EXHIBIT 3
Stockholders Agreement Term Sheet
The closing of the proposed transaction would be subject to the
negotiation and execution by the Investors, the Company, ▇▇▇▇▇▇▇ ▇▇▇▇ 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):
1
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.
2
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:
|X| Company share repurchases
|X| Affiliated Party Transactions (as
described in section (c) of Article
XIV of the proposed Amended
Certificate of Incorporation)
|X| Equity or debt financings of the
Company
|X| 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
3
of Common Stock to be 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
Rights: The Investors will have unlimited piggyback
registration 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 right of first
4
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: ▇▇▇▇▇▇▇ ▇▇▇▇ 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.
5
▇▇▇▇▇ 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
6
▇▇▇▇▇ owned, in the aggregate, by DLJMB and
the Riverstone Entities.
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.
7