EXHIBIT 99.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 11-K
(X) Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
for the fiscal year ended December 31, 1997
( ) Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
________________________
Commission File Number: 0-22032
________________________
A. Full title of the plan and address of the plan, if different from
that of the issuer named below:
AMERICAN OILFIELD DIVERS, INC.
401 (k) PROFIT SHARING PLAN AND TRUST
B. Name of issuer of the securities held pursuant to the plan and
address of its principal executive office:
CEANIC CORPORATION
(FORMERLY AMERICAN OILFIELD DIVERS, INC.)
900 TOWN & COUNTRY LANE, SUITE 400
HOUSTON, TEXAS 77024
American Oilfield Divers, Inc. 401(k)
Profit Sharing Plan and Trust
Financial Statements and
Supplemental Schedules
December 31, 1997 and 1996
Page
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Plan Benefits as of December
31, 1997 and 1996 2
Statement of Changes in Net Assets Available for Plan Benefits for
the Years Ended December 31, 1997 and 1996 3
Notes to Financial Statements 4 - 10
Supplemental Schedules:*
Schedule I - Assets Held for Investment as of December 31, 1997 11
Schedule II - Reportable Transactions for the Year Ended December
31, 1997 12
* All other schedules required under the Department of Labor Rules
and Regulations for R eporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because
of the absence of conditions under which they are required.
Report of Independent Accountants
To the Participants and Plan Administrator of the
American Oilfield Divers, Inc. 401(k) Profit Sharing Plan and Trust
In our opinion, the accompanying statements of net assets available
for plan benefits and the related statements of changes in net assets
available for plan benefits present fairly, in all material respects,
the net assets available for plan benefits of the American Oilfield
Divers, Inc. 401(k) Profit Sharing Plan and Trust at December 31,
1997 and 1996 and the changes in net assets available for Plan
benefits for the years then ended, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The additional
information included in the supplementary schedules is presented for
purposes of additional analysis and is not a required part of the
basic financial statements but is additional information required by
ERISA. The supplementary schedules have been subjected to the
auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
PRICE WATERHOUSE LLP
Houston, Texas
June 11, 1998
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Statement of Net Assets Available for Plan Benefits
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
1997 1996
---- ----
Assets
Investments in group annuity contract in separate and
guaranteed accounts, at contract value $7,739,247 $6,470,390
Employer securities fund, at market 850,647 351,046
Other 2,417
---------- -----------
Total assets 8,589,984 6,823,853
Liabilities
Excess contribution refunds due to participants
65,537
----------- -----------
Net assets available for plan benefits $8,589,984 $6,758,316
The accompanying notes are an integral part of these financial statements.
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Statement of Changes in Net Assets Available for Plan Benefits
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
1997 1996
Additions:
Contributions:
Employee $1,574,310 $ 1,114,824
Employer matching 230,703 155,472
Forfeitures 8,224 30,784
Transfers in 547,799 283,229
------------ -------------
2,361,036 1,584,309
Investment income:
Net appreciation in fair
value of securities 117,474 125,557
Interest and investment income 868,287 545,634
------------ --------------
Total additions 3,346,797 2,255,500
Deductions attributable to;
Distributions and withdrawals 1,515,219 879,908
------------- ---------------
Net increase 1,831,578 1,375,592
Net assets available for plan
benefits:
Beginning of year 6,758,316 5,382,724
------------- --------------
End of year $ 8,589,894 $ 6,758,316
============= ==============
The accompanying notes are an integral part of these financial statements.
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 1997 and 1996
- -----------------------------------------------------------------------------
1. Plan Description
The following description of the American Oilfield Divers, Inc.
401(k) Profit Sharing Plan and Trust (the Plan) provides only
general information. Participants should refer to the Plan
document for a more complete description of the Plan's
provisions.
General
The Plan was established effective January 1, 1989 to provide
eligible employees of American Oilfield Divers, Inc. (the
Company) with the opportunity to contribute to the Plan (and to
defer payment of federal income tax upon) a specified portion of
their compensation, and to have their contributions, together
with the Plan contributions made by the Company, invested in an
unallocated group annuity policy. Effective September 1, 1994,
the Company amended the Plan to clarify certain provisions and
to allow participants to purchase shares of the Company's common
stock through the Employer Securities Fund. The Plan is a
contributory plan in which all the employees of the Company are
eligible to participate upon attaining age 18 and the completion
of one year of service. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan is administered by an administrator appointed by the
Board of Directors of the Company. All contributions made by
the participants and by the Company are held by Union Central
Life Insurance Company (the Contract Plan Servicer) and are
invested in specified investment accounts in accordance with
instructions from the participants.
The Company pays all expenses associated with the Plan's
administration. The entry dates of the Plan are January 1 and
July 1 of each year.
Participant Contributions
A participant contributes to the Plan by electing to defer a portion
of his or her salary which would otherwise be payable to such
employee during any such calendar period. A participant may
contribute up to a maximum of 15% of his or her salary to the
Plan.
Company Contributions
The Company's matching contribution to the Plan is equal to 10% of
participants' salary deferral contributions directed to the
Group Annuity Contract and 30% for amounts directed to the
Employee Securities Fund, limited to 15% of the participants'
compensation. In addition, each year the Board of Directors of
the Company determines the portion of its profit, if any, to be
contributed to the Plan for allocation among the participants.
In accordance with Internal Revenue Service Regulations,
discretionary contributions made by the Company are allocated to
eligible employees regardless of the status of participation in
salary deferral accounts.
The total amount to be contributed by the Company in any
calendar year may not, after taking into account the amount of
the total before-tax Section 401(k) contributions made by the
participants during such year, exceed the maximum amount
deductible by the Company under Section 404 of the Internal
Revenue Code in such year.
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
Participant Accounts
Each participant's account is credited with the participant's
contribution, the Company's match and an allocation of
(a) additional contributions by the Company, (b) Plan earnings,
and (c) forfeitures of terminated participants' nonvested
accounts. Allocations are based on participant compensation or
account balances, as defined in the Plan.
Vesting
Participants are 100% vested in contributions to their 401(k) Salary
Deferral Accounts and the earnings thereon at all times.
Participants become vested in the Company's employer
contributions and the related earnings of such contributions
after attainment of certain years of service, as follows:
Vested and nonforfeitable
Full years percentage of employer's
of service contribution into the Plan
1 0%
2 0%
3 33%
4 67%
5 100%
In general, a participant will be deemed to have completed a
"year of service" for each twelve-month period during which the
participant completes at least 1,000 hours of service.
The Plan contains special rules relating to the consequences of
a break in service by a participant. In the event that less than
100% of a participant's Employer Contribution Account is vested
at the time of termination of employment, a participant, subject
to the break in service provisions of the Plan, will forfeit the
unvested portion of such account and the amount so forfeited
will be reallocated to the remaining participants during the
plan year, at the same rates as the ratio of their compensation
to the total compensation of all participants for such plan
year.
Investment Options
A brief description of the Plan's investment options follows. For a
detailed description of the investment options and respective
risk profiles refer to the Plan document.
Group Annuity Contract
The Group Annuity Contract consists of the Guaranteed Deposit Account
and various investment options maintained in the Separate
Accounts detailed as follows:
Guaranteed Deposit Account - The Guaranteed Deposit
Account is intended to provide a guaranteed return
with no risk of principal or interest through
investment in guaranteed investment contracts.
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
Separate Accounts -
Variable Short Term Fund - The Variable Short Term Fund seeks
maximum current income with preservation of capital
and maintenance of liquidity.
Equity Fund - The Equity Fund is intended to achieve
long-term appreciation of capital by investing in
common stocks and other equity securities which are
undervalued.
Fixed Income Fund - The Fixed Income Bond Fund seeks
high level of income, without undue risk to
principal, by investing in government, mortgage-
backed and corporate securities.
Capital Fund - The Capital Fund allocates its assets
among stocks, bonds and money markets instruments.
The asset allocation is repositioned periodically
based on market conditions.
American Century Select Fund - The American Century
Select Fund seeks appreciation of capital by
investing in stocks that pay dividends and have
growth potential. During 1996, the fund changed its
name from the Twentieth Century Select Fund to the
American Century Select Fund.
American Century Ultra Fund - The American Century
Ultra Fund invests its capital in companies expected
to have accelerated earnings and revenues. During
1996, the fund changed its name from the Twentieth
Century Ultra Fund to the American Century Ultra
Fund.
Other - Various mutual funds with various investment
objectives and risk profiles.
Employer Securities Fund
The Employer Securities Fund invests its capital in stock of the
Company. The stock is purchased on the open market at the
current trading price.
Distributions and Withdrawals
Upon retirement, death or a termination of employment, distributions
are made to the participant or beneficiary. Immediate
distribution of a participant's vested benefit is permitted if
the value of the participant's vested Individual Participant
Account derived from employer and participant contributions
(other than accumulated deductible participant contributions) is
greater than $3,500, and it is required if this value is less
than $3,500. No provision for pre-termination distribution is
made.
In general, distribution of all amounts in the accounts of a
participant will be made in regular monthly life income
installments not to exceed ten years.
Amendments and Termination of the Plan
The Company reserves the right to amend or terminate the Plan. In
the event the Plan terminates, the net assets of the Plan will
be allocated, as prescribed by ERISA and regulations issued
pursuant thereto, to the participants.
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
2. Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual
basis of accounting. Income from investments is recorded as
earned.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Investments
Investments in the group annuity contract are stated at contract
value, as reported by Union Central Life Insurance Company. The
Company's stock is valued at its quoted market price.
3. Investment in Group Annuity Contract
December 31,
-----------------------------
1997 1996
Guaranteed Deposit Account $3,326,464* $ 3,427,547*
Variable Short-Term Fund
(EIN 31-0472910-PSA5) 203,645 156,806
Equity Fund (EIN 31-0472910-PSA4) 895,590* 777,801*
Fixed Income Fund (EIN-31-0472910-PSA6) 185,509 107,489
Capital Fund (EIN 31-0472910-PSA7) 175,444 196,664
American Century Select Fund
(EIN 31-0472910-PSA8) 610,791* 352,562*
American Century Ultra Fund
(EIN 31-0472910-PSA9) 1,716,310* 1,451,521*
American Century Vista Fund 31,103
N&B Genesis (EIN 31-0472910-PSA11) 158,021
N&B Focus (EIN 31-0472910-PSA17) 44,761
N&B Guardian (EIN 31-0472910-PSA10) 41,178
MFS Emerging Growth (EIN 31-0472910-PSA16) 121,864
MFS Growth with Income
(EIN 31-0472910-PSA15) 74,032
MFS High Income (EIN 31-0472910-PSA14) 5,900
S&P 500 Index (EIN 31-0472910-PSA22) 76,584
Sccudder International
(EIN 31-0472910-PSA13) 39,497
Summit High Yield (EIN 31-0472910-PSA23) 17,359
Horizon I (EIN 31-0472910-PSA19) 6,995
Horizon II (EIN 31-0472910-PSA20) 1,797
Horizon III (EIN 31-0472910-PSA21) 433
Government Securities Fund 5,970
------------- ---------------
Total group annuity contract $7,739,247 $6,470,390
============= ===============
* Represents an asset that is five percent or more of the net
assets available for plan benefits.
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 1997 and 1996
- -------------------------------------------------------------------------
Units assigned to participants are as follows:
December 31,
-----------------------------------------------------------------
1997 1996
--------------------------------- ----------------------------
Market Market
Number value Number value
of units per unit of units per unit
Guaranteed Deposit Account
Variable Short-term Fund 111,486.84 $ 1.83 89,603 $1.75
Equity Fund 1,538,385.33 .58 160,371 4.85
Fixed Income Fund 57,063.98 3.25 36,686 2.93
Capital Fund 68,026.97 2.58 80,932 2.43
American Century Select Fund 287,210.11 2.13 216,296 1.63
American Century Ultra Fund 617,448.70 2.78 636,632 2.28
American Century Vista Fund 31,531.49 .99
N&B Genesis 63,685.42 2.48
N&B Focus 30,929.44 1.45
N&B Guardian 18,336.72 2.25
MFS Emerging Growth 81,677.86 1.49
MFS Growth With Income 43,444.46 1.70
MFS High Income 4,650.63 1.27
S&P 500 Index 47,816.55 1.60
Scudder International 25,095.14 1.57
Summit High Yield 12,856.35 1.35
Horizon I 4,776.01 1.46
Horizon II 1,309.76 1.37
Horizon III 333.36 1.30
Government Securities Fund 4,605 1.30
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
4. Fund Information
A summary of the activity in each investment account for the years
ended December 31, 1997 and 1996 follows:
Group Annuity Contract
----------------------------------------------------------------------------------------------------
Separate Accounts
-----------------------------------------------------------------------------------------------------
Variable American American
Guaranteed Short- Fixed Century Century Employer
Deposit Term Equity Income Capital Select Ultra Other Securities Plan
Account Fund Fund Fund Fund Fund Fund Funds Fund Total
Net assets available
for plan benefits at
December 31, 1995 $3,338,543 $48,084 $486,083 $60,545 $141,426 $180,374 $960,338 $167,331 $5,382,724
Contributions:
Employee 262,014 34,895 152,347 43,600 47,798 82,784 306,808 184,578 1,114,824
Employer 32,553 3,380 15,254 4,380 4,780 8,279 30,792 56,054 155,472
Forfeitures 12,587 4,436 4,483 534 785 1,491 6,468 30,784
Transfers in 17,766 96,070 92,125 6,160 9,183 25,205 31,521 5,199 283,229
Investment income:
Net appreciation in
fair value of
securities 125,557 125,557
Interest and
investment income 214,169 2,532 124,281 5,712 21,759 40,439 136,742 545,634
Deductions attribut-
able to:
Distributions and
withdrawals (394,353) (15,910) (132,802) (7,429) (32,813) (21,087) (71,171) (204,343) (879,908)
Transfers between
funds (118,852) (16,681) 36,030 (6,013) 3,746 35,077 50,023 16,670
Net assets available ----------- --------- -------- -------- -------- -------- ---------- ---------- --------
for plan benefits at
December 31, 1996 3,364,427 156,806 777,801 107,489 196,664 352,562 1,451,521 351,046 6,758,316
Contributions:
Employee 289,022 55,532 142,343 44,856 33,753 109,184 327,329 211,559 360,732 1,574,310
Employer 29,006 5,728 14,372 4,521 3,409 11,026 33,252 21,169 108,220 230,703
Forfeitures 8,224 8,224
Transfers in 13,592 407,143 42,362 937 1,755 4,465 27,125 39,488 10,932 547,799
Investment income:
Net appreciation in
fair value of
securities
Interest 117,474 117,474
investment income 214,812 7,761 147,484 13,250 11,377 117,036 312,771 43,796 868,287
Deductions attribut-
able to:
Distributions and
withdrawals (364,345) (59,650) (106,782) (22,208) (15,097) (47,220) (314,411) (31,454) (554,052)(1,515,219)
Transfers between
funds (220,050) (377,899) (121,990) 36,664 (56,417) 63,738 (121,277) 340,936 456,295
----------- --------- ---------- -------- --------- --------- ---------- -------- ---------- ----------
Net assets available
for plan benefits at
December 31, 1997 $3,326,464 $203,645 $895,590 $185,509 $175,444 $610,791 $1,716,310 $625,494 $850,647 $8,589,894
=========== ========= ========= ======== ========== ========= ========= ========= ======== ==========
5. Federal Income Tax Status
The Plan has received a favorable determination letter from the
Internal Revenue Service. A favorable determination allows
American Oilfield Divers, Inc. to take a business expense
deduction for contributions paid to the Contract Plan Servicer
and for participants not to be taxed on benefits until received
by them. In addition, since the Plan is treated as an exempt
organization, its income is not subject to federal or state
income taxes.
6. Subsequent Event
During the 1997 plan year, Union Central Life Insurance Company (UCL)
performed the duties of Contract Plan Servicer for the Plan.
Effective February 1, 1998, Transamerica Asset Management Company
will replace UCL as the Contract Plan Servicer.
Schedule I
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Assets Held for Investment
December 31, 1997
- ------------------------------------------------------------------------------
Market
Issuer Shares value Cost
Employer Securities Fund 71,974.85 $ 850,647 $ 763,918
AMERICAN OILFIELD DIVERS, INC. 401(k) PROFIT SHARING PLAN AND TRUST
Reportable Transactions
December 31, 1997 and 1996
- ------------------------------------------------------------------------------
During the year ended December 31, 1997, the Plan had the following
transactions which were greater than 5% of the plan assets:
Series of Transactions
PURCHASES
Market value
of asset on
Number of Purchase Cost of transaction
Transactions Description of assets price asset date
18 Employer Securities Fund $856,671 $856,671 $856,671
SALES
Number of Selling Cost of
transactions Description of assets price asset Net gain
19 Employer Securities Fund $559,733 $366,363 $193,370
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees of the American Oilfield Divers, Inc. 401(k) Profit
Sharing Plan and Trust have duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly
authorized.
AMERICAN OILFIELD DIVERS, INC.
401(k) PROFIT SHARING PLAN AND TRUST
By: /s/ Bradley M. Parro
_________________________________
Bradley M. Parro
Vice President - Finance and
Chief Accounting Officer
June 30, 1998
EXHIBIT INDEX
Exhibit No. Description
23.1 Consent of Price Waterhouse LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-83594)of Ceanic Corporation (formerly
American Oilfield Divers, Inc.) of our report dated June 11, 1998 relating
to the American Oilfield Divers, Inc. Profit Sharing Plan and Trust for the
year ended December 31, 1997, which appears in the December 31, 1997 annual
on Form 11-K of American Oilfield Diver's 401(k) Profit Sharing Plan and
Trust.
/s/ Price Waterhouse LLP
------------------------
Price Waterhouse LLP
Houston, Texas
June 30, 1998