender or exchange offer,
the fair market value per share of the shares into which such Options being
surrendered are exercisable, as determined by the Committee as of the date
determined by the Committee to be the date of cancellation and surrender of
such Options. In the event that the consideration offered to shareholders
of the Company in any transaction described in this paragraph or the
paragraph above consists of anything other than cash, the Committee shall
determine the fair cash equivalent of the portion of the consideration
offered which is other than cash. Upon the occurrence of a Change of
Control, with respect to the recipient of Restricted Stock Awards the
Committee, acting in its sole discretion, without the consent or approval
of any holder of Restricted Stock may provide that (x) all restrictions
applicable to such recipient's Restricted Stock shall lapse and the
Restricted Stock shall vest in full, (y) all restrictions applicable to
such recipient's Restricted Stock which would expire or be satisfied within
twelve months of the Change of Control shall be deemed to have been
satisfied and to that extent such Restricted Stock shall vest in full or
(iii) such Change of Control shall have no effect on the restrictions
applicable to such recipient's Restricted Stock.
X. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares of Common Stock for which Awards have not theretofore
been granted. The Board shall have the right to alter or amend the Plan or
any part thereof from time to time, provided that no change in any Award
theretofore granted may be made which would impair the rights of the
recipient thereof without the consent of such recipient, and provided
further that the Board may not, without approval of the shareholders of the
Company, amend the Plan to (a) increase the maximum aggregate number of
shares that may be issued under the Plan or (b) change the class of
individuals eligible to receive Awards under the Plan.
XI. MISCELLANEOUS
(a) NO RIGHT TO AN OPTION OR RESTRICTED STOCK. Neither the adoption
of the Plan nor any action of the Board or the Administrator shall be
deemed to give an employee or Director any right to be granted an Award or
any other rights hereunder except as may be evidenced by an Option
Agreement or Restricted Stock Agreement duly executed and delivered on
behalf of the Company, and then only to extent and on the terms and
conditions expressly set forth therein. The Plan shall be unfunded. The
Company shall not be required to establish any special or separate fund or
to make any other segregation of funds or assets to assure the performance
of its obligations under any Award. Nothing contained herein shall be
deemed to create a trust of any kind or create any fiduciary relationship.
(b) NO EMPLOYMENT OR MEMBERSHIP RIGHTS CONFERRED. Nothing contained
in the Plan shall (i) confer upon any employee any right with respect to
continuation of employment with the Company or any Subsidiary or
(ii) interfere in any way with the right of the Company or any Subsidiary to
terminate his or her employment at any time. Nothing contained in the Plan
shall confer upon any Director any right with respect to continuation of
membership on the Board.
(c) OTHER LAWS; WITHHOLDING. The Company shall not be obligated to
issue any Common Stock pursuant to any Award granted under the Plan at any
time when the shares covered thereby have not been registered under the
Securities Act of 1933, as amended, and such other state and federal laws,
rules and regulations as the Company or the Administrator deems applicable
and, in the opinion of legal counsel to the Company, there is no exemption
from the registration requirements of such laws, rules and regulations
available for the issuance and sale of such shares. No fractional shares
of Common Stock shall be delivered, nor shall any cash in lieu of
fractional shares be paid. The Company shall have the right to (i) make
deductions from any settlement or exercise of an Award made under the Plan,
including the delivery of shares, or require shares or cash or both be
withheld from any Award, in each case in an amount sufficient to satisfy
withholding of any federal, state or local taxes required by law, or
(ii) take such other action as may be necessary or appropriate to satisfy
any such tax withholding obligations. The Administrator may determine the
manner in which such tax withholding may be satisfied, and may permit
shares of Common Stock (together with cash, as appropriate) to be used to
satisfy required tax withholding based on the Market Value per Share of any
such shares of Common Stock, as of the date of delivery of shares in
satisfaction of the applicable Award; provided that election by any
participant who is subject to Section 16 of the Exchange Act may only be
made during the period beginning on the third business day following the
date of release for publication of quarterly or annual summary statements
of earnings and ending on the last business day of the second month of the
fiscal quarter during which such announcement was made following such date.
(d) NO RESTRICTION ON CORPORATE ACTION. Subject to the restrictions
contained in Section X, nothing contained in the Plan shall be construed to
prevent the Company or any Subsidiary from taking any corporate action,
whether or not such action would have an adverse effect on the Plan or any
Award granted hereunder. No Employee, Director, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a
result of any such action.
(e) RESTRICTIONS ON TRANSFER OF OPTIONS AND CERTAIN UNDERLYING
SHARES. An Option (other than an Incentive Stock Option, which shall be
subject to the transfer restrictions set forth in Section VII(c)) shall not
be transferable otherwise than (i) by will or the laws of descent and
distribution, (ii) pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security
Act of 1974, as amended, or the rules thereunder, or (iii) with the consent
of the Administrator.
(f) GOVERNING LAW. The Plan shall be constructed in accordance with
the laws of the State of Texas.
Exhibit 10.29
THIRD AMENDMENT TO RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO RESTATED CREDIT AGREEMENT (hereinafter
referred to as the "Agreement") dated as of the 8th day of April, 1998 by
and among GLOBAL INDUSTRIES, LTD., a Louisiana corporation (the
"Borrower"), GLOBAL PIPELINES PLUS, INC., a Louisiana corporation ("Plus"),
GLOBAL DIVERS AND CONTRACTORS, INC., a Louisiana corporation ("Divers"),
GLOBAL MOVIBLE OFFSHORE, INC., a Louisiana corporation ("Movible"),
PIPELINES, INCORPORATED, a Louisiana corporation ("Pipelines"), GLOBAL
INDUSTRIES OFFSHORE, INC., a Delaware corporation ("Industries Offshore")
and GLOBAL INTERNATIONAL VESSELS, LTD., a Cayman Islands corporation
("International Vessels") (Plus, Divers, Movible, Pipelines, Industries
Offshore and International Vessels are collectively called the
"Guarantors"), BANK ONE, LOUISIANA, NATIONAL ASSOCIATION, a national
banking association ("Bank One"), ABN AMRO BANK N.V., HOUSTON AGENCY
("ABN"), CREDIT LYONNAIS NEW YORK BRANCH ("CL"), THE FUJI BANK, LIMITED,
HOUSTON AGENCY ("Fuji"), HIBERNIA NATIONAL BANK ("Hibernia"), BANQUE
PARIBAS ("Paribas") and WHITNEY NATIONAL BANK ("Whitney") (Bank One, ABN,
CL, Fuji, Hibernia, Paribas and Whitney are hereinafter referred to
collectively as "Banks", and individually as "Bank") and Bank One, as Agent
(in such capacity, the "Agent").
WHEREAS, Borrower, the Guarantors and the Bank One entered into a
Restated Credit Agreement dated as of April 17, 1997 (the "Credit
Agreement") under the terms of which Bank One agreed to provide Borrower
with a revolving loan facility in amounts of up to $85,000,000.00; and
WHEREAS, Bank One subsequently assigned interest in the Credit
Agreement and the revolving commitment described therein to ABN AMRO Bank
N.V., Houston Agency, Credit Lyonnais, New York Branch, The Fuji Bank,
Limited, Houston Agency and Hibernia National Bank (with Bank One, the
"Existing Bank Group"); and
WHEREAS, Borrower, the Guarantors and the Existing Bank Group entered
into a First Amendment to Restated Credit Agreement dated as of June 23,
1997 (the "First Amendment"); and
WHEREAS, Borrower, the Guarantors and the Existing Bank Group entered
into a Second Amendment to Restated Credit Agreement dated as of November
18, 1997 (the "Second Amendment"); and
WHEREAS, as of the date hereof, Paribas and Whitney (the "Acquiring
Banks") are acquiring interests in the Credit Agreement and the Revolving
Commitment described therein; and
WHEREAS, the Agent, the Banks, the Borrower and the Guarantors have
agreed to further amend the Credit Agreement to increase the amount of the
Revolving Commitment and made certain additional changes thereto.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained the parties agree to amend the Credit Agreement
in the following respects:
1. Section 1 of the Credit Agreement is hereby amended in the
following respects:
(a) By deleting the definition of "Revolving Commitment" and
inserting the following new definition in lieu thereof:
""Revolving Commitment" shall mean (A) for all
Banks, (i)$200,000,000 from the Effective Date through
June 30, 2000; (ii) $150,000,000.00 from July 1, 2000
through June 30, 2001; and (iii) $100,000,000.00 from
July 1, 2001 through June 30, 2002 and (B) as to any
Bank, its obligation to make Advances hereunder on the
Revolving Loan and purchase its Pro Rata Part of
participations in Letters of Credit issued hereunder by
the Agent in amounts not exceeding an amount equal to
its Revolving Commitment Percentage times the Revolving
Commitment in existence at the time of determination."
(b) By deleting the definition of "Revolving Commitment
Percentage" and inserting the following new definition in lieu
thereof:
""Revolving Commitment Percentage" shall mean for
each Bank the percentage derived by dividing its
Revolving Commitment at the time of determination by
the Revolving Commitments of all Banks at the time of
determination. At the Effective Date, the Revolving
Commitment Percentage of each Bank is as follows:
Bank One 20%
ABN 17%
CL 15%
Fuji 15%
Hibernia 17%
Paribas 7.5%
Whitney 8.5%"
2. Section 3 of the Credit Agreement is hereby amended in the
following respects:
(a) Subsection 3(a) is hereby amended by deleting the reference
therein to "$160,000,000" and asserting in lieu thereof
"$200,000,000".
(b) Subsection 3(b) is hereby amended by deleting the first
sentence thereof in its entirety and substituting the following
sentence in lieu thereof:
"From and after the date of the Third Amendment to
Restated Credit Agreement, there shall be outstanding
eight notes: (i) one Revolving Note in the aggregate
face amount of $40,000,000 payable to the order of Bank
One, (ii) one Revolving Note in the aggregate face
amount of $34,000,000 payable to ABN, (iii) one
Revolving Note in the aggregate face amount of
$30,000,000 payable to the order of CL, (iv) one
Revolving Note in the aggregate face amount of
$30,000,000 payable to the order of Fuji, and (v) one
Revolving Note in the aggregate face amount of
$34,000,000 payable to the order of Hibernia, (vi) one
Revolving Note in the aggregate face amount of
$15,000,000 payable to the order of Paribas, and
(vii) one Revolving Note in the aggregate face amount
of $17,000,000 payable to the order of Whitney."
3. Section 12 of the Credit Agreement is hereby amended in the
following respects:
(a) Subsection 12(g)(vii) thereof is hereby deleted in its
entirety and the following new Subsection 12(g)(vii) inserted in lieu
thereof:
"(vii) performance and currency exchange risk
guarantees given by Borrower on behalf of CCC
Fabricaciones y Construcciones S.A. de C.V. ("CCC") for
job and project completion costs not exceeding in the
aggregate $150,000,000 performed in CCC's normal
day-to-day operations, which performance and currency
exchange risk guarantees involve an amount not to
exceed in the aggregate outstanding at any time the sum
of $75,000,000; or"
(b) Subsection 12(g)(x) thereof is hereby deleted in its
entirety and the following two new subsections inserted in lieu
thereof:
"(x) indebtedness of CCC owed to Heller Financial
[Company] in the amount of $17,500,000 secured by
vessels of the Company; or
(y) renewals or extensions of any or
all of the foregoing."
4. Section 13 of the Credit Agreement is hereby amended to add the
following new Subsection (j):
"(j) default shall occur under the CCC Credit Agreement."
5. Section 14(f) of the Credit Agreement is hereby amended by
deleting therefrom the second sentence of the fourth unnumbered paragraph
and substituting the following new sentence in lieu thereof:
"Provided, further, however, that no amendment, waiver, or
other action shall be affected pursuant to the preceding sentence
without the consent of all Banks which: (i) would increase the
Revolving Commitment amount of any Bank, (ii) would reduce any
fees hereunder, or the principal of, or the interest on, any
Bank's Note or Notes, (iii) would postpone any date fixed for any
payment of any fees hereunder, or any principal or interest of
any Bank's Note or Notes, (iv) would materially increase any
Bank's obligations hereunder or would materially alter Agent's
obligations to any Bank hereunder, (v) would release Borrower
from its obligations to pay any Bank's Note or Notes, (vi) would
release any collateral pledged to secure the Borrower's
obligations hereunder, or (vii) would amend this sentence."
6. The Existing Bank Group does hereby sell, transfer and assign to
the Acquiring Banks and the Acquiring Banks hereby purchase, assume and
undertake from the Assignor undivided interests in the Revolving Commitment
and Revolving Loans, said assignment to be made pursuant to the terms of
Exhibit "A" hereto.
7. Exhibit C to the Credit Agreement is hereby deleted and replaced
by the new Exhibit C in the form attached hereto.
8. The obligation of the Banks hereunder shall be subject to the
following conditions precedent:
(a) Borrower's Execution and Delivery. Borrower shall have
executed and delivered to the Agent for the benefit of the Banks, this
Agreement, the new Notes and other required documents, all in form and
substance satisfactory to Agent;
(b) Guarantors' Execution and Delivery. The Guarantors shall
have executed and delivered to the Agent for the benefit of the Banks,
new Guaranties in the form of Exhibit C hereto and other required
documents, all in form and substance satisfactory to Agent;
(c) Legal Opinion. The Agent shall have received from
Borrower's and Guarantors' legal counsel a favorable legal opinion in
form and substance reasonably satisfactory to Agent and its counsel;
(d) Corporate Resolutions. The Agent shall have received
appropriate certified corporate resolutions of Borrower and each
Guarantor;
(e) Good Standing. The Agent shall have received evidence of
existence and good standing for Borrower and each Guarantor;
(f) Amendments to Articles of Incorporation and Bylaws. The
Agent shall have received copies of all amendments to the Articles of
Incorporation of Borrower and each Guarantor made since the Effective
Date of the Credit Agreement, certified by the Secretary of State of
the State or Country of its incorporation, and a copy of any
amendments to the Bylaws of Borrower and each Guarantor, made since
the Effective Date of the Credit Agreement, certified by Borrower and
each Guarantor as being true, correct and complete;
(g) Payment of Fees. The Agent shall have received payment in
full of all fees due on the date of execution of this Agreement;
(h) Representation and Warranties. The representations and
warranties of Borrower and each Consolidated Subsidiary under this
Agreement are true and correct in all material respects as of such
date, as if then made (except to the extent that such representations
and warranties related solely to an earlier date or the Majority Banks
shall have consented to the contrary);
(i) No Event of Default. No Event of Default shall have
occurred and be continuing nor shall any event have occurred or failed
to occur which, with the passage of time or service of notice, or
both, would constitute an Event of Default;
(j) Other Documents. Agent shall have received such other
instruments and documents incidental and appropriate to the
transaction provided for herein as Bank or its counsel may reasonably
request, and all such documents shall be in form and substance
reasonably satisfactory to the Agent; and
(k) Legal Matters Satisfactory. All legal matters incident to
the consummation of the transactions contemplated hereby shall be
reasonably satisfactory to special counsel for Agent retained at the
expense of Borrower.
9. Except to the extent its provisions are specifically amended,
modified or superseded by this Agreement, the representations, warranties
and affirmative and negative covenants of the Borrower contained in the
Credit Agreement are incorporated herein by reference for all purposes as
if copied herein in full. The Borrower hereby restates and reaffirms each
and every term and provision of the Credit Agreement, as amended,
including, without limitation, all representations, warranties and
affirmative and negative covenants. Except to the extent its provisions
are specifically amended, modified or superseded by this Agreement, the
Credit Agreement, as amended, and all terms and provisions thereof shall
remain in full force and effect, and the same in all respects are confirmed
and approved by the Borrower and the Banks.
10. Unless otherwise defined herein, all defined terms used herein
shall have the same meaning ascribed to such terms in the Credit Agreement.
11. This Agreement may be executed in any number of identical
separate counterparts, each of which for all purposes to be deemed an
original, but all of which shall constitute, collectively, one Agreement.
12. The Guarantors are executing this Agreement only to indicate
their consent to the execution hereof by the Borrower.
13. WRITTEN CREDIT AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY
THE FIRST AMENDMENT, THE SECOND AMENDMENT AND THIS THIRD AMENDMENT,
REPRESENTS THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
AND AMONG THE PARTIES.
IN WITNESS WHEREOF, the parties have caused this Third Amendment to
Restated Credit Agreement to be duly executed as of the date first above
written.
BORROWER:
GLOBAL INDUSTRIES, LTD.
a Louisiana corporation
By:
Name:
Title:
GUARANTORS:
GLOBAL PIPELINES PLUS, INC.;
GLOBAL DIVERS AND CONTRACTORS,INC.;
GLOBAL MOVIBLE OFFSHORE, INC.;
PIPELINES, INCORPORATED;
GLOBAL INDUSTRIES OFFSHORE, INC.; AND
GLOBAL INTERNATIONAL VESSELS, LTD.
By:
Name:
Title:
BANKS:
BANK ONE, LOUISIANA, NATIONAL
ASSOCIATION, a national banking association
By:
Rose M. Miller, Vice President
ABN AMRO BANK N.V., HOUSTON AGENCY
By:
H. Gene Shiels, Vice President
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By:
Name:
Title:
HIBERNIA NATIONAL BANK
By:
Bruce Ross, Vice President
BANQUE PARIBAS
By:
Name:
Title:
By:
Name:
Title:
WHITNEY NATIONAL BANK
By:
Name:
Title:
AGENT:
BANK ONE, LOUISIANA, NATIONAL
ASSOCIATION, a national banking association
By:
Rose M. Miller, Vice President
EXHIBIT "A"
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of __________, 1998 is made by and between BANK ONE,
LOUISIANA, NATIONAL ASSOCIATION, ABN AMRO BANK N.V., HOUSTON AGENCY, CREDIT
LYONNAIS NEW YORK BRANCH, THE FUJI BANK, LIMITED, HOUSTON AGENCY and
HIBERNIA NATIONAL BANK (the "Assignors") and BANQUE PARIBAS and WHITNEY
NATIONAL BANK (the "Assignees").
RECITALS
WHEREAS, Bank One, Louisiana, National Association ("Bank One") is a
party to that certain Restated Credit Agreement dated as of April 17, 1997
(as extended, renewed, amended or restated from time to time, the "Restated
Credit Agreement") by and among Global Industries, Ltd., a Louisiana
corporation (the "Company"), the Guarantors, the Banks signatory thereto
(the "Banks") and Bank One, as Agent (in such capacity, the "Agent")
(unless otherwise defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Restated Credit Agreement);
WHEREAS, as provided under the Restated Credit Agreement, Bank One
committed to make Revolving Loans and issue letters of credit (the
"Committed Loans") to the Company in aggregate amounts not to exceed
$85,000,000 (the "Revolving Commitment"), such Revolving Commitment being
evidenced by a Revolving Note in the face amount of $85,000,000 (the
"Revolving Note");
WHEREAS, Bank One has heretofore assigned undivided interests in the
Commitment and the Committed Loan to ABN AMRO Bank N.V. Houston Agency
("ABN"), Credit Lyonnais New York Branch ("CL"), The Fuji Bank, Limited,
Houston Agency ("Fuji") and Hibernia National Bank ("Hibernia"), and after
such assignments the respective percentage share of each of the Assignors
was as follows:
Bank One 25%
ABN 18.75%
CL 18.75%
Fuji 18.75%
Hibernia 18.75%
WHEREAS, the Assignors and the Company are parties to that certain
First Amendment to Restated Credit Agreement dated as of June 23, 1997 (the
"First Amendment"), that certain Second Amendment to Restated Credit
Agreement dated as of March 18, 1998 (the "Second Amendment"), and that
certain Third Amendment to Restated Credit Agreement dated of even date
herewith (the "Third Amendment"); and
WHEREAS, pursuant to the Second Amendment the Assignors committed to
increase the amount of the Committed Loan to the Company to amounts not to
exceed $160,000,000, such new Revolving Commitment being executed by
Revolving Notes in the aggregate face amount of $160,000,000; and
WHEREAS, the Assignors have made Committed Loans to the Company in an
aggregate principal amount of $_________________ on the Revolving
Commitment; and
WHEREAS, pursuant to the Third Amendment, the Assignors have agreed to
increase the amount of the Committed Loans to the Company to $200,000,000
and to evidence such increase by Revolving Notes in the face amount of
$200,000,000; and
WHEREAS, the Assignors wish to assign to the Assignees part of the
rights and obligations of the Assignors under the Restated Credit Agreement
in an aggregate amount equal to $32,000,000 on the Revolving Commitments
(the "Assigned Amounts"), with Paribas receiving an assignment of
$15,000,000 in assigned amount and Whitney receiving an assignment of
$17,000,000 in an assigned amount, all of such assignments to be on the
terms and subject to the conditions set forth herein and the Assignees wish
to accept assignment of such rights and assume such obligations from the
Assignors on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignors hereby sell, transfer and assign to the
Assignees, and (ii) the Assignees hereby purchase, assume and undertake
from the Assignors, without recourse and without representation or warranty
(except as provided in this Assignment and Acceptance) the percentage
interest set forth hereinbelow (the "Assignees' Percentage Share") of (A)
the Commitment and the Committed Loans of the Assignors, (B) the Notes, and
(C) all related rights, benefits, obligations, liabilities and indemnities
of the Assignors under and in connection with the Restated Credit
Agreement, as amended and the Loan Documents:
Paribas 7.5%
Whitney 8.5%
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignees shall be a party to the Restated Credit
Agreement, as amended, and succeed to all of the rights and be obligated to
perform all of the obligations of a Bank under the Restated Credit
Agreement, including the requirements concerning confidentiality and the
payment of indemnification, with a Revolving Commitment in an amount equal
to the Assigned Amounts. The Assignees agree that it will perform in
accordance with their terms all of the obligations which by the terms of
the Restated Credit Agreement, as amended, are required to be performed by
it as a Bank. It is the intent of the parties hereto that the Revolving
Commitment of the Assignors shall, as of the Effective Date, be reduced by
an amount equal to the Assigned Amounts and the Assignors shall relinquish
their rights and be released from their obligations under the Restated
Credit Agreement, as amended, to the extent such obligations have been
assumed by the Assignees.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date each Assignee's Revolving Commitment will be:
Paribas $15,000,000
Whitney $17,000,000
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date each Assignor's Commitment will be:
Bank One $40,000,000
ABN AMRO $34,000,000
CL $30,000,000
Fuji $30,000,000
Hibernia $34,000,000
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignees shall pay to the Agent for
the ratable benefit of the Assignors on the Effective Date in immediately
available funds the following amounts, representing each Assignee's Pro
Rata Share of the principal amount of all Committed Loans:
Paribas $__________
Whitney $__________
3. Reallocation of Payments. Any interest, fees and other payments
accrued to the Effective Date with respect to the Revolving Commitment, the
Committed Loans and the Notes shall be for the account of the Assignors.
Any interest, fees and other payments accrued on and after the Effective
Date with respect to the Assigned Amounts shall be for the account of the
Assignees. Each of the Assignors and the Assignees agree that they will
hold in trust for the other parties any interest, fees and other amounts
which they may receive to which the other parties are entitled pursuant to
the preceding sentence and pay to the other parties any such amounts which
they may receive promptly upon receipt.
4. Independent Credit Decision. The Assignees (a) acknowledges that
it has received a copy of the Restated Credit Agreement, as amended, and
the Schedules and Exhibits thereto, together with copies of the most recent
financial statements referred to in Section 12 of the Restated Credit
Agreement, as amended, and such other documents and information as they
have deemed appropriate to make their own credit and legal analysis and
decision to enter into this Assignment and Acceptance; and (b) agree that
they will, independently and without reliance upon the Assignors, the Agent
or any other Bank and based on such documents and information as they shall
deem appropriate at the time, continue to make theirs own credit and legal
decisions in taking or not taking action under the Restated Credit
Agreement, as amended.
5. Effective Date; Notices.
(a) As between the Assignors and the Assignees, the effective date
for this Assignment and Acceptance shall be _________, 1998 (the "Effective
Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignors and the Assignees, together with the Note;
(ii) the consent of the Agent and the Company required for an
effective assignment of the Assigned Amounts by the Assignors to the
Assignees under Section 29 of the Restated Credit Agreement, as
amended, shall have been duly obtained and shall be in full force and
effective as of the Effective Date;
(iii) the Assignees shall pay to the Assignors all amounts
due to the Assignors under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof and in
Section 29 of the Restated Credit Agreement, as amended, shall have
been paid to the Agent; and
(v) the Assignors shall have assigned and the Assignees shall
have assumed a percentage equal to each Assignee's Percentage Share of
the rights and obligations of the Assignor under the Restated Credit
Agreement, as amended, (if such agreement exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignors shall deliver to the Company and the Agent for
acknowledgment by the Agent and the Company, a Notice of Assignment
substantially in the form attached hereto as Schedule 1.
6. Agent.
(a) The Assignees hereby appoint and authorize the Agent to take such
action as agent on their behalf and to exercise such powers under the
Restated Credit Agreement, as amended, as are delegated to the Agent by the
Banks pursuant to the terms of the Restated Credit Agreement, as amended.
(b) The Assignees shall assume no duties or obligations held by the
Agent in its capacity as Agent under the Restated Credit Agreement, as
amended.
7. Withholding Tax. Each Assignee (a) represents and warrants to
the Banks, the Agent and the Company that under applicable law and treaties
no tax will be required to be withheld with respect to any payments to be
made to the Assignees hereunder, (b) agrees to furnish (if it is organized
under the laws of any jurisdiction other than the United States or any
State thereof) to the Agent and the Company prior to the time that the
Agent or Company is required to make any payment of principal, interest or
fees hereunder, duplicate executed originals of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein the Assignees claims entitlement to the benefits of a tax treaty
that provides for a complete exemption from U.S. federal income withholding
tax on all payments hereunder) and agrees to provide new Forms 4224 or 1001
upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and
amendments thereto, duly executed and completed by the Assignees, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard
to such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignors represent and warrant that (i) they are the legal
and beneficial owners of the interest being assigned by them hereunder and
that such interest is free and clear of any Lien or other adverse claim;
(ii) they are duly organized and existing and they have the full power and
authority to take, and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by them in connection with this
Assignment and Acceptance and to fulfill their obligations hereunder; (iii)
no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for their due
execution, delivery and performance of this Assignment and Acceptance, and
apart from any agreements or undertakings or filings required by the
Restated Credit Agreement, as amended, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery
or performance; and (iv) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignors, enforceable against the Assignors in
accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of
general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignors make no representation or warranty and assume no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Restated Credit
Agreement, as amended, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Restated Credit
Agreement, as amended, or any other instrument or document furnished
pursuant thereto. The Assignors make no representation or warranty in
connection with, and assume no responsibility with respect to, the
solvency, financial condition or statements of the Company, or the
performance or observance by the Company, of any of its respective
obligations under the Restated Credit Agreement, as amended, or any other
instrument or document furnished in connection therewith.
(c) Each Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any
already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance; and apart from any agreements or
undertakings or filings required by the Restated Credit Agreement, as
amended, no further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance; (iii) this
Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of such Assignee,
enforceable against such Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles; and (iv)
it is an Eligible Assignee.
9. Further Assurances. The Assignors and the Assignees each hereby
agree to execute and deliver such other instruments, and take such other
action, as either party may reasonably request in connection with the
transactions contemplated by this Assignment and Acceptance, including the
delivery of any notices or other documents or instruments to the Company or
the Agent, which may be required in connection with the assignment and
assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No
failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach
thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignors and the Assignees shall each pay their own costs
and expenses incurred in connection with the negotiation, preparation,
execution and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF LOUISIANA. The Assignors and
the Assignees each irrevocably submit to the non-exclusive jurisdiction of
any State or Federal court sitting in Louisiana over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agree that all claims in respect of such action or proceeding
may be heard and determined in such Louisiana State or Federal court. Each
party to this Assignment and Acceptance hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding.
(f) THE ASSIGNORS AND THE ASSIGNEES EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE RESTATED CREDIT
AGREEMENT, AS AMENDED, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE
OF CONDUCT, COURSE OF DEALING OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignors and the Assignees have caused this
Assignment and Acceptance to be executed and delivered by their duly
authorized officers as of the data first above written.
ASSIGNORS:
BANK ONE, LOUISIANA, NATIONAL ASSOCIATION
a national banking association
By:
Rose M. Miller, Vice President
Address: 200 W. Congress, 9th Floor
Lafayette, Louisiana 70502
ABN AMRO BANK N.V., HOUSTON AGENCY
By:
H. Gene Shiels, Vice President
By:
Name:
Title:
Address: ABN AMRO Bank N.V., Houston Agency
Three Riverway, Suite 1700
Houston, Texas 77056
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
Address: Credit Lyonnais
1000 Louisiana, Suite 5360
Houston, Texas 77002
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By:
Name:
Title:
By:
Name:
Title:
Address: The Fuji Bank, Limited, Houston Agency
One Houston Center, Suite 4100
1221 McKinney
Houston, Texas 77010
HIBERNIA NATIONAL BANK
By:
Name:
Title:
Address: Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
ASSIGNEES:
BANQUE PARIBAS
By:
Name:
Title:
By:
Name:
Title:
Address: Banque Paribas
1200 Smith Street, Suite 3100
Houston, Texas 77002
WHITNEY NATIONAL BANK
By:
Name:
Title:
Address: Whitney National Bank
228 St. Charles Street
New Orleans, Louisiana 70130
SCHEDULE 1 TO
NOTICE OF ASSIGNMENT AND ACCEPTANCE
______________, 1998
Bank One, Louisiana, National Association
P.O. Box 3248
200 West Congress Street
Lafayette, Louisiana 70502-3249
Attn: Rose M. Miller, Vice President
Global Industries, Ltd.
P.O. Box 31936
Lafayette, Louisiana 70593
Attn: ______________________________
Ladies and Gentlemen:
We refer to that certain Restated Credit Agreement dated as of April
17, 1997 (as extended, renewed, amended or restated from time to time, the
"Restated Credit Agreement"), by and among Global Industries, Ltd., a
Louisiana corporation (the "Company"), certain of the Company's
subsidiaries (the "Guarantors"), the Banks signatory thereto (the "Banks")
and Bank One, Louisiana, National Association, as Agent (in such capacity,
the "Agent") as amended by that certain First Amendment to Restated Credit
Agreement dated as of June 23, 1997 (the "First Amendment") and that
certain Second Amendment to Restated Credit Agreement dated as of March 18,
1998 (the "Second Amendment") and that certain Third Amendment to Restated
Credit Agreement dated of even date herewith (the "Third Amendment").
Unless otherwise defined herein, capitalized terms used herein have the
respective meaning assigned to them in the Restated Credit Agreement.
1. We hereby give you notice of the assignment by Bank One,
Louisiana, National Association ("Bank One"), ABN AMRO N.V. Houston Agency
("ABN"), Credit Lyonnais New York Branch ("CL"), The Fuji Bank, Limited,
Houston Agency ("Fuji") and Hibernia National Bank ("Hibernia") (the
"Assignors") to Banque Paribas ("Paribas") and Whitney National Bank
("Whitney") (the "Assignees") of 16% of the right, title and interest of
the Assignors in and to the Restated Credit Agreement, as amended,
including, without limitation, the right, title and interest of the
Assignors in and to the commitments of the Assignors, and all outstanding
Loans made by the Assignors pursuant to the Assignment and Acceptance
Agreement attached hereto (the "Assignment and Acceptance"). Of the
Commitments being assigned hereunder, Paribas shall receive a 7.5% interest
and Whitney a 8.5% interest. The aforesaid assignment is subject to the
consent of the Agent and the Borrower, which consent is hereby requested.
Before giving effect to such assignment, the Assignors' Revolving
Commitment was $160,000,000 and the aggregate amount of its outstanding
Revolving Loans was $_______________. Upon execution of the Third
Amendment to Restated Credit Agreement between the Company, the Banks
(including the Assignees) and the Agent, the Banks' Revolving Commitment
will be $200,000,000 and the aggregate amount of its outstanding Revolving
Loans will be $________________.
2. The Assignees agreed that upon receiving the consent of the Agent
and the Company to such assignment, the Assignees will be bound by the
terms of the Restated Credit Agreement, as amended, as fully and to the
same extent as if the Assignees were the Bank originally holding such
interest in the Restated Credit Agreement, as amended.
3. Tendered herewith are the Notes executed in connection with the
Restated Credit Agreement, as amended, representing the commitments of the
Assignors.
4. The following administrative details apply to each Assignee:
(A) Banque Paribas:
(i) Notice Address:
Assignee
name:
Address:
Attention:
Telephone:( )
Telecopier:( )
Telex (Answerback):
(ii) Payment Instructions:
Account No.:
At:
Reference:
Attention:
(B) Whitney National Bank:
(i) Notice Address:
Assignee
name:
Address:
Attention:
Telephone:( )
Telecopier:( )
Telex (Answerback):
(ii) Payment Instructions:
Account No.:
At:
Reference:
Attention:
5. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignors and Assignees contained in the
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignors and the Assignees have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above
mentioned.
Very truly yours,
ASSIGNORS:
BANK ONE, LOUISIANA, NATIONAL ASSOCIATION
a national banking association
By:
Rose M. Miller, Vice President
ABN AMRO BANK N.V., HOUSTON AGENCY
By:
H. Gene Shiels, Vice President
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By:
Name:
Title:
By:
Name:
Title:
HIBERNIA NATIONAL BANK
By:
Name:
Title:
ASSIGNEES:
BANQUE PARIBAS
By:
Name:
Title:
By:
Name:
Title:
WHITNEY NATIONAL BANK
By:
Name:
Title:
ACKNOWLEDGED AND
CONSENTED TO:
Global Industries, Ltd.
By:
Name:
Title:
BANK ONE, LOUISIANA, NATIONAL
ASSOCIATION, as Agent
By:
Rose M. Miller, Vice President
EXHIBIT "C"
CONTINUING GUARANTY
CONTINUING GUARANTY (this "Agreement") made and entered into as of
__________, 1998 by Global Pipelines Plus, Inc., Global Divers and
Contractors, Inc., Global Movible Offshore, Inc., Pipelines, Incorporated,
Global Industries Offshore, Inc. and Global International Vessels, Ltd.
(hereinafter, whether one or more, individually and collectively referred
to as "Guarantor"), in favor of Bank One, Louisiana, National Association
of Lafayette, Louisiana, as Agent for itself and each of the financial
institutions which are or have become a party to that certain Restated
Credit Agreement dated as of April 17, 1997, as amended, by and among
Borrower (as hereinafter defined), the Agent and the financial institutions
party thereto (the "Credit Agreement") (hereinafter referred to as
"Lenders"), guarantying the Indebtedness (as defined) of GLOBAL INDUSTRIES,
LTD., a Louisiana corporation (hereinafter referred to as "Borrower").
WITNESSETH:
FOR VALUE RECEIVED, and in consideration of and for credit and
financial accommodations extended, to be extended, or continued to or for
the account of the above named Borrower, the undersigned Guarantor, whether
one or more, hereby jointly, severally and solidarity, agrees as follows:
Section 1. Continuing Guaranty of Borrower's Indebtedness.
Guarantor hereby absolutely and unconditionally agrees to, and by these
presents does hereby, guarantee the prompt and punctual payment,
performance and satisfaction of any and all loans, extensions of credit
and/or other obligations that Borrower may now and/or in the future owe to
and/or incur in favor of Lenders under or pursuant to that certain Restated
Credit Agreement dated as of April 17, 1997, as amended, by and among
Borrower, Guarantors and Lenders, and as the same may be amended and/or
restated from time to time and in effect (the "Credit Agreement"),
including the indebtedness of Borrower evidenced by certain Promissory
Notes of even date herewith in the maximum aggregate principal amount of
$200,000,000.00, made by Borrower pursuant to the Credit Agreement, as said
Promissory Notes may be renewed from time to time and in effect, and
whether such indebtedness and/or obligations are absolute or contingent,
liquidated or unliquidated, due or to become due, secured or unsecured, and
whether now existing or hereafter arising, of any nature or kind
whatsoever, up to a maximum principal amount outstanding at any one or more
times not to exceed TWO HUNDRED MILLION AND NO/100 DOLLARS (U.S.
$200,000.000.00), together with interest, costs and attorneys' fees thereon
(with all of Borrower's indebtedness and/or obligations being hereinafter
individually and collectively referred to under this Agreement as
"Borrower's Indebtedness" or the "Indebtedness").
Notwithstanding any other provision herein to the contrary, the
maximum principal amount of Borrower's Indebtedness in favor of Lenders
guaranteed by Guarantor under this Agreement is limited to TWO HUNDRED
MILLION AND NO/100 DOLLARS (U.S. $200,000,000.00) (interest, costs, and
attorney's fees under Borrower's Indebtedness are additionally guaranteed
hereunder.)
Section 2. Limitation on Liability. The liability of any
Guarantor hereunder with respect to the Indebtedness shall be limited to
the maximum amount of liability that can be incurred without rendering this
Continuing Guaranty, as it relates to any Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount.
Section 3. Joint, Several and Solidarity Liability. Guarantor
further agrees that its obligations and liabilities for the prompt and
punctual payment, performance and satisfaction of all of Borrower's
Indebtedness shall be on a "joint and several" and "solidary" basis along
with Borrower to the same degree and extent as if Guarantor had been and/or
will be a co-borrower, co-principal obligor and/or co-maker of all of
Borrower's Indebtedness. In the event that there is more than one
guarantor under this Agreement, or in the event that there are other
guarantors, endorsers or sureties of all or any portion of Borrower's
Indebtedness, Guarantor's obligations and liabilities hereunder shall be on
a "joint and several" and "solidary" basis along with such other guarantor
or guarantors, endorsers and/or sureties.
Section 4. Duration; Cancellation of Agreement. This Agreement
and Guarantor's obligations and liabilities hereunder shall remain in full
force and effect until such time as each and every Indebtedness of Borrower
shall be paid, performed and/or satisfied in full, in principal, interest,
costs and attorneys' fees, or until such time as this Agreement may be
cancelled or otherwise terminated by Lenders under a written cancellation
instrument in favor of Guarantor (subject to the automatic reinstatement
provision hereinbelow). Unless otherwise indicated under such a written
cancellation instrument, Lenders' agreement to terminate or otherwise
cancel this Agreement shall only effect and shall be expressly limited to
Guarantor's continuing obligations and liabilities to guarantee the prompt
and punctual payment, performance and satisfaction of Borrower's
Indebtedness incurred, originated and/or extended or committed to by
Lenders after the date of such a written cancellation instrument; with
Guarantor remaining fully obligated and liable under this Agreement for the
prompt and punctual payment, performance and satisfaction of any and all of
Borrower's then outstanding Indebtedness together with continuing
assessment of interest thereon) that was incurred, originated, extended or
committed to prior to the date of such a written cancellation instrument.
Nothing under this Agreement or under any other agreement or understanding
by and between Guarantor and Lenders, shall in any way obligate, or be
construed to obligate, Lenders to agree to the subsequent termination or
cancellation of Guarantor's obligations and liabilities hereunder, it being
fully understood and agreed by Guarantor that Lenders may, within its sole
and uncontrolled discretion and judgment, refuse to release Guarantor from
any of its obligations and liabilities under this Agreement for any reason
whatsoever as long as any of Borrower's Indebtedness remains unpaid and
outstanding.
Section 5. Default of Borrower. Should Borrower default under any
of its Indebtedness in favor of Lenders as provided in the Credit
Agreement, Guarantor unconditionally and absolutely agrees to pay the full
then unpaid amount of all of Borrower's Indebtedness guaranteed hereunder,
in principal interest, costs and reasonable attorneys' fees. Such payment
or payments shall be made immediately following demand by Lenders at
Agent's offices at 200 West Congress Street, Lafayette, Louisiana 70501.
Guarantor hereby waives notice of acceptance of this Agreement and of any
Indebtedness to which it applies or may apply. Guarantor further waives
presentation and demand for payment of Borrower's Indebtedness, notice of
dishonor and of nonpayment, notice of intention to accelerate, notice of
acceleration, protest and notice of protest, collection or institution of
any suit or other action by Lenders in collection thereof, including any
notice of default in payment thereof or other notice to, or demand for
payment thereof on any party. Guarantor additionally waives any and all
rights and pleas of division and discussion as provided under Louisiana
State law, as well as, to the degree applicable, any similar rights as may
be provided under the laws of any other state.
Section 6. Guarantor's Subordination of Rights to Lenders. In the
event that Guarantor should for any reason (i) make any payment for and on
behalf of Borrower under any of Borrower's Indebtedness, and/or (ii) make
any payments to Lenders in total or partial satisfaction of Guarantor's
obligations and liabilities hereunder, Guarantor hereby agrees that any and
all rights that Guarantor may have or acquire to collect or to be
reimbursed by Borrower (or by any guarantor, endorser or surety of
Borrower's Indebtedness), whether Guarantor's rights of collection or
reimbursement arise by way of subrogation to the rights of Lenders or
otherwise, shall in all respects be subordinate, inferior and junior to
Lenders' rights to collect and enforce payment, performance and
satisfaction of Borrower's then remaining Indebtedness, until such time as
all of Borrower's Indebtedness is fully paid and satisfied. Upon the
occurrence and continuance of an Event of Default (as defined in the Credit
Agreement) any and all amounts owed by Borrower to Guarantor shall in all
respects be subordinate, inferior and junior to Lenders' rights to collect
and enforce payment, performance and satisfaction of Borrower's then
remaining Indebtedness, until such time as all of Borrower's Indebtedness
is fully paid and satisfied. Guarantor further agrees to refrain from
attempting to collect and/or enforce any of Guarantor's aforesaid rights
against Borrower (or any other guarantor, surety or endorser of Borrower's
Indebtedness), arising by way of subrogation or otherwise, until such time
as all of Borrower's then remaining Indebtedness in favor of Lenders is
fully paid and satisfied, in principal, interest, costs and attorneys'
fees.
Section 7. Additional Covenants. Guarantor further agrees that
Lenders may, at its sole option, at any time, and from time to time,
without the consent of or notice to Guarantor, or any one of them, or to
any other party, and without incurring any responsibility to Guarantor or
to any other party, and without impairing or releasing the obligations of
Guarantor under this
Agreement:
(A) Discharge or release any party (including, but not limited
to, Borrower or any guarantor under this Agreement) who is or may be liable
to Lenders for any of Borrower's Indebtedness;
(B) Sell, exchange, release, surrender, realize upon or
otherwise deal with, in any manner and in any order, any collateral
directly or indirectly securing repayment of any of Borrower's
Indebtedness;
(C) Change the manner, place or terms of payment, or change or
extend the time of payment of or renew, as often and for such periods as
Lenders may determine, or after, any of Borrower's Indebtedness;
(D) Settle or compromise any of Borrower's Indebtedness;
(E) Subordinate and/or agree to subordinate the payment of all
or any of Borrower's Indebtedness or Lenders' security rights in and/or to
any collateral directly or indirectly securing any such indebtedness, to
the payment and/or security rights of any other present and/or future
creditors of Borrower;
(F) Apply any sums paid to any of Borrower's Indebtedness, with
such payments being applied in such priority or with such preferences as
Lenders may determine in its sole discretion, regardless of what
Indebtedness of Borrower remains unpaid;
(G) Take or accept any other security for any or all of
Borrower's Indebtedness; and/or
(H) Enter into, deliver, modify, amend or waive compliance with,
any Instrument or arrangement evidencing, securing or otherwise affecting,
all or any part of Borrower's Indebtedness.
In addition, no course of dealing between Lenders and Borrower
(or any other guarantor, surety or endorser of Borrower's Indebtedness),
nor any failure or delay on the part of Lenders to exercise any of Lenders'
rights and remedies, or any other agreement or agreements by and between
Lenders and Borrower (or any other guarantor, surety or endorser) shall
have the affect of impairing or releasing Guarantor's obligations and
liabilities to Lenders or of waiving any of Lenders' rights and remedies.
Any partial exercise of any rights and remedies granted to Lenders shall
furthermore not constitute a waiver of any of Lenders' other rights and
remedies, it being Guarantor's intent and agreement that Lenders' rights
and remedies shall be cumulative in nature. Guarantor further agrees that,
should Borrower default under any of its Indebtedness, any waiver or
forbearance on the part of Lenders to pursue the rights and remedies
available to Lenders shall be binding upon Lenders only to the extent that
Lenders specifically agree to such waiver or forbearance in writing. A
waiver or forbearance on the part of Lenders as to one event of default
shall not constitute a waiver of forbearance as to any other default.
Section 8. No Release of Guarantor. Guarantor's obligations and
liabilities under this Agreement shall not be released, impaired, reduced
or otherwise affected by, and shall continue in full force and effect,
notwithstanding the occurrence of any event, including without limitation
any one of the following events:
(A) Death, insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of authority
(whether corporate, partnership or trust) of Borrower (or any person acting
on Borrower's behalf), or any other guarantor, surety or endorser of any of
Borrower's Indebtedness;
(B) Partial payment or payments of any amount due and/or
outstanding under any of Borrower's Indebtedness;
(C) Any payment of Borrower or any other party to Lenders is
held to constitute a preferential transfer or a fraudulent conveyance under
any applicable law, or for any reason, Lenders is required to refund such
payment or pay such amount to Borrower or to any other person;
(D) Any dissolution of Borrower or any sale, lease or transfer
of all or any part of Borrower's assets; and/or
(E) Any failure of Lenders to notify Guarantor of the acceptance
of this Agreement or of the making loans or other extensions of credit in
reliance on this Agreement or of the failure of Borrower to make any
payment due by Borrower to Lenders.
(F) Apply any sums paid to any of Borrower's Indebtedness, with
such payments being applied in such priority or with such preferences as
Lenders may determine in its own discretion, regardless of what
Indebtedness of Borrower remains unpaid;
(G) Take or accept any other security for any or all of
Borrower's Indebtedness; and/or
(H) Enter into, deliver, modify, amend or waive compliance with,
any Instrument or arrangement evidencing, securing or otherwise affecting,
all or any part of Borrower's Indebtedness.
This Agreement and Guarantor's obligations and liabilities
hereunder shall continue to be effective, and/or shall automatically and
retroactively be reinstated if a release or discharge has occurred, as the
case may be, if at any time any payment or part thereof to Lenders with
respect to any of Borrower's Indebtedness is rescinded or must otherwise be
restored by Lenders pursuant to any insolvency, bankruptcy, reorganization,
receivership, or any other debt relief granted to Borrower or to any other
party. In the event that Lenders must rescind or restore any payment
received by Lenders in satisfaction of Borrower's Indebtedness, any prior
release or discharge from the terms of this Agreement given to Guarantor
shall be without effect, and this Agreement and Guarantor's obligations and
liabilities hereunder shall automatically be renewed or reinstated and
shall remain in full force and effect to the same degree and extent as if
such a release or discharge was never granted. It is the intention of
Lenders and Guarantor that Guarantor's obligations and liabilities
hereunder shall not be discharged except by Guarantor's full and complete
performance of such obligations and liabilities and then only to the extent
of such performance.
Section 9. Enforcement of Guarantor's Obligations and Liabilities.
Guarantor agrees that, should Lenders deem it necessary to file an
appropriate collection action to enforce Guarantor's obligations and
liabilities under this Agreement, Lenders may commence such a civil action
against Guarantor without the necessity of first (i) attempting to collect
Borrower's Indebtedness from Borrower or from any other guarantor, surety
or endorser, whether through filing of suit or otherwise, (ii) attempting
to exercise against any collateral directly or indirectly securing
repayment of any of Borrower's Indebtedness, whether through the filing of
an appropriate foreclosure action or otherwise, or (iii) including Borrower
or any other guarantor, surety or endorser of any of Borrower's
Indebtedness as an additional party defendant in such a collection action
against Guarantor. If there is more than one guarantor under this
Agreement, each guarantor additionally agrees that Lenders may file an
appropriate collection and/or enforcement action against any one or more of
them, without impairing the rights of Lenders against any other guarantor
under this Agreement. In the event that Lenders should ever deem it
necessary to refer this Agreement to an attorney-at-law for the purpose of
enforcing Guarantor obligations and liabilities hereunder, or of protecting
or preserving Lenders' rights hereunder, Guarantor (and each of them, on a
joint, several and solidary basis) agrees to reimburse Lenders for the
reasonable fees of such an attorney. Guarantor additionally agrees that
Lenders shall not be liable for failure to use diligence in the collection
of any of Borrower's Indebtedness or any collateral security therefor, or
in creating or preserving the liability of any person liable on any such
Indebtedness, or in creating, perfecting or preserving any security for any
such Indebtedness.
Section 10. Additional Documents. Upon the reasonable request of
Lenders, Guarantor will, at any time, and from time to time, duly execute
and deliver to Lenders any and all such further instruments and documents,
and supply such additional information as may be necessary or advisable in
the opinion of Lenders, to obtain the full benefits of this Agreement.
Section 11. Transfer of Indebtedness. This agreement is for the
benefit of Lenders and for such other person or persons as may from time to
time become or be the holders of any of Borrower's Indebtedness hereby
guaranteed and this Agreement shall be transferable and negotiable, with
the same force and effect and to the same extent as Borrower's Indebtedness
may be transferable, it being understood that, upon the transfer or
assignment by Lenders of any of Borrower's Indebtedness hereby guaranteed,
the legal holder of such Indebtedness shall have all the rights granted to
Lenders under this Agreement.
Guarantor hereby recognizes and agrees that Lenders may, from time to
time, one or more times, transfer all or any portion of Borrower's
Indebtedness to one or more third parties. Such transfers may include, but
are not limited to, sales of a participation or syndication interest in
such Indebtedness in favor of one or more third parties. Guarantor
specifically agrees and consents to all such transfers and assignments and
Guarantor further waives any subsequent notice of and right to consent to
any such transfers and assignments as may be provided under applicable
Louisiana law. Guarantor additionally agrees that the purchaser of a
participation or syndication interest in Borrower's Indebtedness will be
considered as the absolute owner of an interest in, or a percentage
interest of, such Indebtedness and that such a purchaser shall have all of
the rights granted to the purchaser under any participation agreement
governing the sale of such a participation or syndication interest.
Guarantor further waives any right of offset that Guarantor may have
against Lenders and/or any purchaser of such a participation or syndication
interest in Borrower's Indebtedness and Guarantor unconditionally agrees
that either Lenders or such a purchaser may enforce Guarantor's obligations
and liabilities under this Agreement, irrespective of the failure or
insolvency of Lenders or any such purchaser. Guarantor further agrees
that, upon any transfer of all or any portion of Borrower's Indebtedness,
Lenders may transfer and deliver any and all collateral securing repayment
of such Indebtedness including, but not limited to, any collateral provided
by Guarantor) to the transferee of such Indebtedness and such collateral
(again, including but not limited to Guarantor's collateral) shall secure
any and all of Borrower's Indebtedness in favor of such transferee.
Guarantor additionally agrees that, after any such transfer or assignment
has taken place, Lenders shall be fully discharged from any and all
liability and responsibility to Borrower (and Guarantor) with respect to
such collateral, and the transferee thereafter shall be vested with all the
powers and rights with respect to such collateral.
Section 12. Right of Offset. As collateral security for the
repayment of Guarantor's obligations and liabilities under this Agreement,
Guarantor hereby grants Lenders, as well as their successors and assigns,
the right to apply, upon the occurrence of an Event of Default under the
Credit Agreement and the expiration of any applicable grace period allowed
to cure the Event of Default, any and all funds that Guarantor may then
have on deposit with or in the possession or control of any Lender and its
successors or assigns (with the exception of funds deposited in IRA,
pension or other tax-deferred deposit accounts), towards repayment of any
of Borrower's Indebtedness subject to this Agreement.
Section 13. Construction. The provisions of this Agreement shall
be in addition to and cumulative of, and not in substitution, novation or
discharge of, any and all prior or contemporaneous guaranty or other
agreements by Guarantor (or any one or more of them), in favor of Lenders
or assigned to Lenders by others, all of which shall be construed as
complementing each other. Nothing herein contained shall prevent Lenders
from enforcing any and all such guaranties or agreements in accordance with
their respective terms.
Section 14. Amendment. No amendment, modification, consent or
waiver of any provision of this Agreement, and no consent to any departure
by Guarantor therefrom, shall be effective unless the same shall be in
writing signed by a duly authorized officer of Lenders, and then shall be
effective only to the specific instance and for the specific purpose for
which given.
Section 15. Successors and Assigns Bound. Guarantor's obligations
and liabilities under this Agreement shall be binding upon Guarantor's
successors, heirs, legatees, devisees, administrator executors and assigns.
The rights and remedies granted to Lenders under this Agreement shall also
inure to the benefit of Lenders' successors and assigns, as well as to any
and all subsequent holder or holders of any of Borrower's Indebtedness
subject to this Agreement.
Section 16. Caption Heading. Caption headings of the of this
Agreement are for convenience purposes only and are not to be used to
interpret or to define their provisions. In this Agreement, whenever the
context so requires, the singular includes the plural and the plural also
includes the singular.
Section 17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
LOUISIANA.
Section 18. Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof; such provision shall be fully severable,
this Agreement shall be construed and enforceable as if the illegal,
invalid or unenforceable provision had never comprised a part of it, and
the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement, a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and
legal, valid and enforceable.
IN WITNESS WHEREOF, Guarantor has executed this Agreement in favor of
Lenders on the day, month, and year first written above.
GUARANTORS:
GLOBAL PIPELINES PLUS, INC.;
GLOBAL DIVERS AND CONTRACTORS, INC.;
GLOBAL MOVIBLE OFFSHORE, INC.;
PIPELINES, INCORPORATED;
GLOBAL INDUSTRIES OFFSHORE, INC.; and
GLOBAL INTERNATIONAL VESSELS, LTD.
By:
Name:
Title:
ACCEPTED:
BANK ONE, LOUISIANA,
NATIONAL ASSOCIATION
as Agent for itself
and the Lenders
By: DATE: _________, 1998
Rose M. Miller, Vice President
EXHIBIT 21.1
Subsidiaries of the Registrant
(Global Industries, Ltd.)
NAME INCORPORATION
Global Divers and Contractors, Inc. Louisiana
Global Pipelines PLUS, Inc. Louisiana
Pipelines, Incorporated Louisiana
Global Movible Offshore, Inc. Louisiana
Pelican Transportation, Inc. Louisiana
The Red Adair Company, Inc. Louisiana
Global Industries Offshore, Inc. Delaware
Global Offshore International, Ltd. Cayman Islands
Global International Vessels, Inc. Cayman Islands
Norman Offshore Pipelines, Inc. Louisiana
Global Offshore Pty., Ltd. Australia
Global Industries Asia Pacific Pte. Ltd. Singapore
Yamado Enterprise, Sdn. Bhd. Brunei
PT Global Industries Asia-Pacific Indonesia
Global Asia Pacific Industries Sdn. Bhd. Malaysia
Subtec Asia, Ltd. Isle of Mann
Subtec Marine Services, Ltd. Cyprus
Subtec Laut Sdn. Bhd. Brunei
Subtec Offshore Support, Ltd. Cyprus
Subtec Middle East, Ltd. Delaware
CCC Fabricaciones y Construcciones, Mexico
S.A. de C.V. (1)
(1) CCC Fabricaciones y Construcciones, S.A. de C.V. is a 49% owned,
unconsolidated subsidiary.
All other subsidiaries are 100% owned.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-58048 & 33-89778 of Global Industries, Ltd. on Form S-8 of our report
dated June 12, 1998, appearing in this Annual Report on Form 10-K of Global
Industries, Ltd. for the year ended March 31, 1998.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
June 18, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Global
Industries, Ltd.'s financial statements for the twelve months ended March 31,
1998 and is qualified in its entirety by reference to such 10K.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 18,693
<SECURITIES> 0
<RECEIVABLES> 97,156
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 152,610
<PP&E> 432,224
<DEPRECIATION> 0
<TOTAL-ASSETS> 625,367
<CURRENT-LIABILITIES> 75,138
<BONDS> 144,825
0
0
<COMMON> 915
<OTHER-SE> 368,018
<TOTAL-LIABILITY-AND-EQUITY> 625,367
<SALES> 0
<TOTAL-REVENUES> 379,901
<CGS> 0
<TOTAL-COSTS> 265,245
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,245
<INCOME-PRETAX> 91,685
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