EXHIBIT 99.2
Stockholders Agreement Term Sheet
The closing of the proposed transaction would be subject to the
negotiation and execution by the Investors, the Company, Xxxxxxx Xxxx and
potentially certain management stockholders of a mutually satisfactory
Stockholders Agreement. The Stockholders Agreement would, in any event provide
for the following (in addition to such other such terms as may be agreed):
Board Representation: DLJMB, Riverstone's domestic investment vehicle ("Riverstone
U.S.", and together with Riverstone's two other investment
vehicles, the "Riverstone Entities") and the management
stockholders will agree to vote their shares to ensure that
the Board of Directors will consist of 10 members and will
be constituted as follows: DLJMB will be entitled to
designate 4 of the directors, Riverstone U.S. will be
entitled to designate 2 of the directors (together, the
"Investor Members"), 3 of the directors will be independent
directors (i.e., non-investor designated directors), which
initially will consist of continuing directors (together
with any directors designated to the board to fill a vacancy
caused by the disqualification, death, removal or
resignation of one of the independent directors, the
"Continuing Directors"), and the Chief Executive Officer of
the Company will serve as a director. Each of the
designated directors will be designated in a manner
consistent with the ruling request made to the United States
Coast Guard in connection with the proposed transaction. In
the event of the death, disability, resignation or removal
of an independent director, DLJMB and Riverstone U.S. will
mutually agree upon an independent director (that is a
non-investor designated director) to fill the vacancy. For
a period of one year following the closing of the
transaction, the initial Continuing Directors that are
non-investor designated will not be removed except for
cause.
In the event that DLJMB owns less than 50%, but more than 10%, of
the shares of Common Stock initially purchased by it, DLJMB
shall be entitled to designate only 2 directors. In the event
DLJMB owns less than 10%, but more than 5%, of shares of Common Stock
initially purchased by it, it shall be entitled to designate
only 1 director. In the event DLJMB owns less than 5% of the
shares of Common Stock initially purchased by it, it shall no
longer be entitled to designate any directors.
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In the event that the Riverstone Entities, collectively, own less
than 50%, but more than 10%, of the shares of Common Stock
initially purchased by them, Riverstone U.S. shall be entitled
to designate only 1 director. In the event the Riverstone Entities
own less than 10% of the shares of Common Stock initially purchased
by them, Riverstone U.S. shall no longer be entitled to nominate any
directors. Each of Riverstone and CSFB will be represented on the
Board's Audit and Compensation Committees
Investor Members will be compensated for their services in
an amount and manner consistent with other Directors of the
Company.
For a period of one year, (i) the Investors will not take any action
that will cause the Continuing Directors to be less than a
majority of the total number of independent directors on the Board
of Directors and (ii) to the extent an annual meeting is held
for the election of the directors, the Investors will vote for the
election of the Continuing Directors.
Unanimous Vote: So long as the Riverstone Entities or DLJMB own shares of
Common Stock equaling at least 15% of the outstanding shares
of Common Stock of the Company, determined on a
fully-diluted basis, the unanimous vote of the Investor
Members will be required for the following actions:
o Company share repurchases
o Affiliated Party Transactions (as described in
section (c) of Article XIV of the proposed Amended
Certificate of Incorporation)
o Equity or debt financings of the Company
o Amendments to Charter and by-laws, including any
changes to the number of Directors
Demand Registration Rights: The Investors will have the right to require the Company to
effect up to six 6 demand registrations on an appropriate
form selected by the Company and the Investors demanding
registration, provided that shares of Common Stock to be
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offered in any such registration have an aggregate offering
price in excess of $20 million. DLJMB will be entitled to
request four 4 demand registrations. Riverstone will be
entitled to request two 2 demand registrations. If a demand
registration is to involve an underwritten public offering,
the Investor requesting such registration will have the
right to select the underwriters in such underwritten demand
registration. Notwithstanding the foregoing, the Company
shall not be required to effect two demand registrations
pursuant to this agreement in any nine-month period. The
Company will have customary "black-out" rights to delay a
registration.
"Piggy-Back" Registration The Investors will have unlimited piggyback registration
Rights: rights, subject to customary pro rata cut-backs based on the
number of shares requested to be covered under such
registration.
Holdback: The Investors will agree not to offer, sell or transfer any
shares during the 14 days prior to the filing of a
registration statement or prospectus or any amendments
thereto (except for shares, if any, sold in that public
offering) and during a period thereafter equal (i) 180 days,
or (ii) such other period as reasonably required by the
managing underwriters of an underwritten offering.
Registration Expenses: All fees and expenses (including reasonable fees and
expenses of counsel) in connection with a registration will be paid
by the Company, other than underwriting fees and discounts.
Termination of Existing Registration Rights: The Company will cause all registration rights agreements to
which it is currently a party to be terminated.
Right of First Refusal; Tag-Along: The parties to the Stockholders Agreement will be subject to
rights of first refusal and tag-along rights in any proposed
transfer of Common Stock owned by them. Specifically, the
Investors will have PRO RATA tag-along rights in any
proposed transfer of any Common Stock owned by the parties
to the Stockholders Agreement. The Investors would have the
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right of first refusal to purchase any shares proposed to be
transferred by the other parties on a PRO RATA basis (based
on the number of shares held by such Investor). The rights
of first refusal and tag-along right will be subject to
limited customary exceptions, including Rule 144 sales,
sales pursuant to demand or piggy-back registration rights
and sales to certain permitted transferees.
Minority Protections: For a period of two years or until a Qualified Minority
Transaction or Business Combination is effected in
compliance with the Company's certificate of incorporation
is consummated, at any time a Control Person (as defined in
the Company's certificate of incorporation, as amended)
beneficially owns 90% or more of the outstanding Common
Stock, the Company will not enter into a Business
Combination (including a Section 253 short-form merger)
without the approval of holders of a majority of the
outstanding shares of Common Stock held by the Minority
Holders (as defined in the Company's certificate of
incorporation, as amended), provided, however, that such
approval shall not be required for (x) a merger described in
clause (ii) of paragraph (e) of Article XIV of the Company's
certificate of incorporation, as amended, or (y) a Qualified
Minority Transaction.
A "Qualified Minority Transaction" shall mean a Business Combination
that follows a public tender offer by a Control Person where (i) the
Control Person purchases all shares that are validly tendered
and (ii) to the extent that a Control Person has purchased
shares in the six month period prior to the consummation of the
tender offer, the offer price is, at a minimum, the highest price
per share paid by such Control Person or affiliate of such
Control Person in the six month period prior to the commencement
of the tender offer.
Management Stockholders: Xxxxxxx Xxxx and potentially certain other members
of management will be parties to the Stockholders Agreement. The
Stockholders Agreement will impose certain customary transfer
limitations and repurchase rights with respect to such parties.
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Xxxxx Act Protection: No party to the Stockholders Agreement may transfer shares
of Common Stock owned by it to the extent that such transfer
would result in the Company not meeting the requirements of
Section 2 of the Shipping Act, 1916, as amended, for the
ownership and operation of vessels in the United States
coastwise trade.
Transfer of Rights: Subject to the transfer restrictions discussed above, the
rights and obligations of the Investors under the
Stockholders Agreement will be assigned in connection with
any transfer of shares; provided, however, that in no event
shall the right to designate a member of the board of
directors be assignable; provided further, that the
registration rights are assignable only if the transferee
(together with its affiliates) is acquiring at least 500,000
shares of Common Stock (assuming exercise of all warrants).
Formation of Holding Company: In the event that the holders of a majority of the shares of
Common Stock subject to the Stockholders Agreement desire to
acquire any or all of the remaining shares of Common Stock
of the Company (by tender offer, merger or otherwise), then
the Investors will contribute all shares of Common Stock
owned by them to a corporation to be formed for such
purpose. In the event of any such transaction, each of
DLJMB and the Riverstone Entities will have the option to
purchase its Pro Rata Portion of the shares of Common Stock
to be purchased. Notwithstanding the foregoing, such
transaction will be conducted in a manner such that, after
such transaction, the Company would not fail to meet the
requirements of Section 2 of the Shipping Act, 1916, as
amended, for the ownership and operation of vessels in the
United States Coastwise trade.
"Pro Rata Portion" shall mean the total number of shares
being acquired multiplied by a fraction, the numerator of
which is the number of shares of Common Stock owned by such
Investor, and the denominator of which is the total number
of shares of Common Stock owned, in the aggregate, by DLJMB
and the Riverstone Entities.
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Fee Letter: CSFB and Riverstone will participate on a pro rata basis in
any fees paid in connection with the Fee Letter as defined
in the Stock Purchase Agreement between Seabulk and the
Investors
Termination: Except with respect to registration rights, the
Stockholders Agreement will terminate upon a Change of Control
of the Company. The Stockholders Agreement would not terminate upon
a future public offering of shares of Common Stock of the Company.
With respect to registration rights, such rights will terminate
upon the earlier of (i) the seventh anniversary or (ii) when,
with respect to each holder of registrable securities, such
holder owns less than 3% of the shares of Common Stock (including
upon exercise of all warrants) initially purchased by such
holder. A "Change of Control" occurs when a person or group (as
determined pursuant to Rule 13d-3 of the Exchange Act) other than
affiliates of the Investors (with respect to a group, all such
members shall be non-affiliates) acquires more than 50% of the
outstanding shares of Common Stock.
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