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<SEC-DOCUMENT>0000950129-01-001718.txt : 20010330
<SEC-HEADER>0000950129-01-001718.hdr.sgml : 20010330
ACCESSION NUMBER: 0000950129-01-001718
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 7
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010329
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: OCEANEERING INTERNATIONAL INC
CENTRAL INDEX KEY: 0000073756
STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389]
IRS NUMBER: 952628227
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0331
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 001-10945
FILM NUMBER: 1583002
BUSINESS ADDRESS:
STREET 1: 11911 FM 529
CITY: HOUSTON
STATE: TX
ZIP: 77041
BUSINESS PHONE: 713-329-4500
MAIL ADDRESS:
STREET 1: 11911 FM 529
CITY: HOUSTON
STATE: TX
ZIP: 77041
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>h85406e10-k.txt
<DESCRIPTION>OCEANEERING INTERNATIONAL, INC. - 12/31/2000
<TEXT>
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(c) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from April 1, 2000 to December 31, 2000
Commission file number 1-10945
OCEANEERING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-2628227
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11911 FM 529
HOUSTON, TEXAS 77041
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 329-4500
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE
ON WHICH REGISTERED
Common Stock, $0.25 par value New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X], No [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
<TABLE>
<S> <C>
Aggregate market value of the voting stock held by non-affiliates of the
registrant at March 19, 2001 based upon the closing sale price of the Common
Stock on the New York Stock Exchange: $476,851,000
Number of shares of Common Stock outstanding at March 19, 2001: 23,308,423
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the proxy statement relating to the registrant's 2001 annual meeting
of shareholders, to be filed on or before April 30, 2001 pursuant to Regulation
14A of the Securities and Exchange Act of 1934 are incorporated by reference to
the extent set forth in Part III, Items 10-13 of this report.
<PAGE> 2
PART I
ITEM 1. BUSINESS.
Recent Developments
Effective November 1, 2000, our Board of Directors changed our fiscal year-end
to December 31 from March 31, which was the fiscal year-end used in our last
report on Form 10-K filed with the SEC. This report covers the nine-month
transition period from April 1, 2000 to December 31, 2000.
Unless the context indicates otherwise, references to fiscal years
indicate the twelve months ended March 31 of that year. For example, fiscal 2000
refers to the twelve-month period ended March 31, 2000.
General Development of Business
Oceaneering International, Inc. is an advanced applied technology company that
provides a comprehensive range of integrated technical services and hardware to
customers who operate in harsh environments such as underwater, space and other
hazardous areas. Oceaneering was organized in 1969 out of the combination of
three diving service companies founded in the early 1960s. Since our
establishment, we have concentrated on the development and marketing of
underwater services and products requiring the use of advanced deepwater
technology. We are one of the world's largest underwater services contractors.
We provide most of our services and products to the oil and gas industry. These
include drilling support, subsea construction, design, lease and operation of
production systems, facilities maintenance and repair, specialty subsea hardware
and specialized onshore and offshore engineering and inspection. We operate in
the United States and 18 other countries. Our international operations,
principally in the North Sea, Africa and the Far East, accounted for
approximately 46% of our revenues, or $142 million, for the nine-month period
ended December 31, 2000.
We operate in five business segments. The segments are contained within
two businesses -- services and products provided to the offshore oil and gas
industry ("Offshore Oil and Gas") and all other services and products ("Advanced
Technologies"). Our business segments within the Offshore Oil and Gas business
are Remotely Operated Vehicles ("ROVs"), Subsea Products, Mobile Offshore
Production Systems and Other Services. We report our Advanced Technologies
business as one segment. In each of our businesses, we have been concentrating
on expanding our capabilities to provide technical solutions to our customers.
OFFSHORE OIL AND GAS. In the last few years, the focus of our Offshore Oil and
Gas business has been toward increasing our asset base for servicing deepwater
projects and subsea completions. Prior to 1996, we purchased most of our
remotely operated vehicles, often referred to as ROVs, which are submersible
vehicles operated from the surface and widely used in the offshore oil and gas
industry. However, in response to increased demand for more powerful systems
operating in deeper water, we expanded our capabilities and established an
in-house facility to design and build ROVs to meet the continued expansion of
our ROV fleet. This facility was established and became fully operational in
January 1998. We have built over 50 ROV systems and we are producing all our new
ROVs in-house. In September 2000, we exchanged our diving-related assets in
Asia, Australia and the Middle East for 11 ROVs. The diving-related assets were
part of our Other Services segment.
In addition to the ROV expansion, we also committed to the construction of
two multiservice vessels, the Ocean Intervention and the Ocean Intervention II,
which went into service in the fourth quarter of calendar 1998 and the third
quarter of calendar 2000, respectively. These multiservice vessels are equipped
with thrusters that allow them to be dynamically positioned, which means the
vessels can maintain a constant position at a location without the use of
anchors. Both vessels can carry and install significant lengths of coiled tubing
or umbilicals required to bring subsea well completions into production
(tie-back to production facilities). These vessels have been designed for use in
pipeline or flowline tie-ins, pipeline crossings and subsea hardware
interventions and installations. These vessels are part of our Other Services
segment.
Through our Multiflex division, we are a leading provider of subsea
hydraulic and electrohydraulic thermoplastic umbilicals. These umbilicals are
the means by which offshore operators control subsea wellhead hydrocarbon flow
rates. We entered this market in March 1994 through our purchase of the
operating subsidiaries of Multiflex International Inc. During fiscal 1999, we
constructed a new umbilical plant in Brazil and relocated, modernized and
increased the capabilities of our umbilical manufacturing facility in Scotland.
The plant in Brazil began operations in fiscal 1999, and the plant in Scotland
was commissioned in early fiscal 2000.
2
<PAGE> 3
We own two operating mobile offshore production systems, the PB San
Jacinto, acquired in December 1997 and currently under contract offshore
Indonesia, and the floating production, storage and offloading system Ocean
Producer, which has been operating offshore West Africa since December 1991.
In November 1999, we contracted to provide a mobile offshore production
system for development of oil fields offshore Western Australia. We converted a
jackup drilling rig to our third mobile offshore production system for this
multiple year contract. We put the unit on location in January 2001, and our
customer oil companies expect production to begin in mid-calendar 2001.
In November 1995, we contracted with a major oil company for the provision
of a floating production, storage and offloading unit. We converted a crude oil
tanker and delivered the Zafiro Producer to its first operational location off
West Africa in August 1996. In December 1996, the customer exercised an option
to purchase the unit. We continue to participate as a member of the customer's
integrated team to operate and enhance the unit's production facilities.
ADVANCED TECHNOLOGIES. In August 1992 and May 1993, we purchased two businesses
that formed the basis of our Advanced Technologies segment. The first business
designed, developed and operated robotic systems and ROVs specializing in
non-oilfield markets and provided the basis for our expansion into
telecommunications cable laying and burial and commercial theme park animation
in 1993. The second business designed, developed and fabricated spacecraft
hardware and high temperature insulation products.
We intend to continue our strategy of acquiring, as opportunities arise,
additional assets or businesses, to improve our market position or expand into
related service and product lines, either directly through merger, consolidation
or purchase, or indirectly through joint ventures. We are also applying our
skills and technology in further developing business unrelated to the oil and
gas industry and performing services for government agencies and firms in the
telecommunications, aerospace and civil engineering and construction industries.
Financial Information about Segments
For financial information about our business segments, please see the table in
Note 6 of the Notes to Consolidated Financial Statements in this report, which
presents revenues, income (loss) from operations, depreciation and amortization
expenses, identifiable assets and capital expenditures by business segment for
the nine-month period ended December 31, 2000 and for the fiscal years ended
March 31, 2000 and 1999.
Description of Business
OFFSHORE OIL AND GAS
Our Offshore Oil and Gas business consists of ROVs, Subsea Products, Mobile
Offshore Production Systems and Other Services.
ROVS. ROVs are submersible vehicles operated from the surface. They are widely
used in the offshore oil and gas industry for a variety of underwater tasks
including drill support, installation and construction support, pipeline
inspection and surveys and subsea production facility operation and maintenance.
ROVs may be outfitted with manipulators, sonar, video cameras, specialized
tooling packages and other equipment or features to facilitate the performance
of specific underwater tasks. We use ROVs at water depths or in situations where
the use of divers would be uneconomical or infeasible. We own 118 work class
ROVs and are the industry leader in providing ROV services on deepwater wells,
which are the most technically demanding. We believe we operate the largest and
most technically advanced fleet of ROVs in the world.
ROV revenues:
<TABLE>
<CAPTION>
Percent of
Amount Total Revenues
------------- --------------
<S> <C> <C>
Nine-month period ended December 31, 2000 $ 78,953,000 26%
Fiscal year ended March 31, 2000 94,617,000 23%
Fiscal year ended March 31, 1999 100,854,000 25%
</TABLE>
SUBSEA PRODUCTS. We manufacture a variety of build-to-order specialty subsea
hardware to ISO 9001 quality requirements. These products include hydraulic,
electro-hydraulic and steel tube umbilicals; production control equipment;
pipeline repair
3
<PAGE> 4
systems; and ROV tooling and work packages. We market these products under the
trade names Multiflex and Oceaneering Intervention Engineering.
Subsea umbilicals and production control equipment are the means by which
offshore well operators control subsea wellhead hydrocarbon flow, monitor
downhole and wellhead conditions and perform chemical injection. Pipeline repair
systems make the effective repair of pipelines and risers possible without
requiring underwater welding. ROV tooling and work packages provide the
operational link between an ROV and permanently installed equipment located on
the sea floor.
Subsea Products revenues:
<TABLE>
<CAPTION>
Percent of
Amount Total Revenues
------------- --------------
<S> <C> <C>
Nine-month period ended December 31, 2000 $ 65,771,000 21%
Fiscal year ended March 31, 2000 69,744,000 17%
Fiscal year ended March 31, 1999 72,919,000 18%
</TABLE>
MOBILE OFFSHORE PRODUCTION SYSTEMS. We presently own two operating mobile
offshore production systems, the Ocean Producer and the San Jacinto. We own a
third mobile offshore production system, the Ocean Legend, which is on location
offshore Western Australia for our customer oil companies. We expect production
from that unit to begin in mid-calendar 2001. In addition, we operate and
maintain the Zafiro Producer on behalf of a major oil company.
We also undertake engineering and project management of projects related
to mobile offshore production systems. We have managed the conversion of a
jackup to a production unit and in-field modifications to the Zafiro Producer.
We also perform engineering studies for customers evaluating field development
projects.
Mobile Offshore Production Systems revenues:
<TABLE>
<CAPTION>
Percent of
Amount Total Revenues
------------ --------------
<S> <C> <C>
Nine-month period ended December 31, 2000 $ 15,788,000 5%
Fiscal year ended March 31, 2000 23,983,000 6%
Fiscal year ended March 31, 1999 31,559,000 8%
</TABLE>
OTHER SERVICES. We provide oilfield diving, non-destructive inspection and
testing services and supporting vessel operations, which are utilized
principally in inspection, repair and maintenance activities. We also perform
subsea intervention and hardware installation services from our multiservice
vessels. These services include: subsea well tie-backs; pipeline/flowline
tie-ins and repairs; pipeline crossings; umbilical and other subsea equipment
installations; and subsea intervention.
We supply commercial diving services to the oil and gas industry in the
United States using the traditional techniques of air, mixed gas and saturation
diving, all of which use surface-supplied breathing gas. We do not use divers in
water depths greater than 1,000 feet. We also use atmospheric diving systems,
which enclose the operator in a surface pressure diving suit, in water depths up
to 2,300 feet. In September 2000, we exchanged our diving-related assets in
Asia, Australia and the Middle East for 11 ROVs.
Through our Solus Schall division, we offer a wide range of inspection
services to customers required to obtain third-party inspections to satisfy
contractual structural specifications, internal safety standards or regulatory
requirements. We focus on the inspection of pipelines and onshore fabrication of
offshore facilities for the oil and gas industry. Certain of Solus Schall's
pipeline inspection activities are performed through the use of specialized
x-ray crawlers, which travel inside pipelines, stopping to perform radiographic
inspection of welds.
Other Services revenues:
<TABLE>
<CAPTION>
Percent of
Amount Total Revenues
------------ --------------
<S> <C> <C>
Nine-month period ended December 31, 2000 $ 65,206,000 21%
Fiscal year ended March 31, 2000 105,505,000 25%
Fiscal year ended March 31, 1999 95,748,000 24%
</TABLE>
4
<PAGE> 5
ADVANCED TECHNOLOGIES
Our Advanced Technologies segment provides underwater intervention, engineering
services and related manufacturing to meet a variety of industrial requirements,
including ship husbandry, search and recovery, subsea telecommunications cable
installation, maintenance and repair, civil works projects and commercial theme
park animation. We do this in part by extending the use of existing assets and
technology developed in oilfield operations to new applications.
We work for customers having specialized requirements in underwater or
other environments outside the oil and gas industry. We provide deep ocean
search and recovery services for governmental bodies, including the U.S. Navy.
In other services for the Navy, we provide various engineering and underwater
services ranging from aircraft salvage and recovery operations to inspection and
maintenance of the Navy's fleet of surface ships and submarines. Through a joint
venture we formed with a subsidiary of Smit Internationale, N.V., we also
maintain and operate deepwater cable lay and maintenance equipment. The current
term of the joint venture agreement expires in March 2006. It automatically
extends for five-year periods unless one of the participants gives cancellation
notice at least one year before the end of the then current term.
We design and operate ROVs that are capable of being worked in water
depths to 25,000 feet. Our other specialized equipment includes ROV cable lay
and maintenance equipment rated to 5,000 feet and deep tow, side scan sonar
systems designed for use in depths to 20,000 feet. In fiscal 2000, we located
and recovered the Mercury space capsule Liberty Bell 7 from a water depth of
16,100 feet.
We also design and develop specialized tools and build ROV systems to
customer specifications for use in deepwater and hazardous environments.
We entered the commercial theme park animation market in 1993. We have
provided mechanical sharks and dinosaurs for use in theme park attractions.
As part of our Advanced Technologies segment, Oceaneering Space and
Thermal Systems directs our efforts towards applying undersea technology and
experience in the space industry. We have worked with the NASA and NASA
subcontractors on a variety of projects, including portable life-support
systems, tools and robotic systems and standards and guidelines to ensure
robotic compatibility for space station equipment and payloads. We also support
NASA by producing space shuttle crew support equipment, including the design,
development and fabrication of spacecraft extravehicular and intravehicular
hardware and soft goods, air crew life-support equipment, mechanical and
electromechanical devices and high temperature insulation. These activities
substantially depend on continued government funding for space programs.
Advanced Technologies revenues:
<TABLE>
<CAPTION>
Percent of
Amount Total Revenues
------------ --------------
<S> <C> <C>
Nine-month period ended December 31, 2000 $ 82,012,000 27%
Fiscal year ended March 31, 2000 122,971,000 29%
Fiscal year ended March 31, 1999 99,242,000 25%
</TABLE>
MARKETING
OFFSHORE OIL AND GAS. Oil and gas exploration and development expenditures
fluctuate from year to year. In particular, budgetary approval for more
expensive drilling and production in deepwater, an area in which we have a high
degree of focus, may be postponed or suspended during periods when exploration
and production companies reduce their offshore capital spending.
We market our ROVs, Subsea Products and Other Services to domestic,
international and foreign national oil and gas companies engaged in offshore
exploration, development and production. We also provide services as a
subcontractor to other oilfield service companies operating as prime
contractors. Customers for these services typically award contracts on a
competitive bid basis. These contracts are typically less than one year in
duration.
We market our Mobile Offshore Production Systems primarily to
international and foreign national oil and gas companies. We offer systems for
extended well testing, early production and development of marginal fields and
prospects in areas lacking pipelines and processing infrastructure. Contracts
are typically awarded on a competitive basis, generally for periods of one or
more years.
5
<PAGE> 6
In connection with the services we perform in our Offshore Oil and Gas
business, we generally seek contracts that compensate us on a dayrate basis.
Under dayrate contracts, the contractor provides the ROV or vessel and the
required personnel to operate the unit. Compensation under a dayrate contract is
based on a rate per day for each day the unit is used. The typical dayrate
depends on market conditions, the nature of the operations to be performed, the
duration of the work, the equipment and services to be provided, the
geographical areas involved and other variables. Dayrate contracts may also
contain an alternate, lower dayrate that applies when a unit is in route to a
new site or when operations are interrupted or restricted by equipment
breakdowns, adverse weather or water conditions or other conditions beyond the
contractor's control. Some dayrate contracts provide for revision of the
specified dayrates in the event of material changes in certain items of cost
being incurred by the contractor.
ADVANCED TECHNOLOGIES. We market our marine services and related engineering
services to government agencies, major defense contractors, NASA subcontractors
and telecommunications, construction and other industrial customers outside the
energy sector. We also market to insurance companies, salvage associations and
other customers who have requirements for specialized operations in deep water.
MAJOR CUSTOMERS. Our top five customers in the nine-month period ended December
31, 2000 accounted for 29% of our consolidated revenues. Our top five customers
in fiscal 2000 and 1999 accounted for approximately 25% of our consolidated
revenues in each year. For the nine-month period ended December 31, 2000 and for
fiscal 2000, four of our top five customers were oil and gas exploration and
production companies served by our Offshore Oil and Gas business segments. The
remaining top five customer was the U.S. Navy, which was served by our Advanced
Technologies segment. In fiscal 1999, our top five customers were all oil and
gas exploration and production companies served by our Offshore Oil and Gas
business segments. No single customer accounted for more than 10% of our
consolidated revenues in any of those three periods. While we do not depend on
any one customer, the loss of one of our significant customers could, at least
on a short-term basis, have an adverse effect on our results of operations.
RAW MATERIALS
Most of the raw materials we use in our manufacturing operations, such as
steel in various forms, electronic components and plastics, are available from
many sources, and we are not dependent on any single supplier or source for any
of our raw materials. However, some components we use to manufacture subsea
umbilicals are available from limited sources. While we have not experienced any
difficulties in obtaining those materials in the past and do not anticipate any
such difficulties in the foreseeable future, it is possible that a shortage of
supply could develop. Any significant, prolonged shortage of these materials
could result in increased costs for these materials and delays in our subsea
umbilicals manufacturing operations.
COMPETITION
Our businesses are highly competitive.
OFFSHORE OIL AND GAS.
ROVS. We are the world's largest owner/operator of work class ROVs
employed in oil and gas related operations, with an estimated 33% market share.
At December 31, 2000 we had 118 work class ROVs in service. We compete with
several major companies on a worldwide basis and with numerous others operating
locally in various areas. We have fewer competitors in deeper water depths, as
more sophisticated equipment and technology is needed in deeper water. We
estimate that, during calendar 2000, we provided ROV drilling support on
approximately 50% of the wells drilled worldwide in water depths of 1,000 feet
or more and approximately 60% of the wells drilled worldwide in water depths of
3,000 feet or more.
Competition for ROV services historically has been based on equipment
availability, location of or ability to deploy the equipment, quality of service
and price. The relative importance of these factors can vary from year to year
based on market conditions. The ability to develop improved equipment and
techniques and to attract and retain skilled personnel is also an important
competitive factor in our markets.
MOBILE OFFSHORE PRODUCTION SYSTEMS. We believe we are well positioned to compete
in this market through our ability to identify and offer optimum solutions,
supply equipment and utilize the expertise in associated subsea technology and
offshore construction and operations gained through our extensive operational
experience worldwide. We are one of many companies that offer leased mobile
offshore production systems.
6
<PAGE> 7
SUBSEA PRODUCTS. Although there are many competitors offering either specialized
products or operating in limited geographic areas, we believe we are one of a
small number of companies that compete on a worldwide basis for the provision of
thermoplastic subsea control umbilical cables.
OTHER SERVICES. We believe we are one of several companies that provide
underwater services on a worldwide basis. We compete for contracts with
companies that have worldwide operations, as well as numerous others operating
locally in various areas. We believe that our ability to provide a wide range of
underwater services, including technological applications in deeper water
(greater than 1,000 feet) on a worldwide basis, should enable us to compete
effectively in the oilfield exploration and development market. In some cases
involving projects that require less sophisticated equipment, small companies
have been able to bid for contracts at prices uneconomic to us. We no longer
provide diving services outside of the United States.
The worldwide inspection market consists of a wide range of inspection and
certification requirements in many industries. Solus Schall competes in only
selected portions of this market. We believe that our broad geographic sales and
operational coverage, long history of operations, technical reputation,
application of x-ray pipeline inspection technology and accreditation to
international quality standards enable us to compete effectively in our selected
inspection services market segments.
Frequently, oil and gas companies use prequalification procedures that
reduce the number of prospective bidders for their projects. In some countries,
political considerations tend to favor local contractors. While these
considerations have not materially impacted this segment's results in recent
periods, our view of the increasing trend to favor local contractors in West
Africa was a factor in our decisions to sell our diving operations in West
Africa in fiscal 2000 and to exchange our diving-related assets in Asia,
Australia and the Middle East for ROVs in September 2000.
ADVANCED TECHNOLOGIES. We believe our specialized ROV assets and experience in
deepwater operations give us an advantage in obtaining contracts in water depths
greater than 5,000 feet. We have fewer competitors in deeper water depths due to
the advanced technical knowledge and sophisticated equipment required for
deepwater operations.
Engineering services is a very broad market with a large number of
competitors. We compete in specialized areas in which we can combine our
extensive program management experience, mechanical engineering expertise and
the capability to continue the development of conceptual project designs into
the manufacture of prototype equipment.
We also use the administrative and operational support structures of our
Offshore Oil and Gas business to identify opportunities in foreign countries and
to provide additional local support for services provided to this segment's
customers.
SEASONALITY, BACKLOG AND RESEARCH AND DEVELOPMENT
A material amount of our consolidated revenues is generated from contracts for
marine services in the Gulf of Mexico and the North Sea, which are usually more
active from April through November compared to the rest of the year. However,
our exit from the diving sector in the North Sea in early 1998 and the
substantial number of multi-year ROV contracts we entered into since 1997 have
reduced the seasonality of our ROV and Other Services operations. Revenues in
our Mobile Offshore Production Systems, Subsea Products and Advanced
Technologies segments are generally not seasonal.
The amounts of backlog orders we believe to be firm as of December 31,
2000 and March 31, 2000 were as follows:
<TABLE>
<CAPTION>
As of December 31, 2000 As of March 31, 2000
--------------------------- ------------------------
(in millions) (in millions)
Offshore Oil and Gas Total 1 + yr* Total 1 + yr*
--------- --------- ------- ----------
<S> <C> <C> <C> <C>
ROVs $229 $133 $208 $129
Subsea Products 50 5 39 --
Mobile Offshore Production Systems 100 71 108 94
Other Services 45 2 42 15
------ ------ ------ ------
Total Offshore Oil and Gas 424 211 397 238
Advanced Technologies 38 5 51 1
------ ------ ------ ------
Total $462 $216 $448 $239
==== ==== ==== ====
</TABLE>
* Represents amounts that were not expected to be performed within one year.
7
<PAGE> 8
No material portion of our business is subject to renegotiation of profits
or termination of contracts by the United States government.
Our research and development expenditures were approximately $5 million,
$4 million and $5 million during the nine-month period ended December 31, 2000,
fiscal 2000 and fiscal 1999, respectively. These amounts do not include the
expenditures by others in connection with joint research activities in which we
participated or expenditures we incurred in connection with research conducted
during the course of performing our operations.
REGULATION
Our operations are affected from time to time and in varying degrees by foreign
and domestic political developments and foreign, federal and local laws and
regulations. In particular, oil and gas production operations and economics are
affected by tax, environmental and other laws relating to the petroleum
industry, by changes in such laws and by constantly changing administrative
regulations. Those developments may directly or indirectly affect our operations
and those of our customers.
Compliance with federal, state and local provisions regulating the
discharge of materials into the environment or relating to the protection of the
environment has not had a material impact on our capital expenditures, earnings
or competitive position.
While not a legal requirement, within our Offshore Oil and Gas business we
maintain various quality management systems. Our quality management systems in
the United Kingdom and Norway are certified to the equivalent of ISO 9001 and
cover all our Offshore Oil and Gas products and services. The quality management
systems of our Subsea Products segment are certified to ISO 9001 for its
products and services. The quality management systems of both the Oceaneering
Space and Thermal Systems and Oceaneering Technologies units of our Advanced
Technologies segment are also certified to ISO 9001. ISO 9001 is an
internationally recognized verification system for quality management
established by the International Standards Organization.
RISKS AND INSURANCE
WE DERIVE MOST OF OUR REVENUES FROM COMPANIES IN THE OFFSHORE OIL AND GAS
INDUSTRY, A HISTORICALLY CYCLICAL INDUSTRY WITH LEVELS OF ACTIVITY THAT ARE
SIGNIFICANTLY AFFECTED BY THE LEVELS AND VOLATILITY OF OIL AND GAS PRICES.
We derive most of our revenues from customers in the offshore oil and gas
exploration, development and production industry. The offshore oil and gas
industry is a historically cyclical industry characterized by significant
changes in the levels of exploration and development activities. Oil and gas
prices, and market expectations of potential changes in those prices,
significantly affect the levels of those activities. Worldwide political,
economic and military events have contributed to oil and gas price volatility
and are likely to continue to do so in the future. Any prolonged reduction in
the overall level of offshore oil and gas exploration and development
activities, whether resulting from changes in oil and gas prices or otherwise,
could materially and adversely affect our financial condition and results of
operations in our segments within our offshore oil and gas business. Some
factors that have affected and are likely to continue affecting oil and gas
prices and the level of demand for our services and products include the
following:
o worldwide demand for oil and gas;
o the ability of the Organization of Petroleum Exporting Countries, or
OPEC, to set and maintain production levels and pricing;
o the level of production by non-OPEC countries;
o domestic and foreign tax policy;
o laws and governmental regulations that restrict exploration and
development of oil and gas in various offshore jurisdictions;
o advances in exploration and development technology;
o the political environment of oil-producing regions;
o the price and availability of alternative fuels; and
o overall economic conditions.
OUR INTERNATIONAL OPERATIONS INVOLVE ADDITIONAL RISKS NOT ASSOCIATED WITH
DOMESTIC OPERATIONS.
A significant portion of our revenues is attributable to operations in foreign
countries. These activities accounted for approximately 46% of our consolidated
revenues in the nine-month ended December 31, 2000. Risks associated with our
8
<PAGE> 9
operations in foreign areas include risks of:
o war and civil disturbances or other risks that may limit or disrupt
markets;
o expropriation, confiscation or nationalization of assets;
o renegotiation or nullification of existing contracts;
o foreign exchange restrictions;
o foreign currency fluctuations;
o foreign taxation;
o the inability to repatriate earnings or capital;
o changing political conditions;
o changing foreign and domestic monetary policies; and
o regional economic downturns.
Additionally, in some jurisdictions we are subject to foreign governmental
regulations favoring or requiring the awarding of contracts to local contractors
or requiring foreign contractors to employ citizens of, or purchase supplies
from, a particular jurisdiction. These regulations may adversely affect our
ability to compete.
Our exposure to the risks we described above varies from country to
country. In recent periods, political instability and civil unrest in Indonesia
and West Africa and general economic downturns in Asia and Brazil have been our
greatest concerns. There is a risk that a continuation or worsening of these
conditions could materially and adversely impact our future business,
operations, financial condition and results of operations. Of our total
consolidated revenues for the nine-month period ended December 31, 2000, we
generated approximately 2% from our operations in Indonesia, 12% from our
operations in West Africa, 8% from our operations in Asia excluding Indonesia
and 7% from our operations in Brazil.
OUR OFFSHORE OILFIELD OPERATIONS INVOLVE A VARIETY OF OPERATING HAZARDS AND
RISKS THAT COULD CAUSE LOSSES.
Our operations are subject to the hazards inherent in the offshore
oilfield business. These include blowouts, explosions, fires, collisions,
capsizings and severe weather conditions. These hazards could result in personal
injury and loss of life, severe damage to or destruction of property and
equipment, pollution or environmental damage and suspension of operations. We
may incur substantial liabilities or losses as a result of these hazards. While
we maintain insurance protection against some of these risks, and seek to obtain
indemnity agreements from our customers requiring the customers to hold us
harmless from some of these risks, our insurance and contractual indemnity
protection may not be sufficient or effective to protect us under all
circumstances or against all risks. The occurrence of a significant event not
fully insured or indemnified against or the failure of a customer to meet its
indemnification obligations to us could materially and adversely affect our
results of operations and financial condition.
LAWS AND GOVERNMENTAL REGULATIONS MAY ADD TO OUR COSTS OR ADVERSELY AFFECT OUR
OPERATIONS.
Our business is affected by changes in public policy and by federal,
state, local and foreign laws and regulations relating to the energy industry.
Oil and gas exploration and production operations are affected by tax,
environmental and other laws relating to the petroleum industry, by changes in
those laws and changes in related administrative regulations. It is also
possible that these laws and regulations may in the future add significantly to
our operating costs or those of our customers or otherwise directly or
indirectly affect our operations.
ENVIRONMENTAL LAWS AND REGULATIONS CAN INCREASE OUR COSTS, AND OUR FAILURE TO
COMPLY WITH THOSE LAWS AND REGULATIONS CAN EXPOSE US TO SIGNIFICANT LIABILITIES.
Risks of substantial costs and liabilities related to environmental
compliance issues are inherent in our operations. Our operations are subject to
extensive federal, state, local and foreign laws and regulations relating to the
generation, storage, handling, emission, transportation and discharge of
materials into the environment. Permits are required for the operation of
various facilities, and those permits are subject to revocation, modification
and renewal. Governmental authorities have the power to enforce compliance with
their regulations, and violations are subject to fines, injunctions or both. In
some cases, those governmental requirements can impose liability for the entire
cost of cleanup on any responsible party without regard to negligence or fault
and impose liability on us for the conduct of or conditions others have caused,
or for our acts that complied with all applicable requirements when we performed
them. It is possible that other developments, such as stricter environmental
laws and regulations, and claims for damages to property or persons resulting
from our operations, would result in substantial costs and liabilities. Our
insurance policies and the contractual indemnity protection we seek to obtain
from our customers may not be sufficient or effective to protect us under all
circumstances or against all risks involving compliance with environmental laws
and regulations.
9
<PAGE> 10
EMPLOYEES
As of December 31, 2000, we had approximately 3,000 employees. Our workforce
varies seasonally and peaks during the summer months. Approximately 9% of our
employees are represented by unions. We consider our relations with our
employees to be satisfactory.
Financial Information about Geographic Areas
For financial information about our geographic areas of operation, please see
the table in Note 6 of the Notes to Consolidated Financial Statements in this
report, which presents revenues and assets attributable to each of our
geographic areas for the nine-month period ended December 31, 2000 and for the
fiscal years ended March 31, 2000 and 1999.
ITEM 2. PROPERTIES.
See Item 1 -- "Business -- Description of Business -- Offshore Oil and Gas" and
"Business -- Description of Business -- Advanced Technologies" for a description
of equipment and manufacturing facilities used in providing our services and
products.
We maintain office, shop and yard facilities in various parts of the world
to support our operations. We consider these facilities, which we describe
below, to be suitable for their intended use. In these locations, we typically
lease or own office facilities for our administrative and engineering staff,
shops equipped for fabrication, testing, repair and maintenance activities and
warehouses and yard areas for storage and mobilization of equipment to work
sites. All sites are available to support any of our business segments as the
need arises. The groupings which follow associate our significant offices with
the primary business segment they serve.
OFFSHORE OIL AND GAS. In general, our ROV and Other Services segments share
facilities. The largest location is in Morgan City, Louisiana and consists of
ROV manufacturing and training facilities, open and covered storage space and
offices. The Morgan City facilities primarily support operations in the United
States. The regional support offices for our North Sea and Southeast Asia
operations are located in Aberdeen, Scotland and Singapore, respectively. We
also have operational bases in various other locations, the most significant of
which are in Norway, Australia, Indonesia and Nigeria.
We use workshop and office space in Houston, Texas in both our Mobile
Offshore Production Systems and Subsea Products business segments. Our
manufacturing facilities for our Subsea Products segment are located in or near
Houston, Texas, Edinburgh, Scotland and Rio de Janeiro, Brazil. Each of these
manufacturing facilities is suitable for its intended purpose and has sufficient
excess capacity to respond to increases in demand for our subsea products that
may be reasonably anticipated in the foreseeable future. Operations of the
mobile offshore production unit Ocean Producer are supported through our
regional office in Aberdeen. Operations of the San Jacinto and the Ocean Legend
are supported from our office in Perth, Australia, which we opened in fiscal
2000.
Our principal manufacturing facilities are located on properties we own or
hold under a long-term lease, expiring in 2014. The other facilities we use in
our Offshore Oil and Gas business segments are on properties we lease.
ADVANCED TECHNOLOGIES. Our primary facilities for our Advanced Technologies
segment are leased offices and workshops in Upper Marlboro, Maryland, which
support our services for the U.S. Navy and our commercial theme park animation
activities. We also lease facilities in Houston, Texas, which primarily support
our space industry activities and our subsea telecommunications installation
joint venture.
ITEM 3. LEGAL PROCEEDINGS.
In the ordinary course of business, we are subject to actions for damages
alleging personal injury under the general maritime laws of the United States,
including the Jones Act, for alleged negligence. We report actions for personal
injury to our insurance carriers and believe that the settlement or disposition
of those suits will not have a material effect on our financial position or
results of operations. For additional information, see "Commitments and
Contingencies -- Litigation" in Note 5 of the Notes to Consolidated Financial
Statements included in this report.
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<PAGE> 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of our security holders, through the
solicitation of proxies or otherwise, during the last three months of the
nine-month period ended December 31, 2000.
EXECUTIVE OFFICERS OF THE REGISTRANT.
EXECUTIVE OFFICERS. The following information relates to our executive officers
as of March 1, 2001:
<TABLE>
<CAPTION>
NAME AGE POSITION OFFICER SINCE EMPLOYEE SINCE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John R. Huff 54 Chairman of the Board and 1986 1986
Chief Executive Officer
T. Jay Collins 54 President and 1993 1993
Chief Operating Officer
Marvin J. Migura 50 Senior Vice President and 1995 1995
Chief Financial Officer
Bruce L. Crager 48 Senior Vice President 1988 1988
M. Kevin McEvoy 50 Senior Vice President 1990 1979
George R. Haubenreich, Jr. 53 Senior Vice President, General 1988 1988
Counsel and Secretary
John L. Zachary 47 Controller and Chief 1998 1988
Accounting Officer
</TABLE>
Each executive officer serves at the discretion of our Chief Executive Officer
and our Board of Directors and is subject to reelection or reappointment each
year after the annual meeting of our shareholders. We do not know of any
arrangement or understanding between any of the above persons and any other
person or persons pursuant to which he was selected or appointed as an officer.
BUSINESS EXPERIENCE. John R. Huff, Chairman and Chief Executive Officer, joined
Oceaneering as a director, President and Chief Executive Officer in 1986. He was
elected Chairman of the Board in August 1990. He is a director of BJ Services
Company, Suncor Energy Inc. and Triton Energy Limited.
T. Jay Collins, President and Chief Operating Officer, joined Oceaneering in
October 1993 as Senior Vice President and Chief Financial Officer. In May 1995,
he was appointed Executive Vice President -- Oilfield Marine Services and held
that position until attaining his present position in November 1998. He is a
director of Friede Goldman Halter, Inc.
Marvin J. Migura, Senior Vice President and Chief Financial Officer, joined
Oceaneering in May 1995. From 1975 to 1994 he held various financial positions
with Zapata Corporation, then a diversified energy services company, most
recently as Senior Vice President and Chief Financial Officer from 1987 to 1994.
Bruce L. Crager, Senior Vice President, joined Oceaneering in 1988 as Vice
President -- Offshore Production Systems. Since 1994, he also has had
responsibility for various subsea product groups. He was appointed Senior Vice
President -- Production Systems in May 1997.
M. Kevin McEvoy, Senior Vice President, joined Oceaneering in 1984 when we
acquired Solus Ocean Systems, Inc. Since 1984, he has held various senior
management positions in each of our operating groups and geographic areas. He
was appointed a Vice President in 1990 and Senior Vice President in November
1998.
George R. Haubenreich, Jr., Senior Vice President, General Counsel and
Secretary, joined Oceaneering in 1988.
John L. Zachary, Controller and Chief Accounting Officer, joined Oceaneering in
1988 as Controller for the Advanced Technologies and Mobile Offshore Production
Systems divisions. From 1993 until 1998, he was Controller for the Americas
Region and was appointed to his present position in October 1998.
11
<PAGE> 12
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS.
We are including the following discussion to inform our existing and potential
security holders generally of some of the risks and uncertainties that can
affect our company and to take advantage of the "safe harbor" protection for
forward-looking statements that applicable federal securities law affords.
From time to time, our management or persons acting on our behalf make
forward-looking statements to inform existing and potential security holders
about our company. These statements may include projections and estimates
concerning the timing and success of specific projects and our future backlog,
revenues, income and capital spending. Forward-looking statements are generally
accompanied by words such as "estimate," "project," "predict," "believe,"
"expect," "anticipate," "plan," "goal" or other words that convey the
uncertainty of future events or outcomes. In addition, sometimes we will
specifically describe a statement as being a forward-looking statement and refer
to this cautionary statement.
In addition, various statements this report contains, including those that
express a belief, expectation or intention, as well as those that are not
statements of historical fact, are forward-looking statements. Those
forward-looking statements appear in Item 1 -- "Business," Item 2 --
"Properties" and Item 3 -- "Legal Proceedings" in Part I of this report and in
Item 7 -- "Management's Discussion and Analysis of Financial Condition and
Results of Operations," Item 7A -- "Quantitative and Qualitative Disclosures
About Market Risk" and in the Notes to Consolidated Financial Statements
incorporated into Item 8 of Part II of this report and elsewhere in this report.
These forward-looking statements speak only as of the date of this report, we
disclaim any obligation to update these statements, and we caution you not to
rely unduly on them. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our management
considers these expectations and assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive, regulatory
and other risks, contingencies and uncertainties, most of which are difficult to
predict and many of which are beyond our control. These risks, contingencies and
uncertainties relate to, among other matters, the following:
o general economic and business conditions and industry trends;
o the continued strength of the industry segments in which we are
involved;
o decisions about offshore developments to be made by oil and gas
companies;
o the highly competitive nature of our businesses;
o our future financial performance, including availability, terms and
deployment of capital;
o the continued availability of qualified personnel;
o operating risks normally incident to offshore exploration, development
and production operations;
o changes in, or our ability to comply with, government regulations,
including those relating to the environment;
o rapid technological changes; and
o social, political and economic situations in foreign countries where
we do business.
We believe the items we have outlined above are important factors that
could cause our actual results to differ materially from those expressed in a
forward-looking statement made in this report or elsewhere by us or on our
behalf. We have discussed most of these factors in more detail elsewhere in this
report. These factors are not necessarily all the important factors that could
affect us. Unpredictable or unknown factors we have not discussed in this report
could also have material adverse effects on actual results of matters that are
the subject of our forward-looking statements. We do not intend to update our
description of important factors each time a potential important factor arises.
We advise our security holders that they should (1) be aware that important
factors we do not refer to above could affect the accuracy of our
forward-looking statements and (2) use caution and common sense when considering
our forward-looking statements.
12
<PAGE> 13
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Oceaneering's common stock is listed on the New York Stock Exchange under the
symbol OII. The following table sets out, for the periods indicated, the high
and low sales prices for our common stock as reported on the New York Stock
Exchange (consolidated transaction reporting system):
<TABLE>
<CAPTION>
Nine-month Period Ended
December 31, 2000 Fiscal 2000
---------------------------- -------------------------
High Low High Low
-------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
For the quarter ended:
June 30 $21 1/2 $15 1/4 $18 1/8 $13 3/16
September 30 19 15/16 13 9/16 23 5/8 16
December 31 20 3/8 13 1/4 18 12 1/8
March 31 N/A N/A 20 9/16 13 9/16
</TABLE>
On March 19, 2001, there were 495 holders of record of our common stock. On that
date, the closing sales price, as quoted on the New York Stock Exchange, was
$21.51. We have not made any common stock dividend payments since 1977 and we
currently have no plans to pay cash dividends. Our credit agreements contain
restrictions on the payment of dividends. See Note 3 of Notes to Consolidated
Financial Statements included in this report.
ITEM 6. SELECTED FINANCIAL DATA.
Results of Operations:
<TABLE>
<CAPTION>
Nine-month Fiscal Years Ended March 31,
Period Ended --------------------------------------------------
(in thousands, except per share amounts) Dec. 31, 2000 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $307,730 $416,820 $400,322 $358,121 $368,773
Cost of services and products (1) 254,659 345,178 314,638 282,830 290,801
--------- --------- --------- --------- ---------
Gross margin 53,071 71,642 85,684 75,291 77,972
Selling, general and administrative expenses 30,860 39,343 41,328 39,009 36,363
--------- ---------- --------- --------- ---------
Income from operations $ 22,211 $ 32,299 $ 44,356 $ 36,282 $ 41,609
========= ========= ========= ========= =========
Net income $ 11,313 $ 16,784 $ 25,707 $ 22,001 $ 19,445
Diluted earnings per share 0.49 0.73 1.12 0.93 0.81
Depreciation and amortization (2) 30,664 33,948 29,961 23,176 32,687
Capital expenditures 101,641 80,758 102,014 94,413 79,599
</TABLE>
Other Financial Data:
<TABLE>
<CAPTION>
As of March 31,
As of --------------------------------------------------
(in thousands, except ratios) Dec. 31, 2000 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Working capital ratio 1.54 1.55 1.47 1.52 1.55
Working capital $ 50,323 $ 52,775 $ 41,398 $ 44,890 $ 52,962
Total assets 512,684 450,976 387,343 316,543 268,255
Long-term debt 180,000 128,000 100,312 54,626 --
Total debt 180,073 128,312 100,618 54,919 --
Shareholders' equity 206,894 195,700 179,439 160,322 156,334
</TABLE>
(1) Fiscal 1997 includes a $25,047 gain on the disposition of a floating
production, storage and offloading unit, a $7,980 impairment adjustment and a
$7,980 provision for special drydocking.
(2) Fiscal 1997 includes a $7,980 impairment adjustment.
13
<PAGE> 14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
All statements in this Form 10-K, other than statements of historical facts,
including, without limitation, statements regarding our business strategy, plans
for future operations and industry conditions, are forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to various
risks, uncertainties and assumptions, including those we refer to under the
heading "Cautionary Statement Concerning Forward-Looking Statements" in Part I
of this report. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, because of the inherent limitations
in the forecasting process, as well as the relatively volatile nature of the
industries in which we operate, we can give no assurance that those expectations
will prove to have been correct. Accordingly, evaluation of our future prospects
must be made with caution when relying on forward-looking information.
Liquidity and Capital Resources
We consider our liquidity and capital resources adequate to support our
operations and internally generated growth initiatives. At December 31, 2000, we
had working capital of $50 million. Additionally, we had $50 million available
under committed credit facilities.
We expect operating cash flow to meet our ongoing annual cash
requirements, including debt service. Net cash provided by operating activities
was $41 million for the nine-month period ended December 31, 2000, $38 million
for the nine-month period ended December 31, 1999, $53 million for fiscal 2000
and $59 million for fiscal 1999.
Working capital was $50 million at December 31, 2000 compared to $53
million at the end of fiscal 2000 and $41 million at the end of fiscal 1999.
Capital expenditures for the nine-month period ended December 31, 2000 and
for the fiscal years ended March 31, 2000 and 1999 were $102 million, $81
million and $102 million, respectively. Capital expenditures during the
nine-month period ended December 31, 2000 consisted of expenditures for the
conversion of a jackup drilling rig to a mobile offshore production unit, the
Ocean Legend, for initial use offshore Western Australia under a three-year
contract, ROV additions and construction costs to complete our second
multiservice vessel. Capital expenditures in fiscal 2000 consisted of
construction costs for the second multiservice vessel, additions to our ROV
fleet and the start of the conversion of the Ocean Legend. Capital expenditures
in fiscal 1999 consisted of additions to our ROV fleet, construction costs for
two multiservice vessels, one of which was placed in service prior to March 31,
1999, a new umbilical plant in Brazil and the relocation and upgrading of our
umbilical plant in Scotland.
Commitments for capital expenditures at December 31, 2000 were
approximately $5 million for completion of the conversion of the Ocean Legend.
In April 1997, we approved a plan to purchase up to a maximum of 3 million
shares of our common stock, and 2.9 million shares were purchased under this
plan through December 31, 2000, at a total cost of $40 million. We did not
repurchase any shares of common stock during the nine-month period ended
December 31, 2000.
At December 31, 2000, we had long-term debt of $180 million and a 47%
debt-to-total capitalization ratio. In September 1998, we issued $100 million of
6.72% Senior Notes to be repaid from 2006 through 2010. We used the proceeds
from the sale of those notes to repay the then outstanding indebtedness under
our prior revolving credit facility, which had been incurred in the funding of
capital expenditures and repurchases of common stock. In October 1998, we
replaced that revolving credit agreement with a new five-year, $80 million
revolving credit facility, under which we had $65 million in outstanding
borrowings and $15 million available for future borrowings at December 31, 2000.
In March 2000, we added a $50 million term loan facility, which is available for
drawing until March 30, 2001 and is to be repaid through April 2004. At December
31, 2000, we had $15 million in outstanding borrowings and $35 million available
for future borrowings under the term loan facility.
Because of our significant foreign operations, we are exposed to currency
fluctuations and exchange risks. We generally minimize these risks primarily
through matching, to the extent possible, revenues and expenses in the various
currencies in which we operate. Cumulative translation adjustments as of
December 31, 2000 relate primarily to our permanent investments in and loans to
our foreign subsidiaries. Inflation has not had a material effect on us in the
past two years and no such effect is expected in the near future.
See Item 1 -- "Business -- Description of Business -- Risks and
Insurance".
14
<PAGE> 15
Results of Operations
The table below sets out revenues and profitability for the nine-month
periods ended December 31, 2000 and 1999 and the fiscal years ended March 31,
2000 and 1999.
<TABLE>
<CAPTION>
Nine-Month Period Fiscal Year
Ended December 31, Ended March 31,
------------------------ -------------------------
(dollars in thousands) 2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
Revenues $307,730 $305,777 $416,820 $400,322
Gross Margins 53,071 54,165 71,642 85,684
Gross Margin % 17% 18% 17% 21%
Net Income 11,313 13,145 16,784 25,707
</TABLE>
Information on our business segments is shown in Note 6 of the Notes to
Consolidated Financial Statements included in this report.
The table below sets out revenues and profitability for our Offshore Oil and Gas
business for the nine-month periods ended December 31, 2000 and 1999 and the
fiscal years ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>
Nine-Month Period Fiscal Year
Ended December 31, Ended March 31,
-------------------------- ---------------------------
(dollars in thousands) 2000 1999 2000 1999
- ------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
Offshore Oil and Gas
Remotely Operated Vehicles
Revenues $ 78,953 $ 72,585 $ 94,617 $ 100,854
Gross Margin 19,879 16,806 22,832 25,657
Gross Margin % 25% 23% 24% 25%
Operating Income 12,316 9,855 14,064 16,722
Operating Income % 16% 14% 15% 17%
Subsea Products
Revenues 65,771 43,350 69,744 72,919
Gross Margin 7,647 5,690 8,784 14,192
Gross Margin % 12% 13% 13% 19%
Operating Income 1,225 390 1,499 6,389
Operating Income % 2% 1% 2% 9%
Mobile Offshore Production Systems
Revenues 15,788 18,118 23,983 31,559
Gross Margin 5,774 6,048 8,236 10,930
Gross Margin % 37% 33% 34% 35%
Operating Income 4,271 5,597 7,629 9,478
Operating Income % 27% 31% 32% 30%
Other Services
Revenues 65,206 77,420 105,505 95,748
Gross Margin 7,732 11,231 11,391 19,256
Gross Margin % 12% 15% 11% 20%
Operating Income (Loss) (636) 863 (3,169) 3,308
Operating Income (Loss) % (1)% 1% (3)% 3%
Total Offshore Oil and Gas
Revenues $ 225,718 $ 211,473 $ 293,849 $ 301,080
Gross Margin 41,032 39,775 51,243 70,035
Gross Margin % 18% 19% 17% 23%
Operating Income 17,176 16,705 20,023 35,897
Operating Income % 8% 8% 7% 12%
</TABLE>
15
<PAGE> 16
In response to (1) continued increasing demand to support deepwater
drilling and (2) identified future construction and production maintenance work,
we extended our ROV fleet expansion program in 1997 by announcing plans for
additional new ROVs. These new vehicles are designed for use around the world in
water depths to 10,000 feet and in severe weather conditions. We have added over
50 ROVs to our fleet during the last several years and we plan to add additional
vehicles at a rate dependent on market demand.
In the past few years, we have sold or exchanged our foreign
diving-related assets to concentrate on our other deepwater services and
products which have potential for higher margins:
- In April 1997, we sold our North Sea diving assets, including a
diving support vessel;
- In fiscal 2000, we sold our West Africa diving and related vessel
assets;
- In September 2000, we exchanged our Asia, Australia and Middle East
diving assets, including a diving support vessel, for 11 ROVs.
In the nine-month period ended December 31, 2000, ROV revenues were 9% higher
than the comparable nine-month period of the prior year. Gross margin percentage
rose 2%. These increases were the result of more ROVs available for service and
an increase in ROV utilization from 63% to 67%. In fiscal 2000, ROV revenues
declined 6% from fiscal 1999 despite our additions to the ROV fleet. Utilization
declined from 82% to 62%. Both of our major oilfield ROV markets, drill support
and construction support, were adversely affected as oil and gas companies had
lower capital spending levels than those in the prior year. We anticipate ROV
utilization and margins to increase in 2001 from increased demand as more
floating deepwater drilling rigs return to service and from a rise in offshore
construction-related activities.
Subsea Products revenues were 52% higher for the nine-month period ended
December 31, 2000 than those of the comparable period of the prior year. This
increase was primarily due to (1) increased demand in Brazil and the U.S., as
oil and gas companies proceeded with offshore capital projects which had been
delayed, and (2) a large steel tube umbilical order in the U.K. While total
gross margin was $2.0 million higher, margin percentages were relatively flat,
as increased profitability in Brazil and the U.S. was offset by the large steel
tube umbilical order in our U.K. plant, which earned a low margin. Subsea
Products revenues were down 4% in fiscal 2000 from fiscal 1999, despite the
addition of an umbilical plant in Brazil and the opening of our upgraded
facility in Scotland. Umbilical sales and margins were adversely affected by low
market demand, as oil and gas companies had lower capital spending levels than
those in the prior years, particularly in Brazil. We anticipate improved Subsea
Product results in 2001 from increased subsea completion activity.
Mobile Offshore Production Systems revenues were down 13% for the
nine-month period ended December 31, 2000 from the comparable period of the
prior year, as production-based revenues from the Ocean Producer were lower due
to declining production levels and we had lower project management and
engineering service revenues from lower demand. As of April 2001, the Ocean
Producer unit is on a day-to-day contract. We have a letter of intent to
contract the unit for a period of seven years to produce from another property
in the area. Gross margin percentage was higher due to $4.3 million of gains on
the sales of two out-of-service semisubmersible rigs. In addition, we wrote down
the carrying value of our out-of-service tanker, the OCEAN VENTURE, by $2.5
million as our assessment of the market it was targeted for, conversion into
production service, had changed. This tanker is not of the size prevalently in
demand in the current market and there have been few opportunities to bid the
vessel. Therefore, we wrote this vessel down to its estimated market value.
Mobile Offshore Production Systems fiscal 2000 revenues were 24% lower than
fiscal 1999, as we completed a major modification project for the Zafiro
Producer during the year. In addition, production-based revenues from the Ocean
Producer were lower due to declining production levels. We anticipate improved
Mobile Offshore Production Systems results in 2001 with the commencement of
Ocean Legend operations.
Other Services revenues were 16% lower in the nine-month period ended
December 31, 2000 than the comparable period of the prior year. The lower
revenues reflect our dispositions of (1) our West Africa diving operations in
fiscal 2000 and (2) our Asia, Australia and Middle East diving operations in
September 2000, along with more competitive conditions resulting from lower
capital expenditures by our oilfield customers. Gross margins were lower due to
lower vessel utilization and related services in the Gulf of Mexico. Other
Services revenues were up 10% in fiscal 2000 from fiscal 1999, primarily due to
a full year of operations from the multiservice vessel Ocean Intervention.
However, margins reflected very competitive market conditions resulting from
reduced oilfield capital spending. The net operating loss was attributed to two
large fixed-price jobs in India. We anticipate improved Other Services results
in 2001 from higher demand for our oilfield services in general, including our
multiservice vessels.
16
<PAGE> 17
ADVANCED TECHNOLOGIES. The table below sets out revenues and profitability for
this segment for the nine-month periods ended December 31, 2000 and 1999 and the
fiscal years ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>
Nine-Month Period Fiscal Year
Ended December 31, Ended March 31,
---------------------- -----------------------
(dollars in thousands) 2000 1999 2000 1999
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(unaudited)
Revenues $ 82,012 $ 94,304 $122,971 $ 99,242
Gross Margin 12,039 14,390 20,399 15,649
Gross Margin % 15% 15% 17% 16%
Operating Income 5,035 8,346 12,276 8,459
Operating Income % 6% 9% 10% 9%
</TABLE>
Advanced Technologies revenues were 13% lower in the nine-month period
ended December 31, 2000 than the comparable period of the prior year as the
prior period included a large outfall job in Southeast Asia, which was performed
using resources associated with our Other Services segment. These resources were
part of those we exchanged in September 2000 for ROVs. Margins were lower as the
December 2000 period included provisions totaling $1.8 million relating to
operations of a division we no longer own. Advanced Technologies revenues in
fiscal 2000 were 24% higher than in fiscal 1999 due to increased work levels for
the Navy, the outfall job in Southeast Asia and more search and recovery work.
Margin percentages were relatively unchanged. We anticipate similar results from
Advanced Technologies in the next year, contingent upon the level of government
funding for NASA and U.S. Navy programs in which we currently participate or are
pursuing.
OTHER. Interest expense increased over the three year period as a result of our
increased borrowings to fund capital expenditures and repurchases of common
stock. Interest expense is net of capitalized interest of $3.0 million for the
nine- month period ended December 31, 2000, $1.8 million for fiscal 2000 and
$2.5 million for fiscal 1999.
Our effective tax rate, determined after consideration of valuation
allowances and foreign, state and local taxes, was 36%, 36% and 38% for the
nine-month period ended December 31, 2000 and for fiscal 2000 and fiscal 1999,
respectively.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are currently exposed to certain market risks arising from transactions we
have entered into in the normal course of business. These risks relate to
interest rate changes and fluctuations in foreign exchange rates. We do not
believe these risks are material. We have not entered into any market risk
sensitive instruments for trading purposes. We manage our exposure to interest
rate changes through the use of a combination of fixed and floating rate debt.
See Note 3 of Notes to Consolidated Financial Statements included in this report
for a description of our long-term debt agreements, interest rates and
maturities. We believe that significant interest rate changes will not have a
material near-term impact on our future earnings or cash flows. We manage our
exposure to changes in foreign exchange rates primarily through arranging
compensation in U.S. dollars or freely convertible currency and, to the extent
possible, by limiting compensation received in other currencies to amounts
necessary to meet obligations denominated in those currencies. We believe that a
significant fluctuation in the foreign exchange rates would not have a material
near-term effect on our future earnings or cash flows.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
In this report, our consolidated financial statements and supplementary data
appear following the signature page to this report and are hereby incorporated
by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
17
<PAGE> 18
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information with respect to the directors and nominees for election to our
Board of Directors is incorporated by reference from the section "Election of
Directors" in our definitive proxy statement to be filed on or before April 30,
2001, relating to our 2001 Annual Meeting of Shareholders.
The information with respect to our executive officers is provided under the
heading "Executive Officers of the Registrant" following Item 4 of Part I of
this report. There are no family relationships between any director or executive
officer.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is incorporated by reference from the
section "Executive Compensation" in the proxy statement described in Item 10
above.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by Item 12 is incorporated by reference from the
section "Election of Directors -- Security Ownership of Management and Certain
Beneficial Owners" in the proxy statement described in Item 10 above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 13 is incorporated by reference from the
section "Certain Relationships and Related Transactions" in the proxy statement
described in Item 10 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) Documents filed as part of this report.
1. Financial Statements.
(i) Report of Independent Public Accountants
(ii) Consolidated Balance Sheets
(iii) Consolidated Statements of Income
(iv) Consolidated Statements of Cash Flows
(v) Consolidated Statements of Shareholders' Equity
and Comprehensive Income
(vi) Notes to Consolidated Financial Statements
2. Exhibits:
<TABLE>
<CAPTION>
Registration
or File Form or Report Exhibit
Number Report Date Number
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3.01 Restated Certificate of Incorporation
3.02 Amended and Restated By-Laws
*4.01 Specimen of Common Stock Certificate 1-10945 10-K March 1993 4(a)
*4.02 Shareholder Rights Agreement dated November 20, 1992 1-10945 8-K Nov. 1992 1
*4.03 Note Purchase Agreement dated as of September 8, 1998
relating to $100,000,000 6.72% Senior Notes due
September 8, 2010 1-10945 10-Q Sept. 1998 4.01
</TABLE>
18
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C>
*4.04 Loan Agreement ($80,000,000 Revolving Credit Facility)
dated as of October 23, 1998 1-10945 10-Q Sept. 1998 4.02
*4.05 Loan Agreement ($50,000,000 Term Loan) dated as of 1-10945 10-K/A March 2000 4.05
March 30, 2000
</TABLE>
We and certain of our consolidated subsidiaries are parties to debt instruments
under which the total amount of securities authorized does not exceed 10 percent
of our total consolidated assets. Pursuant to paragraph 4(ii)(A) of Item 601(b)
of Regulation S-K, we agree to furnish a copy of those instruments to the
Securities and Exchange Commission on request.
<TABLE>
<S> <C> <C> <C> <C>
*10.01+ Oceaneering Retirement Investment Plan, as amended 1-10945 10-K March 1996 10.02
*10.02+ Employment Agreement dated August 15, 1986 between
John R. Huff and Oceaneering 0-8418 10-K March 1987 10(l)
*10.03+ Addendum to Employment Agreement dated
February 22, 1996 between John R. Huff and Oceaneering 1-10945 10-K March 1997 10.04
*10.04+ Amended and Restated Supplemental Executive Retirement Plan 1-10945 10-Q Dec. 1999 10.1
*10.05+ 1999 Restricted Stock Award Incentive Agreements
dated August 19, 1999 1-10945 10-Q Sept. 1999 10.1
*10.06+ Senior Executive Severance Plan, as amended 0-8418 10-K March 1989 10(k)
*10.07+ Supplemental Senior Executive Severance Agreements,
as amended 0-8418 10-K March 1989 10(l)
*10.08+ 1999 Incentive Plan 1-10945 10-K March 2000 10.08
10.09+ 2000 Bonus Award Plan
*10.10+ 1990 Long-Term Incentive Plan 33-36872 S-8 Sept. 1990 4(f)
*10.11+ 1990 Nonemployee Directors Stock Option Plan 33-36872 S-8 Sept. 1990 4(g)
*10.12+ Indemnification Agreement between Registrant
and its Directors 0-8418 10-Q Sept. 1991 10(a)
*10.14+ 1996 Incentive Plan of Oceaneering International, Inc. 1-10945 10-Q Sept. 1996 10.02
*10.15+ 1996 Restricted Stock Award Incentive Agreements
dated August 23, 1996 1-10945 10-Q Sept. 1996 10.03
*10.16+ 1997 Bonus Restricted Stock Award Agreements
dated April 22, 1997 1-10945 10-K March 1997 10.20
*10.17+ Amendment No. 1 to the Oceaneering
Retirement Investment Plan 1-10945 10-Q Sept. 1996 10.01
*10.18+ Amendment No. 1 to 1990 Nonemployee Director Stock
Option Plan 1-10945 10-K March 1999 10.19
*10.19+ 1998 Bonus Restricted Stock Award Agreements 1-10945 10-K March 1999 10.20
*10.20+ 1999 Bonus Restricted Stock Award Agreements 1-10945 10-K/A March 2000 10.20
*10.21+ Non-Executive Incentive Plan 333-50400 S-8 Nov. 2000 4.6
21 Subsidiaries of the Registrant
23 Consent of Independent Public Accountants
24 Powers of Attorney
</TABLE>
* Indicates exhibit previously filed with the Securities and Exchange
Commission as indicated and incorporated herein by reference.
+ Indicates management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K.
The registrant filed no reports on Form 8-K during the last quarter of the
period covered by this report.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
OCEANEERING INTERNATIONAL, INC.
Date: March 28, 2001 By: /s/ JOHN R. HUFF
-------------------------------------
John R. Huff
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ JOHN R. HUFF Principal Executive Officer, March 28, 2001
- ------------------------------------ Director
John R. Huff
/s/ MARVIN J. MIGURA Senior Vice President, March 28, 2001
- ------------------------------------ Principal Financial Officer
Marvin J. Migura
/s/ JOHN L. ZACHARY Controller, Principal March 28, 2001
- ------------------------------------ Accounting Officer
John L. Zachary
/s/ CHARLES B. EVANS* Director
- ------------------------------------
Charles B. Evans
/s/ DAVID S. HOOKER* Director
- ------------------------------------
David S. Hooker
/s/ D. MICHAEL HUGHES* Director
- ------------------------------------
D. Michael Hughes
/s/ HARRIS J. PAPPAS* Director
- ------------------------------------
Harris J. Pappas
*By: /s/ GEORGE R. HAUBENREICH, JR. March 28, 2001
-------------------------------
George R. Haubenreich, Jr.
Attorney-in-Fact
</TABLE>
20
<PAGE> 21
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Index to Financial Statements
Report of Independent Public Accountants
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Consolidated Statements of Shareholders' Equity and Comprehensive Income
Notes to Consolidated Financial Statements
Selected Quarterly Financial Data (unaudited)
Index to Schedules
All schedules for which provision is made in the applicable regulations of the
Securities and Exchange Commission have been omitted because they are not
required under the relevant instructions or because the required information is
included in the financial statements included herein or in the related footnotes
thereto.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Oceaneering International, Inc.:
We have audited the accompanying consolidated balance sheets of Oceaneering
International, Inc. (a Delaware corporation) and subsidiaries as of December 31,
2000 and March 31, 2000 and the related consolidated statements of income, cash
flows and shareholders' equity and comprehensive income for the nine-month
period ended December 31, 2000 and for each of the two years in the period ended
March 31, 2000. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Oceaneering
International, Inc. and subsidiaries as of December 31, 2000 and March 31, 2000
and the results of their operations and their cash flows for the nine-month
period ended December 31, 2000 and each of the two years in the period ended
March 31, 2000, in conformity with accounting principles generally accepted in
the United States.
ARTHUR ANDERSEN LLP
Houston, Texas
February 14, 2001
21
<PAGE> 22
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(in thousands, except share data) DECEMBER 31, 2000 March 31, 2000
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,911 $ 11,001
Accounts receivable, net of allowances for doubtful accounts
of $510 and $500 107,417 118,572
Prepaid expenses and other 27,019 18,990
---------- ----------
Total current assets 144,347 148,563
---------- ----------
PROPERTY AND EQUIPMENT, AT COST:
Marine services equipment 313,853 311,639
Mobile offshore production equipment, including construction
in progress of $83,321 and $21,054 124,785 68,646
Manufacturing facilities 41,024 37,858
Other 43,723 43,142
---------- ----------
523,385 461,285
Less accumulated depreciation 187,025 184,918
---------- ----------
Net property and equipment 336,360 276,367
---------- ----------
OTHER ASSETS:
Goodwill, net of accumulated amortization of $7,526 and $6,612 11,493 11,611
Other 20,484 14,435
---------- ----------
TOTAL ASSETS $ 512,684 $ 450,976
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 25,076 $ 34,593
Accrued liabilities 60,139 53,645
Income taxes payable 8,736 7,238
Current portion of long-term debt 73 312
---------- ----------
Total current liabilities 94,024 95,788
---------- ----------
LONG-TERM DEBT, NET OF CURRENT PORTION 180,000 128,000
---------- ----------
OTHER LONG-TERM LIABILITIES 31,766 31,488
---------- ----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common Stock, par value $0.25 per share; 90,000,000 shares
authorized; 24,017,046 shares issued 6,004 6,004
Additional paid-in capital 78,945 77,972
Treasury stock; 979,285 and 1,197,705 shares at cost (13,123) (16,050)
Retained earnings 151,806 140,493
Cumulative translation adjustments (16,738) (12,719)
---------- ---------
Total shareholders' equity 206,894 195,700
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 512,684 $ 450,976
========== ==========
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
22
<PAGE> 23
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Nine-Month Fiscal Year
Period Ended Ended
December 31, March 31,
---------------------- --------------------------
(in thousands, except per share data) 2000 1999 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(unaudited)
REVENUES $ 307,730 $ 305,777 $ 416,820 $ 400,322
COST OF SERVICES AND PRODUCTS 254,659 251,612 345,178 314,638
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 30,860 29,114 39,343 41,328
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 22,211 25,051 32,299 44,356
INTEREST INCOME 386 422 533 846
INTEREST EXPENSE, NET (5,629) (4,461) (5,936) (3,425)
OTHER INCOME (EXPENSE), NET 122 (1) (330) (447)
MINORITY INTERESTS 586 (472) (341) 163
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 17,676 20,539 26,225 41,493
PROVISION FOR INCOME TAXES (6,363) (7,394) (9,441) (15,786)
---------- ---------- ---------- ----------
NET INCOME $ 11,313 $ 13,145 $ 16,784 $ 25,707
========== ========== ========== ==========
BASIC EARNINGS PER SHARE $ 0.49 $ 0.58 $ 0.74 $ 1.13
DILUTED EARNINGS PER SHARE $ 0.49 $ 0.57 $ 0.73 $ 1.12
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 22,935 22,752 22,757 22,708
INCREMENTAL SHARES FROM STOCK OPTIONS 291 271 279 180
WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND EQUIVALENTS 23,226 23,023 23,036 22,888
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
23
<PAGE> 24
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine-Month Fiscal Year
Period Ended Ended
December 31, March 31,
--------------------- ----------------------
(in thousands) 2000 1999 2000 1999
- ---------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 11,313 $ 13,145 $ 16,784 $ 25,707
---------- ---------- --------- ----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 30,664 24,864 33,948 29,961
Currency translation adjustments and other (46) 2,256 1,582 (3,067)
Decrease (increase) in accounts receivable, net 11,155 (6,652) (14,734) 11,085
Increase in prepaid expenses and other current assets (8,029) (3,968) (2,131) (9,782)
Increase in other assets (3,036) (946) (2,922) (571)
Increase (decrease) in accounts payable (9,517) 16 11,112 (2,590)
Increase (decrease) in accrued liabilities 6,494 7,648 (962) 3,223
Increase (decrease) in income taxes payable 1,595 (436) (2,801) 849
Increase in other long-term liabilities 278 2,280 13,192 4,505
---------- ---------- --------- ----------
Total adjustments to net income 29,558 25,062 36,284 33,613
---------- ---------- --------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 40,871 38,207 53,068 59,320
---------- ---------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (101,641) (43,737) (80,758) (102,014)
Dispositions of property and equipment 8,122 -- 5,309 2,207
Decrease (increase) in other assets (2,884) 593 (593) 1,058
---------- ---------- --------- ----------
NET CASH USED IN INVESTING ACTIVITIES (96,403) (43,144) (76,042) (98,749)
---------- ---------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings, net of costs -- -- -- 98,537
Net proceeds (payments) on revolving credit
and other long-term debt 51,748 9,772 27,419 (54,301)
Proceeds from issuance of common stock 2,694 5,205 6,246 3,026
Purchases of treasury stock -- (7,303) (8,057) (8,530)
---------- ---------- --------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 54,442 7,674 25,608 38,732
---------- ---------- --------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,090) 2,737 2,634 (697)
CASH AND CASH EQUIVALENTS -- BEGINNING OF PERIOD 11,001 8,367 8,367 9,064
---------- ---------- --------- ----------
CASH AND CASH EQUIVALENTS -- END OF PERIOD $ 9,911 $ 11,104 $ 11,001 $ 8,367
========== ========== ========= ==========
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
24
<PAGE> 25
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
Common Stock Issued Additional Cumulative
--------------------- Paid-in Treasury Retained Translation
(in thousands) Shares Amount Capital Stock Earnings Adjustments Total
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 31, 1998 24,017 $ 6,004 $ 81,442 $ (17,634) $ 98,002 $ (7,492) $ 160,322
Comprehensive Income:
Net Income -- -- -- -- 25,707 -- 25,707
Translation adjustments -- -- -- -- -- (2,400) (2,400)
--------- --------- --------- --------- --------- --------- ---------
Total Comprehensive Income -- -- -- -- 25,707 (2,400) 23,307
Restricted stock issued -- -- (289) 289 -- -- --
Stock options exercised -- -- (42) 250 -- -- 208
Restricted stock plan
compensation expense -- -- 1,310 -- -- -- 1,310
Treasury stock purchases -- -- -- (8,530) -- -- (8,530)
Treasury stock issued
to company benefit
plan, at average cost -- -- -- 2,822 -- -- 2,822
--------- --------- --------- --------- --------- --------- ---------
BALANCE, MARCH 31, 1999 24,017 6,004 82,421 (22,803) 123,709 (9,892) 179,439
Comprehensive Income:
Net Income -- -- -- -- 16,784 -- 16,784
Translation adjustments -- -- -- -- -- (2,827) (2,827)
--------- --------- --------- --------- --------- --------- ---------
Total Comprehensive Income -- -- -- -- 16,784 (2,827) 13,957
Restricted stock issued -- -- (8,165) 8,165 -- -- --
Stock options exercised -- -- 461 4,233 -- -- 4,694
Restricted stock plan
compensation expense -- -- 3,255 -- -- -- 3,255
Treasury stock purchases -- -- -- (8,057) -- -- (8,057)
Treasury stock issued
to company benefit
plan, at average cost -- -- -- 2,412 -- -- 2,412
--------- --------- --------- --------- --------- --------- ---------
BALANCE, MARCH 31, 2000 24,017 6,004 77,972 (16,050) 140,493 (12,719) 195,700
Comprehensive Income:
Net Income -- -- -- -- 11,313 -- 11,313
Translation adjustments -- -- -- -- -- (4,019) (4,019)
--------- --------- --------- --------- --------- --------- ---------
Total Comprehensive Income -- -- -- -- 11,313 (4,019) 7,294
Restricted stock issued -- -- (175) 175 -- -- --
Stock options exercised -- -- 39 880 -- -- 919
Restricted stock plan
compensation expense -- -- 1,109 -- -- -- 1,109
Treasury stock issued
to company benefit
plan, at average cost -- -- -- 1,872 -- -- 1,872
--------- --------- --------- --------- --------- --------- ---------
BALANCE, DECEMBER 31, 2000 24,017 $ 6,004 $ 78,945 $ (13,123) $ 151,806 $ (16,738) $ 206,894
========= ========= ========= ========= ========= ========= =========
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
25
<PAGE> 26
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF MAJOR ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Oceaneering
International, Inc. and its 50% or more owned and controlled subsidiaries
("Oceaneering"). Oceaneering accounts for its investments in unconsolidated
affiliated companies under the equity method. All significant intercompany
accounts and transactions have been eliminated.
Effective November 1, 2000, Oceaneering's Board of Directors approved the change
of its year end to December 31 from March 31. This report covers the nine-month
transition period ended December 31, 2000. The accompanying financial statements
for the nine-month period ended December 31, 1999 are unaudited. Management has
reflected all adjustments which it believes are necessary to present fairly
Oceaneering's results of operations and cash flows for that nine-month period.
All such adjustments are of a normal recurring nature. The results for the
nine-month periods are not necessarily indicative of annual results.
Cash and Cash Equivalents
Cash and cash equivalents include demand deposits and highly liquid investments
with original maturities of three months or less from the date of the
investment.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
<TABLE>
<CAPTION>
December 31, March 31,
(in thousands) 2000 2000
------------------------------------------------------------------
<S> <C> <C>
Spare parts for remotely operated vehicles $10,568 $ 7,950
Inventories, primarily raw materials 8,848 5,593
Other 7,603 5,447
------- -------
Total $27,019 $18,990
======= =======
</TABLE>
Inventory is priced at lower of cost or market. Oceaneering determines cost
using the weighted-average method.
Property and Equipment and Goodwill
Oceaneering provides for depreciation of property and equipment primarily on the
straight-line method over estimated useful lives of three to 20 years for marine
services equipment, up to 12 years for mobile offshore production equipment and
three to 25 years for buildings, improvements and other equipment. Goodwill
arising from business acquisitions is amortized on the straight-line method over
15 years.
The costs of repair and maintenance of property and equipment are
charged to operations as incurred, while the costs of improvements are
capitalized. Oceaneering accrues in advance for anticipated drydocking expenses
of its larger vessels. Accrued drydock costs, which are included in accrued
liabilities on the balance sheet, were $3.2 million and $2.4 million at December
31, 2000 and March 31, 2000, respectively. Interest is capitalized on assets
where the construction period is anticipated to be more than three months.
Oceaneering does not allocate general administrative costs to capital projects.
Upon the disposition of property and equipment, the related cost and accumulated
depreciation accounts are relieved and the resulting gain or loss is included as
an adjustment to cost of services and products.
During the nine-month period ended December 31, 2000, Oceaneering
exchanged its diving-related assets, including a vessel, in Asia, Australia and
the Middle East for 11 remotely operated vehicles. The assets acquired were
recorded at their fair market value and the transaction did not result in a
material gain or loss to Oceaneering.
26
<PAGE> 27
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
Management periodically, and upon the occurrence of a triggering event,
reviews the realizability of goodwill and other long-term assets and makes any
appropriate impairment adjustments and disclosures required by Statement of
Financial Accounting Standards Board Standard Number ("SFAS") 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." During the nine-month period ended December 31, 2000, Oceaneering recorded
a $2.5 million impairment adjustment in the form of additional depreciation
included in cost of services and products within the Mobile Offshore Production
Systems business segment. This adjustment decreased the carrying value of an
out-of-service tanker to its estimated market value. No other impairment
adjustments were made during the periods presented.
Revenue Recognition
Oceaneering's revenues are primarily derived from billings under contracts that
provide for specific time, material and equipment charges, which are accrued
daily and billed monthly. Significant lump-sum contracts, particularly in the
Subsea Products segment, are accounted for using the percentage-of-completion
method. Under this method, we measure the extent of progress toward completion
based on the ratio of costs incurred to total estimated costs at completion.
Unbilled revenues related to recoverable costs and accrued profits on contracts
in process are included in accounts receivable on Oceaneering's balance sheets.
These amounts were $40 million and $43 million at December 31, 2000 and March
31, 2000, respectively. Revenues on contracts with a substantial element of
research and development are recognized to the extent of cost until such time as
the probable final profitability can be determined. Anticipated losses on
contracts, if any, are recorded in the period that such losses are first
determinable. Oceaneering's revenue recognition accounting policies comply with
SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements."
Income Taxes
Oceaneering accounts for income taxes in accordance with SFAS 109, "Accounting
for Income Taxes."
Foreign Currency Translation
The functional currency for several of Oceaneering's foreign subsidiaries is the
applicable local currency. Results of operations for foreign subsidiaries with
functional currencies other than the U.S. dollar are translated into U.S.
dollars using average exchange rates during the period. Assets and liabilities
of these foreign subsidiaries are translated into U.S. dollars using the
exchange rates in effect at the balance sheet date and the resulting translation
adjustments are accumulated as a component of shareholders' equity. All foreign
currency transaction gains and losses are recognized currently in the
Consolidated Statements of Income.
Earnings Per Share
Oceaneering has computed earnings per share in accordance with SFAS 128,
"Earnings Per Share."
Other Long-term Liabilities
At December 31, 2000 and March 31, 2000, other long-term liabilities include
$9.1 million and $9.3 million, respectively, for self-insurance reserves not
expected to be paid out in the following year and $19.1 million for deferred
income taxes at each period end.
Reclassifications
Certain amounts from prior years, particularly segment information, have been
reclassified to conform with the current year presentation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
27
<PAGE> 28
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
New Accounting Standard
In June 1999, the Financial Accounting Standards Board amended SFAS 133
"Accounting for Derivative Instruments and Hedging Activities," by issuing SFAS
137 to defer the effective date of SFAS 133 to fiscal years beginning after June
15, 2000. Oceaneering believes the adoption of this statement will not have a
significant impact on its results of operations or financial position.
2. INCOME TAXES
Oceaneering and its domestic subsidiaries, including acquired companies from
their respective dates of acquisition, file a consolidated U.S. federal income
tax return. Oceaneering conducts its international operations in a number of
locations which have varying codes and regulations with regard to income and
other taxes, some of which are subject to interpretation. On a geographic basis,
income before minority interests and income taxes attributable to the United
States was $6.7 million, $10.5 million and $18.4 million for the nine-month
period ended December 31, 2000 and the years ended March 31, 2000 and 1999,
respectively. Income taxes are provided at the appropriate tax rates in
accordance with Oceaneering's interpretation of the respective tax regulations
after review and consultation with its internal tax department, tax consultants
and, in some cases, legal counsel in the various jurisdictions. Management
believes that adequate provisions have been made for all taxes which will
ultimately be payable.
Deferred income taxes are provided for temporary differences in the
recognition of income and expenses for financial and tax reporting purposes.
Oceaneering's policy is to provide for deferred U.S. income taxes on
unrepatriated foreign income only to the extent such income is not to be
invested indefinitely in the related foreign entity.
The provisions for income taxes were as follows:
<TABLE>
<CAPTION>
Fiscal Year
Nine-Month Ended
Period Ended March 31,
December 31, ---------------------
(in thousands) 2000 2000 1999
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. federal and state $ 1,671 $ 4,988 $12,205
Foreign 4,692 4,453 3,581
-------- -------- -------
Total provision $ 6,363 $ 9,441 $15,786
======== ======== =======
Current $ 6,375 $ 2,135 $13,040
Deferred (12) 7,306 2,746
-------- -------- -------
Total provision $ 6,363 $ 9,441 $15,786
======== ======== =======
Cash taxes paid $ 4,538 $ 7,906 $12,191
======== ======== =======
</TABLE>
During the nine-month period ended December 31, 2000, Oceaneering also
received a cash tax refund of $4,353,000.
As of December 31, 2000, Oceaneering's United Kingdom subsidiary had net
operating loss carryforwards ("NOLs") of approximately $11 million, which are
available to reduce future United Kingdom Corporation Tax which would otherwise
be payable.
As of December 31, 2000 and March 31, 2000, Oceaneering's worldwide deferred
tax assets and liabilities and related valuation reserves were as follows:
<TABLE>
<CAPTION>
December 31, March 31,
(in thousands) 2000 2000
-----------------------------------------------------
<S> <C> <C>
Gross deferred tax assets $ 9,849 $ 9,600
Valuation allowance (4,613) (4,376)
-------- --------
Net deferred tax assets $ 5,236 $ 5,224
======== ========
Deferred tax liabilities $ 19,123 $ 19,123
======== ========
</TABLE>
28
<PAGE> 29
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
Oceaneering's gross deferred tax assets consist primarily of NOLs in its
United Kingdom subsidiary, which have no expiration date, and insurance claim
reserves for which a tax deduction has not yet been allowed. Deferred tax
liabilities consist primarily of depreciation and amortization book/tax
differences and provisions for income of foreign subsidiaries expected to be
repatriated.
Oceaneering has established a valuation allowance for deferred tax assets
after taking into account factors that are likely to affect Oceaneering's
ability to utilize the tax assets. In particular, Oceaneering conducts its
business through several foreign subsidiaries and, although Oceaneering expects
its consolidated operations to be profitable, there is no assurance that profits
will be earned in entities or jurisdictions which have NOLs available. Since
April 1, 1998, changes in the valuation allowance primarily relate to the
expected utilization of foreign NOLs and realization of foreign tax credits.
Income taxes, computed by applying the federal statutory income tax rate of 35%
to income before income taxes and minority interests, are reconciled to the
actual provisions for income taxes as follows:
<TABLE>
<CAPTION>
Fiscal Year
Nine-Month Ended
Period Ended March 31,
December 31, ----------------------
(in thousands) 2000 2000 1999
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed U.S. statutory expense $ 5,981 $ 9,298 $ 14,466
Change in valuation allowances 237 (6,008) (1,057)
Withholding taxes and foreign earnings taxed
at rates different from U.S. statutory rates 1,066 3,375 1,172
State and local taxes and other, net (921) 2,776 1,205
-------- -------- --------
Total provision for income taxes $ 6,363 $ 9,441 $ 15,786
======== ======== ========
</TABLE>
3. DEBT
Long-term Debt consisted of the following:
<TABLE>
<CAPTION>
December 31, March 31,
(in thousands) 2000 2000
-------------------------------------------------------------------
<S> <C> <C>
6.72% Senior Notes $ 100,000 $ 100,000
Revolving credit agreement 65,000 28,000
Capital lease 73 312
Term loan agreement 15,000 --
--------- ---------
Long-term Debt 180,073 128,312
Current portion (73) (312)
--------- ---------
Long-term Debt, net of current portion $ 180,000 $ 128,000
========= =========
</TABLE>
In September 1998, Oceaneering issued $100 million aggregate principal
amount of 6.72% Senior Notes due 2010. The net proceeds were $98.6 million after
issuance costs and were used to retire existing debt. The notes have an average
life of ten years and are scheduled to be paid in five equal annual installments
beginning September 2006.
In October 1998, Oceaneering entered into an $80 million revolving credit
facility (the "Credit Agreement") to replace its prior revolving credit
agreement. There is a commitment fee ranging from .20% to .25% per annum,
depending on Oceaneering's debt-to-capitalization ratio, on the unused portion
of the banks' commitments. Principal maturity is in October 2003. Under the
Credit Agreement, Oceaneering has the option to borrow dollars at the London
Interbank Offered Rate ("LIBOR") plus a margin ranging from .50% to 1.00%,
depending on Oceaneering's debt-to-capitalization ratio, or at the agent bank's
prime rate.
In March 2000, Oceaneering entered into a four-year, $50 million term loan
agreement (the "Term Loan"). Borrowings under the Term Loan can be made until
March 2001 and principal repayments commence in October 2001 with final maturity
in April 2004. There are no commitment fees on the Term Loan. Under the Term
Loan, Oceaneering has the
29
<PAGE> 30
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
option to borrow dollars at LIBOR plus a margin ranging from .75% to 1.25%,
depending on Oceaneering's debt-to- capitalization ratio, or at the agent bank's
prime rate.
All of these credit arrangements contain similar restrictive covenants as
to minimum net worth, debt-to-capitalization ratio, fixed charge coverage,
interest coverage and restricted payments. Restricted payments, which include
dividends and treasury stock purchases, are limited from April 1, 1998, on a net
basis, to the sum of $25 million plus 50% of Oceaneering's consolidated net
income after April 1, 1998, plus cash proceeds from any sales of common stock.
Oceaneering has uncommitted credit agreements with banks totaling $29
million for use for borrowings and letters of credit. As of December 31, 2000,
Oceaneering had approximately $17 million in letters of credit outstanding under
these agreements.
Cash interest payments of $6.7 million, $7.7 million and $5.7 million were
made in the nine-month period ended December 31, 2000 and the fiscal years ended
March 31, 2000 and 1999, respectively. Interest charges of $3.0 million, $1.8
million and $2.5 million were capitalized as part of construction in progress in
the nine-month period ended December 31, 2000 and the fiscal years ended March
31, 2000 and 1999, respectively.
4. EMPLOYEE BENEFIT PLANS AND SHAREHOLDER RIGHTS PLAN
Retirement Investment Plans
Oceaneering has three separate employee retirement investment plans which, taken
together, cover most of its full-time employees. The Oceaneering Retirement
Investment Plan is a deferred compensation plan in which domestic employees may
participate by deferring a portion of their gross monthly salary and directing
Oceaneering to contribute the deferred amount to the plan. Oceaneering matches a
portion of the deferred compensation. Oceaneering's contributions to the plan
were $3,220,000, $2,867,000 and $2,508,000 for the plan years ended December 31,
2000, 1999 and 1998, respectively.
The second plan is the Oceaneering International Services Pension Scheme
for employees in the United Kingdom. Under this plan, employees may contribute a
portion of their gross monthly salary. Oceaneering also contributes an amount
equal to a portion of the participant's gross monthly salary. The plan assets
exceed vested benefits and are not material to the assets of Oceaneering.
Company contributions to this plan for the nine-month period ended December 31,
2000 and the fiscal years ended March 31, 2000 and 1999 were $41,000, $32,000
and $34,000, respectively.
The third plan is the Oceaneering International, Inc. Supplemental
Executive Retirement Plan, which covers selected key management employees and
executives of Oceaneering as approved by the Compensation Committee of
Oceaneering's Board of Directors (the "Compensation Committee"). This plan
replaced a prior Executive Retirement Plan effective June 30, 1997 and covers
more employees. Expense related to the prior plan during the year ended March
31, 1998 was $576,000. Under the new plan, Oceaneering accrues an amount
determined as a percentage of the participant's gross monthly salary and the
amounts accrued are treated as if they are invested in one or more investment
vehicles pursuant to this plan. Expense related to this plan during the
nine-month period ended December 31, 2000 and the fiscal years ended March 31,
2000 and 1999 was $921,000, $972,000 and $980,000, respectively.
Incentive and Stock Option Plans
Under the 1996, 1999 and 2000 Incentive Plans (the "Incentive Plans"), a
total of 1,165,000, 1,450,000 and 900,000 shares of common stock of Oceaneering,
respectively, were made available for awards to employees and other persons
(excluding nonemployee directors except with respect to automatic grants as
described below and, with respect to the 2000 Incentive Plan, excluding
executive officers) having an important business relationship or affiliation
with Oceaneering. Under the 1999 Incentive Plan, each director of Oceaneering is
automatically granted an option to purchase 10,000 shares of common stock on the
date the director becomes a nonemployee director and each year thereafter at an
exercise price per share equal to the fair market value of a share of common
stock on the date the option was granted. These options become fully exercisable
six months following the date of grant. The Incentive Plans are administered by
the Compensation Committee, which determines the type or types of award(s) to be
made to each participant and sets forth in the related award agreement the
terms, conditions and limitations applicable to each award. The Compensation
Committee may grant stock options, stock appreciation rights and stock and cash
awards. The exercise price for each option is not less than the fair market
value of the optioned shares at the date of grant. Options outstanding vest over
a three- or four-year period and are exercisable over a period of four, five or
ten years after the date of grant or five years after the date of vesting.
30
<PAGE> 31
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
During fiscal 1999 and 2000 and the nine-month period ended December 31,
2000, the Compensation Committee granted restricted common stock of Oceaneering
to certain of its key executives. These grants are subject to earning
requirements on the basis of a percentage change between the price of the common
stock of Oceaneering versus the average of the common stock price of a peer
group of companies over one-, three- and two-year time periods, respectively. Up
to one-half of the grant made in the nine-month period ended December 31, 2000
and up to one-third of the total grant made in fiscal 2000 may be earned each
year depending on Oceaneering's cumulative common stock performance, with any
amount earned subject to vesting in four equal installments over a four-year
period, conditional upon continued employment. All of the total grant made in
fiscal 1999 was earned at the end of one year, subject to vesting. At the time
of each vesting, a participant receives a tax assistance payment for which the
participant must reimburse Oceaneering if the vested common stock is sold by the
participant within three years after the vesting date. As of December 31, 2000,
none of the grant made in the nine-month period ended December 31, 2000 has been
earned and one-third of the grant made in fiscal 2000 has been earned. As of
December 31, 2000, a total of 705,250 shares of restricted stock was outstanding
under these and former, similar grants, of which 325,250 shares were earned,
subject to vesting requirements. The numbers and weighted average grant date
fair values of restricted stock granted were 16,000 and $19.87, respectively,
during the nine-month period ended December 31, 2000, 549,000 and $17.06,
respectively, during fiscal 2000 and 9,000 and $16.83, respectively, during
fiscal 1999. In June 1998 and June 1999, certain key executives also elected to
receive restricted common stock of Oceaneering totaling 35,920 and 42,812 shares
with grant date fair values of $17.94 and $16.56 per share, respectively,
subject to similar vesting requirements and tax assistance payments, in lieu of
cash for all or part of their fiscal 1998 and fiscal 1999 bonus awards. Each
grantee of shares of restricted stock mentioned in this paragraph is deemed to
be the record owner of those shares during the restriction period, with the
right to vote and receive any dividends on those shares.
Oceaneering accounts for stock options it issues under its plans pursuant
to Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," under which no compensation cost is recognized unless options are
granted at an option price below the fair market value of the stock at the date
of the grant. Had compensation cost for these stock options been determined
consistent with SFAS 123, "Accounting for Stock-Based Compensation,"
Oceaneering's pro forma net income for the nine-month period ended December 31,
2000 and for fiscal 2000 and fiscal 1999 would have been $9,137,000, $15,442,000
and $24,735,000, respectively, and its diluted earnings per share for those
periods would have been $0.39, $0.67 and $1.08, respectively.
Information regarding these option plans is as follows:
<TABLE>
<CAPTION>
Shares under Weighted Average
Option Exercise Price
---------------- -------------------
<S> <C> <C>
Balance at March 31, 1998 1,283,340 $ 14.56
Granted 481,900 10.43
Exercised (18,090) 12.63
Forfeited (61,980) 15.40
----------- -------
Balance at March 31, 1999 1,685,170 13.37
Granted 384,000 16.88
Exercised (319,760) 12.48
Forfeited (45,280) 14.12
------------ -------
Balance at March 31, 2000 1,704,130 14.31
Granted 803,800 14.57
Exercised (66,035) 12.51
Forfeited (93,620) 15.47
------------ -------
Balance at December 31, 2000 2,348,275 $ 14.40
============ =======
</TABLE>
The weighted average fair value of options granted in the nine-month
period ended December 31, 2000 and for fiscal 2000 and 1999 was $7.18, $8.90 and
$5.86, respectively. The fair value of the stock options granted was estimated
on the
31
<PAGE> 32
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
date of grant using the Black-Scholes option pricing model with the following
assumptions:
<TABLE>
<CAPTION>
Fiscal Year
Nine-Month Ended
Period Ended March 31,
December 31, --------------------
(in thousands) 2000 2000 1999
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Risk-free interest rate 6.13% 5.87% 5.34%
Expected dividend yield 0% 0% 0%
Expected life 4.5 years 6 years 6 years
Expected volatility 51.24% 46.14% 42.27%
</TABLE>
The following table provides information about the options outstanding at
December 31, 2000.
<TABLE>
<CAPTION>
Outstanding Exercisable
--------------------------------------------- ---------------------------
Weighted
Number of Average Weighted Number of Weighted
Range of Shares at Remaining Average Shares at Average
Exercise December 31, Contractual Exercise December 31, Exercise
Prices 2000 Life (years) Price 2000 Price
--------------------- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$4.72 - 14.19 685,725 2.76 $10.55 494,375 $10.63
$14.20 - 15.58 826,400 4.74 $14.41 65,400 $14.63
$15.59 - 20.34 836,150 3.09 $17.57 495,250 $17.78
</TABLE>
At December 31, 2000, there were 760,820 shares of Oceaneering common
stock under these plans available for grant, awarding stock options, stock
appreciation rights, stock and cash awards to employees, subject to no more than
517,220 shares being used for awards other than stock options or stock
appreciation rights to employees.
Shareholder Rights Plan
On November 20, 1992, Oceaneering's Board of Directors adopted a Shareholder
Rights Plan and, in accordance with the plan, declared a dividend of one
preferred share purchase right for each outstanding share of Oceaneering common
stock. The plan will cause substantial dilution to a party that attempts to
acquire Oceaneering in a manner or on terms not approved by the Board of
Directors, except pursuant to an offer conditioned on a substantial number of
rights being acquired.
The rights, which do not have voting rights and are not entitled to
dividends until such time as they become exercisable, expire in December 2002.
5. COMMITMENTS AND CONTINGENCIES
Lease Commitments
At December 31, 2000, Oceaneering occupied several facilities under
noncancellable operating leases expiring at various dates through 2023. Future
minimum rentals under these leases are as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
2001 $ 4,053
2002 2,704
2003 2,261
2004 2,078
2005 1,899
Thereafter 7,789
--------
Total Lease Commitments $20,784
========
</TABLE>
32
<PAGE> 33
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
Rental expense, which includes hire of vessels, specialized equipment and
real estate rental, was approximately $13 million, $22 million and $18 million
for the nine-month period ended December 31, 2000 and the fiscal years ended
March 31, 2000 and 1999, respectively.
Insurance
Oceaneering self-insures for workers' compensation, maritime employer's
liability and comprehensive general liability claims to levels it considers
financially prudent and carries insurance after it reaches the initial claim
levels, which can be by occurrence or in the aggregate. Oceaneering determines
the level of accruals by reviewing its historical experience and current year
claim activity. It does not record accruals on a present-value basis.
Oceaneering reviews each claim with insurance adjusters and establishes specific
reserves for all known liabilities. It establishes an additional reserve for
incidents incurred but not reported to Oceaneering for each year using
management estimates and based on prior experience. Oceaneering's management
believes that Oceaneering has established adequate accruals for uninsured
expected liabilities arising from those obligations.
Litigation
Various actions and claims are pending against Oceaneering, most of which are
covered by insurance. In the opinion of Oceaneering's management, the ultimate
liability, if any, which may result from these actions and claims will not
materially affect Oceaneering's financial position or results of operations.
Letters of Credit
Oceaneering had $17 million in letters of credit outstanding as of both December
31, 2000 and March 31, 2000 as guarantees in force for self-insurance
requirements and various performance and bid bonds which are usually for a
period of one year or the duration of the applicable contract.
Financial Instruments and Risk Concentration
Financial instruments which potentially subject Oceaneering to concentrations of
credit risk are primarily cash and cash equivalents, long-term bank and other
borrowings and accounts receivable. The carrying values of cash and cash
equivalents and bank borrowings approximate their fair values due to the short
maturity of those instruments or the short- term duration of the associated
interest rate periods. Accounts receivable are generated from a broad and
diverse group of customers primarily from within the energy industry, which is
Oceaneering's major source of revenues. Oceaneering maintains an allowance for
doubtful accounts based on expected collectibility.
Oceaneering estimated the fair value of its $100 million of 6.72% Senior
Notes (see Note 3) to be $94 million as of December 31, 2000. This estimate was
arrived at by computing the present value of the future principal and interest
payments using a yield-to-maturity interest rate for securities of similar
quality and term.
6. OPERATIONS BY BUSINESS SEGMENT AND GEOGRAPHIC AREA
Business Segment Information
Oceaneering supplies a comprehensive range of integrated technical services to a
variety of industries and is one of the world's largest underwater services
contractors. Oceaneering's Offshore Oil and Gas business consists of remotely
operated vehicles ("ROVs"), Subsea Products, Mobile Offshore Production Systems
and Other Services. Oceaneering's Advanced Technologies business provides
project management, engineering services and equipment for applications in
non-oilfield markets.
The following table presents Revenues, Income (Loss) from Operations and
Depreciation and Amortization Expense
33
<PAGE> 34
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
for the nine-month periods ended December 31, 2000 and 1999 and the fiscal years
ended March 31, 2000 and 1999 by business segment:
<TABLE>
<CAPTION>
Nine-Month Fiscal Year
Period Ended Ended
December 31, March 31,
----------------------- ------------------------
(in thousands) 2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
REVENUES
Offshore Oil and Gas
Remotely Operated Vehicles $ 78,953 $ 72,585 $ 94,617 $ 100,854
Subsea Products 65,771 43,350 69,744 72,919
Mobile Offshore Production Systems 15,788 18,118 23,983 31,559
Other Services 65,206 77,420 105,505 95,748
--------- --------- --------- ---------
Total Offshore Oil and Gas 225,718 211,473 293,849 301,080
Advanced Technologies 82,012 94,304 122,971 99,242
--------- --------- --------- ---------
Total $ 307,730 $ 305,777 $ 416,820 $ 400,322
========= ========= ========= =========
INCOME (LOSS) FROM OPERATIONS
Offshore Oil and Gas
Remotely Operated Vehicles $ 12,316 $ 9,855 $ 14,064 $ 16,722
Subsea Products 1,225 390 1,499 6,389
Mobile Offshore Production Systems 4,271 5,597 7,629 9,478
Other Services (636) 863 (3,169) 3,308
--------- --------- --------- ---------
Total Offshore Oil and Gas 17,176 16,705 20,023 35,897
Advanced Technologies 5,035 8,346 12,276 8,459
--------- --------- --------- ---------
Total $ 22,211 $ 25,051 $ 32,299 $ 44,356
========= ========= ========= =========
DEPRECIATION AND AMORTIZATION EXPENSES
Offshore Oil and Gas
Remotely Operated Vehicles $ 13,719 $ 9,897 $13,827 $ 11,609
Subsea Products 3,401 3,088 4,212 3,215
Mobile Offshore Production Systems 5,497 3,202 4,239 4,409
Other Services 5,791 5,732 7,906 6,313
--------- --------- --------- ---------
Total Offshore Oil and Gas 28,408 21,919 30,184 25,546
Advanced Technologies 2,256 2,945 3,764 4,415
--------- --------- --------- ---------
Total $ 30,664 $ 24,864 $ 33,948 $ 29,961
========= ========= ========= =========
</TABLE>
The following table presents Assets and Capital Expenditures as of and for
the periods indicated:
<TABLE>
<CAPTION>
As of March 31,
As of -------------------------
(in thousands) December 31, 2000 2000 1999
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Offshore Oil and Gas
Remotely Operated Vehicles $161,355 $145,486 $132,709
Subsea Products 85,401 78,993 71,679
Mobile Offshore Production Systems 107,677 58,553 45,938
Other Services 84,110 90,562 69,826
-------- -------- --------
Total Offshore Oil and Gas 438,543 373,594 320,152
Advanced Technologies 49,555 45,608 46,698
Other 24,586 31,774 20,493
-------- -------- --------
Total $512,684 $450,976 $387,343
======== ======== ========
</TABLE>
34
<PAGE> 35
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
<TABLE>
<CAPTION>
Fiscal Year
Ended
Nine-Month March 31,
Period Ended ------------------------
(in thousands) December 31, 2000 2000 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CAPITAL EXPENDITURES
Offshore Oil and Gas
Remotely Operated Vehicles $ 25,293 $ 29,614 $ 41,783
Subsea Products 6,299 4,700 25,951
Mobile Offshore Production Systems 61,972 16,590 1,854
Other Services 7,480 20,320 25,528
-------- --------- ---------
Total Offshore Oil and Gas 101,044 71,224 95,116
Advanced Technologies 597 9,534 6,898
-------- --------- ---------
Total $101,641 $ 80,758 $ 102,014
======== ========= =========
</TABLE>
Income (loss) from operations for each business segment is determined
before interest income or expense, other income (expense), minority interests
and provision for income taxes. An allocation of these items is not considered
practical. All assets specifically identified with a particular business segment
have been segregated. Cash and cash equivalents, certain prepaid expenses and
other current assets, certain investments and other assets have not been
allocated to particular business segments.
No individual customer accounted for more than 10% of Oceaneering's
consolidated revenues in the nine-month period ended December 31, 2000 or the
years ended March 31, 2000 and 1999.
Geographic Operating Areas
The following table summarizes certain financial data by geographic area:
<TABLE>
<CAPTION>
Fiscal Year
Nine-Month Ended
Period Ended March 31,
December 31, ---------------------
(in thousands) 2000 2000 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
United States $165,858 $207,415 $206,703
Norway 18,484 26,934 30,162
United Kingdom 20,127 26,504 34,641
Indonesia 6,389 25,983 19,153
Other Asia 24,910 41,381 33,451
Africa 35,798 49,673 50,033
Brazil 21,061 16,515 3,859
Other 15,103 22,415 22,320
-------- -------- --------
Total $307,730 $416,82 $400,322
======== ======== ========
LONG-LIVED ASSETS
United States $188,105 $205,861 $156,457
Europe 50,614 46,614 44,043
Africa 8,736 10,088 17,167
Asia 101,777 22,494 21,625
Other 14,814 14,738 15,547
-------- -------- --------
Total $364,046 $299,79 $254,839
======== ======== ========
</TABLE>
35
<PAGE> 36
OCEANEERING INTERNATIONAL, INC. & SUBSIDIARIES
7. ACCRUED LIABILITIES
Accrued liabilities consisted of the following:
<TABLE>
<CAPTION>
December 31, March 31,
(in thousands) 2000 2000
------------------------------------------------------------------------------------------
<S> <C> <C>
Payroll and related costs $ 18,130 $ 15,583
Accrued job costs 22,415 19,972
Self insurance reserves for claims expected
to be paid within one year 5,422 5,360
Other 14,172 12,730
-------- --------
Total Accrued Liabilities $ 60,139 $ 53,645
======== ========
</TABLE>
================================================================================
================================================================================
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Nine-Month Period Ended December 31, 2000
------------------------------------------------------------
QUARTER ENDED JUNE 30 SEPT. 30 DEC. 31 TOTAL
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $104,039 $100,464 $103,227 $307,730
Gross profit 15,373 18,373 19,325 53,071
Income from operations 5,378 7,980 8,853 22,211
Net income 2,703 4,112 4,498 11,313
Diluted earnings per share $ 0.12 $ 0.18 $ 0.19 $ 0.49
Weighted average number of
common shares and equivalents 23,186 23,221 23,271 23,226
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31, 2000
-----------------------------------------------------------------------------
QUARTER ENDED JUNE 30 SEPT. 30 DEC. 31 MAR. 31 TOTAL
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $98,860 $100,405 $106,512 $111,043 $416,820
Gross profit 18,527 17,455 18,183 17,477 71,642
Income from operations 8,978 7,745 8,328 7,248 32,299
Net income 5,034 4,116 3,995 3,639 16,784
Diluted earnings per share $ 0.22 $ 0.18 $ 0.17 $ 0.16 $ 0.73
Weighted average number of
common shares and equivalents 22,667 23,079 23,323 23,074 23,036
</TABLE>
36
<PAGE> 37
EXHIBIT INDEX
<TABLE>
<CAPTION>
Registration
or File Form or Report Exhibit
Number Report Date Number
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3.01 Restated Certificate of Incorporation
3.02 Amended and Restated By-Laws
*4.01 Specimen of Common Stock Certificate 1-10945 10-K March 1993 4(a)
*4.02 Shareholder Rights Agreement dated November 20, 1992 1-10945 8-K Nov. 1992 1
*4.03 Note Purchase Agreement dated as of September 8, 1998
relating to $100,000,000 6.72% Senior Notes due
September 8, 2010 1-10945 10-Q Sept. 1998 4.01
*4.04 Loan Agreement ($80,000,000 Revolving Credit Facility)
dated as of October 23, 1998 1-10945 10-Q Sept. 1998 4.02
*4.05 Loan Agreement ($50,000,000 Term Loan) dated as of 1-10945 10-K/A March 2000 4.05
March 30, 2000
</TABLE>
We and certain of our consolidated subsidiaries are parties to debt instruments
under which the total amount of securities authorized does not exceed 10 percent
of our total consolidated assets. Pursuant to paragraph 4(ii)(A) of Item 601(b)
of Regulation S-K, we agree to furnish a copy of those instruments to the
Securities and Exchange Commission on request.
<TABLE>
<S> <C> <C> <C> <C>
*10.01+ Oceaneering Retirement Investment Plan, as amended 1-10945 10-K March 1996 10.02
*10.02+ Employment Agreement dated August 15, 1986 between
John R. Huff and Oceaneering 0-8418 10-K March 1987 10(l)
*10.03+ Addendum to Employment Agreement dated
February 22, 1996 between John R. Huff and Oceaneering 1-10945 10-K March 1997 10.04
*10.04+ Amended and Restated Supplemental Executive Retirement Plan 1-10945 10-Q Dec. 1999 10.1
*10.05+ 1999 Restricted Stock Award Incentive Agreements
dated August 19, 1999 1-10945 10-Q Sept. 1999 10.1
*10.06+ Senior Executive Severance Plan, as amended 0-8418 10-K March 1989 10(k)
*10.07+ Supplemental Senior Executive Severance Agreements,
as amended 0-8418 10-K March 1989 10(l)
*10.08+ 1999 Incentive Plan 1-10945 10-K March 2000 10.08
*10.09+ 2000 Bonus Award Plan
*10.10+ 1990 Long-Term Incentive Plan 33-36872 S-8 Sept. 1990 4(f)
*10.11+ 1990 Nonemployee Directors Stock Option Plan 33-36872 S-8 Sept. 1990 4(g)
*10.12+ Indemnification Agreement between Registrant
and its Directors 0-8418 10-Q Sept. 1991 10(a)
*10.14+ 1996 Incentive Plan of Oceaneering International, Inc. 1-10945 10-Q Sept. 1996 10.02
*10.15+ 1996 Restricted Stock Award Incentive Agreements
dated August 23, 1996 1-10945 10-Q Sept. 1996 10.03
*10.16+ 1997 Bonus Restricted Stock Award Agreements
dated April 22, 1997 1-10945 10-K March 1997 10.20
*10.17+ Amendment No. 1 to the Oceaneering
Retirement Investment Plan 1-10945 10-Q Sept. 1996 10.01
*10.18+ Amendment No. 1 to 1990 Nonemployee Director Stock
Option Plan 1-10945 10-K March 1999 10.19
*10.19+ 1998 Bonus Restricted Stock Award Agreements 1-10945 10-K March 1999 10.20
*10.20+ 1999 Bonus Restricted Stock Award Agreements 1-10945 10-K/A March 2000 10.20
*10.21+ Non-Executive Incentive Plan 333-50400 S-8 Nov. 2000 4.6
21 Subsidiaries of the Registrant
23 Consent of Independent Public Accountants
24 Powers of Attorney
</TABLE>
* Indicates exhibit previously filed with the Securities and Exchange
Commission as indicated and incorporated herein by reference.
+ Indicates management contract or compensatory plan or arrangement.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.01
<SEQUENCE>2
<FILENAME>h85406ex3-01.txt
<DESCRIPTION>RESTATED CERTIFICATE OF INCORPORATION
<TEXT>
<PAGE> 1
EXHIBIT 3.01
RESTATED CERTIFICATE OF INCORPORATION
OF
OCEANEERING INTERNATIONAL, INC.
Oceaneering International, Inc. (the "corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "DGCL"), hereby adopts this
Restated Certificate of Incorporation, which accurately restates and integrates
the provisions of the existing Certificate of Incorporation of the corporation
as heretofore amended (as so amended, the "Certificate of Incorporation") and
does hereby further certify that:
1. The name of the corporation is Oceaneering International,
Inc. The original certificate of incorporation of the corporation was filed with
the Secretary of State of the State of Delaware on June 20, 1969 under the name
Oceaneering International, Inc.
2. The board of directors of the corporation has duly adopted
this Restated Certificate of Incorporation in accordance with Section 245 of the
DGCL and without a vote of the corporation's stockholders. This Restated
Certificate of Incorporation only restates and integrates and does not further
amend the provisions of the Certificate of Incorporation, and no discrepancy
exists between those provisions and the provisions hereof.
3. The Certificate of Incorporation is hereby restated to read
in its entirety as follows:
RESTATED CERTIFICATE OF INCORPORATION
OF
OCEANEERING INTERNATIONAL, INC.
* * * *
FIRST. The name of the corporation is OCEANEERING INTERNATIONAL, INC.
SECOND. The address of its registered office in the State of Delaware
is 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware
19801. The name of its registered agent at such address is The Corporation Trust
Company.
THIRD. The nature of the business or purposes to be conducted or
promoted is:
To engage in the business of commercial deep-sea diving and developing,
marketing, leasing, selling and supplying deep-sea diving equipment and
services.
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
1
<PAGE> 2
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trade-marks and trade names, relating to
or useful in connection with any business of this corporation.
To acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of the shares of the capital stock,
or any voting trust certificates in respect of the shares of capital stock,
scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other
securities, obligations, choses in action and evidences of indebtedness or
interest issued or created by any corporations, joint stock companies
syndicates, associations, firms, trusts or persons, public or private, or by the
government of the United States of America, or by any foreign government, or by
any state, territory, province, municipality or other political subdivision or
by any governmental agency, and as owner thereof to possess and exercise all the
rights, powers and privileges of ownership, including the right to execute
consents and vote thereon, and to do any and all acts and things necessary or
advisable for the preservation, protection, improvement and enhancement in value
thereof.
To borrow or raise moneys for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness, and to secure the payment of any thereof and of
the interest thereon by mortgage upon or pledge, conveyance or assignment in
trust of the whole or any part of the property of the corporation, whether at
the time owned or thereafter acquired, and to sell, pledge or otherwise dispose
of such bonds or other obligations of the corporation for its corporate
purposes.
To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of the corporation's property and
assets, or any interest therein, wherever situated.
In general, to possess and exercise all the powers and privileges
granted by the General Corporation Law of Delaware or by any other law of
Delaware or by this certificate of incorporation together with any powers
incidental thereto, so far as such powers and privileges are necessary or
convenient to the conduct, promotion or attainment of the business or purposes
of the corporation.
The business and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other
2
<PAGE> 3
clause in this certificate of incorporation, but the business and purposes
specified in each of the foregoing clauses of this article shall be regarded as
independent business and purposes.
FOURTH. The total number of shares of stock which the Corporation shall
have authority to issue is Ninety-Three Million (93,000,000), consisting of
Ninety Million (90,000,000) shares of Common Stock of the par value of
Twenty-Five Cents ($.25) per share and Three Million (3,000,000) shares of
Preferred Stock of the par value of One Dollar ($1.00) per share.
The designations, powers, preferences and rights, and the
qualifications, limitations and restrictions of each class of capital stock of
the Corporation are as follows:
(a) COMMON STOCK
1. Voting Rights of Common Stock. Each holder of Common Stock
shall be entitled to one vote for each share of Common Stock on each
matter submitted to a vote of the stockholders of the Corporation.
2. Dividends on Common Stock. The holders of Common Stock
shall be entitled to receive dividends on shares of Common Stock when,
if and as declared by the board of directors of the Corporation.
3. Distribution on Common Stock in the Event of Dissolution,
Liquidation or Winding Up. In the event of any voluntary or involuntary
dissolution, liquidation, or winding up of the Corporation, after
payment or provision for payment of the debts and other liabilities of
the Corporation and the amounts, if any, to which the holders of all
classes of Preferred Stock may be entitled, the holders of Common Stock
shall be entitled to share ratably in the remaining assets of the
Corporation.
(b) PREFERRED STOCK
1. Authority of the board of directors to Issue Preferred
Stock. The board of directors may by resolution from time to time
classify or reclassify and issue in one or more series any unissued
shares of Preferred Stock, and may fix or alter in any one or more
respects, from time to time before issuance of such shares, the number
and designation of any series or classification, liquidation and
dividend rights, conversion rights, and any other rights, restrictions
and qualifications of and the terms of any purchase, retirement or
sinking fund which may be provided for such shares of Preferred Stock.
2. Filing Requirements. Before any such Preferred Stock is
issued, the board of directors shall cause to be filed with the
Secretary of State, State of Delaware, a certificate setting forth a
copy of the resolutions of the board of directors of the Corporation
containing a description of any such class or series of Preferred Stock
and the terms of issuance thereof
3
<PAGE> 4
duly executed, acknowledged and filed in accordance with Section 103 of
the Delaware Corporation Law.
In accordance with the provisions of this Article FOURTH, the
board of directors of the corporation has designated shares of
Preferred Stock with the voting powers, preferences and relative,
participating, optional or other rights and the qualifications,
limitations and restrictions thereof as set forth in Exhibit A hereto,
which is hereby incorporated by reference herein.
FIFTH. The name and mailing address of each incorporator is as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
B. J. Consono 100 West Tenth Street
Wilmington, Delaware
J. L. Rivera 100 West Tenth Street
Wilmington, Delaware
F. J. Obara, Jr. 100 West Tenth Street
Wilmington, Delaware
</TABLE>
SIXTH. The corporation is to have perpetual existence.
SEVENTH. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the real
and personal property of the corporation.
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
By a majority of the whole board, to designate one or more committees,
each committee to consist of two or more of the directors of the corporation.
The board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. Any such committee, to the extent provided in the resolution or
in the by-laws of the corporation, shall have and may exercise the powers of the
board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; provided, however, the by-laws may provide that in
the absence or disqualification of any member of such committee or committees,
the
4
<PAGE> 5
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member.
When and as authorized by the affirmative vote of the holders of the
percentage as required by law or by the certificate of incorporation of the
corporation of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called upon such notice as is required by statute, or
when authorized by the written consent of the holders of the required percentage
of the voting stock issued and outstanding to sell, lease or exchange all or
substantially all of the property and assets of the corporation, including its
good will and its corporate franchises, upon such terms and conditions and for
such consideration, which may consist in whole or in part of money or property
including shares of stock in, and/or other securities of, any other corporation
or corporations, as its board of directors shall deem expedient and for the best
interests of the corporation.
EIGHTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
NINTH. Meetings of stockholders may be held within or without the State
of Delaware, as the by-laws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation. Elections of directors
need not be by written ballot unless the by-laws of the corporation shall so
provide.
TENTH. The corporation reserves the right to amend, alter, change, or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute or by this certificate of
incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation.
5
<PAGE> 6
Whenever the vote of stockholders at a meeting thereof is required or
permitted by law to be taken for or in connection with any corporate action,
such corporate action may be taken upon the written consent of the holders of a
majority of the stock which would have been entitled to vote upon such action if
a meeting were held.
ELEVENTH. The affirmative vote of the holders of not less than 80
percent of the outstanding shares of "Voting Stock" (as hereinafter defined) of
the corporation shall be required for the approval or authorization of any
"Business Combination" (as hereinafter defined) of the corporation with any
"Related Person" (as hereinafter defined); provided, however, that the 80
percent voting requirement shall not be applicable if:
(1) The "Continuing Directors" of the corporation (as
hereinafter defined) by a two-thirds vote, (a) have determined that the
80% percent voting requirement of this provision shall not be
applicable, or (b) have approved the Business Combination;
(2) The Business Combination is solely between the corporation
and another corporation, one hundred percent of the Voting Stock
(except for directors' qualifying shares) of which is owned directly or
indirectly by the corporation; or
(3) The Business Combination is a merger or consolidation and
the cash or fair market value of each of the property, securities or
other consideration to be received per share (with appropriate
adjustments for recapitalizations and for stock splits, stock dividends
and like distributions) by holders of common stock of the corporation
in the Business Combination is not less than the highest per share
price (including brokerage commissions, soliciting dealers' fees,
dealer-management compensation, and other expenses, including, but not
limited to, costs of newspaper advertisements, printing expenses and
attorneys' fees), paid by the Related Person in acquiring any of its
holdings of the corporation's common stock.
For the purposes of this Article ELEVENTH:
(i) The term "Business Combination" shall mean (a) any merger
or consolidation of the corporation or a subsidiary with or into a
Related Person, (b) any sale, lease, exchange, transfer or other
disposition, including without limitation the creation of a mortgage or
any other security device of all or any "Substantial Part" (as
hereinafter defined) of assets either of the corporation (including
without limitation any voting securities of a subsidiary) or of a
subsidiary, to a Related Person, (c) any merger or consolidation of a
Related Person with or into the corporation or a subsidiary of the
corporation, (d) any sale, lease, exchange, transfer, or other
disposition of all or any Substantial Part of the assets of a Related
Person to the corporation or a subsidiary of the corporation, (e) the
issuance of any securities of the corporation or a subsidiary of the
corporation to a Related Person, (f) any recapitalization that would
have the effect of increasing the voting power of a Related Person, (g)
the acquisition by the corporation or a subsidiary of the corporation
of any securities of a Related Person, (h) the adoption of any plan or
proposal for the liquidation or dissolution of this corporation
6
<PAGE> 7
if, as of the record date for the determination of shareholders
entitled to notice thereof and to vote thereon, any person shall be a
Related Person and (i) any agreement, contract or other arrangement
providing for any of the transactions described in this definition of
Business Combination.
(ii) The term "Related Person" shall mean and include any
individual, corporation, partnership or other person including the
definition of a person as contained in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or entity
(collectively, a "Person") which together with its "Affiliates" and
"Associates" (as defined at Rule 12b-2 under the Exchange Act),
"Beneficially Owns" (as defined at Rule 13d-3 under the Exchange Act)
in the aggregate 20 percent or more of the outstanding Voting Stock of
the corporation, and any Affiliate or Associate of any such individual,
corporation, partnership or other person or entity.
(iii) The term "Substantial Part" shall mean more than 30
percent of the fair market value of the total assets of the corporation
in question, as of the end of its most recent fiscal year ending prior
to the time the determination is being made.
(iv) Without limitation, any shares of common stock of the
corporation that any Related Person has the right to acquire pursuant
to any agreement, or upon exercise of conversion rights, warrants or
options, or otherwise, shall be deemed beneficially owned by the
Related Person.
(v) For the purposes of subparagraph (3) of this Article
ELEVENTH, the term "other consideration to be received" shall include,
without limitation, common stock of the corporation retained by its
existing public stockholders in the event of a Business Combination in
which the corporation is the surviving corporation.
(vi) The term "Voting Stock" shall mean all outstanding shares
of capital stock of the corporation or another corporation entitled to
vote generally in the election of directors and each reference to a
proportion of shares of Voting Stock shall refer to such proportion of
the votes entitled to be cast by such shares.
(vii) With respect to any proposed Business Combination, the
term "Continuing Director" shall mean (i) any director who was a member
of the Board of Directors of the corporation on January 21, 1983, or
(ii) any director who was a member of the Board of Directors of the
corporation immediately prior to the date, if such date is after
January 21, 1983, that any Related Person involved in the proposed
Business Combination became a Related Person (or, if the transaction
involves more than one Related Person, immediately prior to the date,
if such date is after January 21, 1983, the first of such Persons to
become a Related Person became a Related Person).
7
<PAGE> 8
The provisions set forth in this Article ELEVENTH (including the
provisions set forth in this paragraph) may not be repealed or amended in any
respect, unless such action is approved by the affirmative vote of the holders
of not less than 80 percent of the outstanding shares of Voting Stock of the
corporation.
TWELFTH. The Board of Directors (exclusive of Directors to be elected
by the holders of any one or more series of Preferred Stock voting separately as
a class or classes) shall be divided into three classes, Class I, Class II, and
Class III, which shall be as nearly equal in number as possible. Each director
shall serve for a term ending on the date of the third annual meeting following
the annual meeting at which such director was elected; provided, however, that
each initial director in Class I shall hold office until the annual meeting of
stockholders in 1984; each initial director in Class II shall hold office until
the annual meeting of stockholders in 1985; and each initial director in Class
III shall hold office until the annual meeting of stockholders in 1986.
The Directors whose names and mailing addresses are shown below are
hereby designated initial members of the classes indicated, to serve as
Directors in such classes until the appropriate annual meeting of stockholders,
as indicated in the paragraph immediately preceding or until their successors
are elected and qualified:
<TABLE>
<CAPTION>
CLASS I
NAME: ADDRESS:
---- -------
<S> <C>
Edward A. Wardwell............................ 10575 Katy Freeway, Suite 400
Houston, Texas 77024
D. Michael Hughes............................. P.O. Box 530
Ingram, Texas 78025
E.C. Broun, Jr................................ 6500 Texas Commerce Tower
Houston, Texas 77002
CLASS II
Bruce C. Gilman............................... 10575 Katy Freeway, Suite 400
Houston, Texas 77024
Charles B. Evans.............................. 16854 Little Tujunga Canyon Road
San Fernando, California 91342
Robert H. Etnyre.............................. 12223 Kimberley
Houston, Texas 77024
CLASS III
J. Wesley Rogers.............................. 10575 Katy Freeway, Suite 400
Houston, Texas 77024
David S. Hooker............................... 29 Smith Terrace
London SW3 England
Stephen E. Halprin............................ 3000 Sand Hill Road
Menlo Park, California 94025
</TABLE>
8
<PAGE> 9
Any vacancies in the Board of Directors for any reason, and any newly
created directorships resulting from any increase in the number of directors,
may, except as otherwise required by law, be filled only by the Board of
Directors, acting by a majority of the Directors then in office, although less
than a quorum, and any Directors so chosen shall hold office until the next
election of the class for which such Directors shall have been chosen and until
their successors shall be elected and qualified. No decrease in the number of
Directors shall shorten the term of any incumbent Director and Directors may be
removed only for cause. Notwithstanding the foregoing, and except as otherwise
required by law, whenever the holders of any one or more series of Preferred
Stock shall have the right, voting separately as a class, to elect one or more
Directors of the Company, the terms of the Director or Directors elected by such
holders shall expire at the next succeeding annual meeting of stockholders.
The provisions set forth in the Article TWELFTH (including the
provisions set forth in this paragraph) may not be repealed or amended in any
respect, unless such action is approved by the affirmative vote of the holders
of not less than 80 percent of the outstanding shares of the Company's common
stock.
THIRTEENTH. No director of the corporation shall be personally liable
to the corporation or any of its stockholders for monetary damages resulting
from a breach of fiduciary duty involving any act or omission of any such
director occurring on or after August 15, 1986; provided, however, that the
foregoing provision shall not eliminate or limit the liability of any director
(i) for any breach of such director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Title 8,
section 174 of the Delaware Code or (iv) for any transaction from which such
director derived an improper personal benefit.
IN WITNESS WHEREOF, the corporation has caused this Restated
Certificate of Incorporation to be executed this 18th day of August, 2000.
OCEANEERING INTERNATIONAL, INC.
By: /s/ JOHN R. HUFF
--------------------------
John R. Huff
Chairman of the Board and
Chief Executive Officer
9
<PAGE> 10
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
of
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
OCEANEERING INTERNATIONAL, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, John R. Huff, President and Chief Executive Officer, and
George R. Haubenreich, Jr., Secretary, of Oceaneering International, Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 103 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate of Incorporation,
as amended, of the said Corporation, the said Board of Directors on November 20,
1992, adopted the following resolution creating a series of 900,000 shares of
Preferred Stock designated as "Series B Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of
the Certificate of Incorporation, a series of Preferred Stock, par
value $1.00 per share, of the Corporation be and hereby is created, and
that the designation and number of shares thereof and the voting and
other powers, preferences and relative, participating, optional or
other rights of the shares of such series and the qualifications,
limitations and restrictions thereof are as follows:
1. Designation and Amount. There shall be a series of
Preferred Stock that shall be designated as "Series B Junior Participating
Preferred Stock," and the number of shares constituting such series shall be
900,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, however, that no decrease shall reduce the
number of shares of Series B Junior Participating Preferred Stock to less than
the number of shares then issued and outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.
A-1
<PAGE> 11
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series B Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series B Junior Participating Preferred
Stock, in preference to the holders of shares of any class or series of stock of
the Corporation ranking junior to the Series B Preferred Stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the 15th day of October, January, April and July in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment hereinafter set forth, the
Adjustment Number (as defined below) times the aggregate per share amount of all
cash dividends, and the Adjustment Number times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $.25 per share, of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series B Junior Participating Preferred
Stock. The "Adjustment Number" shall initially be 100. In the event the
Corporation shall at any time after November 20, 1992 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series B Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series B Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series B Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series B Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which
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events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series B Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series B Junior Participating Preferred
Stock shall entitle the holder thereof to a number of votes equal to the
Adjustment Number on all matters submitted to a vote of the stockholders of the
Corporation.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series B Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C)(i) If at any time dividends on any Series B Junior
Participating Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") that shall extend until
such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series B Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series B Junior
Participating Preferred Stock) upon which these or like voting rights have been
conferred and are exercisable (the "Voting Preferred Stock") with dividends in
arrears in an amount equal to six quarterly dividends thereon, voting as a
class, irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the
holders of Series B Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Voting Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors shall be
exercised unless the holders of ten percent in number of shares of Voting
Preferred Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the exercise by the
holders of Voting Preferred Stock of such voting right. At any meeting at which
the holders of Voting Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a class,
to elect Directors to fill such vacancies, if any, in the Board of Directors as
may then exist up to two Directors or, if such right is exercised at an annual
meeting, to elect two Directors. If the number that may be so elected at any
special meeting does not amount to the required number, the holders of the
Voting Preferred Stock shall have the right to make such increase in the number
of Directors as shall be necessary to permit the election by them of the
required number. After the holders of the Voting
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<PAGE> 13
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Voting Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series B Junior
Participating Preferred Stock.
(iii) Unless the holders of Voting Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent of the total
number of shares of Voting Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the holders of Voting Preferred
Stock, which meeting shall thereupon be called by the Chairman of the Board, the
President, a Vice President or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Voting Preferred Stock are
entitled to vote pursuant to this paragraph (C)(iii) shall be given to each
holder of record of Voting Preferred Stock by mailing a copy of such notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or, in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any stockholder or stockholders owning in the aggregate not
less than ten percent of the total number of shares of Voting Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such
special meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Voting
Preferred Stock shall have exercised their right to elect two Directors voting
as a class, after the exercise of which right (x) the Directors so elected by
the holders of Voting Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as
provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders of the class of
stock which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of a
particular class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Voting Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Voting
Preferred Stock as a class shall terminate and (z) the number of Directors shall
be such number as may be provided for in the Certificate of Incorporation or
By-Laws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Certificate of
Incorporation or By-Laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled by
a majority of the remaining Directors.
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(D) Except as set forth herein, holders of Series B Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
B Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
B Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Junior Participating Preferred Stock, except dividends paid
ratably on the Series B Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (both as to dividends and upon
dissolution, liquidation or winding up) to the Series B Junior
Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series B
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
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<PAGE> 15
5. Reacquired Shares. Any shares of Series B Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series B Junior Participating Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series B Liquidation Preference"). Following the payment of
the full amount of the Series B Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series B Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series B Liquidation
Preference by (ii) the Adjustment Number. Following the payment of the full
amount of the Series B Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series B Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series B Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, that rank on a parity with the Series B Junior Participating
Preferred Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination, or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series B Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
8. Redemption. (A) The Corporation, at its option, may redeem
shares of the Series B Junior Participating Preferred Stock in whole at any time
and in part from time to time, at a redemption price equal to the Adjustment
Number times the current per share market price (as such term is hereinafter
defined) of the Common Stock on the date of the mailing of the notice of
redemption, together with unpaid accumulated dividends to the date of such
redemption. The
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<PAGE> 16
"current per share market price" on any date shall be deemed to be the average
of the closing price per share of such Common Stock for the ten consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current per share market
price of the Common Stock is determined during a period following the
announcement of (A) a dividend or distribution on the Common Stock other than a
regular quarterly cash dividend or (B) any subdivision, combination or
reclassification of such Common Stock and the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, shall not have occurred prior to the commencement of such ten
Trading Day period, then, and in each such case, the current per share market
price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sales price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange, or, if the Common Stock is
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the last quoted sales price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System or such other self-regulatory
organization or registered securities information processor (as such terms are
used under the Securities Exchange Act of 1934, as amended) that then reports
information concerning the Common Stock or, if on any such date the Common Stock
is not quoted by any such entity, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Corporation. If on any such date
no such market maker is making a market in the Common Stock, the fair value of
the Common Stock on such date as determined in good faith by the Board of
Directors of the Corporation shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Common
Stock is listed or admitted to trading is open for the transaction of business
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which
banking institutions in the State of New York are not authorized or obligated by
law or executive order to close.
(B) In the event that fewer than all the outstanding shares of
the Series B Junior Participating Preferred Stock are to be redeemed, the number
of shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method that may be
determined by the Board of Directors in its sole discretion to be equitable.
(C) Notice of any such redemption shall be given by mailing to
the holders of the shares of Series B Junior Participating Preferred Stock to be
redeemed a notice of such redemption, first class postage prepaid, not later
than the fifteenth day and not earlier than the sixtieth day before the date
fixed for redemption, at their last address as the same shall appear upon the
books of the Corporation. Each such notice shall state: (i) the redemption date;
(ii) the number of shares to be redeemed and, if fewer than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (iii) the redemption price; (iv) the place or places where
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<PAGE> 17
certificates for such shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on the close of business on such redemption date. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the stockholder received such notice, and failure duly to
give such notice by mail, or any defect in such notice, to any holder of Series
B Junior Participating Preferred Stock shall not affect the validity of the
proceedings for the redemption of any other shares of Series B Junior
Participating Preferred Stock that are to be redeemed. On or after the date
fixed for redemption as stated in such notice, each holder of the shares called
for redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If fewer than all the
shares represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(D) The shares of Series B Junior Participating Preferred
Stock shall not be subject to the operation of any purchase, retirement or
sinking fund.
9. Ranking. The Series B Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. Amendment. At any time that any shares of Series B Junior
Participating Preferred Stock are outstanding, the Certificate of Incorporation,
as amended, of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series B Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series B Junior Participating Preferred Stock, voting
separately as a class.
11. Fractional Shares. Series B Junior Participating Preferred
Stock may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series B Junior Participating Preferred Stock.
A-8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.02
<SEQUENCE>3
<FILENAME>h85406ex3-02.txt
<DESCRIPTION>AMENDED AND RESTATED BY-LAWS
<TEXT>
<PAGE> 1
EXHIBIT 3.02
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
BYLAWS
OF
OCEANEERING INTERNATIONAL, INC.
AMENDED AND RESTATED AS OF AUGUST 18, 2000
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C> <C> <C>
ARTICLE I STOCKHOLDERS...............................................................................1
Section 1.1 Annual Meetings...................................................................1
Section 1.2 Special Meetings..................................................................1
Section 1.3 Notice of Meetings................................................................1
Section 1.4 Adjournments......................................................................2
Section 1.5 Quorum............................................................................2
Section 1.6 Organization......................................................................2
Section 1.7 Voting; Proxies...................................................................2
Section 1.8 Fixing Date for Determination of Stockholders of Record...........................3
Section 1.9 List of Stockholders Entitled To Vote.............................................4
Section 1.10 Election of Directors.............................................................4
Section 1.11 Other Stockholder Business........................................................6
Section 1.12 Approval or Ratification of Acts or Contracts by Stockholders.....................7
Section 1.13 Action By Consent of Stockholders.................................................7
Section 1.14 Conduct of Meetings...............................................................8
ARTICLE II BOARD OF DIRECTORS.........................................................................8
Section 2.1 Number; Board Classification; Term; Eligibility for Election; Vacancies...........8
Section 2.2 Regular Meetings..................................................................8
Section 2.3 Special Meetings..................................................................9
Section 2.4 Telephonic Meetings...............................................................9
Section 2.5 Organization......................................................................9
Section 2.6 Order of Business.................................................................9
Section 2.7 Notice of Meetings................................................................9
Section 2.8 Quorum; Vote Required for Action..................................................9
Section 2.9 Informal Action by Directors.....................................................10
Section 2.10 Director Compensation............................................................10
ARTICLE III BOARD COMMITTEES..........................................................................10
Section 3.1 Board Committees.................................................................10
Section 3.2 Board Committee Rules; Minutes...................................................11
Section 3.3 Existing Committees..............................................................11
ARTICLE IV OFFICERS..................................................................................11
Section 4.1 Designation......................................................................11
Section 4.2 CEO..............................................................................11
Section 4.3 Powers and Duties of Other Officers..............................................11
Section 4.4 Term of Office, etc..............................................................11
ARTICLE V CAPITAL STOCK.............................................................................12
Section 5.1 Certificates.....................................................................12
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C> <C> <C>
Section 5.2 Transfer of Shares...............................................................12
Section 5.3 Ownership of Shares..............................................................12
Section 5.4 Regulations Regarding Certificates...............................................12
Section 5.5 Lost or Destroyed Certificates...................................................12
ARTICLE VI INDEMNIFICATION...........................................................................13
Section 6.1 General..........................................................................13
Section 6.2 Expenses.........................................................................13
Section 6.3 Advances.........................................................................13
Section 6.4 Request for Indemnification......................................................13
Section 6.5 Nonexclusivity of Rights.........................................................14
Section 6.6 Insurance and Subrogation........................................................14
Section 6.7 Severability.....................................................................14
Section 6.8 Certain Actions Where Indemnification Is Not Provided............................14
Section 6.9 Definitions......................................................................15
Section 6.10 Notices..........................................................................15
Section 6.11 Contractual Rights...............................................................16
Section 6.12 Maintenance of Insurance.........................................................16
ARTICLE VII MISCELLANEOUS.............................................................................16
Section 7.1 Offices..........................................................................16
Section 7.2 Fiscal Year......................................................................16
Section 7.3 Seal.............................................................................16
Section 7.4 Interested Directors; Quorum.....................................................16
Section 7.5 Form of Records..................................................................17
Section 7.6 Bylaw Amendments.................................................................17
Section 7.7 Notices; Waiver of Notice........................................................17
Section 7.8 Resignations.....................................................................17
Section 7.9 Facsimile Signatures.............................................................18
Section 7.10 Reliance on Books, Reports and Records...........................................18
Section 7.11 Certain Definitional Provisions..................................................18
Section 7.12 Captions.........................................................................18
</TABLE>
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<PAGE> 4
AMENDED AND RESTATED
BYLAWS
OF
OCEANEERING INTERNATIONAL, INC.
The Board of Directors of Oceaneering International, Inc. (the
"Corporation") by resolution has duly adopted these Amended and Restated Bylaws
(these "Bylaws") to govern the Corporation's internal affairs.
ARTICLE I
STOCKHOLDERS
Section 1.1 Annual Meetings. The Corporation will hold an annual
meeting of the holders of its capital stock (each, a "Stockholder") for the
election of directors of the Corporation (each, a "Director") at such date, time
and place as the Board of Directors of the Corporation (the "Board") by
resolution may designate from time to time. The Corporation may transact any
other business at an annual meeting which has properly come before that meeting
in accordance with Section 1.11.
Section 1.2 Special Meetings. Any of the following may call special
meetings of Stockholders for any purpose or purposes at any time and designate
the date, time and place of any such meeting: (i) the Board pursuant to a
resolution that a majority of the total number of Directors the Corporation
would have if there were no vacancies (the "Whole Board") has duly adopted; (ii)
any committee of the Board (each, a "Board Committee") the Board has duly
designated and empowered to call special meetings;(iii) the chairman of the
Board (the "Chairman"); and (iv) the CEO (as hereinafter defined). Except as the
certificate of incorporation of the Corporation (as amended from time to time
and including each certificate of designation, if any, respecting any class or
series of preferred stock of the Corporation which has been executed,
acknowledged and filed in accordance with applicable law, the "Certificate of
Incorporation") or applicable law otherwise provides, no other Person or Persons
may call a special meeting of Stockholders.
Section 1.3 Notice of Meetings. By or at the direction of the Chairman
or the secretary of the Corporation (the "Secretary") whenever Stockholders are
to take any action at a meeting, the Corporation will give a written notice of
that meeting to the Stockholders entitled to vote at that meeting which states
the place, date and hour of that meeting and, in the case of a special meeting,
the purpose or purposes for which that meeting is called. Unless the Certificate
of Incorporation, these Bylaws or applicable law otherwise provides, the
Corporation will give the written notice of any meeting of Stockholders not less
than 10 nor more than 60 days before the date of that meeting. If mailed to any
Stockholder, any such notice will be deemed given (whether or not delivered)
when deposited in the United States mail, postage prepaid, directed to that
Stockholder at his address as it appears in the stock records of the
Corporation.
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<PAGE> 5
Section 1.4 Adjournments. Any meeting of Stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business it
might have transacted at the original meeting. If the adjournment is for more
than 30 days, or if after the adjournment the Board fixes a new record date for
the adjourned meeting, the Corporation will give, in accordance with Section
1.3, notice of the adjourned meeting to each Stockholder of record and entitled
to vote at the adjourned meeting.
Section 1.5 Quorum. Except as the Certificate of Incorporation, these
Bylaws or applicable law otherwise provides: (i) at each meeting of Stockholders
the presence in person or by proxy of the holders of shares of stock having a
majority of the votes the holders of all outstanding shares of stock entitled to
vote at the meeting could cast will be necessary and sufficient to constitute a
quorum; and (ii) the holders of stock so present and entitled to vote at any
duly convened meeting at which the necessary quorum has been ascertained may
continue to transact business until that meeting adjourns notwithstanding any
withdrawal from that meeting of shares of stock counted in determining the
existence of that quorum. In the absence of a quorum, the chairman of the
meeting or the Stockholders so present may, by majority vote, adjourn the
meeting from time to time in the manner Section 1.4 provides until a quorum
attends. Shares of its own stock belonging to the Corporation or to another
corporation, limited liability company, partnership or other entity (each, an
"Entity"), if the Corporation, directly or indirectly, holds a majority of the
shares entitled to vote in the election of directors (or the equivalent) of that
other Entity, will be neither entitled to vote nor counted for quorum purposes;
provided, however, that the foregoing will not limit the right of the
Corporation to vote stock, including but not limited to its own stock, it holds
in a fiduciary capacity.
Section 1.6 Organization. The Chairman will chair and preside over any
meeting of Stockholders at which he is present. The Board will designate the
chairman and presiding officer over any meeting of Stockholders from which the
Chairman is absent. The Secretary will act as secretary of meetings of
Stockholders, but in his absence from any such meeting the chairman of that
meeting may appoint any person to act as secretary of that meeting. The chairman
of any meeting of Stockholders will announce at that meeting the date and time
of the opening and the closing of the polls for each matter on which the
Stockholders will vote at that meeting.
Section 1.7 Voting; Proxies. (a) Except as the Certificate of
Incorporation otherwise provides, each Stockholder entitled to vote at any
meeting of Stockholders will be entitled to one vote for each share of capital
stock of the Corporation he holds which has voting power on the matter in
question. Each Stockholder entitled to vote at a meeting of Stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by proxy, but no proxy will
be voted or acted on after three years from its date, unless that proxy provides
for a longer period. A proxy will be irrevocable if it states that it is
irrevocable and if, and only so long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A Stockholder may revoke any
proxy he has given for a meeting which is not irrevocable by attending that
meeting and voting in person or by filing an instrument in writing revoking the
proxy or by delivering a proxy in accordance with applicable law bearing a later
date to the Secretary. Proxies for use at any meeting of Stockholders must be
filed, before or at the time of
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that meeting, with the Secretary or such other person as the Board by resolution
may designate from time to time.
(b) The secretary of any meeting of Stockholders will take charge of
and canvass all ballots delivered at that meeting and will decide all questions
relating to the qualification of voters, the validity of proxies and the
acceptance or rejection of votes at that meeting, unless the chairman has
appointed an inspector or inspectors to decide those questions. Voting at
meetings of Stockholders: (i) need not be by written ballot unless the Board, in
its discretion, by resolution so requires or, in the case of any such meeting,
the chairman of that meeting, in his discretion, so requires; and (ii) unless
applicable law otherwise requires, need not be conducted by inspectors of
election unless so determined by the holders of shares of stock having a
majority of the votes the holders of all outstanding shares of stock entitled to
vote thereon which are present in person or by proxy at that meeting could cast.
(c) At all meetings of Stockholders at which a quorum is present for
the election of Directors, a plurality of the votes cast by the holders of
outstanding shares of stock of the Corporation entitled to vote in the election
of Directors will be sufficient to elect, except as the Certificate of
Incorporation may otherwise provide. In the case of any question to which the
stockholder approval policy of any national securities exchange or quotation
system on which capital stock of the Corporation is traded or quoted on the
Corporation's application, the requirements under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or any provision of the Internal Revenue
Code of 1986, as amended, or the rules and regulations thereunder (the "Code")
applies, in each case for which question the Certificate of Incorporation, these
Bylaws or the General Corporation Law of the State of Delaware, as amended (the
"DGCL"), does not specify a higher voting requirement, that question will be
decided by the requisite vote that stockholder approval policy, Exchange Act
requirement or Code provision, as the case may be, specifies (or the highest
requisite vote if more than one applies). A majority of the votes cast on the
question whether to approve the appointment of independent public accountants
(if that question is submitted for a vote of Stockholders) will be sufficient to
approve. All other elections and questions which have properly come before any
meeting will, unless the Certificate of Incorporation, these Bylaws or
applicable law otherwise provides, be decided by the vote of the holders of
shares of stock of the Corporation present in person or by proxy at that meeting
and having a majority of the votes entitled to vote thereon.
Section 1.8 Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the Stockholders entitled to notice of
or to vote at any meeting of Stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board by
resolution may fix a record date, which record date: (i) must not precede the
date on which the Board adopts that resolution; (ii) in the case of a
determination of Stockholders entitled to vote at any meeting of Stockholders or
adjournment thereof, will, unless applicable law otherwise requires, not be more
than 60 nor less than 10 days before the date of that meeting; (iii) in the case
of a determination of Stockholders entitled to express consent to corporate
action in writing without a meeting, will not be more than 10 days from the date
on which the Board adopts the resolution fixing the record date; and (iv) in the
case
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of any other action, will not be more than 60 days prior to that other action.
If the Board does not fix a record date: (i) the record date for determining
Stockholders entitled to notice of or to vote at a meeting of Stockholders will
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) the record date for
determining Stockholders entitled to express consent to corporate action in
writing without a meeting will be (A) if applicable law does not require a prior
action by the Board, the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the Corporation
in accordance with applicable law; and (B) if applicable law requires prior
action by the Board, at the close of business on the day on which the Board
adopts the resolution taking that prior action; and (iii) the record date for
determining Stockholders for any other purpose will be at the close of business
on the day on which the Board adopts the resolution relating thereto. A
determination of Stockholders of record entitled to notice of or to vote at a
meeting of Stockholders will apply to any adjournment of that meeting; provided,
however, that the Board may fix a new record date for the adjourned meeting.
Section 1.9 List of Stockholders Entitled To Vote. The Secretary will
prepare and make, at least 10 days before each meeting of Stockholders, a list
of the Stockholders entitled to vote at that meeting which complies with the
requirements of Section 219 of the DGCL as in effect at that time. Such list
shall be open to examination by any Stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present at the meeting.
Section 1.10 Election of Directors. (a) Subject to such rights of the
holders of any class or series of the Corporation's capital stock as the
Certificate of Incorporation may prescribe, only persons who are nominated in
accordance with the procedures this Section 1.10 sets forth will be eligible for
election by Stockholders as Directors. Nominations of persons for election to
the Board may be made at any meeting of Stockholders at which Directors are to
be elected: (i) by or at the direction of the Board or any Board Committee the
Board has duly designated and empowered to nominate persons for election as
Directors; or (ii) by any Stockholder who (A) is a Stockholder of record at the
time that Stockholder gives the notice this Section 1.10 specifies below, (B)
will be entitled to vote at that meeting in the election of the Director for
which that Stockholder is making the nomination and (C) complies with this
Section 1.10.
(b) For a Stockholder to bring any nomination of a person for election
as a Director properly before any meeting of Stockholders, that Stockholder must
have given timely notice of that nomination (a "Nomination Notice") in proper
written form to the Secretary. To be timely, a Stockholder's Nomination Notice
must be delivered to, or mailed and received at, the principal executive offices
of the Corporation: (i) if it relates to an election at any annual meeting of
Stockholders, not later than the close of business on the 120th day and not
earlier than the 180th day prior to the first anniversary of the preceding
year's annual meeting; provided, however, that, if the date of the pending
annual meeting is more than 30 days before or more than 60 days after that
anniversary date, that Nomination Notice will be timely if it is so delivered
not later than the last to occur of the close of business on (A) the 120th day
prior to the pending annual meeting or (B) the
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10th day following the day on which the Corporation first makes a public
announcement of the date of the pending annual meeting; and (ii) if it relates
to any special meeting of Stockholders, not earlier than 180 days prior to that
special meeting and not later than the last to occur of the close of business on
(A) the 120th day prior to that special meeting or (B) the 10th day following
the day on which the Corporation first makes a public announcement of the date
of that special meeting. The public disclosure of an adjournment of any annual
or special meeting will not in any event commence a new time period for the
giving of any Nomination Notice.
(c) To be in proper written form, any Nomination Notice of a
Stockholder must: (i) set forth (A) as to each person whom that Stockholder
proposes to nominate for election as a Director, (1) the name, age and business
address of that person, (2) the principal occupation or employment of that
person, (3) the class or series and number of shares of capital stock of the
Corporation which that person owns beneficially or of record and (4) all other
information, if any, relating to that person which Section 14 of the Exchange
Act and the rules and regulations thereunder would require the Corporation or
that Stockholder to disclose in a proxy statement or any other filing in
connection with solicitations of proxies for an election of directors and (B) as
to that Stockholder and the beneficial owner, if any, of capital stock of the
Corporation on whose behalf the nomination is being made, (1) the name and
address of that Stockholder as they appear in the stock records of the
Corporation and the name and address of that beneficial owner, (2) the class or
series and the number of shares of capital stock of the Corporation which that
Stockholder and that beneficial owner each owns beneficially or of record, (3) a
description of all arrangements and understandings between that Stockholder or
that beneficial owner and each proposed nominee of that Stockholder and any
other person or persons (including their names) pursuant to which the
nomination(s) are to be made by that Stockholder, (4) a representation by that
Stockholder that he intends to appear in person or by proxy at that meeting to
nominate the person(s) named in that Nomination Notice and (5) all other
information, if any, relating to that Stockholder and that beneficial owner
which Section 14 of the Exchange Act and the rules and regulations thereunder
would require the Corporation or that Stockholder to disclose in a proxy
statement or any other filing in connection with solicitations of proxies for an
election of directors; and (ii) be accompanied by a written consent of each
person that Stockholder proposes to nominate for election as a Director to be
named as such a nominee and to serve as a Director if elected.
(d) Except as the Certificate of Incorporation, these Bylaws or
applicable law otherwise provides, the chairman of any meeting of Stockholders
at which Directors are to be elected will have the power and duty to determine
whether nominations of persons for election as Directors have been made in
accordance with the procedures this Section 1.10 sets forth and, if that
chairman determines that any such nomination has not been made in compliance
with these procedures, to declare to that meeting that such nomination is
defective and will be disregarded.
(e) Notwithstanding anything in Section 1.10(b) to the contrary, if the
number of Directors to be elected at an annual meeting of Stockholders is
increased and the Corporation has not made a public announcement at least 100
days prior to the first anniversary of the preceding year's annual meeting,
which announcement (i) names all the nominees for Director of the Board or any
duly designated and empowered Board Committee or (ii) specifies the size of the
increased Board, a Stockholder's Nomination Notice will be timely, but only with
respect to nominees for any new positions that increase creates, if that
Nomination Notice is delivered to, or mailed and received at,
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the principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which the Corporation first makes
that public announcement.
(f) For purposes of Section 1.11 and this Section 1.10, "public
announcement" means disclosure in a press release the Dow Jones News Service,
Associated Press or any comparable national news service in the United States
reports or in a document the Corporation publicly files with the Securities and
Exchange Commission (the "SEC") pursuant to the Exchange Act.
(g) Notwithstanding the foregoing provisions of this Section 1.10, a
Stockholder also must comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters this
Section 1.10 sets forth.
Section 1.11 Other Stockholder Business. (a) At any annual meeting the
Corporation holds pursuant to Section 1.1, the Stockholders will transact only
such business, in addition to the election of Directors, as has been properly
brought before that meeting. Except as the Certificate of Incorporation
otherwise provides, to be brought properly before any annual meeting, business
other than the election of Directors ("Other Business") must be (i) business the
notice of that meeting (or any supplement thereto) given by or at the direction
of the Board specifies, (ii) business otherwise properly brought before that
meeting by or at the direction of the Board and (iii) business (A) properly
brought before that meeting by a Stockholder who (1) is a Stockholder of record
at the time that Stockholder gives the notice this Section 1.11 specifies below,
(2) will be entitled to vote on that business at that meeting and (3) complies
with this Section 1.11, (B) that is a proper subject for Stockholder action and
(C) is properly introduced at that meeting.
(b) For a Stockholder to bring any Other Business properly before any
annual meeting of Stockholders, that Stockholder must have given timely notice
thereof (a "Business Notice") in proper written form to the Secretary. To be
timely, a Stockholder's Business Notice must be delivered to, or mailed and
received at, the principal executive offices of the Corporation not later than
the close of business on the 120th day and not earlier than the 180th day prior
to the first anniversary of the preceding year's annual meeting; provided,
however, that if the date of the pending annual meeting is more than 30 days
before or more than 60 days after that anniversary date, that Business Notice
will be timely if it is so delivered not later than the last to occur of the
close of business on (A) the 120th day prior to that pending annual meeting or
(B) the 10th day following the day on which the Corporation first makes a public
announcement of the date of the pending meeting. The public disclosure of an
adjournment of any annual meeting will not in any event commence a new time
period for the giving of any Business Notice.
(c) To be in proper written form, any Business Notice of a Stockholder
must set forth: (i) as to each matter of Other Business that Stockholder
proposes to bring before an annual meeting, (A) a brief description of that
Other Business, (B) the reasons for conducting that Other Business at an annual
meeting and (C) each material interest in that Other Business of that
Stockholder and the beneficial owner, if any, of capital stock of the
Corporation on whose behalf that proposal is being made; and (ii) as to that
Stockholder and each such beneficial owner, (A) the name and address of that
Stockholder as they appear on the Corporation's books and the name and address
of that beneficial owner, (B) the class or series and the number of shares of
capital stock of the Corporation which that Stockholder and that beneficial
owner each owns beneficially or of record,
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(C) a description of all arrangements and understandings between that
Stockholder or that beneficial owner and any other person or persons (including
their names) in connection with that Other Business and (D) a representation by
that Stockholder that he intends to appear in person or by proxy at that meeting
to bring that Other Business before that meeting.
(d) Except as applicable law otherwise provides, the chairman of any
annual meeting of Stockholders will have the power and duty to determine whether
proposals by Stockholders of any Other Business to be brought before that
meeting have been made in accordance with the procedures this Section 1.11 sets
forth and, if that chairman determines that any such proposal has not been made
in compliance with these procedures, to declare to that meeting that such
proposal is defective and will be disregarded.
(e) At any special meeting the Corporation holds pursuant to Section
1.2, the Stockholders will transact only such business as (i) the notice given
of that meeting pursuant to Section 1.3 sets forth and (ii) constitutes matters
incident to the conduct of that meeting as the chairman of that meeting
determines to be appropriate.
(f) Notwithstanding the foregoing provisions of this Section 1.11, a
Stockholder also must comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters this
Section 1.11 sets forth.
Section 1.12 Approval or Ratification of Acts or Contracts by
Stockholders. The Board in its discretion may submit any act or contract for
approval or ratification at any annual meeting of Stockholders, or at any
special meeting of Stockholders called for the purpose of considering any such
act or contract, and any act or contract that the holders of shares of stock of
the Corporation present in person or by proxy at that meeting and having a
majority of the votes entitled to vote on that approval or ratification approve
or ratify will (provided that a quorum is present) be as valid and as binding on
the Corporation and on all Stockholders as if every Stockholder had approved or
ratified it.
Section 1.13 Action By Consent of Stockholders. Unless the Certificate
of Incorporation otherwise provides, Stockholders may, without a meeting, prior
notice or a vote, take any action they must or may take at any annual or special
meeting, if the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take that action at a
meeting at which all shares entitled to vote thereon were present sign a written
consent to that action which sets forth that action and cause the delivery of
that consent to the Corporation (i) at its registered office in the State of
Delaware or its principal place of business or (ii) to an officer or agent of
the Corporation having custody of the books in which the Corporation records
minutes of proceedings or other actions of Stockholders. Any such delivery made
to the Corporation's registered office in the State of Delaware must be made by
hand or by certified or registered mail, return receipt requested. Stockholders
may execute any consent pursuant to this Section 1.13 in counterparts, all of
which together will constitute a single consent. Every written consent pursuant
to this Section 1.13 shall bear the date of signature of each Stockholder who
signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within 60 days of the earliest
dated consent delivered to the Corporation in the manner this Section 1.13
requires, written consents signed by a sufficient number of holders to take
action are delivered to the
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Corporation in accordance with the provisions of this Section 1.13. The
Corporation will give prompt notice of the taking pursuant to this Section 1.13
of any action without a meeting by less than unanimous written consent to those
Stockholders who have not consented to that action in writing and who, if the
action had been taken at a meeting, would have been entitled to notice of the
meeting if the record date for that meeting had been the date that written
consents signed by a sufficient number of holders to take the action were
delivered to the Corporation as this Section 1.13 provides.
Section 1.14 Conduct of Meetings. The Board may adopt by resolution
such rules and regulations for the conduct of meetings of Stockholders as it
deems appropriate. Except to the extent inconsistent with those rules and
regulations, if any, the chairman of any meeting of Stockholders will have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of that chairman, are appropriate for the
proper conduct of that meeting. Those rules, regulations or procedures may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to Stockholders of record, their
duly authorized and constituted proxies or such other persons as the chairman of
the meeting may determine; (iv) restrictions on entry to the meeting after the
time fixed for the commencement thereof; and (v) limitations on the time
allotted to questions or comments by participants. Except to the extent the
Board or the chairman of any meeting otherwise prescribes, no rules or
parliamentary procedure will govern any meeting of Stockholders.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1 Number; Board Classification; Term; Eligibility for
Election; Vacancies. The number of Directors of the Corporation (exclusive of
any Directors to be elected by the holders of any one or more series of the
Corporation's preferred stock voting separately as a class or classes, as the
Certificate of Incorporation may provide for) shall not be less than three nor
more than 12, the exact number of Directors to be determined from time to time
by resolution adopted by the affirmative vote of a majority of the Whole Board.
In accordance with the provisions of the Certificate of Incorporation, the Board
(exclusive of any Directors to be elected by the holders of any one or more
series of the Corporation's preferred stock voting separately as a class or
classes, as the Certificate of Incorporation may provide for) shall be divided
into three classes, Class I, Class I and Class III, which shall be as nearly
equal in number as possible. Each Director will hold office for a term ending on
the date of the third annual meeting following the annual meeting at which that
Director was elected and, the foregoing notwithstanding, will serve until his
successor shall have been duly elected and qualified or until his earlier death,
resignation or removal. Only persons who are nominated in accordance with the
procedures Section 1.10 sets forth will be eligible for election as Directors.
Any vacancies in the Board may be filled in such manner as the Certificate of
Incorporation provides.
Section 2.2 Regular Meetings. The Board will hold its regular meetings
at such places, on such dates and at such times as the Board by resolution may
determine from time to time, and any such resolution will constitute due notice
to all Directors of the regular meeting or meetings
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to which it relates. By notice pursuant to Section 2.7, the Chairman or a
majority of the Board may change the place, date or time of any regular meeting
of the Board.
Section 2.3 Special Meetings. The Board will hold a special meeting at
any place or time whenever the Chairman or a majority of the Board by resolution
calls that meeting by notice pursuant to Section 2.7.
Section 2.4 Telephonic Meetings. Members of the Board may hold and
participate in any Board meeting by means of conference telephone or similar
communications equipment that permits all persons participating in the meeting
to hear each other, and participation of any Director in a meeting pursuant to
this Section 2.4 will constitute the presence in person of that Director at that
meeting for purposes of these Bylaws, except in the case of a Director who so
participates only for the express purpose of objecting to the transaction of any
business on the ground that the meeting has not been called or convened in
accordance with applicable law or these Bylaws.
Section 2.5 Organization. The Chairman will chair and preside over
meetings of the Board at which he is present. A majority of the Directors
present at any meeting of the Board from which the Chairman is absent will
designate one of their number as chairman and presiding officer over that
meeting. The Secretary will at as secretary of meetings of the Board, but in his
absence from any such meeting the chairman of that meeting may appoint any
person to act as secretary of that meeting.
Section 2.6 Order of Business. The Board will transact business at its
meetings in such order as the Chairman or the Board by resolution will
determine.
Section 2.7 Notice of Meetings. To call a special meeting of the Board,
the Chairman or a majority of the Board must give a timely written notice to
each Director of the time and place of, and the general nature of the business
the Board will transact at, all special meetings of the Board. To change the
time or place of any regular meeting of the Board, the Chairman or a majority of
the Board must give a timely written notice to each Director of that change. To
be timely, any notice this Section 2.7 requires must be delivered to each
Director personally or by mail, telegraph, telecopier or similar communication
at least two days before the meeting to which it relates; provided, however,
that notice of any meeting of the Board need not be given to any Director who
waives the requirement of that notice in writing (whether after that meeting or
otherwise) or is present at that meeting.
Section 2.8 Quorum; Vote Required for Action. At all meetings of the
Board, the presence in person of a majority of the total number of Directors
then in office will constitute a quorum for the transaction of business, and the
participation by a Director in any meeting of the Board will constitute that
Director's presence in person at that meeting unless that Director expressly
limits that participation to objecting to the transaction of any business at
that meeting on the ground that the meeting has not been called or convened in
accordance with applicable law or these Bylaws. Except in cases in which the
Certificate of Incorporation or these Bylaws otherwise provide, the vote of a
majority of the Directors present at a meeting at which a quorum is present will
be the act of the Board.
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Section 2.9 Informal Action by Directors. Unless the Certificate of
Incorporation or these Bylaws otherwise provides, the Board may, without a
meeting, prior notice or a vote, take any action it must or may take at any
meeting, if all members of the Board consent thereto in writing, and the written
consents are filed with the minutes of proceedings of the Board the Secretary
maintains.
Section 2.10 Director Compensation. The Directors shall be paid their
expenses, if any, of attendance at each meeting of the Board and or any Board
Committee, and nonmanagement Directors shall be paid such sums, retainers and
fees for attending and performing services in connection with meetings of the
Board or any Board Committee as the Board may fix from time to time by
resolution. No such payment will preclude any Director from serving the
Corporation in any other capacity or from receiving compensation therefor.
Nonmanagement Directors who are members of special or standing Board Committees
will be allowed compensation for attending meetings of those Board Committees in
such amounts as the Board may fix from time to time by resolution.
ARTICLE III
BOARD COMMITTEES
Section 3.1 Board Committees. (a) The Board, by resolution a majority
of the Whole Board adopts, may designate one or more Board Committees consisting
of one or more of the Directors. The Board may designate one or more Directors
as alternate members of any Board Committee, who may replace any absent or
disqualified member at any meeting of that committee. The member or members
present at any meeting of any Board Committee and not disqualified from voting
at that meeting may, whether or not constituting a quorum, unanimously appoint
another Director to act at that meeting in any place of any member of that
committee who is absent from or disqualified to vote at that meeting.
(b) The Board by resolution may change the membership of any Board
Committee at any time and fill vacancies on any of those committees. A majority
of the members of any Board Committee will constitute a quorum for the
transaction of business by that committee unless the Board by resolution
requires a greater number for that purpose. The Board by resolution may elect a
chairman of any Board Committee. The election or appointment of any Director to
a Board Committee will not create any contract rights of that Director, and the
Board's removal of any member of any Board Committee will not prejudice any
contract rights that member otherwise may have.
(c) Pursuant to Section 3.1(a), the Board may designate an executive
committee (the "Executive Committee") to exercise, subject to applicable
provisions of law, all the powers of the Board in the management of the business
and affairs of the Corporation when the Board is not in session, including the
powers to (i) declare dividends and (ii) authorize the issuance by the
Corporation of any class or series of its capital stock. The Executive Committee
will include the Chairman among its members.
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(d) Each other Board Committee the Board may designate pursuant to
Section 3.1(a) will, subject to applicable provisions of law, have and may
exercise all the powers and authorities of the Board to the extent the Board
resolution designating that committee so provides.
Section 3.2 Board Committee Rules; Minutes. Unless the Board otherwise
provides, each Board Committee may make, alter and repeal rules for the conduct
of its business. In the absence of those rules, each Board Committee will
conduct its business in the same manner as the Board conducts its business
pursuant to Article II. Each committee shall keep regular minutes of its
meetings and shall report the same to the Board as a whole.
Section 3.3 Existing Committees. The Board has heretofore designated
the Board Committees Exhibit A to these Bylaws lists, and has assigned to those
Board Committees the responsibilities that Exhibit A sets forth or refers to.
ARTICLE IV
OFFICERS
Section 4.1 Designation. The officers of the Corporation will consist
of a chief executive officer ("CEO"), president, chief financial officer, chief
operating officer, chief accounting officer, secretary, treasurer and such
senior or other vice presidents, assistant secretaries, assistant treasurers and
other officers as the Board or the CEO may elect or appoint from time to time.
Any person may hold any number of offices of the Corporation.
Section 4.2 CEO. The CEO will, subject to the control of the Board: (i)
have general supervision and control of the affairs, business, operations and
properties of the Corporation; (ii) see that all orders and resolutions of the
Board are carried into effect; (iii) have the power to appoint and remove all
subordinate officers, employees and agents of the Corporation, except for those
the Board elects or appoints; and (iv) sign and execute, under the seal of the
Corporation, all contracts, instruments, mortgages and other documents
(collectively, "documents") of the Corporation which require that seal, except
as applicable law otherwise requires or permits any document to be signed and
executed and except as these Bylaws, the Board or the CEO authorize other
officers of the Corporation to sign and execute documents. The CEO also will
perform such other duties and may exercise such other powers as generally
pertain to his office or these Bylaws or the Board by resolution assigns to him
from time to time.
Section 4.3 Powers and Duties of Other Officers. The other officers of
the Corporation will have such powers and duties in the management of the
Corporation as the Board by resolution may prescribe and, except to the extent
so prescribed, as generally pertain to their respective offices, subject to the
control of the Board. The Board may require any officer, agent or employee to
give security for the faithful performance of his duties.
Section 4.4 Term of Office, etc. Each officer will hold office until
the first meeting of the Board after the annual meeting of Stockholders next
succeeding his election, and until his successor is elected and qualified or
until his earlier resignation or removal. No officer of the Corporation will
have any contractual right against the Corporation for compensation by reason of
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his election or appointment as an officer of the Corporation beyond the date of
his service as such, except as a written employment or other contract otherwise
may provide. The Board may remove any officer with or without cause at any time,
but any such removal will not prejudice the contractual rights of that officer,
if any, against the Corporation. The Board by resolution may fill any vacancy
occurring in any office of the Corporation by death, resignation, removal or
otherwise for the unexpired portion of the term of that office at any time.
ARTICLE V
CAPITAL STOCK
Section 5.1 Certificates. Shares of capital stock of the Corporation
will be evidenced by certificates in such form or forms as the Board by
resolution may approve from time to time or, if and to the extent the Board so
authorizes by resolution, may be uncertificated. The Chairman, the president or
any vice president of the Corporation and the Secretary or any assistant
secretary of the Corporation may sign certificates evidencing certificated
shares. Any of or all the signatures and the Corporation's seal on each such
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before the
Corporation issues that certificate, the Corporation may issue that certificate
with the same effect as if he were such officer, transfer agent or registrar at
the date of that issue.
Section 5.2 Transfer of Shares. The Corporation may act as its own
transfer agent and registrar for shares of its capital stock or use the services
of such one or more transfer agents and registrars as the Board by resolution
may appoint from time to time. Shares of the Corporation's capital stock will be
transferable only on the books of the Corporation by the holders thereof in
person or by their duly authorized attorneys or legal representatives on
surrender and cancellation of certificates for a like number of shares.
Section 5.3 Ownership of Shares. The Corporation will be entitled to
treat the holder of record of any share or shares of its capital stock as the
holder in fact thereof and, accordingly, will not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it has express or other notice thereof, except
as the applicable laws of the State of Delaware otherwise provide.
Section 5.4 Regulations Regarding Certificates. The Board will have the
power and authority to make all such rules and regulations as it may deem
expedient concerning the issue, transfer and registration or the replacement of
certificates for shares of capital stock of the Corporation.
Section 5.5 Lost or Destroyed Certificates. The Board may determine the
conditions on which a new certificate of stock may be issued in place of a
certificate alleged to have been lost, stolen or destroyed and may, in its
discretion, require the owner of the allegedly lost, stolen or destroyed
certificate or his legal representative to give bond, with sufficient surety, to
indemnify the Corporation and each transfer agent and registrar against any and
all losses or claims that may
-12-
<PAGE> 16
arise by reason of the issue of a new certificate in the place of the one
allegedly so lost, stolen or destroyed.
ARTICLE VI
INDEMNIFICATION
Section 6.1 General. The Corporation will, to the fullest extent
applicable law as it presently exists permits, and to such greater extent as
applicable law hereafter may permit, indemnify and hold harmless each Indemnitee
from and against any and all judgments, penalties, fines (including excise
taxes), amounts paid in settlement and, subject to Section 6.2, Expenses
whatsoever arising out of any event or occurrence by reason of the fact that
such Indemnitee is or was a Director or an officer of the Corporation. The
Corporation may, but need not, indemnify and hold harmless any Indemnitee from
and against any and all judgments, penalties, fines (including excise taxes),
amounts paid in settlement and, subject to Section 6.2, Expenses whatsoever
arising out of any event or occurrence by reason of the fact that such
Indemnitee is or was an employee or agent of the Corporation or is or was
serving in another Corporate Status (other than as a Director or an officer of
the Corporation) at the written request of the Corporation.
Section 6.2 Expenses. If any Indemnitee is, by reason of his serving as
a director, officer, employee or agent of the Corporation, a party to and is
successful, on the merits or otherwise, in any Proceeding, the Corporation will
indemnify him against all his Expenses in connection therewith. If that
Indemnitee is not wholly successful in that Proceeding but is successful, on the
merits or otherwise, as to any Matter in that Proceeding, the Corporation will
indemnify him against all his Expenses relating to that Matter. The termination
of any Matter against which any Indemnitee is defending himself by dismissal of
that Matter with or without prejudice will constitute success of that Indemnitee
with respect to that Matter. If any Indemnitee is, by reason of any Corporate
Status other than his serving as a director, officer, employee or agent of the
Corporation, a party to and is successful, on the merits or otherwise, in any
Proceeding, the Corporation may, but need not, indemnify him against all his
Expenses in connection therewith. If any Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding, the Corporation may, but need
not, indemnify him against all his Expenses in connection therewith.
Section 6.3 Advances. In the event of any threatened or pending
Proceeding in which any Indemnitee is a party or is involved and that may give
rise to a right of that Indemnitee to indemnification under this Article VI,
following written request to the Corporation by that Indemnitee, the Corporation
promptly will pay to that Indemnitee amounts to cover his Expenses in connection
with that Proceeding in advance of its final disposition on the receipt by the
Corporation of (i) a written undertaking of that Indemnitee executed by or on
behalf of that Indemnitee to repay the advance if it ultimately is determined
pursuant to the provisions of this Article VI or by final judgment or other
final adjudication under the provisions of any applicable law that the
Indemnitee is not entitled to be indemnified by the Corporation pursuant to
these Bylaws and (ii) satisfactory evidence as to the amount of those Expenses.
Section 6.4 Request for Indemnification. To request indemnification,
any Indemnitee must submit to the Secretary a written claim or request therefor
which contains sufficient
-13-
<PAGE> 17
information to reasonably inform the Corporation about the nature and extent of
the indemnification or advance sought by that Indemnitee. The Secretary will
promptly advise the Board of each such request.
Section 6.5 Nonexclusivity of Rights. The rights of indemnification and
advancement of Expenses this Article VI provides are not exclusive of any other
rights to which any Indemnitee may at any time be entitled under applicable law,
the Certificate of Incorporation, these Bylaws, any agreement, a vote of
Stockholders or a resolution of Directors, or otherwise. No amendment,
alteration or repeal of this Article VI or any provision hereof will be
effective as to any Indemnitee for acts, events and circumstances that occurred,
in whole or in part, before that amendment, alteration or repeal. The provisions
of this Article VI will continue as to any Indemnitee whose Corporate Status has
ceased for any reason and will inure to the benefit of his heirs, executors and
administrators. Neither the provisions of this Article VI nor those of any
agreement to which the Corporation is a party will preclude the indemnification
of any person whom this Article VI does not specify as having the right to
receive indemnification or is not a party to any such agreement, but whom the
Corporation has the power or obligation to indemnify under the provisions of the
DGCL.
Section 6.6 Insurance and Subrogation. The Corporation will not be
liable under this Article VI to make any payment of amounts otherwise
indemnifiable hereunder to or for the benefit of any Indemnitee if, but only to
the extent that, that Indemnitee has otherwise actually received such payment
under any insurance policy, contract or agreement or otherwise. In the event of
any payment hereunder to or for the benefit of any Indemnitee, the Corporation
will be subrogated to the extent of that payment to all the rights of recovery
of that Indemnitee, who shall execute all papers required and take all action
the Corporation reasonably requests to secure those rights, including execution
of such documents as are necessary to enable the Corporation to bring suit to
enforce those rights.
Section 6.7 Severability. If any provision or provisions of this
Article VI shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby; and, to the
fullest extent possible, the provisions of this Article VI will be construed so
as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
Section 6.8 Certain Actions Where Indemnification Is Not Provided.
Notwithstanding any other provision of this Article VI, no person will be
entitled to indemnification or advancement of Expenses under this Article VI
with respect to any Proceeding, or any Matter therein, brought or made by that
person against the Corporation; provided, however, if any Indemnitee seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Article VI, that Indemnitee will be
entitled to recover from the Corporation, and will be indemnified by the
Corporation against, all his Expenses in that judicial adjudication or
arbitration, but only if he prevails therein; and if it is determined in that
judicial adjudication or arbitration that he is entitled to receive part of, but
not all, the indemnification or advancement of expenses sought, his Expenses in
connection with that judicial adjudication or arbitration will be appropriately
prorated between those in respect of which this Section 6.8 entitles him to
indemnification and those he must bear.
-14-
<PAGE> 18
Section 6.9 Definitions. For purposes of this Article VI:
"Corporate Status" describes the status of a person who is or was a
director, officer, employee or agent of the Corporation or of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, provided that person is or was serving in that capacity at
the written request of the Corporation. For purposes of these Bylaws,
"serving at the written request of the Corporation" includes any service by
an Indemnitee (at the written request of the Corporation) which imposes
duties on or involves services by that Indemnitee with respect to any
employee benefit plan or its participants or beneficiaries.
"Expenses" of any person include all the following that are
actually and reasonably incurred by or on behalf of that person: all
reasonable attorneys' fees, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all
other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating or being or preparing to be a witness in a Proceeding.
"Indemnitee" includes any person who is, or is threatened to be
made, a witness in or a party to any Proceeding as described in Section 6.1
or 6.2 hereof by reason of his Corporate Status.
"Matter" is a claim, a material issue or a substantial request for
relief.
"Proceeding" includes any action, suit, alternate dispute
resolution mechanism, hearing or any other proceeding, whether civil,
criminal, administrative, arbitrative, investigative or mediative, any
appeal in any such action, suit, alternate dispute resolution mechanism,
hearing or other proceeding and any inquiry or investigation that could lead
to any such action, suit, alternate dispute resolution mechanism, hearing or
other proceeding, except one (i) initiated by an Indemnitee to enforce his
rights under this Article VI or (ii) pending on or before the date of
adoption of these Bylaws.
Section 6.10 Notices. Promptly after receipt by any Indemnitee of
notice of the commencement of a Proceeding in respect of which he contemplates
seeking any indemnification or advance or reimbursement of Expenses pursuant to
this Article VI, that Indemnitee must notify the Corporation of the commencement
of that Proceeding; provided, however, that (i) any delay in so notifying the
Corporation will not constitute a waiver or release by that Indemnitee of any
rights hereunder and (ii) any omission by Indemnitee to so notify the
Corporation will not relieve the Corporation from any liability that it may have
to Indemnitee otherwise than under this Article VI. Any communication required
or permitted to the Corporation must be addressed to the Secretary at the
Corporation's principal executive offices, and any such communication to any
Indemnitee must be addressed to that Indemnitee's address as shown in the
Corporation's records, unless he specifies otherwise, and must be personally
delivered or delivered by overnight mail delivery. Any such notice will be
effective upon receipt.
-15-
<PAGE> 19
Section 6.11 Contractual Rights. The right to be indemnified or to the
advancement or reimbursement of Expenses (i) is a contract right based on good
and valuable consideration pursuant to which any Indemnitee may sue as if these
provisions were set forth in a separate written contract between that Indemnitee
and the Corporation, (ii) is and is intended to be retroactive and will be
available as to events occurring prior to the adoption of these provisions and
(iii) will continue after any rescission or restrictive modification of these
provisions as to events occurring prior thereto.
Section 6.12 Maintenance of Insurance. The Board may from time to time
authorize the Corporation to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against that liability under the provisions of these Bylaws.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Offices. The Corporation's registered office shall be in
the City of Wilmington, County of New Castle, State of Delaware. The Corporation
may have such other offices within and without the State of Delaware as have
heretofore been established or may hereafter be established by or with the
authority of the Board. The Corporation's administrative office shall be located
at 11911 FM 529, Houston, Texas.
Section 7.2 Fiscal Year. The fiscal year of the Corporation shall end
on March 31.
Section 7.3 Seal. The corporate seal will have the name of the
Corporation inscribed thereon and will be in such form as the Board by
resolution may approve from time to time. The seal may be used by an officer of
the Corporation causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise applied to any acknowledgments, agreements,
applications, affidavits, certificates, contracts, instruments, statements or
other documents executed for or on behalf of the Corporation.
Section 7.4 Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its Directors or officers, or between
the Corporation and any other Entity in which one or more of its Directors or
officers are directors or officers (or hold equivalent offices or positions), or
have a financial interest, will be void or voidable solely for this reason, or
solely because the Director or officer is present at or participates in the
meeting of the Board or Board Committee which authorizes the contract or
transaction, or solely because his or their votes are counted for that purpose,
if: (i) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the Board or the Board
Committee, and the Board or Board Committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested Directors, even though the disinterested Directors be less than a
quorum; or (ii) the material facts as to his relationship or interest and as to
the contract or
-16-
<PAGE> 20
transaction are disclosed or are known to the Stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of those Stockholders; or (iii) the contract or transaction is fair as
to the Corporation as of the time it is authorized, approved or ratified by the
Board, a Board Committee or the Stockholders. Common or interested Directors may
be counted in determining the presence of a quorum at a meeting of the Board or
of a Board Committee which authorizes the contract or transaction.
Section 7.5 Form of Records. Any records the Corporation maintains in
the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time.
Section 7.6 Bylaw Amendments. The Board has the power to adopt, amend
and repeal from time to time the Bylaws of the Corporation, subject to the right
of Stockholders entitled to vote with respect thereto to amend or repeal those
Bylaws as adopted or amended by the Board. Bylaws of the Corporation may be
adopted, amended or repealed by the affirmative vote of the holders of at least
66.7%of the combined voting power of the outstanding shares of all classes of
capital stock of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class, at any annual meeting, or at any
special meeting if notice of the proposed amendment is contained in the notice
of that special meeting, or by the Board as specified in the preceding sentence.
Section 7.7 Notices; Waiver of Notice. Whenever any notice is required
to be given to any Stockholder, Director or member of any Board Committee under
the provisions of the DGCL, the Certificate of Incorporation or these Bylaws,
that notice will be deemed to be sufficient if given (i) by telegraphic,
facsimile, cable or wireless transmission or (ii) by deposit of the same in the
United States mail, with postage paid thereon, addressed to the person entitled
thereto at his address as it appears in the records of the Corporation, and that
notice will be deemed to have been given on the day of such transmission or
mailing, as the case may be.
Whenever any notice is required to be given to any Stockholder or
Director under the provisions of the DGCL, the Certificate of Incorporation or
these Bylaws, a waiver thereof in writing signed by the person or persons
entitled to that notice, whether before or after the time stated therein, will
be equivalent to the giving of that notice. Attendance of a person at a meeting
will constitute a waiver of notice of that meeting, except when the person
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Stockholders, the Board or any Board
Committee need be specified in any written waiver of notice unless the
Certificate of Incorporation or these Bylaws so require.
Section 7.8 Resignations. Any Director or officer of the Corporation
may resign at any time. Any such resignation must be made in writing and will
take effect at the time specified in that writing, or, if that resignation does
not specify any time, at the time of its receipt by the Chairman or the
Secretary. The acceptance of a resignation will not be necessary to make it
effective, unless that resignation expressly so provides.
-17-
<PAGE> 21
Section 7.9 Facsimile Signatures. In addition to the provisions for the
use of facsimile signatures these Bylaws elsewhere specifically authorize,
facsimile signatures of any officer or officers of the Corporation may be used
as and whenever the Board by resolution so authorizes.
Section 7.10 Reliance on Books, Reports and Records. Each Director and
each member of any Board Committee designated by the Board will, in the
performance of his duties, be fully protected in relying in good faith on the
books of account or reports made to the Corporation by any of its officers, or
by an independent certified public accountant, or by an appraiser selected with
reasonable care by the Board or by any such committee, or in relying in good
faith upon other records of the Corporation.
Section 7.11 Certain Definitional Provisions. (a) When used in these
Bylaws, the words "herein," "hereof" and "hereunder" and words of similar import
refer to these Bylaws as a whole and not to any provision of these Bylaws, and
the words "Article" and "Section" refer to Articles and Sections of these Bylaws
unless otherwise specified.
(b) Whenever the context so requires, the singular number includes the
plural and vice versa, and a reference to one gender includes the other gender
and the neuter.
(c) The word "including" (and, with correlative meaning, the word
"include") means including, without limiting the generality of any description
preceding that word, and the words "shall" and "will" are used interchangeably
and have the same meaning.
Section 7.12 Captions. Captions to Articles and Sections of these
Bylaws are included for convenience of reference only, and these captions do not
constitute a part hereof for any other purpose or in any way affect the meaning
or construction of any provision hereof.
End of Bylaws
-18-
<PAGE> 22
BYLAWS
EXHIBIT "A"
COMMITTEES
Per ARTICLE III, of the Bylaws of Oceaneering International, Inc. (the
"Company") the following committees are designated by the Board of Directors of
the Company (the "Board") with the committee authority and responsibility
specified in the Appendix indicated opposite the name of the committee. Members
of the Audit Committee shall be independent members of the Board. The membership
and composition of the committees shall be as designated by the Board from time
to time.
Audit Committee Appendix "A"
Nominating Committee Appendix "B"
Compensation Committee Appendix "C"
A-1
<PAGE> 23
APPENDIX "A"
OCEANEERING INTERNATIONAL, INC.
AUDIT COMMITTEE CHARTER
GENERAL
The Audit Committee of the Board of Directors of Oceaneering
International, Inc. shall consist of three independent directors. Members of the
Committee shall be considered independent if they have no relationship to the
Company that could interfere with the exercise of their independence from
management and the Company. As determined by the Board of Directors, the Members
of the Committee will be financially literate with at least one having
accounting or related financial management expertise. Company management,
internal and independent auditors and the Company's General Counsel may attend
each meeting or portions thereof as required by the Committee. The Committee
will have two meetings each year on a regular basis and will have special
meetings if and when required.
RESPONSIBILITIES
The Audit Committee's role is one of oversight whereas the Company's
management is responsible for preparing the Company's financial statements and
the independent auditors are responsible for auditing those financial
statements. The Audit Committee is not providing any expert or special assurance
as to the Company's financial statements or any professional certification as to
the independent auditor's work. The following functions shall be the key
responsibilities of the Audit Committee in carrying out its oversight function.
1. The Committee and Board shall be ultimately responsible for
the selection, evaluation, and replacement of the independent
auditors. The Committee will:
recommend annually the appointment of the independent auditors
to the Board for its approval and subsequent submission to the
stockholders for ratification, based upon an annual
performance evaluation and a determination of the auditors'
independence;
A-2
<PAGE> 24
determine the independence of the independent auditors by
obtaining a formal written statement delineating all
relationships between the independent auditors and the
Company, including all non-audit services and fees;
discuss with the independent auditors if any disclosed
relationship or service could impact the auditors'
objectivity and independence; and
recommend that the Board take appropriate action in response
to the auditors statement to ensure the independence of the
independent auditors.
2. Inquire of company management and independent auditors
regarding the appropriateness of accounting principles
followed by the Company, changes in accounting principles and
their impact on the financial statements.
3. Review with Company management the Company's financial
reporting process, published financial statement and/or major
disclosures and the adequacy of the Company's system of
internal controls.
4. Review and discuss with Company management and General Counsel
legal and regulatory matters that may have a material impact
on the Company's financial statements and Company compliance
policies.
5. Meet with independent auditors and review their report to the
Committee including comments relating to the system of
internal controls, published financial statements and related
disclosures, the adequacy of the financial reporting process
and the scope of the independent audit. The independent
auditors are ultimately accountable to the Board and the
Committee on all such matters.
6. Provide an open avenue of communications between the internal
and independent auditors and the Board of Directors, including
private sessions with the internal and independent auditors,
as the Committee may deem appropriate.
7. Review the internal audit program in terms of scope of audits
conducted or scheduled to be conducted.
A-3
<PAGE> 25
8. Review with the internal auditors any major findings and
recommendations from internal audits conducted Company-wide.
Consult with internal auditors regarding on-going monitoring
programs including the Company's Statement of Philosophy and
Beliefs and compliance with policies of the Company.
9. Review with both the internal and independent auditors the
plans for the audit of the Company's information technology
procedures and controls.
10. Review with the internal and independent auditors the
coordination of their respective audit activities.
11. Prepare a Report, for inclusion in the Company's proxy
statement as required, disclosing that the Committee reviewed
and discussed the audited financial statements with management
and discussed certain other matters with the independent
auditors. Based upon these discussions, state in the Report
whether the Committee recommended to the Board that the
audited financial statements be included in the Annual Report.
12. Review and reassess the adequacy of the Audit Committee's
charter annually. If any revisions therein are deemed
necessary or appropriate, submit the same to the Board for its
consideration and approval.
QUORUM
For the transaction of business at any meeting of the Audit Committee,
a majority of the members shall constitute a quorum.
A-4
<PAGE> 26
APPENDIX "B"
NOMINATING COMMITTEE
Responsibilities:
1. Recommending to full Board of Directors of the Company (the "Board")
nominees to fill Board vacancies.
2. Receiving and evaluating stockholder recommendations for nominees to
fill Board vacancies.
3. Recommending to full Board candidates for membership of the committees
of the Board.
4. Recommending to the full Board a director to serve as Chairman of the
Board.
A-5
<PAGE> 27
APPENDIX "C"
COMPENSATION COMMITTEE
Responsibilities:
1. Setting salaries of the Officers of the Company
- The Company's Chief Executive Officer (the "CEO") recommends
and the Compensation Committee (the "Committee") approves
entry salary for all officers of the Company (except the CEO).
- The CEO recommends and the Committee approves changes to
salaries for all officers of the Company (except the CEO).
- The Committee recommends and the Board approves any successor
to the CEO and the entry salary when a vacancy occurs; and
changes to the salary of the CEO.
- The Committee recommends and the Board approves the entry
salary and changes to the salary of the Chairman of the Board.
2. Bonus Plans
- The Committee recommends and the Board approves any bonus
award plans.
- The CEO recommends and the Committee approves any bonus awards
to officers within the parameters of the approved plans.
3. Stock Awards
- The Committee recommends and the Board approves any stock
option or stock award plans which require shareholder
approval.
- The CEO recommends and the Committee approves any grants of
stock options and restricted stock to any recipient.
4. Senior Executive Severance Agreements
- The Committee recommends and the Board approves participants
and terms of any senior executive severance agreements.
5. Other Compensation Plans in which Officers and Directors are Eligible
to Participate
- The Committee recommends and the Board approves adoption of
plans.
- The CEO recommends and the Committee approves participant
changes within the parameters of approved plans.
- The Chief Financial Officer of the Company administers plans
as provided in the plans.
A-6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.09
<SEQUENCE>4
<FILENAME>h85406ex10-09.txt
<DESCRIPTION>2000 BONUS AWARD PLAN
<TEXT>
<PAGE> 1
OCEANEERING INTERNATIONAL, INC. EXHIBIT 10.09
2000 BONUS AWARD PLAN
On June 16, 2000, a 2000 Bonus Award Plan was approved by the Company's Board of
Directors to be administered by its Compensation Committee. In November 2000,
the Company's fiscal year-end changed to a December 31st fiscal year and this
bonus award period is for April 1 - December 31, 2000. Individuals were
nominated and approved for inclusion in the Plan and reviewed after final
results were completed. Recommendations for cash bonus awards were based on the
accomplishment of results (Individual, Profit Center and Total Company) in order
to determine the amount of award, if any, to be made. People must be amongst the
nominated group for eligibility, and be employed by the Company at the time of
funding. Bonuses are earned when paid. Individuals, as designated, are subject
to a maximum bonus eligibility of 10%-150% of current base salary.
The 2000 Bonus Award Plan is based on achieving specific results by the
Individual, his Profit Center and the Total Company. In order to integrate each
of these performances in a fashion that benefits the Shareholders and Employees,
each item is interrelated. The amount of award recommendation was based on the
following methodology:
Individual Coefficient
The Individual Coefficient is determined by taking the individual's weighted
average evaluation of objectives achieved times the individual's salary maximum.
This is the beginning step in determining the final award. An individual's
performance must meet certain minimum criteria or he is eliminated from bonus
award consideration.
Profit Center Results Contribution
The Profit Center Contribution is determined by comparing the Profit Center Net
Income Objective with the results achieved and determining the Contribution to
the Individual Coefficient.
Should the Profit Center results be below a specified amount, all the
individuals in that Profit Center may be eliminated from the Award Program. The
Chief Executive Officer may review the performance of areas within the region on
a case-by-case basis and take appropriate action. Should the actual results be
equal to or greater than such specified amount, the individual becomes eligible
for an award.
Oceaneering International, Inc. Results Contribution
The Company Results Contribution is determined by comparing the Company's Net
Income Result with the Objective planned. The results achieved determine the
multiplier used. Thus, an individual may, subject to the determined maximum, be
recommended for an award equal to the Individual Coefficient times the Profit
Center Contribution times the Company Results Contribution times current base
salary.
The 2000 Bonus Award Plan is in effect for the nine-month period ended December
31, 2000. It is extremely important that the Company continue improved results.
All participants must be committed to a reward system based on achieving
results. The Company is entrepreneurially oriented and must use its maximum
creativity, effort and determination in achieving individual results that
collectively increases its Shareholders' Net Wealth. The 2000 Bonus Award Plan
is structured to foster that position.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>h85406ex21.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
<TEXT>
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF
OCEANEERING INTERNATIONAL, INC. ("OII")
<TABLE>
<CAPTION>
Percentage of Ownership Jurisdiction
by Oceaneering of
Subsidiary International, Inc. Organization
- ---------- ----------------------- ------------
<S> <C> <C>
Consolidated Launcher Technology, Inc. 100% Virginia
Eastport International, Inc. 100% Delaware
Ian Murray Engineering Ltd. 100% Scotland
Marine Production Systems do Brasil 100% Brazil
Marine Production Systems Ltd. 100% Delaware
Marine Production Systems Servicos, Ltda. 100% Brazil
Multiflex, Inc. 100% Texas
Multiflex Limited 100% Scotland
Ocean Systems Engineering, Inc. 100% Texas
Ocean Systems Engineering Limited 100% England
Oceaneering Arabia Ltd. 50% Saudi Arabia
Oceaneering A/S 100% Norway
Oceaneering Australia Pty. Limited 100% Australia
Oceaneering FSC, Inc. 100% Barbados
Oceaneering International AG 100% Switzerland
Oceaneering International (M) Sdn. Bhd. 100% Malaysia
Oceaneering International Pte Ltd 100% Singapore
Oceaneering International, S.A. de C.V. 100% Mexico
Oceaneering International Services Limited 100% England
Oceaneering International (Sharjah) Limited 100% Sharjah
Oceaneering Limited 100% Canada
Oceaneering Services (Nigeria) Limited 100% Nigeria
Oceaneering Space Systems, Inc. 100% Delaware
Oceaneering Survey, Inc. 100% Delaware
Oceaneering Technologies, Inc. 100% Delaware
Oceaneering Underwater GmbH 100% Switzerland
Oceanteam UK Limited 100% Scotland
Oil Industry Engineering, Inc. 100% Texas
P. T. Calmarine 50% Indonesia
Smit Oceaneering Cable Systems, L.L.C. 50% Delaware
Solus Emirates 100% U.A.E.
Solus Ocean Systems, Inc. 100% Delaware
Solus Oceaneering (Malaysia) Sdn. Bhd. 49% Malaysia
Solus Schall Limited 100% England
Solus Schall (Nigeria) Limited 50% Nigeria
Specialty Wire and Cable Company, Inc. 100% Texas
Steadfast Oceaneering, Inc. 100% Virginia
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>h85406ex23.txt
<DESCRIPTION>CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
<TEXT>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated February 14, 2001 included in this Form 10-K, into
the Company's previously filed Form S-8 Registration Statements File No.
33-36872, No. 333-35225, No. 333-41190 and No. 333-50400 and Form S-3
Registration Statement File No. 333-44460.
Houston, Texas
March 28, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>7
<FILENAME>h85406ex24.txt
<DESCRIPTION>POWERS OF ATTORNEY
<TEXT>
<PAGE> 1
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission") under the Securities Exchange Act of 1934, as amended ("Act"), an
Annual Report on Form 10-K for the nine-month period ended December 31, 2000
("10-K"), with any and all exhibits and/or amendments to such 10-K, and other
documents in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint JOHN R.
HUFF, MARVIN J. MIGURA and GEORGE R. HAUBENREICH, JR. and each of them
severally, his true and lawful attorney or attorneys with power to act with or
without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director, officer or
both, as the case may be, of the Company, said 10-K and any and all amendments
thereto and all instruments necessary or incidental in connection therewith and
to file the same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf of the
undersigned in any and all capacities every act whatsoever necessary or
desirable to be done in the premises as fully and to all intents and purposes as
the undersigned might or could do in person, the undersigned hereby ratifying
and approving the acts of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on
this 23rd day of March 2001.
/s/ D. Michael Hughes
--------------------------
D. Michael Hughes
<PAGE> 2
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission") under the Securities Exchange Act of 1934, as amended ("Act"), an
Annual Report on Form 10-K for the nine-month period ended December 31, 2000
("10-K"), with any and all exhibits and/or amendments to such 10-K, and other
documents in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint JOHN R.
HUFF, MARVIN J. MIGURA and GEORGE R. HAUBENREICH, JR. and each of them
severally, his true and lawful attorney or attorneys with power to act with or
without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director, officer or
both, as the case may be, of the Company, said 10-K and any and all amendments
thereto and all instruments necessary or incidental in connection therewith and
to file the same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf of the
undersigned in any and all capacities every act whatsoever necessary or
desirable to be done in the premises as fully and to all intents and purposes as
the undersigned might or could do in person, the undersigned hereby ratifying
and approving the acts of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on
this 23rd day of March 2001.
/s/ Charles B. Evans
-----------------------------------
Charles B. Evans
<PAGE> 3
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission") under the Securities Exchange Act of 1934, as amended ("Act"), an
Annual Report on Form 10-K for the nine-month period ended December 31, 2000
("10-K"), with any and all exhibits and/or amendments to such 10-K, and other
documents in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint JOHN R.
HUFF, MARVIN J. MIGURA and GEORGE R. HAUBENREICH, JR. and each of them
severally, his true and lawful attorney or attorneys with power to act with or
without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director, officer or
both, as the case may be, of the Company, said 10-K and any and all amendments
thereto and all instruments necessary or incidental in connection therewith and
to file the same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf of the
undersigned in any and all capacities every act whatsoever necessary or
desirable to be done in the premises as fully and to all intents and purposes as
the undersigned might or could do in person, the undersigned hereby ratifying
and approving the acts of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on
this 23rd day of March 2001.
/s/ David S. Hooker
---------------------------
David S. Hooker
<PAGE> 4
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission") under the Securities Exchange Act of 1934, as amended ("Act"), an
Annual Report on Form 10-K for the nine-month period ended December 31, 2000
("10-K"), with any and all exhibits and/or amendments to such 10-K, and other
documents in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint MARVIN
J. MIGURA and GEORGE R. HAUBENREICH, JR. and each of them severally, his true
and lawful attorney or attorneys with power to act with or without the other and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director, officer or both, as the case may
be, of the Company, said 10-K and any and all amendments thereto and all
instruments necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on
this 23rd day of March 2001.
/s/ John R. Huff
----------------------------------
John R. Huff
<PAGE> 5
POWER OF ATTORNEY
WHEREAS, OCEANEERING INTERNATIONAL, INC., a Delaware corporation
("Company"), intends to file with the Securities and Exchange Commission
("Commission") under the Securities Exchange Act of 1934, as amended ("Act"), an
Annual Report on Form 10-K for the nine-month period ended December 31, 2000
("10-K"), with any and all exhibits and/or amendments to such 10-K, and other
documents in connection therewith.
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company, does hereby appoint JOHN R.
HUFF, MARVIN J. MIGURA and GEORGE R. HAUBENREICH, JR. and each of them
severally, his true and lawful attorney or attorneys with power to act with or
without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director, officer or
both, as the case may be, of the Company, said 10-K and any and all amendments
thereto and all instruments necessary or incidental in connection therewith and
to file the same with the Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf of the
undersigned in any and all capacities every act whatsoever necessary or
desirable to be done in the premises as fully and to all intents and purposes as
the undersigned might or could do in person, the undersigned hereby ratifying
and approving the acts of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on
this 23rd day of March 2001.
/s/ Harris J. Pappas
-------------------------------------
Harris J. Pappas
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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