UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant þ
Filed by a Party other than the Registrant ¨
Check the appropriate box:

þ		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to § 240.14a-12

GLOBAL INDUSTRIES, LTD.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

o		No fee required.
þ		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
			Common Stock, $0.01 par value, of Global Industries, Ltd.

	(2)		Aggregate number of securities to which transaction applies:
			117,175,564 shares of Global Industries, Ltd. Common Stock (consisting of 114,203,698 shares of Common Stock outstanding on September 28, 2011, 1,554,650 shares of restricted Common Stock, 304,154 options to purchase shares of Common Stock with a per share exercise price less than the per share merger consideration of $8.00 per share of Common Stock and 1,113,062 shares of Common Stock issuable with respect to performance units).

	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
			Solely for the purpose of calculating the filing fee, the underlying value of the transaction was calculated as the sum of: (A) 114,203,698 shares of Common Stock and 1,554,650 shares of restricted Common Stock, each multiplied by $8.00 per share, (B) 304,154 options to purchase shares of Common Stock, multiplied by $1.52 (which is the difference between $8.00 and the weighted average exercise price for the options of $6.48 per share), and (C) 1,113,062 shares of Common Stock issuable with respect to performance units, multiplied by $8.00 per share). The filing fee was determined by multiplying $0.00011460 by the maximum aggregate value of the transaction as determined in accordance with the previous sentence.

	(4)		Proposed maximum aggregate value of transaction:
			$935,433,594.

	(5)		Total fee paid: $107,200.69

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

 

Preliminary Proxy Statement

 

[     ], 2011

 

 

SPECIAL MEETING OF SHAREHOLDERS

 

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

 

Dear Shareholder:

 

The board of directors of Global Industries, Ltd., a Louisiana corporation, or Global Industries, has unanimously approved a merger agreement pursuant to which Global Industries will be acquired by an indirect, wholly-owned subsidiary of Technip S.A., a société anonyme organized under the laws of France.

 

If the merger contemplated by the merger agreement is completed, holders of our common stock will be entitled to receive $8.00 in cash, less any required withholding taxes, for each share of our common stock owned at the effective time of the merger. The merger consideration will be paid without interest. Receipt of the merger consideration will be taxable to our shareholders for U.S. federal income tax purposes.

 

Our shareholders will be asked to approve and adopt the merger agreement and an amendment to our amended and restated articles of incorporation (each of which is a condition to the merger) at a special meeting. Our shareholders will also be asked to approve, on an advisory, non-binding basis, the merger-related compensation arrangements for our named executive officers. Our board of directors has unanimously approved resolutions (i) determining that the merger agreement and the transactions contemplated thereby are in the best interests of Global Industries’ shareholders, (ii) approving, adopting and declaring advisable the merger agreement and the transactions contemplated thereby, (iii) approving, adopting and declaring advisable the adoption of amended and restated articles of incorporation, and (iv) recommending approval and adoption of the merger agreement and amended and restated articles of incorporation by our shareholders. In reaching this determination, our board of directors considered a variety of factors that are discussed in the attached proxy statement. Our board of directors unanimously recommends that all of our shareholders vote FOR the approval and adoption of the merger agreement and FOR the approval and adoption of the amended and restated articles of incorporation. Additionally, our board of directors unanimously recommends that all of our shareholders vote FOR the proposal regarding certain merger-related compensation arrangements for our named executive officers.

 

The affirmative vote of holders of at least two-thirds of the shares of our common stock present in person or represented by proxy at the special meeting is required to approve and adopt the merger agreement and the amended and restated articles of incorporation. Additionally, the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote is required to approve, on an advisory, non-binding basis, the proposal regarding certain merger-related executive compensation arrangements. Each holder of our common stock is entitled to one vote per share. Proxies returned to us that are properly signed and dated but not marked to indicate your voting preference will be counted as votes FOR approval and adoption of the merger agreement, FOR approval and adoption of the amended and restated articles of incorporation, and FOR the proposal regarding certain merger-related executive compensation arrangements. The merger and the adoption of the amended and restated articles of incorporation are each conditional upon the other. Neither the merger nor the amendment of the articles of incorporation will take place unless the other is also approved by our shareholders.

 

The date, time and place of the special meeting are as follows:

 

[  ]

[     ]

 

The proxy statement attached to this letter provides you with information about the special meeting of our shareholders and the proposed merger. We encourage you to read the entire proxy statement carefully. Please do not send in your stock certificates at this time. If the merger is completed, you will receive instructions regarding the surrender of your stock certificates and payment for your shares of common stock.

 

Your vote is very important.  Whether or not you plan to attend the special meeting, if you are a holder of our common stock please complete, sign, date and mail the enclosed proxy card to us or submit your proxy by telephone or Internet. If you attend the special meeting, you may vote in person even if you previously returned your proxy.

 

Sincerely,

 

John A. Clerico

Chairman of the Board of Directors

 

The proxy statement is dated [     ], 2011, and is first being mailed to our shareholders on or about [     ], 2011.

 

 

GLOBAL INDUSTRIES, LTD.

 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 

To the shareholders of Global Industries, Ltd.:

 

Notice is hereby given that on [          ], at [  a.m./p.m.], Central time, Global Industries, Ltd., a Louisiana corporation, or Global Industries, will hold a special meeting of its shareholders (the “special meeting”) at [          ], for the following purposes:

 

1. To consider and vote upon a proposal to approve and adopt the agreement and plan of merger, dated as of September 11, 2011, among Technip S.A., a société anonyme organized under the laws of France (“Technip”), Apollon Merger Sub B, Inc. (“Merger Sub”), a Louisiana corporation and an indirect, wholly-owned subsidiary of Technip, and Global Industries (the “merger agreement”);

 

2. To consider and vote upon a proposal to approve and adopt amended and restated articles of incorporation to remove the limitation on non-U.S. ownership of Global Industries’ common stock contained in the existing articles of incorporation of Global Industries;

 

3. To consider and approve, solely on a non-binding, advisory basis, certain compensation arrangements for Global Industries’ named executive officers in connection with the merger contemplated by the merger agreement (the “merger”); and

 

4. To transact such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.

 

The merger proposal is described more fully in the proxy statement of which this notice forms a part. Please give your careful attention to all of the information in the proxy statement.

 

Only holders of record of Global Industries common stock at the close of business on [          ], the record date, or their proxies can vote at the special meeting or any adjournment of the special meeting. Approval and adoption of the merger agreement and the amended and restated articles of incorporation each require the affirmative vote of holders of at least two-thirds of the shares of our common stock present in person or represented by proxy at the special meeting. The affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote is required to approve, on an advisory, non-binding basis, the proposal regarding certain merger-related executive compensation arrangements.

 

The list of shareholders entitled to vote at the special meeting is available, upon request, at Global Industries’ offices, at 11490 Westheimer, Suite 400, Houston, Texas 77077, for examination by any Global Industries’ shareholder.

 

Dissenting shareholders who comply with the procedural requirements of the Louisiana Business Corporation Law will be entitled to receive payment of the “fair cash value” of their shares, as determined by our agreement with the shareholders or a Louisiana state court, if the merger is effected upon approval by less than 80 percent of Global Industries’ total voting power.

 

Your vote is important. Whether or not you expect to attend the special meeting in person, you are urged to complete, sign, date and return the enclosed proxy card or voting instruction card at your earliest convenience or to submit your vote by Internet or telephone. Instructions for voting your shares are included on the enclosed proxy card or voting instruction card. If you are a record holder and you send in your proxy and then decide to attend the Global Industries special meeting to vote your shares, you may still do so. You may revoke your proxy in the manner described in the proxy statement at any time before it has been voted at the special meeting. If you have any questions about the proposals or about your shares, please contact Innisfree M&A Incorporated, who may be contacted by banks and brokers at (212) 750-5833 and by all others toll free at (877) 456-3463.

 

By Order of the Board of Directors,

 

Russell J. Robicheaux

Corporate Secretary

Houston, Texas

[     ], 2011

 

TABLE OF CONTENTS

 

 

This proxy statement contains certain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” “intend(s)” and similar expressions are intended to identify such forward-looking statements. These statements include, but are not limited to, the expected timing of the acquisition; the ability of Technip and Global Industries to close the acquisition; the performance of the parties under the terms of the merger agreement and related transaction documents; and statements regarding future performance. All of such information and statements are subject to certain risks and uncertainties, the effects of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Investors are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this proxy statement. Investors are also urged to carefully review and consider the various disclosures in our periodic and interim reports filed with the Securities and Exchange Commission (the “SEC”), including but not limited to our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2011 and June 30, 2011 and Current Reports on Form 8-K filed from time to time by us, as well as the following factors:

 

 

Consequently, all of the forward-looking statements we make in this document are qualified by the information contained or incorporated by reference herein, including, but not limited to, (a) the information contained under this heading and (b) the information contained under the heading “Risk Factors” and in our consolidated financial statements and notes thereto included in our most recent filings on Forms 10-Q and 10-K (see the section entitled “Where You Can Find More Information”). We are under no obligation to publicly release any revision to any forward-looking statement contained or incorporated herein to reflect any future events or occurrences.

 

You should carefully consider the cautionary statements contained or referred to in this section in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf.

 

The following questions and answers are intended to address briefly some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a shareholder. Please refer to the “Summary” and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under the section entitled “Where You Can Find More Information.”

 

Throughout this proxy statement, “Global Industries,” “we,” “us” and “our” refer to Global Industries, Ltd., “Technip” refers to Technip S.A., a société anonyme organized under the laws of France, and “Merger Sub” refers to Apollon Merger Sub B, Inc., a Louisiana corporation and an indirect, wholly-owned subsidiary of Technip. We refer to the merger between Global Industries and Merger Sub as the “merger,” and the agreement and plan of merger, dated as of September 11, 2011 among Technip, Merger Sub and Global Industries as the “merger agreement.” All references to the “merger consideration” refer to the consideration of $8.00 per share in cash, without interest and subject to reduction for any required withholding taxes, to be received by the holders of shares of our common stock pursuant to the merger agreement.

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY

 

The Companies (Page 11)

 

The Special Meeting of Global Industries Shareholders (Page 12)

 

The Merger (Page 15)

 

Description of the Merger (Page 15)

 

Reasons for the Merger (Page 23)

	•	its knowledge of the current state of our business, including our financial condition, operations, business plans, management, competitive position and prospects;
	•	our financial and strategic plan and the initiatives and the potential execution risks associated with such plan, and, in connection with these considerations, the attendant risk that, if we did not enter into the merger agreement, the price that might be received by Global Industries’ shareholders selling our common stock in the open market, both from a short-term and long-term perspective, could be less, in present value terms, than the merger consideration, especially in light of recent economic trends in the stock market and the currently challenging business environment;
	•	its belief, based on its knowledge of the matters enumerated above, that the certainty of the merger consideration of $8.00 per share outweighed the substantial risk that our shares might not trade at prices substantially above $8.00 per share for some substantial period;
	•	the fact that the $8.00 per share merger consideration to be received by our shareholders represented a premium of approximately 55% over the closing stock price of our shares as reported on the Nasdaq Global Select Market on September 9, 2011 (which was the last full trading day prior to our board of directors’ approval of the merger agreement with Technip) and a 92% premium over the average closing stock price of our shares as reported on the Nasdaq Global Select Market for the 30 trading days ending on September 9, 2011;

	•	its belief, based on advice of Simmons & Company International (“Simmons”) and assessment of the ability and willingness of other potential buyers to acquire Global Industries, that the premium offered by Technip was greater than any purchase price reasonably available through a public auction, and that the board’s retention of a right to terminate the merger agreement in favor of a superior proposal would permit a superior proposal, if any, to emerge and be considered by the board; and
	•	the financial advice of Simmons, as well as the opinion of Simmons, dated September 10, 2011, to our board of directors as to the fairness, from a financial point of view and as of the date of the opinion, of the $8.00 per share merger consideration.

 

Global Industries’ Board of Directors’ Recommendation (Page 25)

	•	determining that the merger agreement and the transactions contemplated thereby are in the best interests of our shareholders;
	•	approving, adopting and declaring advisable the merger agreement and the transactions contemplated thereby;
	•	approving, adopting and declaring advisable the adoption of the amended and restated articles of incorporation; and
	•	recommending approval and adoption of the merger agreement and the amended and restated articles of incorporation by our shareholders.

 

Financial Advisor’s Opinion Regarding the Merger Consideration (Page 25)

 

Interests of Global Industries’ Executive Officers and Directors in the Merger (Page 39)

 

Amended and Restated Articles of Incorporation of Global Industries (Page 47)

 

Regulatory Matters (Page 47)

 

Dissenters’ Rights (Page 48)

 

Delisting and Deregistration of Global Industries Common Stock (Page 50)

 

Material United States Federal Income Tax Consequences of the Merger (Page 51)

 

Litigation Relating to the Merger (Page 53)

 

The Merger Agreement (Page 54)

 

General (Page 54)

 

Equity Plans (Page 54)

 

Solicitation of Transactions (Page 60)

	•	solicit, initiate or take any action to knowingly facilitate or encourage the submission of any acquisition proposal (as defined in the merger agreement and described in the section captioned “The Merger Agreement — Definitions of Acquisition Proposal and Superior Proposal”) for us;
	•	enter into or participate in any discussions or negotiations with, furnish any information relating to us or our subsidiaries or afford access to our, or our subsidiaries’, business, properties, assets or books, or otherwise cooperate in any way with, or knowingly assist, participate in, facilitate or encourage any effort by, any third party to make an acquisition proposal;
	•	fail to make, withdraw or modify in a manner adverse to Technip, the approval or recommendation of our board of directors of the merger agreement, or the transactions contemplated thereby, and the amended and restated articles of incorporation, or recommend any acquisition proposal or take any action or make any public statement inconsistent with the recommendation of our board of directors, except as permitted by the merger agreement;
	•	grant any waiver or release under any standstill or similar agreement with respect to any class of our, or our subsidiaries’, equity securities; or
	•	enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to an acquisition proposal (other than a confidentiality agreement with a third party as permitted by the terms of the merger agreement).

	•	our board of directors determines in good faith, after consultation with outside legal counsel, that

	•	an acquisition proposal constitutes a superior proposal and the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, or
	•	in the absence of an acquisition proposal, if due to events or changes in circumstances after the date hereof that were neither known to nor reasonably foreseeable by us as of or prior to the date of the merger agreement, the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law

	•	we have notified Technip in writing that our board of directors intends to make such a fiduciary determination; and
	•	at least five business days have elapsed following receipt by Technip of such notice (except that any subsequent notice period following any amendment to the financial or material terms of a superior proposal is two business days).

 

Conditions to the Closing of the Merger (Page 62)

 

Termination (Page 63)

	•	the merger has not been completed by April 23, 2012 (the “outside date”) provided, that the right to so terminate the merger agreement is not available to a party whose breach of any provision of the merger agreement results in the failure of the merger to be consummated by such time;
	•	there is an applicable law, order, writ, assessment, decision, injunction, decree, ruling, judgment or similar action, whether temporary, preliminary or permanent, making consummation of the merger illegal or otherwise prohibited, or otherwise enjoining us or Technip from consummating the merger, and the same shall have become final and non-appealable; provided, that the right to so terminate the merger agreement is not available to a party whose breach of any provision of the merger agreement results in such action or event; or
	•	our shareholders fail to approve and adopt both the merger agreement and the amended and restated articles of incorporation.

	•	our board of directors has made an adverse recommendation change, or an acquisition proposal has been publicly announced and our board of directors has failed to reaffirm its recommendation with 10 business days after such public announcement; provided, however, that the right to terminate the merger agreement pursuant to this termination right as a result of such action must be exercised by Technip within 10 business days following the event giving rise to such right to terminate or, if sooner, immediately prior to the special meeting;
	•	we shall have breached any of our representations and warranties or we have failed to perform any covenant or agreement under the merger agreement, other than those under the non-solicitation provisions of the merger agreement, that would give rise to the failure of certain conditions to closing, in either case in a situation where such breach is incapable of being satisfied by the outside date; provided, however, that Technip shall have given us 10 business days notice prior to termination; or
	•	prior to the special meeting, there has been an intentional and material breach by us of any covenants or obligations under the non-solicitation provisions of the merger agreement; provided, however, that Technip shall have given us 10 business days notice prior to termination (as described in the section captioned “The Merger Agreement — Solicitation of Transactions”).

	•	prior to the special meeting, our board of directors shall have made an adverse recommendation change in order to enter into a definitive, written agreement concerning a superior proposal; provided, however, that we shall have paid any required termination fee; or

	•	Technip or Merger Sub shall have breached any of their representations and warranties or Technip or Merger Sub has failed to perform any of their covenants or agreements under the merger agreement that would give rise to the failure of certain conditions to closing, in either case in a situation where that breach is incapable of being satisfied by the outside date, provided, however, that we shall have given Technip 10 business days notice prior to termination.

 

Termination Fees and Expenses (Page 64)

	•	Technip terminates the merger agreement because (i) our board of directors has made an adverse recommendation change, or an acquisition proposal has been publicly announced and our board of directors has failed to reaffirm its recommendation with 10 business days after such public announcement; (ii) we shall have breached any of our representations and warranties or we have failed to perform any covenant or agreement under the merger agreement, which would give rise to the failure of certain conditions to closing, in either case in a situation where such breach or failure is (a) intentional and (b) incapable of being satisfied by the outside date; or (iii) prior to the special meeting, there has been an intentional and material breach of any covenants or obligations under the non-solicitation provisions of the merger agreement;
	•	prior to the special meeting, our board of directors shall have made an adverse recommendation change in order to enter into a definitive, written agreement concerning a superior proposal and we terminate the merger agreement; or
	•	(i) the merger agreement or the amended and restated articles of incorporation are not approved and adopted by our shareholders at the special meeting, or any adjournment thereof, (ii) prior to such termination, an acquisition proposal shall have been publicly announced or otherwise been communicated to our shareholders and such acquisition proposal is not publicly withdrawn prior to the special meeting and (iii) within nine months following the date of such termination, we shall have entered into a definitive agreement with respect to, or recommended to our shareholders, an acquisition proposal or an acquisition proposal shall have been consummated (provided, however, that for purposes of this clause (iii), each reference to “15%” in the definition of acquisition proposal in the merger agreement shall be deemed to be a reference to “50%”).

 

Market Price of Our Common Stock (Page 71)

 

The Company

 

Global Industries, Ltd.

11490 Westheimer, Suite 400

Houston, Texas 77077

(281) 529-7799

 

Global Industries, a Louisiana corporation, is a leading solutions provider of offshore construction, engineering, project management and support services including pipeline construction, platform installation and removal, deepwater/SURF installations, IRM, and diving to the oil and gas industry worldwide.

 

Additional information regarding Global Industries is contained in our filings with the SEC. See “Where You Can Find More Information.”

 

Technip

 

Technip S.A.

89 avenue de la Grand Armée

75116 Paris

France

(+33) 1-4778-2400

 

Technip S.A., or Technip, a société anonyme organized under the laws of France, is a world leader in project management, engineering and construction for the energy industry, including deep subsea oil & gas developments as well as large and complex offshore and onshore infrastructures. Technip has approximately 25,000 employees and is present in 48 countries, with state-of-the-art industrial assets on all continents and operates a fleet of specialized vessels for pipeline installation and subsea construction. Technip shares are listed on the NYSE Euronext Paris exchange and the USA over-the-counter (OTC) market as an American Depositary Receipt (ADR: TKPPK).

 

Merger Sub

 

Apollon Merger Sub B, Inc.

c/o Technip S.A.

89 avenue de la Grand Armée

75116 Paris

France

(281) 870-1111

 

Apollon Merger Sub B, Inc., or Merger Sub, a Louisiana corporation and an indirect, wholly-owned subsidiary of Technip, was formed solely for the purpose of engaging in the transactions contemplated by the merger agreement, has engaged in no other business activities and has conducted its operations only as contemplated by the merger agreement. Upon completion of the merger, Merger Sub will cease to exist.

 

We are furnishing this proxy statement to our shareholders as part of the solicitation of proxies by our board of directors for use at the special meeting, and at any adjournments or postponements of the special meeting.

 

We will hold the special meeting at [          ] at [  a.m./p.m.], Central time, on [          ].

 

At the special meeting, we will ask holders of our common stock to approve and adopt both the merger agreement and the amended and restated articles of incorporation. Our shareholders will also be asked to approve, on an advisory, non-binding basis, the merger-related compensation arrangement for our named executive officers. Our board of directors has unanimously approved resolutions (i) determining that the merger agreement and the transactions contemplated thereby are in the best interests of Global Industries’ shareholders, (ii) approving, adopting and declaring advisable the merger agreement and the transactions contemplated thereby, (iii) approving, adopting and declaring advisable the adoption of the amended and restated articles of incorporation, and (iv) recommending approval and adoption of the merger agreement and the amended and restated articles of incorporation by our shareholders. Our board of directors unanimously recommends that all of our shareholders vote FOR the approval and adoption of the merger agreement and FOR the approval and adoption of the amended and restated articles of incorporation. Additionally, our board of directors unanimously recommends that you vote FOR the proposal regarding certain merger-related executive compensation arrangements.

 

Only holders of record of our common stock at the close of business on [          ], which is the record date for the special meeting, are entitled to notice of and to vote at the special meeting. As of the record date, [          ] shares of our common stock were outstanding and held by approximately [          ] holders of record. A majority of the shares of our common stock issued and outstanding and entitled to vote at the special meeting present in person or represented by proxy at the special meeting is required for a quorum. Shares of our common stock represented at the special meeting but not voting, including shares of our common stock for which proxies have been received but for which shareholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business at the special meeting.

 

The proposal to approve and adopt the merger agreement and the proposal to approve and adopt the amended and restated articles of incorporation each require the affirmative vote of holders of at least two-thirds of the shares of our common stock present in person or represented by proxy at the special meeting, and each is conditional upon approval of the other. Accordingly, not voting at the special meeting will have no effect on the outcome of this proposal, but abstentions will have the effect of a vote against this proposal. If you hold your shares in “street name” through a broker, bank or other nominee, you must direct your broker, bank or other nominee how to vote your shares of common stock by following their instructions for voting. Brokers, banks or other nominees who hold shares of our common stock in street name for customers who are the beneficial owners of those shares may not vote those customers’ shares in the absence of specific instructions from those customers.

 

The advisory, non-binding proposal relating to certain merger-related executive compensation arrangements for Global Industries’ named executive officers requires the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote. Accordingly, not voting at the special meeting will have no effect on the outcome of this proposal, but abstentions will have the effect of a vote against this proposal. The proposal to approve the compensation

arrangements between Global Industries and its named executive officers that are based on or that otherwise relate to the merger is on an advisory, non-binding basis. Approval of these compensation arrangements is not a condition to completion of the merger, and the vote with respect to this proposal is advisory only. Accordingly, the vote will not be binding on Global Industries or Technip, or their boards of directors or on our compensation committee.

 

If you are a shareholder of record, you may vote your shares of common stock in any of the following ways:

 

 

 

If you are not a shareholder of record, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must obtain a legal proxy from your bank, brokerage firm or other nominee.

 

A control number, located on your proxy card, is designed to verify your identity and allow you to vote your shares of common stock, and to confirm that your voting instructions have been properly recorded when submitting a proxy over the Internet or by telephone. Please be aware that if you submit a proxy over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible.

 

Holders of record of our common stock on the record date are entitled to one vote per share on each matter to be considered at the special meeting.

 

As of the record date, directors and executive officers of Global Industries, and their affiliates, had the right to vote [          ] shares of Global Industries common stock, or [     ]% of the outstanding Global Industries common stock at that date.

 

All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in the manner specified by the holders thereof. Properly executed proxies that do not contain voting instructions will be voted FOR the approval and adoption of the merger agreement, FOR the approval and adoption of the amended and restated articles of incorporation and FOR the proposal regarding certain merger-related executive compensation.

 

The grant of a proxy on the enclosed form of proxy does not preclude a shareholder from voting in person at the special meeting. A shareholder may revoke a proxy at any time prior to its exercise by:

 

 

If you have instructed your broker to vote your shares, you must follow directions received from your broker to change these instructions.

Global Industries’ shareholders who require assistance should contact the persons at the phone number provided on page x of this proxy statement.

 

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements being sent to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost-savings for companies.

 

In connection with the Global Industries special meeting, a number of brokers with account holders who are Global Industries’ shareholders will be householding Global Industries’ proxy materials. As a result, a single proxy statement will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the applicable shareholders. Once a Global Industries’ shareholder receives notice from its broker that they will be householding communications to such shareholder’s address, householding will continue until such shareholder is notified otherwise or until such shareholder revokes its consent. If, at any time, a Global Industries’ shareholder no longer wishes to participate in householding and would prefer to receive a separate proxy statement, such shareholder should notify its broker or contact Global Industries orally or in writing at Global Industries, Ltd., 11490 Westheimer, Suite 400, Houston, Texas 77077, (281) 529-7979, Attention: Corporate Secretary, and Global Industries will promptly deliver a separate copy of the proxy statement. Global Industries’ shareholders who currently receive multiple copies of this proxy statement at their address and would like to request householding of their communications should contact their broker.

 

All costs related to the solicitation of proxies, including the printing and mailing of this proxy statement, will be borne by us. We have retained Innisfree M&A Incorporated to aid in the solicitation of proxies and to verify records relating to the solicitation. Innisfree M&A Incorporated will receive a fee for its services of $25,000, fees per call to shareholders and expense reimbursement. In addition, our directors, officers and employees may, without additional compensation, solicit proxies from shareholders by mail, telephone, facsimile, or in person. However, you should be aware that certain members of our board of directors and our officers have interests in the merger that are different from, or in addition to, yours. See “The Merger — Interests of Global Industries’ Executive Officers and Directors in the Merger.”

 

We will also reimburse brokers and other custodians, nominees and fiduciaries for their expenses in sending these materials to you and getting your voting instructions.

 

Shareholders should not send stock certificates with their proxies. A letter of transmittal with instructions for the surrender of our common stock certificates will be mailed to our shareholders as soon as practicable after completion of the merger.

 

Our board of directors has unanimously approved the merger agreement and the merger whereby Global Industries will become an indirect, wholly-owned subsidiary of Technip upon completion of the merger. If the merger agreement is approved and adopted by Global Industries’ shareholders and the amended and restated articles of incorporation, which will remove the limitation on ownership of Global Industries’ common stock by non-U.S. persons, is approved and adopted by Global Industries’ shareholders, then, subject to other closing conditions as described below in the section captioned “The Merger Agreement — Conditions to the Closing of the Merger,” Merger Sub will be merged with and into Global Industries, and Global Industries will be the surviving corporation in the merger. Upon completion of the merger, Global Industries will become an indirect, wholly-owned subsidiary of Technip. We strongly encourage you to read carefully the merger agreement in its entirety, a copy of which is attached as Annex A to this proxy statement, because it is the legal contract that governs the merger.

 

If the merger is completed, you will receive the merger consideration in exchange for each share of Global Industries common stock that you own at the effective time of the merger. You will also be entitled to receive any declared but unpaid dividends.

 

After the merger is completed, you will have the right to receive the merger consideration but you will no longer have any rights as a shareholder of Global Industries. In the case of shares of our common stock represented by certificates, you will receive the merger consideration for your shares of common stock after exchanging your stock certificates in accordance with the instructions contained in a letter of transmittal to be sent to you shortly after completion of the merger. In the case of shares of our common stock held in book-entry form, you will receive the merger consideration for your shares of common stock as promptly as practicable following the merger without the requirement to deliver a stock certificate or letter of transmittal.

 

Global Industries common stock is currently registered under the Exchange Act and is designated for trading on NASDAQ under the symbol “GLBL.” Following the merger, Global Industries common stock will be delisted from NASDAQ and will no longer be publicly traded, and the registration of our common stock under the Exchange Act will be terminated.

 

Please see “The Merger Agreement” for additional and more detailed information regarding the merger agreement.

 

The Global Industries board of directors and senior management regularly evaluate Global Industries’ business strategy and prospects for growth, and consider potential opportunities to improve Global Industries’ operations and financial performance in order to maximize value for its shareholders. As part of this evaluation, the Global Industries board of directors and senior management have considered, among other things, Global Industries’ competitive market position; growth and revenue potential; and the viability of potential strategic alternatives, such as acquisitions, divestitures, expansion of service offerings and the potential merger or sale of the company.

 

In early May 2011, Thierry Pilenko, the Chairman and Chief Executive Officer of Technip, approached John B. Reed, Global Industries’ Chief Executive Officer, to request a meeting. On May 11, 2011, Mr. Pilenko met with Mr. Reed and expressed Technip’s interest in exploring a potential transaction with Global Industries. Mr. Reed informed Mr. Pilenko that he would discuss the matter with the Global Industries board of directors, but that he did not believe that the board would be interested in pursuing a sale of Global Industries. Later that day, Mr. Reed discussed his conversation with Mr. Pilenko with John A. Clerico, the Chairman of Global Industries’ board. On May 17, 2011, Mr. Pilenko called Mr. Reed again to reiterate Technip’s interest in commencing discussions concerning a potential transaction with Global Industries. Mr. Reed informed Mr. Pilenko that he would get back to Mr. Pilenko after discussing the matter with the full Global Industries board of directors at the board’s next regularly scheduled meeting.

On May 18, 2011, at a regularly scheduled meeting of the Global Industries board of directors, Mr. Reed advised the board of his conversations with Mr. Pilenko. The Global Industries board of directors and management discussed Global Industries’ financial condition, strategic plan and alternatives, as well as the lack of specificity from Technip regarding the proposed transaction. After discussion, the Global Industries board of directors determined not to pursue a possible sale to Technip at that time. Thereafter, Mr. Reed contacted Mr. Pilenko and informed him of the board’s position.

 

On June 6, 2011, Mr. Pilenko called Mr. Reed to express his desire to ensure that the Global Industries board of directors understood Technip’s rationale in pursuing a potential transaction with Global Industries. Subsequently, Mr. Pilenko sent Mr. Reed a letter, which, among other things, formally expressed Technip’s interest in acquiring Global Industries, outlined the reasons why Technip believed that a strategic transaction involving the two companies could offer an attractive value-creation opportunity for the shareholders of Global Industries, and indicated that Technip anticipated that it would pay a premium in any transaction with Global Industries. On June 7, 2011, Mr. Reed spoke with Mr. Clerico, and they agreed that Mr. Reed should meet with Mr. Pilenko to better understand Technip’s motives in pursuing a potential transaction with Global Industries. Mr. Reed and C. Andrew Smith, Senior Vice President and Chief Financial Officer of Global Industries, also contacted Simmons, Global Industries’ long-time financial advisor, to discuss Technip’s interest in a potential transaction with Global Industries. That same day, Mr. Reed updated the Global Industries board of directors on Mr. Pilenko’s phone call and letter, as well as his conversation with Mr. Clerico. On June 8, 2011, Mr. Reed informed Mr. Pilenko that, while the Global Industries board of directors remained uninterested in the sale of the company, the board would consider a reasonable proposal that potentially could offer a value-maximizing alternative to Global Industries’ shareholders. On or about June 9, 2011, Mr. Pilenko and Mr. Reed scheduled a meeting for June 15, 2011 in Paris at which time Mr. Reed would be in Europe on other business matters. On June 9, 2011, Mr. Reed updated the Global Industries board of directors on his communications with Mr. Pilenko.

 

Between June 7, 2011 and June 15, 2011, Mr. Reed and Mr. Clerico continued to have periodic discussions regarding Technip’s interest in a potential transaction with Global Industries and Mr. Reed’s upcoming meeting with Mr. Pilenko. On June 14, Mr. Reed and Mr. Smith met with representatives of Simmons to discuss Mr. Reed’s planned meeting with Mr. Pilenko. On June 15, 2011, Mr. Reed met with Mr. Pilenko and Julian Waldron, Technip’s Chief Financial Officer in Paris to discuss Technip’s interest in a potential transaction with Global Industries. During the meeting, Mr. Reed informed Mr. Pilenko that before Global Industries could consider any transaction with Technip, Technip needed to provide the Global Industries board of directors with an indication of value. Mr. Pilenko advised Mr. Reed that Technip needed to better understand Global Industries’ shallow water business before making an indicative offer.

 

On June 28 and 29, 2011, Mr. Reed, together with Mr. Smith and Ashit Jain, Senior Vice President and Chief Operating Officer of Global Industries, met with Mr. Waldron, Remi Birkeland, Technip’s Senior Vice President, Business Development & Strategy — Subsea, Arnaud Real, Technip’s Deputy Chief Financial Officer, and Scott Munro, Technip’s Vice President, Commercial — Subsea, to discuss Global Industries’ shallow water business generally and based on public information. Mr. Waldron suggested that the parties should have their respective financial advisors engage in preliminary discussions. However, Mr. Smith informed Mr. Waldron that, before such discussions could take place, Global Industries would require Technip to provide an indication of value.

 

On July 5, 2011, Mr. Pilenko sent Mr. Reed a letter expressing a preliminary, non-binding proposal, which would remain open until July 15, 2011, for Technip to acquire all of the outstanding shares of Global Industries common stock for $7.80 per share in cash without any financing contingency. Technip’s proposal represented a 41% premium to the closing price of Global Industries’ common stock on July 1, 2011, the last trading day before the proposal. The letter also expressed Technip’s interest in entering into a confidentiality agreement with Global Industries and proposed a period of exclusive negotiations.

 

On July 7, 2011, the Global Industries board of directors met telephonically to discuss Technip’s proposal. At this meeting, Mr. Reed summarized discussions with Technip. Representatives of Simmons shared with the board their preliminary analysis concerning Technip’s proposal. Simmons reviewed the oil and natural gas

markets and the offshore construction markets generally, expected rig counts, deepwater and shallow water activity and Global Industries’ historical performance and future outlook. Simmons discussed with the board of directors its preliminary views on the attractiveness of Technip’s offer. Simmons also reviewed with the board of directors potential other acquirers. The directors engaged in a robust discussion with Simmons concerning Simmons’ report and analyses. Simmons then left the meeting. The board of directors discussed the implications of the advice it had received and its views of near- and long-term value for the shareholders. After further discussion, the board of directors reached a unanimous view that, based on the then-current and historical trading price of Global Industries’ common stock, the outlook for future financial performance based on expectations of improved market conditions, the company’s strategic plan and the potential synergies in a combination of the parties, Technip’s proposal was financially inadequate. Vinson & Elkins LLP, which is referred to herein as Vinson & Elkins, outside counsel to Global Industries, then discussed with the board of directors its duties in considering Technip’s proposal and Global Industries’ potential responses to Technip. The directors instructed Mr. Clerico to work with senior management and Vinson & Elkins to develop a response that the board would consider at a meeting scheduled for July 11, 2011.

 

On July 11, 2011, the Global Industries board of directors met again telephonically. Mr. Clerico reported to the other directors that he had developed, together with senior management and Vinson & Elkins, a proposed response to Technip’s proposal pursuant to which Mr. Reed would communicate to Technip that the Global Industries board of directors was not interested in pursuing a transaction at the price indicated, but was open to considering a proposal at an increased offer price.

 

Later that day, Mr. Reed contacted Mr. Pilenko and informed him that, based on the then-current and historical trading prices of Global Industries’ common stock, Global Industries’ financial outlook and strategic plan and potential synergies, the Global Industries board of directors did not find Technip’s proposal to offer sufficient value to Global Industries’ shareholders, but that the Global Industries board was willing to consider an offer that appropriately reflected the value of Global Industries. Mr. Pilenko responded that in order to increase its offer, Technip would need to conduct preliminary due diligence, including in-depth discussions with Global Industries’ senior management. Mr. Reed and Mr. Pilenko agreed that further discussions should be conducted only after the parties entered into a mutually acceptable confidentiality agreement. Mr. Pilenko further noted that, if Technip were to engage in such preliminary due diligence, it would request a period of exclusivity.

 

Also on July 11, 2011, Mr. Reed provided a confidentiality agreement drafted by Vinson & Elkins to Mr. Pilenko. Vinson & Elkins, on behalf of Global Industries, also delivered the draft confidentiality agreement to Technip and its outside counsel, Davis Polk & Wardwell LLP, which is referred to herein as Davis Polk.

 

On July 12, 2011, Mr. Pilenko sent Mr. Reed a letter regarding Technip’s proposed diligence review and reiterating Technip’s request for a period during which Global would negotiate exclusively with Technip. Mr. Pilenko attached a proposed form of exclusivity agreement to the letter. Also on July 12, 2011, Davis Polk provided comments to the confidentiality agreement to Vinson & Elkins, as well as a copy of the draft exclusivity agreement provided to Mr. Reed by Mr. Pilenko. Vinson & Elkins informed Davis Polk that Global Industries was unwilling to entertain an exclusivity arrangement at that point in time. After further negotiations on the confidentiality agreement, the parties executed the confidentiality agreement with a “standstill” provision on July 15, 2011, with an effective date as of July 13, 2011. Beginning on July 15, 2011, Global Industries provided Technip with access to an electronic data room created to assist with Technip’s understanding and investigation of Global Industries.

 

From July 20, 2011 through July 22, 2011, members of Global Industries’ senior management, including Mr. Reed, Mr. Smith, Mr. Jain, Russell J. Robicheaux, Global Industries’ Senior Vice President, Chief Administrative Officer, General Counsel and Secretary, Trudy P. McConnaughhay, Global Industries’ Vice President and Controller, James G. Osborn, Global Industries Chief Marketing Officer, and David R. Sheil, Global Industries’ Senior Vice President, Human Resources, along with representatives of Simmons and Vinson & Elkins, met with members of management of Technip, and representatives of Ernst & Young LLP, Tudor, Pickering, Holt & Co. LLC (“Tudor Pickering”), and Blackstone Advisory Partners (“Blackstone”), Technip’s financial advisors, Mars & Co, Technip’s strategic consultant, Davis Polk, and Phelps Dunbar LLP,

Technip’s Louisiana counsel, in Houston, Texas to provide responses to diligence questions of Technip and its advisory teams in panels covering, among other things, Global Industries’ operating units and financial results. Mr. Reed and Mr. Pilenko met twice in person during this period to discuss the progress of the due diligence process.

 

Following the in-person due diligence sessions in Houston and through mid-August 2011, Technip continued to conduct its due diligence review of Global Industries.

 

On July 25, 2011, the board of directors of Technip held a meeting and discussed, among other things, Technip’s interest in a potential transaction with Global Industries. Technip’s senior management updated the board on the status of and findings arising from the due diligence process and the strategic rationale of the potential transaction and answered the directors’ questions. Following deliberation, the board of directors authorized the submission by Technip of a non-binding proposal to acquire all of the outstanding shares of Global Industries common stock for $7.80 per share in cash.

 

On August 3, 2011, the Global Industries board of directors held a regularly scheduled board meeting, at which Global Industries’ second quarter operating results were discussed. Mr. Reed updated the board of directors on Technip’s ongoing due diligence. That same day, Global Industries issued a press release announcing its operating results for the three months ended June 30, 2011, including revenue, net loss and loss per diluted share of $202.9 million, $61.1 million and $0.54, respectively, for the six months ended June 30, 2011, as compared to revenue, net loss and loss per diluted share of $228.6 million, $20.0 million and $0.18, respectively, for the six months ended June 30, 2010. Global Industries’ stock price declined to $3.25 by August 10, 2011. From late July through mid-August 2011, Mr. Reed received inquiries from three other offshore construction companies. Two of these inquiries were discussed over lunch meetings and did not lead to an indication of interest or any other developments beyond preliminary discussions. The third inquiry came from the chief executive officer of a company that is a strategic competitor of Global Industries, referred to herein as Company A, regarding a potential business combination. On August 15, 2011, Global Industries formally engaged Simmons in connection with a potential transaction with Technip by entering into an engagement letter that had been presented to Global Industries on August 1, 2011 and was dated as of August 1, 2011.

 

On August 17, 2011, Mr. Pilenko returned to Houston to meet in-person with Mr. Reed. Mr. Pilenko and Mr. Reed discussed the state of the equity markets and Technip’s view of its preliminary offer of $7.80 per share in light of the downturn in the equity markets and Global Industries’ recently announced operating results. Mr. Pilenko suggested that, in light of market declines, he believed an offer of $7.00 per share reflected a fair valuation of Global Industries. Mr. Reed informed Mr. Pilenko that Global Industries would not be willing to continue discussions if Technip’s offer was below $7.80 per share and that Mr. Pilenko should reconsider Technip’s position if negotiations were to continue. Mr. Pilenko told Mr. Reed he would need to discuss the matter with Technip’s board of directors and would contact Mr. Reed in a few days.

 

On August 18, 2011, the chief executive officer of Company A informed Mr. Reed that Company A was interested in exploring a combination of Company A and Global Industries pursuant to which Global Industries’ shareholders could receive a combination of cash and common stock of Company A. Mr. Reed informed the chief executive officer of Company A that if Company A was serious about a potential transaction, it needed to provide a concrete indication of interest and demonstrate a commitment to negotiating a transaction in a timely fashion. In light of these developments, the Global Industries board of directors scheduled a special meeting for August 19, 2011.

 

On the morning of August 19, 2011, Mr. Pilenko sent Mr. Reed a letter concerning Technip’s interest in a potential transaction with Global Industries. The letter noted that, as Mr. Pilenko had discussed with Mr. Reed on August 17, 2011, in light of the changes in the risk and outlook for Global Industries’ business, including those highlighted by Global Industries’ second quarter results, the increase in volatility in the industry, and Technip’s more modest view of synergies, Technip continued to believe that an offer of $7.00 per share reflected a fair valuation of Global Industries. However, the letter noted that Technip was willing to extend its non-binding proposal to acquire all of the outstanding shares of Global Industries common stock at $7.80 per share in cash if Global Industries granted Technip a 30-day period of exclusivity and an agreement by Global

Industries to pay Technip a termination fee of $37.0 million in certain circumstances (assuming execution of a definitive merger agreement). Mr. Pilenko’s letter also noted that Technip’s proposal would remain open until August 21, 2011. Technip’s revised proposal represented a 106% premium to the closing price of Global Industries common stock on August 18, 2011, the last trading day before Technip’s proposal. Mr. Reed advised Mr. Pilenko that he would discuss the matter with the Global Industries board of directors.

 

Later the morning of August 19, 2011, the Global Industries board of directors met telephonically. Mr. Reed advised the board of his recent discussions with Mr. Pilenko and the chief executive officer of Company A. Mr. Reed then updated the board on the financial performance of Global Industries and management’s outlook as a stand-alone company. Mr. Reed detailed for the board continuing weak market conditions since the board first considered Technip’s proposed offer of $7.80 per share in early July 2011 and Global Industries’ difficulty in adding additional backlog or obtaining higher margins on its contracts. Simmons provided the board of directors with Simmons’ preliminary analysis of Technip’s proposal and its view of the merits and likelihood of potential alternative transactions, including with Company A. Simmons also shared its view on the outlook for Global Industries on a stand-alone basis. Vinson & Elkins then reviewed the directors’ duties with respect to evaluating Technip’s proposal and request for exclusivity, as well as alternative responses to Technip’s proposal. After discussion, the board advised Mr. Reed to contact Mr. Pilenko and inform him that the board was considering Technip’s offer but needed time to evaluate the exclusivity provisions of the offer. The board of directors further instructed Mr. Reed to contact the chief executive officer of Company A regarding a potential alternative transaction and to request a specific indication of value and a commitment to negotiating a transaction in a timely manner. The board then requested that Simmons provide background on Company A, including the value of Company A’s common stock. Finally, the board requested that management provide the board with an update of management’s evaluation of Global Industries’ strategic plan going forward and the potential synergies or strategic fit of Global Industries and Company A.

 

Later on August 19, 2011, following the Global Industries board meeting, Mr. Reed contacted the chief executive officer of Company A to further discuss Company A’s interest in pursuing a potential transaction with Global Industries. At Mr. Reed’s request, representatives from Simmons contacted the chief executive officer of Company A and reiterated that if Company A was serious about a potential transaction with Global Industries, it needed to demonstrate a commitment to negotiating a transaction in a timely fashion. The chief executive officer of Company A told representatives of Simmons that Company A’s board of directors was planning on meeting early the following week, and that Company A would contact Global Industries and Simmons following the board meeting.

 

On August 22, 2011, Mr. Reed contacted Mr. Pilenko and informed him that Global Industries was unwilling to grant Technip exclusivity at the $7.80 per share offer price or to agree to a termination fee of $37.0 million (assuming execution of a definitive merger agreement). Mr. Pilenko asked Mr. Reed to propose a per-share purchase price at which Global Industries would be willing to grant exclusivity. Mr. Reed explained that he would need to discuss this request with the Global Industries board of directors and get back to Mr. Pilenko.

 

Mr. Reed then contacted the chief executive officer of Company A, who informed Mr. Reed that the Company A board of directors had met and that, while the Company A board was interested in the potential transaction, Company A would need to undertake a due diligence review of Global Industries before it was prepared to make an indicative offer. This due diligence review was estimated by Company A to require up to two weeks. Mr. Reed explained to the chief executive officer of Company A that an alternative transaction was available at a compelling offer price, and that if Company A was seriously interested in Global Industries, it needed to provide a preliminary indication of interest on a faster timeline.

 

Also on August 22, 2011, Vinson & Elkins contacted Davis Polk and advised it of certain changes to the form of exclusivity agreement, should Global Industries and Technip reach agreement on a price level at which Global Industries was willing to grant exclusivity. These changes included deletion of an obligation by Global Industries to disclose the names of any third parties who contacted Global Industries about a potential combination transaction and certain exceptions to allow Global Industries to respond to any tender offers made

by third parties. Vinson & Elkins also advised Davis Polk that Global Industries would only grant exclusivity on the basis of price and would not negotiate other terms of the merger agreement, such as deal protection and termination fees, except in the context of a definitive agreement.

 

On August 23, 2011, the Global Industries board of directors met telephonically. Mr. Reed updated the board on his discussions with Mr. Pilenko and with Company A. Management then provided the board with its updated views on future financial performance, which again noted a deterioration in the global economy overall and a challenging environment for adding additional backlog and obtaining higher margins on contracts. Vinson & Elkins then provided the board with its analysis of the exclusivity provisions and an update on Vinson & Elkins’ discussions with Davis Polk on these points. Simmons presented to the board an update of Simmons’ preliminary analyses of Technip’s offer and its view of the feasibility of an alternative transaction with Company A. The board discussed its concern that Technip might withdraw its offer if Global Industries continued to refuse Technip’s request for exclusivity. In addition, the board of directors discussed Technip’s stated refusal to participate in an auction process and the potential distraction and disruption an auction process could present to Global Industries’ employees, customers and suppliers. The board discussed the proposed terms of the exclusivity agreement, including changes negotiated by Vinson & Elkins. Moreover, the board concluded that a 30-day period of exclusivity was reasonable, in light of the exclusivity agreement as a whole. The board also recognized that, while it was not determining to sell the company at that time, if a definitive agreement were reached with Technip during the exclusivity period, third parties would have the opportunity to present superior proposals after the announcement of the transaction with Technip. After a lengthy discussion, and based on the board’s view of continuing weak market conditions, the board instructed Mr. Reed to seek an increase in the $7.80 per share price but authorized Mr. Reed to enter into an exclusivity arrangement as presented to the board of directors at that price or higher.

 

On August 23, 2011, Mr. Reed proposed in writing a price of $8.20 per share in exchange for exclusivity. Mr. Pilenko advised Mr. Reed that he would consult with Technip’s board of directors and get back to him. Mr. Reed then contacted the chief executive officer of Company A and informed him that Global Industries was prepared to enter into exclusive negotiations with a third party and that if Company A was serious about an alternative transaction, it would need to provide an indication of interest. The chief executive officer of Company A expressly declined to do so.

 

On August 24, 2011, Mr. Pilenko indicated that Technip was unwilling to pursue a transaction with Global Industries at its proposed per share price and that the highest price it was willing to pay was $8.00 per share and only if Global Industries agreed to exclusivity. Mr. Reed and Mr. Pilenko agreed that the companies would enter into a 30-day period of exclusive negotiations on the basis of an $8.00 per share proposal, subject to documentation. Mr. Pilenko sent Mr. Reed a letter which included an offer to pay $8.00 per share if an exclusivity period were granted, and indicated a new termination fee proposal of $30 million. An offer price of $8.00 per share represented a 117% premium to the closing price of Global common stock on August 23, 2011, the last trading day prior to the offer. The parties executed an exclusivity agreement later that afternoon, but no agreement was reached with respect to termination fee terms.

 

On the afternoon of August 25, 2011, Davis Polk, on behalf of Technip, distributed a draft merger agreement to Vinson & Elkins. Among other things, the merger agreement provided for $8.00 per share consideration and a termination fee of $30.0 million to be payable in certain circumstances. Davis Polk also delivered a draft voting agreement to Vinson & Elkins, to be signed by William J. Doré, Global Industries’ founder and owner of approximately 10% of Global Industries’ outstanding common stock.

 

From August 29, 2011 through September 2, 2011, representatives of Technip and Global Industries met in Houston, Texas to conduct and discuss additional due diligence.

 

On August 30, 2011, Vinson & Elkins sent a revised draft merger agreement to Davis Polk. The requested changes included a two-tier termination fee whereby if Global Industries terminated the transaction in favor of a superior proposal within 45 days of the announcement of the merger agreement, the termination fee would be $23.0 million, while if such termination occurred after such 45-day period, the termination fee would be $37.0 million. Other requested changes included (i) reducing Technip’s time period to match superior proposals to two (as opposed to five) business days and eliminating such matching rights if the superior

proposal represented consideration in excess of 110% of the consideration to be paid under the merger agreement, (ii) allowing the Global Industries board of directors to change its recommendation for reasons other than a superior proposal, (iii) reducing the number of circumstances under which a termination fee was payable by Global Industries, (iv) providing that if Global Industries paid a termination fee, that payment would be Technip’s exclusive remedy and (v) an agreement by the parties that Global Industries could seek damages in the event of a breach by Technip that would be measured based on the difference of the Global Industries stock price relative to the $8.00 per share price. The Vinson & Elkins revised draft merger agreement also reserved discussion on the voting agreement request, the scope of the government approvals covenant, the treatment of Global Industries’ employees and the conditioning of Technip’s obligations to close on receipt of CFIUS approval and the consent of the U.S. Maritime Administration to the change of control under Global Industries’ Title XI Bonds.

 

Separately on August 30, 2011, Mr. Sheil met with Steve Allen, Technip’s Senior Vice President — Human Resources, to discuss generally the treatment of Global Industries’ existing employees and retention arrangements for key employees.

 

On August 31, 2011, Vinson & Elkins and Davis Polk discussed a number of the issues raised in Vinson & Elkins’ revised draft of the merger agreement, including Technip’s desire to have Mr. Doré enter into a voting agreement.

 

On September 1, 2011, the Global Industries board of directors met in Houston, Texas, with certain members of the board participating telephonically. Also in attendance were members of management and representatives of Simmons and Vinson & Elkins. Mr. Reed updated the board on Technip’s ongoing due diligence and the historical performance of and outlook for Global Industries. Vinson & Elkins then discussed with the board its duties in considering the proposed transaction with Technip as well as a detailed summary of the key terms and provisions of the proposed merger agreement. Simmons then presented to the board its updated analysis of the transaction. Simmons further advised the board on potential alternative buyers, including Company A, and their likely strategic interest and ability to consummate a transaction. The board then engaged in a discussion about Technip’s request that Mr. Doré sign a voting agreement. The board determined that Mr. Reed and Vinson & Elkins should convey to Technip and Davis Polk that the board was unwilling to condition the potential transaction on Mr. Doré entering into a voting agreement.

 

On September 2, 2011, Davis Polk delivered to Vinson & Elkins a revised merger agreement. The requested changes included changing the bifurcated termination fee from $23.0 million/$37.0 million to $28.0 million/$35.0 million. In addition, Technip continued to request a five business day matching right period and rejected the elimination of matching rights in the event of a superior proposal in excess of 110% of the merger consideration. That evening, Mr. Reed reiterated to Mr. Pilenko that while members of the board of directors of Global Industries intended to discuss the transaction with Mr. Doré confidentially prior to announcement, the board was unwilling to condition the transaction on Mr. Doré signing a voting agreement. Mr. Pilenko agreed to withdraw this request.

 

On September 3, 2011, Vinson & Elkins and Davis Polk discussed certain outstanding points on the merger agreement, including the commitments Technip would undertake to obtain regulatory approval, conditioning the transaction on approval by CFIUS, the standard by which a breach by Global Industries of the non-solicitation covenant could lead to a termination right and the obligation to pay a termination fee. The parties also agreed that the time period for Technip’s ability to match a superior proposal would be five business days initially, but would be two business days for revisions to a superior proposal from the same third party. Vinson & Elkins also proposed that the bifurcated termination fee be $25.0 million for terminations due to a superior proposal within 45 days of signing and $35.0 million for all other terminations.

 

On September 4, 2011, Davis Polk delivered to Vinson & Elkins a revised merger agreement, which continued to provide that Technip was not obligated to take any remedial action to obtain regulatory approval and which reserved comment on Technip’s covenant concerning Global Industries’ employees. Moreover, Technip proposed eliminating the bifurcated termination fee and reverting to a $30.0 million termination fee in all instances where a termination fee was owed.

On September 5 and 6, 2011, Global Industries and Technip continued to discuss diligence matters on certain tax-related items as well as the effect of a possible transaction on Global Industries’ 2011 incentive compensation arrangements. In addition, Global Industries’ management discussed with Technip its desire to put in place retention arrangements with certain key employees after the entry into the merger agreement in order to ensure operational continuity prior to the consummation of any potential transaction.

 

On September 7, 2011, Mr. Reed, Ambassador Edward P. Djerejian, a member of the Global Industries board of directors, and a representative from Vinson & Elkins, met with Mr. Doré at the office of Ambassador Djerejian and, under an oral agreement of confidentiality, summarized the transaction terms to Mr. Doré. Mr. Doré indicated that he appreciated the consultation.

 

On September 8, 2011, Vinson & Elkins delivered to Davis Polk a revised merger agreement that, among other things, required Technip to take certain remedial actions in order to obtain regulatory approval so long as it did not result in a burdensome condition on Technip and continued to request a bifurcated termination fee of $25.0 million/$35.0 million. The parties ultimately agreed that Technip would agree to remedial actions that did not result in a burdensome condition and that the termination fee would be a flat $30.0 million.

 

On September 8, 2011, Technip’s board of directors met in Paris, France, with certain members of the board participating telephonically. Also in attendance by telephone or in person were members of management and representatives of Blackstone, Tudor Pickering and Davis Polk. Mr. Pilenko updated the board on the findings of Technip’s due diligence investigation of Global Industries, and the valuation exercise undertaken. John Harrison, Technip’s General Counsel, presented a detailed summary of the key terms and provisions of the proposed merger agreement. The board then engaged in discussion of the transaction and asked questions of management and the advisors. Following this discussion, the board approved Technip’s entry into the transaction with Global Industries and authorized Technip’s officers to finalize and execute the merger agreement as described.

 

On September 10, 2011, the Global Industries board of directors held a specially scheduled board meeting attended by all members of the board, as well as members of management and representatives of Simmons and Vinson & Elkins. At the meeting, Mr. Reed updated the board on the principal financial and other terms of the transaction and discussed the history of the negotiations commencing with the initial written proposal on June 6, 2011. He also discussed his view of the principal benefits to Global Industries and its shareholders of the combination. Vinson & Elkins then reviewed with the Global Industries board of directors its fiduciary duties and discussed with the board the terms and conditions of the draft merger agreement, including provisions that permitted Global Industries to terminate the merger agreement with Technip in favor of a superior proposal from a third party. A discussion then ensued in which the directors inquired about various aspects of the draft merger agreement. Simmons presented its financial analyses of the proposed merger, including the merger consideration, and summarized the content of its written opinion to the effect that, based upon and subject to the various assumptions and limitations set forth therein, as of September 10, 2011, the $8.00 in cash to be received by the Global Industries shareholders pursuant to the terms of the merger agreement was fair, from a financial point of view, to such shareholders. Later that day Simmons electronically delivered its written opinion dated September 10, 2011 to the board of directors of Global Industries. See “The Merger — Financial Advisor’s Opinion Regarding the Merger Consideration.” Following further review and discussion among the members of the Global Industries board of directors, the board determined that the merger agreement and the transactions contemplated by the merger agreement were advisable and in the best interests of Global Industries’ shareholders, and the Global Industries directors voted unanimously to approve the merger agreement and the transactions contemplated by the merger agreement.

 

Following the conclusion of the special meeting of the Global Industries board of directors, the merger agreement and related documentation were finalized. Later that day, Technip agreed to certain requests by Global Industries with respect to the payment of 2011 incentive compensation at target levels if the transaction did not close prior to December 31, 2011, as well as a request to put in place retention arrangements with certain key employees after the entry into the merger agreement in order to ensure operational continuity prior to the consummation of any potential transaction.

 

On September 11, 2011, Technip and Global Industries executed the merger agreement.

Prior to the commencement of trading on the Paris Stock Exchange on September 12, 2011, each of Global Industries and Technip announced the transaction. Various communications and the merger agreement were filed with the SEC on September 12, 2011 and thereafter.

 

At the meeting of our board of directors on September 10, 2011, our board of directors approved the merger with Technip and recommended it to our shareholders. See “The Merger — Background of the Merger,” and “The Merger — Global Industries Board of Directors’ Recommendation.”

 

In making its determination and recommendation set forth above, our board of directors considered, among other things:

 

 

 

In the course of its deliberations, our board of directors also considered, among other things, the following potentially negative factors regarding the merger:

 

 

Our board of directors concluded that these potentially negative factors were substantially outweighed by the opportunity presented by the merger for our shareholders to monetize their Global Industries investment for $8.00 per share in cash if the merger conditions were satisfied, which our board of directors believed would maximize the value of shareholders’ shares and eliminate the risk that inherent uncertainty affecting our future prospects could result in a diminution in the market value of their shares. Accordingly, our board of directors concluded that the merger was in the best interests of our shareholders.

 

The preceding discussion of the factors considered by our board of directors is not, and is not intended to be, exhaustive, but does set forth the material factors considered. In light of the variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, our board of directors did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination, nor did it undertake to make any specific determination as to whether any particular factors (or any aspect of any particular factors) was favorable or unfavorable to its

ultimate determination. Rather, our board of directors reached its conclusion and recommendation based on its evaluation of the totality of the information presented, considered and analyzed. In considering the factors discussed above, individual directors may have ascribed differing significance to different factors.

 

Our board of directors has unanimously approved resolutions (i) determining that the merger agreement and the transactions contemplated thereby are in the best interests of Global Industries’ shareholders, (ii) approving, adopting and declaring advisable the merger agreement and the transactions contemplated thereby, (iii) approving, adopting and declaring advisable the adoption of the amended and restated articles of incorporation, and (iv) recommending approval and adoption of the merger agreement and the amended and restated articles of incorporation by our shareholders. Accordingly, our board of directors unanimously recommends that all of our shareholders vote FOR the approval and adoption of the merger agreement and FOR the approval and adoption of the amended and restated articles of incorporation. Additionally, our board of directors unanimously recommends that all of our shareholders vote FOR the proposal regarding certain merger-related executive compensation arrangements.

 

The merger and the adoption of the amended and restated articles of incorporation are each conditional upon the other. Neither the merger nor the amendment of the articles of incorporation will take place unless the other is also approved by our shareholders.

 

Simmons acted as financial advisor to the board of directors of Global Industries in connection with the merger. Simmons is an internationally recognized investment banking firm that specializes in the energy industry and is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, secondary distributions of listed and unlisted securities and private placements. Simmons was selected to act as financial advisor to the board of directors of Global Industries in connection with the merger on the basis of Simmons’ experience in similar transactions, its reputation in the investment community and its familiarity with Global Industries and its business.

 

On September 10, 2011, Simmons delivered to the board of directors of Global Industries the written opinion of Simmons to the effect that, based on and subject to various assumptions and limitations described in its opinion, as of September 10, 2011, the $8.00 in cash to be received by the shareholders of Global Industries pursuant to the terms of the merger agreement is fair, from a financial point of view, to such shareholders.

 

For the complete terms of Simmons’ opinion, holders of Global Industries’ common stock are referred to the full text of Simmons’ written opinion to the board of directors of Global Industries, which describes, among other things, certain assumptions made, procedures followed, factors considered and limitations on the review undertaken. The full text of Simmons’ written opinion is attached as Annex C hereto and is incorporated by reference herein in its entirety. Simmons delivered its opinion to the board of directors of Global Industries for the benefit and use of the board of directors of Global Industries in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. Simmons’ opinion did not address the relative merits of the merger as compared to other business strategies or transactions that might be available with respect to Global Industries or Global Industries’ underlying business decision to effect the merger. Simmons’ opinion did not address any other aspect of the merger and does not constitute a recommendation to any shareholder of Global Industries as to how to vote or act in connection with the proposed merger. Holders of Global Industries’ common stock are urged to read Simmons’ opinion in its entirety.

 

In connection with rendering its opinion, Simmons, among other things:

 

 

 

In arriving at its opinion, Simmons did not independently verify any of the foregoing information and relied on it being complete and accurate in all material respects. With respect to the financial forecasts, Simmons assumed that they were reasonably prepared on bases reflecting the best currently available estimates and judgments of Global Industries’ management as to the future financial performance of Global Industries. Simmons assumed that the final/execution version of the merger agreement was substantially the same as the latest draft of such document that Simmons reviewed and that the merger would be consummated in accordance with the terms set forth in the merger agreement without any waiver, amendment or delay of any material terms or conditions. Simmons assumed that in connection with the receipt of all necessary governmental, regulatory or other approvals and consents required for the merger, no delays, limitations, conditions or restrictions would be imposed that would have a material adverse effect on the receipt of the merger consideration by the shareholders of Global Industries. Simmons is not a legal, tax or regulatory advisor and has relied upon, without independent verification, the assessment of Global Industries and its legal, tax and regulatory advisors with respect to such matters. Simmons did not perform any tax analysis, nor was Simmons furnished with any such analysis. In addition, Simmons did not make an independent evaluation or appraisal of the assets of Global Industries. While Simmons was asked to analyze certain third parties as potential transaction parties, Simmons was not requested to, and did not, solicit third party indications of interest in acquiring all or any part of Global Industries.

 

In conducting its analysis and arriving at its opinion, Simmons considered such financial and other factors as it deemed appropriate under the circumstances including, among others, the following: (i) the historical and

current financial position and results of operations of Global Industries; (ii) the business prospects of Global Industries; (iii) the historical and current market for the common stock of Global Industries and for the equity securities of certain other companies believed to be comparable to Global Industries; (iv) the value of the discounted cash flows of Global Industries under several scenarios and related sensitivities; and (v) the nature and terms of certain other acquisition transactions that Simmons believed to be relevant. Simmons also took into account its assessment of general economic, market and financial conditions and its experience in connection with similar transactions and securities valuation generally. Simmons’ opinion necessarily was based upon conditions as they existed and could be evaluated on, and on the information made available at, September 10, 2011. Events occurring after such date may affect Simmons’ opinion and the assumptions used in preparing it, and Simmons does not assume any obligation to update, revise or reaffirm its opinion.

 

Simmons’ opinion is only for the information and assistance of the board of directors of Global Industries in connection with its consideration of the merger. Simmons’ opinion did not address Global Industries’ underlying business decision to pursue the merger or the relative merits of the merger as compared to any alternative business strategies that might exist for Global Industries. Simmons’ opinion did not address the fairness of the amount or nature of the compensation to any of Global Industries’ officers, directors or employees, or class of such persons, relative to the compensation to the public shareholders of Global Industries. Simmons’ opinion did not constitute a recommendation to any shareholder as to how such shareholder should vote on the merger.

 

The following represents a brief summary of the material financial analyses presented by Simmons to the board of directors of Global Industries in connection with its opinion. The following summary, however, does not purport to be a complete description of the financial analyses performed by Simmons. The order of analyses described does not represent relative importance or weight given to those analyses by Simmons. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Simmons’ financial analyses. Considering the summary data and tables alone without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Simmons. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before September 10, 2011 and is not necessarily indicative of current market conditions.

 

Financial Analysis.  Simmons reviewed Global Industries’ historical and projected financial performance, including Global Industries’ historical and projected free cash flow results, historical balance sheets, historical backlog, historical vessel utilization, and historical and projected income statement data, including revenue, EBITDA, EBIT, net income and diluted earnings per share, among other items.

Transaction Premium Analysis.  Simmons also analyzed the merger consideration to be received by the shareholders of Global Industries’ common stock as set forth in the merger agreement based on the historical market prices of Global Industries’ common stock. The following table presents the results of this analysis:

 

Simmons also analyzed certain information relating to the following 39 selected public energy service transactions since 2005:

 

 

 

 

For each of the selected transactions and for the transaction contemplated by the merger agreement, Simmons calculated and compared the type of consideration, transaction value and the premium or discount to the one-day and 30-trading day average closing market prices. The proposed transaction premiums are based on closing prices as of September 9, 2011. While none of the companies included in the preceding transaction premium analysis are directly comparable to Global Industries, Simmons selected these companies for comparison because they have operations that, for the purposes of analysis, may be considered similar to certain of Global Industries’ results, market size and service profile. The following table summarizes this analysis:

 

 

The premiums and discounts presented above were obtained from Bloomberg and Securities Data Corporation. Bloomberg and Securities Data Corporation data is available to the public at a subscription cost.

 

Simmons also analyzed one-day and four-week prior premiums and discounts paid in U.S. public mergers and acquisitions transactions greater than $200 million since January 1, 2000, excluding mergers of equals and any stock-funded transactions, using data obtained from Securities Data Corporation. For each of the transactions and for the transaction contemplated by the merger agreement, Simmons analyzed the transaction value and the premium or discount to the one-day and four-week prior closing market prices. The proposed transaction premiums are based on closing prices as of September 9, 2011. The following table presents the results of this analysis:

 

 

 

Selected Companies Analysis.  Simmons reviewed and compared certain financial information of Global Industries to corresponding financial information, ratios and market multiples for the following publicly traded companies in the offshore construction services industry:

 

 

 

Simmons selected these companies on the basis of their comparable business characteristics to Global Industries. Although none of the selected companies is directly comparable to Global Industries, the selected companies are publicly traded companies with business and market characteristics that, for purposes of analysis, may be considered similar to certain business and market characteristics of Global Industries. Each of the selected companies has one or more of the following in common with Global Industries: industry demand drivers, customers, locations and service lines.

 

Simmons calculated and compared various financial multiples and ratios of the selected companies, and for Global Industries, based on SEC and/or international securities law filings by the respective companies and the mean of estimates of securities research analysts obtained from Bloomberg, using closing prices on September 9, 2011. Simmons calculated the enterprise value, referred to herein as the “Enterprise Value,” of each company as the market value of its common equity, plus the book values of its debt and preferred stock (where applicable), plus minority interests held by other companies, minus investments in unconsolidated affiliates and cash and cash equivalents, including short-term and long-term marketable securities and restricted cash. Simmons calculated Enterprise Value to EBITDA multiples of each company by dividing such company’s Enterprise Value by such company’s EBITDA. Simmons used publicly available company SEC and international securities law filings for historical EBITDA data. For projected EBITDA data for the selected companies and Global Industries, Simmons used the mean of estimates of securities research analysts obtained by Bloomberg (referred to as “consensus” estimates). Bloomberg data is available to the public at a subscription cost. The results of these analyses are summarized as follows:

 

 

 

 

Simmons then applied a selected range of comparable multiples (based on the preceding analyses) to both Global Industries’ consensus estimates for projected 2011 and 2012 EBITDA and certain projection scenarios provided by Global Industries’ management described herein as Case I and Case III for projected 2011, 2012 and 2013 EBITDA to generate implied share prices. The range of implied share prices was $1.62 to $7.97 with mean and median implied share prices of $4.28 and $5.00, respectively. For a discussion of the assumptions underlying Case I and Case III, see “The Merger — Projected Financial Information.”

 

Relative Trading Analysis.  Simmons also analyzed historical relative trading performance of Global Industries’ common stock compared to the performance of the stock prices of certain comparable publicly traded companies in the offshore construction services segment over various periods. The comparable group of certain publicly traded companies consisted of Technip, Subsea 7 SA, Oceaneering International, Inc., Saipem SpA, McDermott International, Inc. and Cal Dive International, Inc. Simmons selected these six comparable

publicly traded companies based on its belief that, of the companies included in the “Selected Companies Analysis” above, they shared the greater similarities with Global Industries’ business. The following table summarizes this analysis based on prices as of September 9, 2011:

 

 

 

 

Simmons also reviewed recent relative trading performance of Global Industries’ common stock compared to the median performance of certain comparable publicly traded companies in the offshore construction services segment from August 10, 2011. The group consisted of Technip, Subsea 7 SA, Oceaneering International, Inc., Saipem SpA, McDermott International, Inc. and Cal Dive International, Inc. From August 10, 2011 through September 9, 2011, the cumulative daily percentage change in Global Industries’ share price was 45.2% versus a 4.8% increase for the cumulative peer group median daily share price change.

 

Implied Price Analysis Based on Comparable Company Trading Performance.  Simmons analyzed the merger consideration compared to potential implied stock prices of Global Industries had the common stock of Global Industries traded similarly to those of certain comparable publicly traded companies in the offshore construction services segment from May 1, 2011 to September 9, 2011. The comparable group consisted of Technip, Subsea 7 SA, Oceaneering International, Inc., Saipem SpA, McDermott International, Inc. and Cal Dive International, Inc. Simmons selected these six comparable publicly traded companies based on its belief that, of the companies included in the “Selected Companies Analysis” above, they shared the greater similarities with Global Industries’ business. This analysis resulted in implied Global Industries share prices ranging from $2.51 to $6.66, with a mean of $4.99 and implied premiums ranging from 20.1% to 218.6%, with a premium of 60.3% relative to the $4.99 mean stock price.

 

Simmons also analyzed the merger consideration compared to potential implied stock prices of Global Industries had common stock of Global Industries traded similarly to an index of certain comparable publicly traded companies in the offshore construction services segment since various dates. The peer index consisted of Technip, Subsea 7 SA, Oceaneering International, Inc., Saipem SpA, McDermott International, Inc. and Cal Dive International, Inc. The following table summarizes the implied premium/discount analysis based on the dates set forth below:

 

Discounted Cash Flow Analysis.  Simmons performed a discounted cash flow analysis on Global Industries for the projected five-year period beginning on July 1, 2011 and ending on June 30, 2016. Simmons utilized two projection scenarios provided by Global Industries’ management (Case I and Case III) to develop three discounted cash flow cases. As further described below, Case II was developed by Simmons and was based on Case I. Each case utilized projections provided by Global Industries’ management for the projected six months ended December 31, 2011. Each of Case I, Case II and Case III reflect the following assumptions: (i) the valuation of Global Industries as of June 30, 2011; (ii) Global Industries’ financial performance for the six months ended December 31, 2011 is evenly allocated between the two quarters; (iii) Global Industries’ corporate tax rate is 35%; (iv) discount rates of 10%, 12.5% and 15%; (v) exit date as of June 30, 2016; (vi) terminal value calculated utilizing a multiple of 2016 projected EBITDA; (vii) terminal EBITDA multiples of 6.0x, 7.0x and 8.0x, based on peer forward EBITDA multiples; and (viii) working capital, capital expenditures and other items per projections provided by Global Industries’ management. Case I, Case II and Case III results do not reflect any transaction adjustments or forecasted synergies.

 

In addition,

 

Case I reflects the following:

 

 

Case II utilizes the same performance assumptions as Case I until 2014, with performance remaining consistent with 2014 levels thereafter.

 

Case III reflects the following:

 

 

Simmons calculated illustrative implied present values of unlevered free cash flows, defined as EBITDA minus cash taxes, minus capital expenditures, minus increases (plus decreases) in net working capital and minus other one-time items, for the projected five-year period beginning on July 1, 2011 and ending on June 30, 2016 and illustrative implied terminal values, using discount rates ranging from 10% to 15%. The discount rate was derived using a weighted average cost of capital (“WACC”) methodology. The WACC sensitivity range was determined by comparing capital structure, equity volatility and cost of debt across a peer group of oilfield services companies. Simmons calculated illustrative terminal values for Global Industries based on multiples ranging from 6.0x to 8.0x, in each case, of Global Industries’ 2016 estimated EBITDA. Simmons derived the ranges of these selected terminal value multiples based on its professional judgment and experience, including its judgment on business characteristics of Global Industries relative to the other

companies identified under the captions “Selected Companies Analysis” set forth above and “Selected Transactions Analysis” set forth below, and other factors, including, but not limited to, historical financial performance, profitability and scale of business.

 

Simmons calculated net working capital, defined as current assets (excluding cash) minus current liabilities (excluding the current portion of long-term debt and any other short-term debt), at the end of each year, during the projected five-year period beginning on July 1, 2011 and ending on June 30, 2016, and assumed that its components’ intensity remained similar to historical results. The change in this amount between each such year was either subtracted or added as a component of unlevered free cash flow.

 

This analysis resulted in implied per share values ranging from (a) $1.95-$3.54, under Case I, (b) $4.38-$7.47, under Case II and (c) $9.27-$14.95, under Case III.

 

Capitalization and Valuation Multiples Summary.  Simmons calculated the Enterprise Value of Global Industries and various financial multiples and ratios based on information obtained from Bloomberg and Global Industries’ management. Simmons calculated Enterprise Value to EBITDA multiples by dividing the Global Industries’ Enterprise Value by Global Industries’ EBITDA. For consensus projected EBITDA data for Global Industries, Simmons used the mean of estimates of securities research analysts obtained by Bloomberg. Bloomberg data is available to the public at a subscription cost. Simmons used information provided by Global Industries’ management for Case I, Case II and Case III projected EBITDA. Simmons calculated the adjusted book value of Global Industries as the book value of its shareholders’ equity, plus the book value of its debt, plus minority interests held by other companies, minus investments in unconsolidated affiliates and cash and cash equivalents, including short-term and long-term marketable securities and restricted cash. The multiples and ratios of Global Industries were calculated using the closing price on September 9, 2011. The results of these analyses are summarized as follows:

 

 

Book Equity Analysis.  Simmons analyzed the merger consideration to be received by the shareholders of Global Industries’ common stock as set forth in the merger agreement based on the implied value per share of Global Industries’ common stock as of June 30, 2011. Based on information provided by Global Industries’ management, as of June 30, 2011, Global Industries’ shareholders’ equity book value was $720 million and Global Industries had 116.0 million shares outstanding. As of June 30, 2011, the offer price implies a premium of 28.9% per outstanding share of Global Industries’ common stock.

 

Research Analyst Price Targets.  Simmons analyzed the price targets (which are typically 12-month price targets) of Global Industries, as determined by five research analysts who had updated price targets since July 1, 2011. The offer price represents a 45.5% premium to the average undiscounted research analyst target price of Global Industries, a 60.0% premium to the present value of the average target price of Global Industries using a 10% discount rate and a 74.5% premium to the present value of the average target price of Global Industries using a 20% discount rate. Each of the five research analyst price targets are below the offer price. The following table summarizes this analysis:

 

 

Selected Transactions Analysis.  Simmons also analyzed certain information relating to 12 selected energy service transactions since 2004. This sample of transactions was considered to evaluate the contemplated transaction in comparison to selected energy service transactions on a transaction value-to-EBITDA

ratio basis. Transactions were selected based on the acquired company’s services being related in certain respects to those services provided by Global Industries. For each of the selected transactions and for the transaction contemplated by the merger agreement, Simmons calculated and compared the ratio of the transaction value to the trailing twelve month EBITDA and projected EBITDA. EBITDA multiples for the selected transactions were derived primarily from public sources (company filings, press releases, Bloomberg and IHS Herold). Bloomberg and IHS Herold data are both available to the public at a subscription cost. Simmons has certain material, non-public and proprietary information regarding transactions that it receives in the course of conducting its business. Simmons used this information in its analyses, but refrains from releasing specific, identifying transaction details. The following table summarizes this analysis (code names are used for transactions in which Simmons has confidential information):

 

 

For each of the selected transactions and for the transaction contemplated by the merger agreement, Simmons calculated and compared the ratio of the transaction value to each of the trailing twelve-month and projected EBITDA multiples. The following table summarizes this analysis:

 

 

Simmons then applied a selected range of comparable multiples (based on the preceding analysis) to both Global Industries consensus estimates and Case I and Case III assumptions for projected 2012 EBITDA to generate implied share prices. The range of implied share prices was $1.62 to $6.77 with mean and median implied share prices of $3.19 and $2.21, respectively.

 

Miscellaneous.  As noted above, the discussion set forth above is a summary of the material financial analyses presented by Simmons to the board of directors of Global Industries in connection with the opinion of Simmons and is not a comprehensive description of all analyses undertaken by Simmons in connection with such opinion. The presentation of an opinion as to the fairness, from a financial point of view, of consideration to be paid pursuant to a proposed transaction is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial analysis is not readily susceptible to partial analysis or summary description. Simmons believes that its analyses summarized above must be considered as a whole. Simmons further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Simmons’ analyses and opinion. The fact that any specific analysis has been referred to in the summary above

is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

 

In performing its analyses, Simmons considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of Global Industries. The estimates of the future performance of Global Industries in or underlying Simmons’ analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by Simmons’ analyses. These analyses were prepared solely as part of Simmons’ analysis of the fairness, from a financial point of view, of the merger consideration to be paid by Technip to the holders of Global Industries’ common stock and were provided to the board of directors of Global Industries in connection with the delivery of Simmons’ opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be Simmons’ view of actual values with respect to Global Industries.

 

The type and amount of consideration payable to holders of Global Industries’ common stock were determined through negotiations between Global Industries and Technip, rather than by any financial advisor, and was approved by the board of directors of Global Industries. The decision to enter into the merger agreement was solely that of the board of directors of Global Industries. As described above, Simmons’ opinion and analyses were only one of many factors considered by the board of directors of Global Industries in its evaluation of the merger and should not be viewed as determinative of the views of the Global Industries’ board of directors or management with respect to the merger or the merger consideration.

 

Pursuant to the terms of its engagement with Simmons, Global Industries has agreed to pay Simmons for its financial advisory services in connection with the merger an aggregate transaction fee estimated to be approximately $8,000,000, which is payable upon the consummation of the merger. Simmons has also received a fixed fee of $1,000,000 for rendering its opinion, as to the fairness of the consideration to be paid by Technip pursuant to the merger, which fixed fee was payable without regard to the conclusions expressed in the opinion and will be deducted from the transaction fee payable to Simmons upon consummation of the merger.

 

In addition, Global Industries has also agreed to reimburse Simmons for its reasonable out-of-pocket expenses, including the reasonable fees and expenses of its legal counsel, incurred in connection with the engagement, including the delivery of the opinion, and to indemnify Simmons against certain losses or liabilities that may arise out of Simmons’ engagement.

 

During the last five years, Global Industries has engaged Simmons as a financial advisor on two separate occasions unrelated to the potential transaction to provide certain financial advisory services. As part of the prior engagement agreements with Global Industries, Simmons received aggregate fees of approximately $675,000.

 

A foreign affiliate of Simmons, Simmons & Company International Limited (“SCIL”), has previously performed work for Technip. During the last five years, SCIL has acted as financial advisor to Technip on three separate assignments unrelated to the merger and any potential transaction between Technip and Global Industries. As part of the prior engagement agreements with Technip, SCIL received aggregate fees of approximately $3,700,000.

 

In the ordinary course of Simmons’ business, Simmons actively trades the debt and equity securities of both Global Industries and Technip for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in securities of Global Industries and Technip.

 

As part of Global Industries’ strategic planning process, in May 2011, Global Industries’ management prepared a set of unaudited projections of Global Industries’ financial performance through 2016 as a standalone public company. Subsequently, at the Global Industries’ board of directors’ request, in early July

2011, Global Industries’ management prepared a second set of unaudited projections of Global Industries’ financial performance through 2016 as a standalone public company assuming a more timely and robust market reversal. For purposes of the following discussion, Global Industries refers to the initial set of unaudited projections as “Case I” and the second set of unaudited projections as “Case III.” In addition, as part of Global Industries’ discussions with Technip, Global Industries’ management prepared and, in mid-July 2011, provided to Technip a set of unaudited projections of Global Industries’ financial performance through 2016 as a standalone public company. For purposes of the following discussion, Global Industries refers to the unaudited projections provided to Technip as the “Shared Projections.”

 

Global Industries reviewed both Case I and Case III with the Global Industries board of directors during the Summer of 2011. Case II, which was prepared by Simmons and is described in “The Merger — Financial Advisor’s Opinion Regarding the Merger Consideration,” was also reviewed with the Global Industries board of directors. In addition, Global Industries provided both Case I and Case III to Simmons for its use in preparing its financial analyses and provided Simmons with the Shared Projections. Simmons did not conduct any activities to verify or authenticate the unaudited projected financial information set forth below and did not render any opinion on such unaudited projected financial information.

 

The divergence in unaudited projections of Global Industries’ financial performance between Case I and Case III results from significant differences in the assumptions made about future performance based on utilization and market conditions. Global Industries’ management expressed its view to the Global Industries board of directors that Global Industries was more likely to achieve the results set forth in Case I than the results set forth in Case III.

 

The assumptions underlying the two cases differ primarily in the following ways:

 

 

 

 

 

 

 

The divergence in unaudited projections of Global Industries’ financial performance between Case III and the Shared Projections results primarily from a different set of assumptions related to the timing and magnitude of the gross margin increase, with the Shared Projections being more optimistic in each respect.

 

All of the unaudited financial projections prepared by the management of Global Industries are subject to substantial risks and uncertainties that could cause actual results to differ materially from the unaudited projected results, including important factors described under the heading “Risk Factors” in Global Industries’ Annual Report on Form 10-K for the year ended December 31, 2010 and Global Industries’ Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2011 and June 30, 2011. All unaudited projections are forward-looking statements, and these and other forward-looking statements are expressly qualified in their entirety by the risks and uncertainties identified in Global Industries’ Annual Report on Form 10-K for the year ended December 31, 2010, Global Industries’ Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2011 and June 30, 2011 and Global Industries’ Current Reports on Form 8-K.

The unaudited projected financial information below does not take into account any circumstances or events occurring after September 2, 2011 (with respect to Case I and Case III) or July 16, 2011 (with respect to the Shared Projections), the respective dates on which such unaudited projected financial information was last reviewed for updating by management. The unaudited projected financial information below does not give effect to the proposed transaction.

 

The unaudited projections in Case I included the following estimates of Global Industries’ future financial performance:

 

 

The unaudited projections in Case III included the following estimates of the Global Industries’ future financial performance:

 

 

The unaudited projections in the Shared Projections included the following estimates of Global Industries’ future financial performance:

 

 

Global Industries does not as a matter of course make public any projections as to future revenues, net income or other results due to, among other reasons, business volatility and the uncertainty of the underlying assumptions and estimates. The previously non-public Case I and Case III unaudited projections set forth above are included in this proxy statement only because this information was part of the information considered by the board of directors of Global Industries in evaluating Technip’s offer. The previously non-public Shared Projections set forth above are included in this proxy statement only because this information was provided to Technip. The unaudited projections also were provided to Simmons, Global Industries’ financial advisor. The unaudited projections were not prepared for use in this proxy statement or with a view to public disclosure of any kind. The unaudited projections also were not prepared in compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The unaudited projections do not purport to present operations in accordance with generally accepted accounting principals in the United States (“GAAP”), and specifically the Adjusted EBITDA financial metric. Adjusted EBITDA means earnings (net income (loss)) before net interest expense, other expense/income, income tax expense, non-cash stock compensation expense, non-cash goodwill and intangible impairment, gains/losses on asset disposal, depreciation and amortization and excludes restructuring charges, interests in equity of uncontrolled subsidiaries, transaction costs and asset write-downs. This term, as defined herein, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income, cash flows provided by operating, investing and financing activities or other income or cash flow statement data prepared in accordance with GAAP. Global Industries’ independent registered public accounting firm has not examined, compiled or otherwise applied procedures to the unaudited projections and accordingly assumes no responsibility for them. Global Industries’ internal financial forecasts, upon which the unaudited projections were based in part, are, in general, prepared solely for internal use, such as budgeting and other management decisions, and are subjective in many respects. As a result, these unaudited internal financial forecasts are susceptible to interpretations and periodic revision based on actual experience and business developments. The unaudited projections reflect numerous assumptions made by Global Industries’ management at the time they were

prepared, and general business, economic, market and financial conditions and other matters, all of which are difficult to predict and many of which are beyond Global Industries’ control. Accordingly, there can be no assurance that the assumptions made in preparing the unaudited projections will prove accurate or that any of the unaudited projections will be realized.

 

The inclusion of the unaudited projections in this proxy statement should not be regarded as an indication that Global Industries or its affiliates or representatives considered or consider the unaudited projections to be a prediction of actual future events, and the unaudited projections should not be relied upon as such. None of Global Industries or its affiliates or representatives intends to update or otherwise revise the unaudited projections to reflect circumstances existing or arising after the date such unaudited projections were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the unaudited projections are shown to be in error.

 

Global Industries’ shareholders are cautioned not to place undue reliance on the unaudited projections included in this proxy statement. The selected unaudited projected financial information is not being included in this proxy statement to influence a Global Industries shareholder’s decision how to vote or act in connection with the proposed merger, but because it represents projected financial information prepared by management of Global Industries that was used for purposes of the financial analyses performed by Simmons and that was presented to Global Industries’ board of directors.

 

You should be aware that our directors and officers have interests in the merger that are described below and may be different from or in addition to the interests of our shareholders generally and that may present a conflict of interest. Our board of directors was aware of and considered these interests in making its determinations and recommendations in connection with the merger agreement and the transactions contemplated thereby. You should consider the interests of our directors and officers that are described in this proxy statement.

 

Treatment of Outstanding Equity Awards

 

Stock Options.  As described in “The Merger Agreement — Equity Plans — Stock Options,” the merger agreement provides that, at or immediately prior to the effective time of the merger, each outstanding option to purchase our common stock, whether or not exercisable or vested, shall be cancelled, and we shall pay each holder at or promptly after the effective time of the merger for each such cancelled option an amount in cash, less any required withholding taxes, determined by multiplying (i) the excess of the merger consideration over the applicable exercise price per share of common stock subject to such stock option by (ii) the number of shares of common stock such holder could have purchased (assuming full vesting of the stock option) had such holder exercised such option in full immediately prior to the effective time of the merger.

 

Restricted Stock.  As described in “The Merger Agreement — Equity Plans — Restricted Stock,” the merger agreement provides that at or immediately prior to the effective time of the merger, each restricted share of common stock that is outstanding shall become fully vested, and shall be treated as a share of common stock and eligible to receive the merger consideration.

 

Performance Units.  As described in “The Merger Agreement — Equity Plans — Performance Units,” the merger agreement provides, that at or immediately prior to the effective time of the merger, each performance unit shall be canceled, and we shall pay each holder at or promptly after the effective time of the merger for each such canceled performance unit an amount in cash, less any required withholding taxes, equal to (i) merger consideration multiplied by (ii) the number of shares of common stock issuable pursuant to such performance unit, assuming achievement of the target level of performance applicable to such performance unit.

 

In addition, should the effective time of the merger not occur prior to December 31, 2011, performance units with a performance period expiring on such date may, at the discretion of the compensation committee

of our board of directors, be settled as early as such date, calculated as if the target level of performance had been achieved.

 

Change in Control Agreements

 

We have entered into change in control agreements with substantially uniform terms with our current executive officers and Mr. Clerico, the chairman of our board of directors. James J. Doré, our former Senior Vice President, Worldwide Diving, retired on March 31, 2011 and Peter Atkinson, our former Executive Vice President, retired on December 31, 2010 and each of their respective change in control agreements terminated as of such retirement. As described in more detail below, each change in control agreement generally provides for the acceleration of equity awards and, in the event of certain “qualifying terminations” (as described below), severance benefits, including lump sum salary and bonus payments, continuation of benefits, payment for unvested contributions in our 401(k) retirement plan, and reimbursement for legal fees and relocation expenses.

 

In the event of a “qualifying termination” (as described below) within two years following a “change in control,” which includes the merger, the change in control agreements generally entitle such individual to (a) a lump sum payment equal to three times the sum of (x) the individual’s annual base salary and (y) the greater of (i) the highest annual bonus earned by the individual in respect of any of the five most recently completed fiscal years or (ii) the individual’s annual target bonus for the year in which the termination occurs, (b) an amount equal to the greater of (i) the highest annual bonus earned by the individual in respect of any of the five most recently completed fiscal years or (ii) the individual’s annual target bonus for the year in which the termination occurs, pro rated based upon the number of days such individual has worked during the fiscal year in which termination occurs, (c) a cash payment for unvested contributions under our 401(k) retirement plan as of the date of termination and (d) reimbursement of legal fees incurred as a result of any dispute as to the termination and certain relocation expenses, if applicable. In lieu of the benefits described above, upon such a “qualifying termination” the change in control agreement with Mr. Clerico entitles him to (a) a fixed lump sum in the amount of $3.6 million, (b) an amount equal to his target bonus, if any, for the year in which the termination occurs, pro rated based upon the number of days he has worked during the fiscal year in which termination occurs, and (c) reimbursement of legal fees incurred as a result of any dispute as to the termination. However, as Mr. Clerico is not currently a participant in the Management Incentive Plan and does not have a target bonus, any payment to him in the event of a “qualifying termination” would not currently include an amount related to a target annual bonus.

 

A “qualifying termination” includes a termination of employment by the individual for “good reason” or a termination of the individual’s employment by us without “cause.” Under the terms of the change in control agreements, (i) “good reason” means (a) a substantial change in the individual’s responsibilities or position, (b) a reduction in the individual’s base salary or total compensation or the failure to increase the individual’s total salary and payment under the bonus incentive plan each year after the change in control by an amount which at least equals, on a percentage basis, the mean average percentage increase in total compensation for all of our officers during the three full fiscal years immediately preceding the change in control, (c) the failure to continue the bonus incentive plan substantially on the basis in effect prior to the change in control, or a failure by us to continue the individual as a participant on at least the same basis as his or her participation for the fiscal year immediately preceding a change in control, (d) relocation of the individual’s principal place of employment by more than 30 miles from his or her principal place of employment prior to the date on which a change in control occurs, (e) a material reduction in the individual’s benefits, (f) the failure of a successor entity to assume the agreement, or (g) any purported termination not satisfying the notice requirements of the change in control agreement, and (ii) “cause” means (a) the individual committed an act of dishonesty constituting a felony and resulting in a personal benefit at our expense or (b) the willful and continued failure by the individual to substantially perform his or her duties, resulting in material injury to Global Industries.

 

In addition, following any termination other than for “cause” or due to death or disability (including the individual’s resignation without “good reason”) during the two years following a “change in control,” each executive officer (but not Mr. Clerico), will be entitled to two years of medical, dental and life insurance

coverage under Global Industries’ welfare plans for the executive and their eligible dependents at a cost not to exceed the executive officer’s cost to participate in such plan prior to the “change in control.”

 

The change in control agreements also provide for the acceleration of all unvested options to purchase shares of common stock, unvested shares of restricted common stock and unvested performance units with respect to our common stock held by such individual upon a “change in control.” However, as described above, all outstanding equity awards will be canceled and “cashed out” pursuant to the terms of the merger agreement.

 

Each change in control agreement also provides that in the event that the individual receives an “excess parachute payment,” as defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), which subjects him or her to an excise tax under Section 4999 of the Code, his or her total severance payments and benefits will be reduced to an amount such that he or she is not subject to the excise tax. However, the severance payments and benefits will be reduced only if the individual would be in a better net after-tax position after the reduction than he or she would be in without such reduction taking into consideration payment of the excise tax under Section 4999 of the Code. In all events, the individual is responsible for any excise tax that may be due on any such payments.

 

Management Incentive Plan

 

Each executive officer participates in our Management Incentive Plan, which is an annual cash incentive plan. In the event the employment of a participant in the Management Incentive Plan terminates for any reason during the year following a “change in control,” which includes the merger, such participant will be entitled to a payment equal to his or her target bonus, pro rated based upon the number of days such executive has worked during the fiscal year in which termination occurs. Mr. Clerico, the chairman of our board of directors, does not participate in the Management Incentive Plan and would not currently receive a payment related to a bonus in the event of his termination.

 

In addition, should the effective time of the merger not occur prior to December 31, 2011, we may, at the discretion of the compensation committee of our board of directors, pay bonuses for 2011 as early as such date, calculated as if the target level of performance had been achieved.

 

Indemnification of Directors and Officers

 

For six years from and after the effective time of the merger, Technip and Global Industries as the surviving corporation will, jointly and severally, indemnify and hold harmless our, and our subsidiaries’, present and former officers and directors and each person who acts or has acted as a fiduciary under any of our, or our subsidiaries’, employee benefit plans in respect of acts or omissions occurring at or prior to the effective time of the merger to the fullest extent permitted by the Louisiana Business Corporation Law or any other applicable law or provided under our articles of incorporation and bylaws in effect as of September 11, 2011. Technip is required to maintain in effect provisions in the surviving corporation’s articles of incorporation and bylaws (or in such documents of any successor to the business of the surviving corporation) regarding elimination of liability of directors, indemnification of officers, directors and employees and advancement of expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions in existence on September 11, 2011. Technip is also obligated to maintain substantially equivalent, and in any event no less favorable, directors’ and officers’ liability insurance or to purchase “tail period” coverage for a period of six years after the completion of the merger; provided the annual cost is not greater than 200% of our current annual premium, in which case Technip is obligated to provide as much insurance as may be purchased at such cost.

 

Quantification of Payments and Benefits

 

The following tables show the amounts of payments and benefits that our chairman and each of our executive officers would receive in connection with the merger, assuming (i) the consummation of the merger occurs on January 31, 2012, and (ii) that the executive officer’s or chairman’s employment was terminated by us without “cause” or by the executive officer or chairman for “good reason” on such date. These amounts

may change if the date on which the merger is consummated or the executive officer experiences a “qualifying termination” differs from our assumption. The first table below, entitled “Golden Parachute Compensation: Named Executive Officers,” along with its footnotes, shows the compensation payable to the chairman of our board of directors (who served as our principal executive officer until March 2, 2010), our chief executive officer, our chief financial officer, our executive vice president (who served as our principal financial officer from January 28, 2010 until April 26, 2010) and the other three most highly compensated executives as determined for purposes of our most recent annual proxy statement (together, our “named executive officers”), and is covered by a non-binding, advisory vote of our shareholders, as described in “Approval of Executive Compensation Related to the Merger.” The second table below, entitled “Golden Parachute Compensation: Other Executive Officers,” along with its footnotes, shows the compensation payable to our other executive officers, and is not subject to such an advisory vote. Although the rules of the SEC do not require the second table, it has been included so that quantification of the payments and benefits that could be received by all our executive officers is presented in a uniform manner. No amounts with respect to our non-employee directors (other than Mr. Clerico, who is also a named executive officer) are shown, because such individuals are not entitled to any payments or benefits in connection with the merger, other than the indemnification described above and payments with respect to fully-vested shares of common stock.

 

Golden Parachute Compensation: Named Executive Officers*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Golden Parachute Compensation: Other Executive Officers*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Global Industries’ board of directors has unanimously approved, subject to shareholder approval, the amended and restated articles of incorporation to remove a limitation on the ownership of our outstanding common stock by non-United States citizens. In the event that the merger agreement is approved but the amended and restated articles of incorporation are not adopted, the merger will not be completed. In the event the amended and restated certificate of incorporation is approved by our shareholders, but the merger is not completed, the amended and restated articles of incorporation will not become effective.

 

The form of amended and restated articles of incorporation is included in this proxy statement as Annex B.

 

Antitrust Clearance.  Under the HSR Act, and the related rules and regulations that have been issued by the FTC, certain acquisition transactions may not be consummated until a Premerger Notification and Report Form have been furnished to the FTC and the Antitrust Division and certain waiting period requirements have been satisfied. These requirements of the HSR Act apply to the merger. Under the HSR Act, the merger may not be completed until the expiration of a 30 calendar day waiting period following the filing by Technip and Global Industries of a Premerger Notification and Report Form concerning the merger with the FTC and the Antitrust Division, unless the waiting period is earlier terminated by the FTC and the Antitrust Division.

 

Technip and Global Industries both filed Premerger Notification and Report Forms on September 23, 2011 with the FTC and the Antitrust Division in connection with the merger (within the time period required by contract) and requested early termination of the waiting period. Accordingly, the required waiting period with respect to the merger will expire at 12:00 midnight, New York City time, on October 24, 2011, unless earlier terminated by the FTC and the Antitrust Division or Technip and Merger Sub receive a Second Request prior to that time. If within the 30 calendar day waiting period either the FTC or the Antitrust Division issues a Second Request to Technip and Merger Sub, the waiting period with respect to the merger would be extended for an additional period of 30 calendar days following the date of substantial compliance with that request by Technip and Merger Sub. The FTC or the Antitrust Division may terminate the additional 30 calendar day waiting period before its expiration. In practice, complying with a Second Request can take a significant period of time. Failure by Global Industries to comply with an applicable Second Request will not extend the waiting period with respect to the merger.

 

At any time before or after the completion of the merger, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the merger or seeking the divestiture of substantial assets of Technip or its subsidiaries, or of Global Industries or its subsidiaries. Private parties and state governments may also bring legal action under the antitrust laws under certain circumstances. While the parties believe that consummation of the merger would not violate any antitrust law, there can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if a challenge is made, what the result will be.

 

Mexico.  The merger is also subject to the LFCE in Mexico. Technip and Global Industries are obligated to submit a filing to the FCC. Each of Global Industries and Technip made such filing on September 26, 2011 (within the time period required by contract). The FCC has 10 business days following the date of filing, to

issue an order preventing the parties from closing the merger while the FCC reviews the merger. If after such term the FCC does not issue such an order, the parties are allowed to close the transaction before clearance. The FCC has 5 business days from the date of filing, to request basic information that should have been included in the initial filing and the FCC has 15 business days, from the later of the date of filing or the date upon which information was requested, to request additional documents from the parties. The FCC has 35 business days from the later of the date of filing or, if applicable, the date from which the parties complete their response to an information request, to determine whether to approve the transaction. In complicated cases, the FCC may extend the period for 40 additional business days to and/or make a decision as to whether the transaction complies with the LFCE. The parties believe that after obtaining the required approvals, consummation of the merger would not violate the LFCE. In this regard, please note that pursuant to the LFCE, a transaction that has been approved by the FCC may not be challenged, except on grounds that the parties furnished false information to the FCC. Prior to obtaining a decision, however, there is no assurance that the FCC would approve the transaction or approve the transaction without changes. Under the terms of the merger agreement, if the FCC issues an order preventing the closing of the merger a waiting period will commence and we must have subsequently received an approval from the FCC following the issuance of such an order, in order for the closing conditions to be met.

 

Brazil.  The merger is also subject to review by the competition authorities in Brazil. The appropriate Brazilian competition authorities were required to be notified of the transactions contemplated by the merger agreement within 15 business days of its execution. Notification of this transaction is a condition to the merger, but approval by the Brazil competition authorities is not. The required notification was submitted on September 28, 2011 (within the time period required by contract and Brazilian law).

 

Exon-Florio.  The merger is also subject to review by CFIUS pursuant to Section 721 of Title VII of the Defense Production Act of 1950, as amended by the Foreign Investment and National Security Act of 2007 (“Exon-Florio”). Exon-Florio authorizes CFIUS to review the effects on national security of mergers, acquisitions and takeovers by or with foreign persons which could result in foreign control of persons engaged in interstate commerce in the United States. The President has delegated authority to investigate proposed transactions to CFIUS. In order for the President to exercise his authority to suspend or prohibit a transaction, the President must make two findings: (i) that there is credible evidence that leads the President to believe that the foreign interest exercising control might take action that threatens to impair national security and (ii) that provisions of law other than Exon-Florio and the International Emergency Economic Powers Act do not, in the President’s judgment, provide adequate and appropriate authority for the President to protect the national security in connection with the transaction. The President’s actions are not subject to judicial review. If the President makes such findings, he may take action for such time as he considers appropriate to suspend or prohibit the relevant transaction. The President may direct the Attorney General to seek appropriate relief, including divestment relief, in the district courts of the United States in order to implement and enforce Exon-Florio. Absent certain conditions, Exon-Florio does not obligate the parties to a covered transaction to notify CFIUS of a proposed transaction. However, if notice of a proposed transaction is not submitted, then the transaction remains subject to review by the President under Exon-Florio.

 

On October 7, 2011, Technip and Global Industries submitted a joint voluntary notice to CFIUS of the proposed acquisition of Global Industries. Within thirty days of receiving the notification, CFIUS must conclude a preliminary review and determine whether a full investigation of the proposed transaction should be undertaken.

 

We cannot assure you that an antitrust, CFIUS or other regulatory challenge to the merger will not be made.

 

Dissenting shareholders who comply with the procedural requirements of the Louisiana Business Corporation Law will be entitled to receive payment of the fair cash value of their shares as of the day before the special meeting if the merger is effected upon approval by less than eighty percent of our total voting power. These provisions establish the exclusive means by which you may exercise your right to dissent from

the merger. If the merger is approved by the holders of at least eighty percent of our outstanding common stock, you will not be entitled to dissenters’ rights. The following is a summary of the dissenters’ rights provisions and is qualified in its entirety by reference to the statute. Because it is a summary, it may not contain all of the information that is important to you. We have attached a copy of Section 131 of the Louisiana Business Corporation Law (La. Rev. Stat. § 12:131) as Annex D to this proxy statement, which we urge you to read carefully in conjunction with this summary.

 

To dissent from the merger, you will be required to deliver to us a written objection prior to or at the special meeting. Thereafter, you must vote (in person or by proxy) against the proposal to approve the merger agreement and the merger. Neither a vote against the merger agreement nor a specification in a proxy to vote against the merger agreement will in and of itself constitute the necessary written objection to the merger agreement. Moreover, by voting in favor of, or abstaining from voting on, the merger agreement, or by returning the enclosed proxy without instructing the proxy holders to vote against the merger agreement, a shareholder waives his or her rights under Section 131. Please remember that a shareholder who executes and returns an unmarked proxy card will have his shares voted “FOR” the merger agreement and the merger and, as a consequence, that shareholder will be foreclosed from exercising rights as a dissenting shareholder under Section 131.

 

If the merger agreement and the merger are approved by the holders of less than eighty percent of our total voting power, we will promptly notify in writing by mail, after the merger is completed, each shareholder who filed the written objection described above and voted against the merger. Each of these shareholders is referred to in this section as a “dissenting shareholder.” Within 20 days after we mail the notice of shareholder approval (but not thereafter), the dissenting shareholder must file with us his written demand for the fair cash value of his shares of stock, valued as of the day before the special meeting. In addition to stating the value that he is demanding, the written demand must provide a post office address to which we may respond.

 

At the same time, the dissenting shareholder will be required to deposit his stock certificates in escrow at a bank or trust company located in Calcasieu Parish. The certificates must be duly endorsed and transferred to us upon the sole condition that we pay the dissenting shareholder the fair cash value of his shares as determined under Section 131 of the Louisiana Business Corporation Law. To verify the deposit in escrow, the dissenting shareholder will be required to deliver to us a written acknowledgement of the depository bank or trust company that holds his shares. Unless the shareholder objects to and votes against the merger agreement, demands payment, endorses and deposits his certificates and delivers the required written acknowledgment in accordance with the procedures and within the time periods set forth above, the shareholder will conclusively be presumed to have acquiesced to the merger agreement and will forfeit any right to seek payment pursuant to Section 131.

 

Within 20 days after we have received the dissenting shareholder’s written demand and acknowledgement, we will notify the dissenting shareholder in writing if we either (i) disagree with the fair cash value demanded or (ii) take the position that no payment is due to him. If we determine that a payment is due to the dissenting shareholder, we will state in the notice of disagreement the price deemed by us to be the fair cash value of his shares. If we fail to respond timely to the dissenting shareholder’s written demand and acknowledgement, we will be liable for the amount that the dissenting shareholder has demanded. In this regard, shareholders should be aware that opinions of investment banking firms as to fairness from a financial point of view, including the opinion of Simmons described in this proxy statement, are not opinions as to “fair cash value” under Louisiana law, and a determination of the fair cash value of the shares could be more or less than the consideration to be paid in the merger.

 

Thereafter, if any disagreement remains with respect to whether a payment is due or the fair cash value of the dissenting shareholder’s shares of stock, the dissenting shareholder, within 60 days after receipt of notice in writing of our notice of disagreement (but not thereafter), may file suit against us in a Calcasieu Parish district court, requesting that the court determine the fair cash value of his shares of stock as of the day before the special meeting. Any shareholder entitled to file such suit may, within such 60-day period but not thereafter, intervene as a plaintiff in any suit filed against us by another former shareholder for a judicial determination of the fair cash value of such other shareholder’s shares. If the dissenting shareholder is entitled

to file a suit under the provisions of Section 131 of the Louisiana Business Corporation Law, but fails to file within 60 days after he receives the notice of disagreement, he will be deemed to have accepted (i) our statement that no payment is due if we have contended that no payment is due or (ii) the fair cash value for his shares as fixed by us in the notice of disagreement.

 

When we have agreed upon the fair cash value of the shares with the shareholder, or when we have become liable for the fair cash value demanded by the shareholder because of our failure to give notice of disagreement and of the price deemed by us to be the fair cash value of the shares, or when the shareholder has become bound to accept the fair cash value of the shares we agree is due because of the shareholder’s failure to bring suit within 60 days after receipt of notice of our disagreement, the action of the shareholder to recover such value must be brought within five years from the date the fair cash value was agreed upon or our liability became fixed.

 

If we, in our notice of disagreement, have offered to pay to the dissenting shareholder on demand an amount in cash deemed by us to be the fair cash value of the dissenting shareholder’s shares and, if, on institution of a suit by the dissenting shareholder claiming an amount in excess of the amount offered by us, we deposit in the registry of the court the amount offered by us, then the costs of the proceeding will be taxed against us if the amount finally awarded to the shareholder, exclusive of interest and costs, is more than the amount offered and deposited by us. Otherwise, the costs of the proceeding will be taxed against the shareholder.

 

The dissenting shareholder will cease to have any of the rights of a shareholder, except the rights under the dissenters’ rights provisions, when the dissenting shareholder files his written demand for the fair cash value of his shares of stock. The dissenting shareholder will have the unconditional right to withdraw his demand to proceed under the dissenters’ rights provisions and accept the terms offered under the merger agreement at any time before the dissenting shareholder receives the notice of disagreement from us. After the dissenting shareholder receives the notice of disagreement, the dissenting shareholder will be required to obtain our written consent before he may withdraw his demand to proceed under the dissenters’ rights provisions. If the dissenting shareholder withdraws his demand or if he otherwise loses his right to dissent from the merger, he will receive the consideration to which he is entitled under the merger agreement.

 

If you do not follow the prescribed procedures, you will not be entitled to dissenters’ rights with respect to your shares.

 

A shareholder who is a beneficial, but not the registered, owner of our common stock who wishes to exercise the rights of a dissenting shareholder under the Louisiana Business Corporation Law cannot do so in his own name and should have the record ownership of the shares transferred to his name or instruct the record owner thereof to take all required action to comply on his behalf with the procedures under Section 131 of the Louisiana Business Corporation Law.

 

Because of the complexity of the procedures necessary to exercise the rights of a dissenting shareholder, we recommend that any shareholder wishing to exercise the right to dissent consult with his own legal counsel.

 

Dissenting shareholders should send any communications regarding their rights to Russell J. Robicheaux, Corporate Secretary, 11490 Westheimer, Suite 400, Houston, Texas 77077. All such communications should be signed by or on behalf of the dissenting shareholder in the form in which his shares are registered on the books of Global Industries, Ltd.

 

If the merger is completed, our common stock will no longer be traded on NASDAQ and will be deregistered under the Exchange Act.

 

The merger will be accounted for as a “purchase transaction” for financial accounting purposes.

 

The following is a summary of the material U.S. federal income tax consequences of the merger to beneficial owners of shares of Global Industries common stock who exchange their shares of Global Industries common stock for cash pursuant to the merger. This summary is based on the Code, applicable Treasury Regulations, and administrative and judicial interpretations thereof, each as of the date hereof, all of which may change, possibly with retroactive effect. No ruling has been or will be sought from the Internal Revenue Service (the “IRS”) with respect to the matters discussed below, and there can be no assurance that the IRS will not take a contrary position regarding the tax consequences of the merger or that any such contrary position would not be sustained by a court.

 

This summary is limited to beneficial holders of shares of Global Industries common stock who hold their shares as capital assets within the meaning of Section 1221 of the Code. In addition, this summary does not address tax considerations which may be applicable to a holder’s particular circumstances or to (i) holders that may be subject to special tax rules (e.g., financial institutions, mutual funds, insurance companies, broker-dealers, tax-exempt organizations and certain expatriates or former long-term residents of the United States), (ii) holders who acquired shares of Global Industries common stock in connection with stock option, stock purchase, stock appreciation right, restricted stock unit or restricted stock plans or in other compensatory transactions, or as part of a straddle, hedge, conversion, constructive sale, or other integrated security transaction for U.S. federal income tax purposes, or (iii) holders who perfect dissenters’ rights with respect to the merger, all of whom may be subject to tax rules that differ significantly from those discussed below. This discussion assumes that the shares of Global Industries common stock are not U.S. real property interests within the meaning of section 897 of the Code. In addition, this summary does not address any U.S. federal estate or gift tax consequences, nor any state, local or foreign tax consequences, of the merger.

 

BECAUSE YOUR INDIVIDUAL CIRCUMSTANCES MAY BE UNIQUE, YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION, AS WELL AS ANY TAX CONSEQUENCES OF THE MERGER ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

 

U.S. Holders

 

For purposes of this summary, a “U.S. Holder” is a beneficial owner of shares of Global Industries common stock that is, for U.S. federal income tax purposes, (i) a citizen or individual resident of the United States; (ii) a corporation or an entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States, or any state or political subdivision thereof; (iii) an estate, the income of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust, (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has validly elected to be treated as a U.S. person for U.S. federal income tax purposes.

 

If a partnership (or other entity taxed as a partnership for U.S. federal income tax purposes) holds shares of Global Industries common stock, the tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partnership. Accordingly, partnerships that hold shares of Global Industries common stock and partners in such partnerships are urged to consult their tax advisors regarding the specific U.S. federal income tax consequences to them of the merger.

 

Effect of the Merger.  With respect to U.S. Holders, the receipt of cash in exchange for shares of Global Industries common stock in the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. Holder will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares of Global Industries common stock exchanged in the merger. Any such gain or loss would be long-term capital gain or loss if the U.S. Holder’s holding period for the shares of Global Industries common stock exchanged exceeds one year. For non-corporate taxpayers, long-term capital gains are generally taxable at a reduced rate.

The deductibility of capital losses is subject to certain limitations. Gain or loss must be calculated separately for each block of shares of Global Industries common stock (i.e., shares of Global Industries common stock acquired at the same cost in a single transaction) exchanged for cash in the merger.

 

Information Reporting and Backup Withholding.  Payments made to a U.S. Holder in the merger generally will be subject to information reporting and may be subject to backup withholding at a rate of 28%. To avoid backup withholding, U.S. Holders that do not otherwise establish an exemption should complete and return the Substitute Form W-9 included in the letter of transmittal, which will be sent to our common shareholders of record if the merger is completed. The Substitute Form W-9 should certify that such holder is a U.S. person, the taxpayer identification number provided is correct, and that such holder is not subject to backup withholding. Certain holders (including corporations) generally are not subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability, and such U.S. Holder may obtain a refund of any amounts withheld in excess of the U.S. Holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

 

Non-U.S. Holders

 

The following is a summary of certain U.S. federal income tax consequences that will apply to Non-U.S. Holders of shares of Global Industries common stock. The term “Non-U.S. Holder” means a beneficial owner of shares of Global Industries common stock, other than a partnership (or entity treated as a partnership for U.S. federal income tax purposes), that is not a U.S. Holder.

 

Effect of the merger.  The receipt of cash in exchange for shares of Global Industries common stock pursuant to the merger generally will be exempt from U.S. federal income tax, unless:

 

 

If gain is effectively connected with the conduct by a Non-U.S. Holder of a U.S. trade or business, such Non-U.S. Holder generally will be subject to U.S. federal income tax, on a net income basis, on the gain derived from the sale or exchange, except as otherwise required by an applicable U.S. income tax treaty. If the Non-U.S. Holder is a corporation, any such effectively connected gain received by it may also, under certain circumstances, be subject to the branch profits tax at a 30% rate (or such lower rate as may be prescribed under an applicable U.S. income tax treaty). If the Non-U.S. Holder is described in the second bullet point above, the Non-U.S. Holder will be subject to a 30% U.S. federal income tax on the gain derived from the sale or exchange of shares of Global Industries common stock, which may be offset by U.S. source capital losses, even though the Non-U.S. Holder is not considered a resident of the United States.

 

Information Reporting and Backup Withholding.  In general, a Non-U.S. Holder will not be subject to backup withholding or information reporting with respect to a payment made with respect to shares of Global Industries common stock exchanged for cash in the merger if it provided the paying agent with a properly completed IRS Form W-8BEN (or a Form W-8ECI if the gain is effectively connected with the conduct of a U.S. trade or business). If shares of Global Industries common stock are held through a foreign partnership or other flow-through entity, certain documentation requirements also apply to the partnership or other flow-through entity. If a Non-U.S. Holder fails to provide the properly completed forms, such Non-U.S. Holder will be subject to backup withholding at the rates provided in the Code (currently at a rate of 28%) on the cash received in the merger or upon the exercise of dissenters’ rights. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be credited against the Non-U.S. Holder’s U.S. federal income tax liability, and the Non-U.S. Holder may obtain a refund of any amounts withheld in excess of the Non-U.S. Holder’s U.S. federal income tax liability; provided, that the Non-U.S. Holder furnish the required information to the IRS in a timely manner.

Litigation Related to the Merger