Schedules not filed herein are omitted because of the
absence of conditions under which they are required.
The Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA)
and under the ERISA requirements for plans with less than 100 participants, no audit of the plan financial statements
is required.
GulfMark Offshore, Inc. 401(K) Plan Notes to Financial Statements December 31, 2008 and 2007
Note 1:Description of the Plan
The following description of GulfMark Offshore, Inc. 401(k) Plan (the “Plan”) provides only
general information. Participants should refer to the plan document for a more complete
description of the Plan’s provision.
General
The Plan is a defined contribution plan covering substantially all employees of GulfMark
Offshore, Inc. (the “Company”) who are employed as an eligible class. Participants should
refer to the Summary Plan Description for a more complete description of an “eligible class”.
The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974
(“ERISA”).
Contributions
Each year, participants may contribute up to the maximum amount permitted under the law.
Participants who have achieved age 50 before the end of the plan year are eligible to make
catch-up contributions. Participants may also elect to contribute after-tax compensation
subject to Roth 401(K). Participants direct the investment of their contributions into
various investment options offered by the Plan. The Company matches
100% of the participants’ contributions up to 6% of eligible compensation. Additional profit
sharing amounts may be contributed at the option of the Company’s board of directors and are
invested in a portfolio of investments as directed by the Company.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and allocation of
the Company’s contribution and plan earnings, and charged with an allocation of
administrative expenses. Allocations are based on participant earnings or account balances,
as defined. The benefit to which a participant is entitled is the benefit that can be
provided from the participant’s vested account.
Vesting
Participants are vested immediately in their contributions plus actual earnings thereon.
Vesting in the Company’s contribution portion of their accounts is based on years of
continuous service.
Forfeitures
Upon termination of employment, participants’ non-vested balances are forfeited. Such
forfeitures can be applied to reduce employer contributions or Plan administrative expenses
otherwise payable by the Company.
GulfMark Offshore, Inc. 401(K) Plan Notes to Financial Statements December 31, 2008 and 2007
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to
the lesser of $50,000 or 50 percent of their vested interest. The loans are secured by the balance in the participants’ account and bear
interest at rates that must be a reasonable rate similar to the rate charged for a loan made
under similar circumstances by persons in the business of lending money. The term of loan
cannot exceed 5 years, unless it is used to purchase your principal residence. Principle and
interest paid must be in substantially equal installments made not less frequently than
quarterly.
Payment of Benefits
On termination of service due to death, disability, or retirement, a participant may elect to
receive either a lump-sum amount equal to the value of the participant’s vested interest in
his or her account, or annual installments that meet federal minimum distribution
requirements. Instead of receiving a cash distribution from the Plan, participants may elect
to receive a distribution of the portion of their account that is invested in Company stock.
If a distribution is eligible for rollover into an IRA or other eligible retirement plan, the
participant can elect to have the distribution transferred directly into the IRA or other
eligible plan.
Note 2:Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of accounting.
Valuation of Investments and Income Recognition
Investments are reported at fair value. Quoted market prices, if available, are used to value
investments, as provided by Hartford Life Insurance Company (“Hartford”). Pooled separate
accounts are valued at estimated fair value, as provided by Hartford. Participant loans are
valued at cost, which approximates fair value.
Securities for which no quoted market value is available are evaluated and valued by Plan
management with reference to the underlying investments, assumptions and methodologies used
in arriving at fair value in accordance with Financial Accounting Standards Board Statement
No. 157, Fair Value Measurements (“FASB Statement No. 157”).
Purchases and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net
depreciation includes the plan’s gains and losses on investments bought and sold as well as
held during the year.
GulfMark Offshore, Inc. 401(K) Plan Notes to Financial Statements December 31, 2008 and 2007
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and changes therein
and disclosure of contingent assets and liabilities at the date of the financial statements.
Actual results could differ from those estimates.
Payment of Benefits
Benefit payments are recorded when paid.
Note 3:Investments
The Plan’s investments are held by Hartford, the trustee of the Plan. The following table
presents the Plan’s investments at December 31, 2008 and 2007. Investments that represent 5
percent or more of the total Plan’s net assets are separately identified.
2008
2007
Separate Account 401
$
1,886,783
$
1,802,604
Other investments
9,489
482
Total investments
$
1,896,272
$
1,803,086
During the year ended 2008, the Plan’s investments (including gains and losses on investments
bought, sold and held during the year) depreciated in value by $868,309 as follows.
Common stocks
$
(2,265
)
Pooled separate accounts
(866,044
)
Net depreciation in fair value
$
(868,309
)
Note 4: Fair Value Measurements
Financial Accounting Standards Board Statement No. 157, Fair Value Measurements (FASB
Statement No. 157), establishes a framework for measuring fair value. That framework provides
a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the lowest priority to
unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy
under FASB Statement No. 157 are described below:
Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets
or liabilities in active markets that the Plan has the ability to access.
GulfMark Offshore, Inc. 401(K) Plan Notes to Financial Statements December 31, 2008 and 2007
Level 2 Inputs to the valuation methodology include: 1) quoted prices for similar assets or
liabilities in active markets; 2) quoted prices for identical or similar assets or
liabilities in inactive markets; 3) inputs other than quoted prices that are observable for
the asset or liability; and inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets
at fair value as of December 31, 2008:
The table below sets forth a summary of changes in the fair value of the Plan’s level 3
assets for the year ended December 31, 2008.
Participant Loans
Balance, beginning of the year
$
—
Purchases, sales, issuances and settlements (net)
6,906
Balance, end of year
$
6,906
Note 5:Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to
discontinue its contributions at any time and to terminate the Plan subject to the provisions
of ERISA. In the event of Plan termination, participants would become 100 percent vested in
their employer contributions.
GulfMark Offshore, Inc. 401(K) Plan Notes to Financial Statements December 31, 2008 and 2007
Note 6:Plan Tax Status
The Plan’s trustee received a favorable opinion letter dated August 7, 2001, from the
Internal Revenue Service informing the trustee that their prototype non-standardized profit
sharing plan is qualified under provisions of Section 401(a) of the Internal Revenue Code.
The plan administrator believes that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan’s financial statements.
Note 7:Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to
various risks such as interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and that such
changes could materially affect participants’ account balances and the amounts reported in
the statement of net assets available for benefits.
Note 8:Transactions with Parties-In-Interest
Certain Plan investments are funds managed by Hartford (the custodian) and therefore qualify
as party-in-interest transactions. Other party-in-interest investments held by the Plan
include GulfMark Offshore, Inc. common stock, which totaled $2,583 and $482 at December 31,2008 and 2007, respectively.
Fees paid during the year for legal, accounting, and other professional services rendered by
parties-in-interest were based on customary and reasonable rates for such services.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
GulfMark Offshore, Inc. 401(k) Savings Plan Administrator (or other persons who administer the employee benefit plan) has
duly caused this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
