<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
-----------------------------------------------------
Seal Fleet, Inc.
-----------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] 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:
<PAGE>
SEAL FLEET, INC.
125 WORTH AVENUE, SUITE 314
PALM BEACH, FLORIDA 33480 (561) 833-5111
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1997
The Annual Meeting of Stockholders of Seal Fleet, Inc. ("Company") will be
held at the Board Room, First National in Palm Beach, 255 South County Road,
Palm Beach, Florida 33480, on May 14, 1997 at 10:00 A.M., Florida time for the
following purposes:
1. To amend the Bylaws of the Company to reduce the minimum number of
authorized directors to no less than three (3).
2. To elect as directors the three (3) persons listed.
3. To consider and act upon the ratification of Ernst & Young LLP as
independent auditors for the Company for the fiscal year ending December 31,
1997.
4. To consider and act upon the ratification of a reverse stock split of the
Company's Class A and Class B Common Stock on a 1 share for 2 shares basis,
such reverse stock split to be accomplished by an initial reverse stock split
on a 1 share for 50 shares basis, followed by a forward stock split on a 25
shares to 1 share basis. Assuming the stock splits are ratified, the aggregate
number of authorized Class A Common Stock will be 1,850,000, and the aggregate
number of Class B Common Stock will be 25,000. Both classes of Common Stock
will have a par value of $.20.
5. To consider and vote on the following proposals, to be voted on together
as the "Reincorporation Proposal":
(a) The approval of the change in the Company's state of incorporation
from Nevada to Delaware;
(b) The approval of an increase in the number of authorized shares of
Class A Common Stock from 1,850,000 shares, par value $.20 following the
stock splits referred to in Proposal 3 above, to 14,975,000 shares, par
value $.20;
(c) The authorization of an aggregate of 3,000,000 shares of a class of
Preferred Stock, par value $.001; and
(d) The merger of the Company into its wholly-owned subsidiary, Seal
Holdings Corporation, a Delaware corporation.
The effectiveness of each of the proposals set out in (a), (b), (c) and (d)
above is contingent on the approval of the others, and no action will be taken
by the Company unless all such matters are approved. Accordingly, the matters
are offered together in the Reincorporation Proposal.
6. To consider and vote on the removal of a restriction requiring the Board
of Directors to seek stockholder approval of an initial acquisition.
7. To approve the 1997 Incentive Option Plan.
8. To act upon any other matters properly coming before the meeting or any
adjournment thereof.
<PAGE>
Holders of common stock at the close of business on March 31, 1997, will be
entitled to vote at the meeting and any adjournment thereof as set forth in
the accompanying Proxy Statement.
By order of the Board of Directors
/s/ James S. Goodner
---------------------
James S. Goodner
Secretary
April 9, 1997
Palm Beach, Florida
In order to avoid additional soliciting expense to the Company, please SIGN,
DATE and MAIL your proxy PROMPTLY in the return envelope provided, even if you
plan to attend the meeting. You may revoke your proxy at any time prior to its
use at the Annual Meeting by giving written notice of revocation, by signing
and delivering to the Secretary of the Company a proxy bearing a later date or
by personally voting at the meeting.
<PAGE>
SUMMARY OF PROPOSALS FOR CONSIDERATION
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing elsewhere or
incorporated by reference herein.
The Company continues its transition from the offshore marine business into
a new line of business to be determined by the Board of Directors, as more
fully described in the Proxy Statement dated June 17, 1996, and the Current
Report on Form 8-K dated August 27, 1996, and amended October 28, 1996. The
following proposals are intended to continue this transition:
1. To reduce the authorized number of directors to between three and twenty-
one.
Currently, the Company has three directors. The Board of Directors believes
the current size of the Board of Directors is optimal for the Company's
current plans. Although it may be advisable to increase the size of the Board
of Directors in the future, there is no present need for more than three
members on the Board. The Bylaws of the Company currently provide for a Board
of Directors of between five and twenty-one directors, and must be amended to
allow the full authorized Board to comprise no less than three directors.
2. To elect as directors Mr. Thomas M. Ferguson, Mr. Donald L. Caldera and
Mr. J. Erik Hvide. Mr. Ferguson and Mr. Caldera are nominated as Class B
Directors, and Mr. Hvide is nominated as Class A Director.
Each director will hold office until the next meeting of stockholders for
the election of directors and until his successor is elected and qualifies
unless he sooner resigns or is removed as provided in the Bylaws. The holders
of Class B Common Stock are entitled to nominate and elect a simple majority
of the Board of Directors, and the holders of Class A Common Stock are
entitled to nominate and elect the remainder of the Board of Directors.
3. To consider and act upon the ratification of Ernst & Young LLP as
independent auditors for the Company for the 1997 fiscal year.
The Company has enjoyed an excellent working relationship with its current
independent auditors, Pannell Kerr Forster of Texas, P.C., who have audited
the financial statements of the Company for the 1996 fiscal year. The Board of
Directors has determined that the Company's independent auditors should, if
possible, be located in Florida near the Company's offices. The Board has
therefore appointed Ernst & Young LLP to serve as independent auditors of the
Company for the fiscal year ended December 31, 1997, subject to ratification
by the stockholders of the Company.
4. To consider and act upon the ratification of a reverse stock split of the
Company's Class A and Class B Common Stock, to be achieved by an initial
reverse stock split on a 1 share for 50 shares basis, followed by a forward
stock split on a 25 shares to 1 share basis.
To decrease the Company's administrative expenses and to increase potential
earnings per share and book value per share, the Company proposes a one for
fifty reverse split of the Class A and Class B Common Stock followed by a
twenty-five for one stock split of the Class A and Class B Common Stock. The
net effect of the stock splits will be a one for two reverse stock split,
which will reduce the number of stockholders.
5. To approve the Reincorporation Proposal.
The Reincorporation Proposal will, if approved, be effected by the change of
the state of incorporation of the Company from Nevada to Delaware, through a
merger of the Company (the "Merger") with and into Seal Holdings Corporation,
a Delaware company formed for that purpose. The Merger will change the
Company's name to Seal Holdings Corporation, increase the aggregate number of
shares of the Company's authorized Class A Common Stock, and authorize a class
of Preferred Stock.
<PAGE>
The Company believes that it would be advantageous for the Company to be
governed by the corporate law of Delaware which has reached an advanced stage
of development as a result of the large number of corporations which are
domiciled there and the numerous interpretive decisions that have been
rendered by its courts. The Board of Directors also feels that the name of the
Company should be changed to reflect the Company's sale of its marine fleet
business and new direction. The Board of Directors believes an issuance of
Class A Common Stock or Preferred Stock may be necessary or desirable in order
to complete a business combination. Under the Company's current Articles of
Incorporation, only a relatively insignificant amount of authorized but
unissued Class A Common Stock is available to be issued, and Preferred Stock
of the Company is not available.
6. To remove a restriction requiring the Board of Directors to seek
stockholder approval of an initial acquisition.
The Company has previously undertaken to its stockholders that it would not
conclude its first significant acquisition without seeking their approval. The
Board of Directors now believes that in the event a suitable acquisition
target is identified by the Board, valuable time will be lost in seeking
stockholder approval. The Board, therefore, asks the stockholders to remove
the requirement of stockholder approval previously placed on the Board's
ability to conclude an initial acquisition. If the requirement is removed, no
further stockholder approval will be sought in connection with a merger or
acquisition, provided that the transaction does not require stockholder
approval as a matter of applicable law.
7. To ratify the 1997 Incentive Option Plan.
The 1997 Incentive Option Plan (the "Plan") would authorize the grant of
incentive stock options and nonqualified stock options and is intended to
promote the interests of the Company by offering those directors, executive
officers, key employees and outside consultants of the Company, who are
primarily responsible for the Company's management, growth and success, the
opportunity to participate in a long-term incentive plan designed to reward
them for their services and to encourage them to continue in the employ of or
to provide services to the Company.
8. To act upon any other matters properly coming before the meeting or any
adjournment thereof.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 1997
The accompanying Form of Proxy is being solicited on behalf of the Board of
Directors of Seal Fleet, Inc. (hereinafter sometimes referred to as "Company"
or "Seal Fleet"). The meeting will be held at The Board Room, First National
in Palm Beach, 255 South County Road, Palm Beach, Florida, at 10:00 A.M. on
May 14, 1997. Only stockholders of record as of the close of business on March
31, 1997 (the "Record Date"), will be entitled to notice of and to vote at the
Annual Meeting of Stockholders or any adjournment thereof. This Proxy
Statement is being mailed on or about April 9, 1997.
Seal Fleet, Inc. has outstanding two classes of stock, Class A voting common
stock, par value $0.10 per share ("Class A Stock"), and Class B voting common
stock, par value $0.10 per share ("Class B Stock") (together with Class A
Stock, the "Common Stock"). The holders of the Class B Stock are entitled to
elect a simple majority of the Company's directors, and the holders of Class A
Stock are entitled to elect the remaining directors. Holders of Class A Stock
may only vote for Class A Directors, and holders of Class B Stock may only
vote for Class B Directors. The two classes of stock may be voted together as
a single class on certain matters and may be voted as separate classes on
certain other matters. On March 20, 1997 there were outstanding 2,262,405
shares of Class A Stock and 50,000 shares of Class B Stock. Each stockholder
will be entitled to one vote for each share of stock owned.
The presence, in person or by proxy, of the holders of (i) a majority of the
outstanding shares of Class A Stock, and (ii) a majority of the outstanding
shares of Class B Stock, entitled to vote at the Annual Meeting is necessary
to constitute a quorum for the transaction of business at the Annual Meeting.
Shares represented by proxies that reflect abstentions will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum, and will have the same effect as a vote against the
Proposals. "Broker non-votes" (i.e., shares held by a broker or nominee which
are represented at the meeting, but with respect to which such broker or
nominee is not empowered to vote on a particular proposal) will be counted as
shares that are present and entitled to vote with respect to Proposal 5,
"Reincorporation in Delaware," and will have the same effect as votes against
Proposal 5. Broker non-votes will not be counted in determining the number of
shares present and entitled to vote with respect to Proposals 1, 3, 4, 6 and
7, and will not be counted as votes either for or against Proposals 1, 3, 4, 6
and 7.
The persons nominated as "Class A Directors" will be elected if they receive
the affirmative vote of a plurality of the outstanding shares of the Class A
Stock present, in person or by proxy, at the Annual Meeting and entitled to
vote. The persons nominated as "Class B Directors" likewise will be elected if
they receive the affirmative vote of a plurality of the outstanding shares of
Class B Stock present, in person or by proxy, at the Annual Meeting and
entitled to vote. "Plurality" means that individuals who receive the largest
number of votes cast are elected as directors up to the maximum number of
directors to be chosen at the Annual Meeting. Cumulative voting is not
permitted.
The Reincorporation Proposal will be approved if it receives the affirmative
vote of (i) a majority of the outstanding shares of Class A Stock and (ii) a
majority of the outstanding shares of Class B Stock, each voting separately as
a class.
The removal of the restriction on the Board requiring stockholder approval
of an initial acquisition will be approved if it receives the affirmative vote
of the majority of the stockholders not affiliated with the officers and
directors of the Company present, in person or by proxy, at the Annual Meeting
and entitled to vote. Ratification of the independent auditors, ratification
of the 1997 Incentive Option Plan and any other matters that come before the
Annual Meeting will require the affirmative vote of a majority of the shares
of Common Stock present, in person or by Proxy, at the Annual Meeting and
entitled to vote. The Board has decided not to effect the proposed one for two
stock split unless Proposal 4 receives the affirmative vote of a majority of
shares of Common Stock
1
<PAGE>
present, in person or by proxy, at the Annual Meeting and entitled to vote.
The decrease in the authorized number of directors requires the affirmative
vote of the majority of shares of each class of Common Stock present, in
person or by proxy and entitled to vote.
All properly signed and submitted proxies will be voted. Where a choice has
been specified by the stockholder as provided on the proxy, the proxy will be
voted (or withheld) in accordance with such specification. IF A PROXY DOES NOT
SPECIFY OTHERWISE, IT WILL BE VOTED FOR THE THREE DIRECTOR NOMINEES DESCRIBED
IN THE PROXY STATEMENT, FOR ALL ISSUES PRESENTED TO THE STOCKHOLDERS IN THIS
PROXY STATEMENT AND IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTERS
THAT MAY BE BROUGHT BEFORE THE ANNUAL MEETING. SEE "ELECTION OF DIRECTORS,"
"AMENDMENT TO BYLAWS," "APPOINTMENT OF INDEPENDENT AUDITORS," "ONE-FOR TWO
SPLIT OF THE COMPANY'S STOCK," "REINCORPORATION IN DELAWARE," "AUTHORIZATION
OF INITIAL ACQUISITION" AND "1997 INCENTIVE OPTION PLAN."
Solicitation of proxies will be primarily by mail, but proxies may also be
solicited personally, by telephone or fax by officers, directors and regular
employees of the Company. The Company will make arrangements with brokerage
firms, banks and other nominees to forward proxy materials to beneficial
owners of shares and will reimburse such nominees for their reasonable costs.
Corporate Investor Communications, Inc. has been retained to act as proxy
solicitor in conjunction with the Annual Meeting of Stockholders, and will
develop a communications strategy, perform a broker search, distribute proxy
materials and solicit voted proxies from all banks, brokers, nominees and
intermediaries. Fees for this proxy solicitation service are estimated to be
$4,000, plus out-of-pocket costs and expenses. The cost of the solicitation
will be borne by the Company. Any stockholder giving a proxy may revoke it at
any time prior to its use at the meeting by giving the Company written notice
of the revocation, by signing and delivering to the Secretary of the Company a
proxy bearing a later date or by personally voting at the meeting.
A representative of the Company's transfer agent will be present at the
meeting and will tabulate the votes.
2
<PAGE>
PROPOSAL ONE
AMENDMENT OF BYLAWS
The Bylaws of the Company provide for the Board of Directors to comprise
between five (5) and twenty-one (21) directors. Following the sale of the
Company's vessels and marine assets to Hvide Marine Incorporated ("Hvide") in
August, 1996, as more fully described in "Certain Transactions" below, the
current three Board members were appointed to the Board on August 14, 1996. It
was anticipated that the post-Sale Board would appoint a further two members
to bring the total number of directors to five.
The Board of Directors has now determined that a three-member Board is
optimal for the Company's present activities. Once a significant business
combination is completed, or once the Board has identified suitable candidates
for membership on the Board, the Board will be increased by the addition of
members identified by the Board. Until such time, however, the Board of
Directors seeks approval for a reduction in the authorized number of Board
members to no less than three. Amendment of the Bylaws to reduce the
authorized number of Directors from a range of five to twenty-one to a range
of three to twenty-one requires the affirmative vote of a majority of the
outstanding shares of each of Class A and Class B Stock, present in person on
by proxy and entitled to vote.
The Company's current Bylaws allow the directors to increase the number of
members of the Board provided the number of directors is within five and
twenty-one. The Board of Directors proposes the adoption of the following
Section 3.02 of the Company's Bylaws, in substitution of the Current Section
3.02. The following Section 3.02 reduces the minimum number of authorized
directors. In addition, the revised Section 3.02 clarifies the procedures for
qualifying, electing and removing directors, amending the authorized number of
directors, and setting the authorized number of directors within the specified
limits.
Section 3.02. Number and Election.
The Board of Directors shall consist of not less than three (3) and not
more than twenty-one (21) directors. Within the limits specified, the
number of directors may be determined by resolution of the Board of
Directors. The limits on the number of authorized directors may be modified
from time to time by amendment of this Section 3.02, in accordance with
Article VII hereof, and with the Certificate of Incorporation. The
directors shall be elected at the annual meeting of the stockholders,
except as hereinafter provided, and each director elected shall hold office
until his successor shall be elected and shall qualify. Directors need not
be stockholders. If for any cause directors shall not have been elected at
the Annual Meeting, they may be elected as soon thereafter as convenient at
a special meeting of stockholders called for that purpose. No reduction of
the authorized number of directors shall have the effect of removing any
director before the director's term of office expires, unless such removal
is made pursuant to these Bylaws.
Abstentions will be counted for purposes of determining the number of shares
present and entitled to vote and will have the effect of a vote against the
amendment to the Company's Bylaws. Broker non-votes, if any, will not be
counted in determining the number of shares present and entitled to vote on
the amendment to the Company's Bylaws.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE COMPANY'S BYLAWS. UNLESS MARKED TO THE CONTRARY, PROXIES
RECEIVED WILL BE VOTED "FOR" APPROVAL.
3
<PAGE>
PROPOSAL TWO
ELECTION OF DIRECTORS
Prior to the Sale to Hvide Marine Incorporated, the Board of Directors
consisted of seven directors, elected at the 1996 Annual Meeting. Pursuant to
the terms of the sale, all of the directors of the Company then holding office
resigned. By written consent of Directors dated August 14, 1996, Mr. Caldera,
Mr. Ferguson and Mr. Hvide were appointed as directors to fill three of the
vacancies created by the resignations, and to serve until the next annual
meeting of the stockholders of the Company.
If Proposal 1 is adopted by the stockholders of the Company, the Board of
Directors may be comprised of three directors. The Board of Directors has
presented three nominees. Each director elected pursuant to this proposal will
hold office until the next meeting of stockholders for the election of
directors and until his successor is elected and qualifies unless he sooner
resigns or is removed as provided in the Bylaws. The holders of Class B Stock
are entitled to nominate and elect a simple majority of the Board of Directors
(two directors, if Proposal 1 is adopted), and the holders of Class A Stock
are entitled to nominate and elect the remainder of the Board of Directors
(one director, if Proposal 1 is adopted).
The Board of Directors has selected the following persons as nominees for
election to the Board. Holders of Class A Common Stock may withhold authority
from the proxyholders to vote for the Class A nominee. Although management has
no reason to believe that the nominees will be unable or unwilling to serve,
if any nominee withdraws or otherwise becomes unavailable to serve, the
proxyholders will vote for any substitute nominee designated by the Board of
Directors. Certain information concerning the nominees is provided below.
NOMINEE FOR CLASS A DIRECTOR
J. ERIK HVIDE Director since August, 1996
Ft. Lauderdale, Florida Age 48
Mr. Hvide has served as Chairman of Hvide Marine Incorporated ("Hvide")
since September, 1994, and its President and Chief Executive Officer since
January 1991. He has been a director of Hvide since 1973. From 1981 until
1991, Mr. Hvide was President and Chief Operating Officer of Hvide. He has
been employed by Hvide in various capacities since 1970 and became Vice
President in 1973. He is also a director of the Executive Committee of
American Waterways Operators, a participant on the Transportation Committee of
the American Petroleum Institute, a member of the American Bureau of Shipping,
a past Chairman of the Board of the American Institute of Merchant Shipping,
and a past appointee to the US Coast Guard's Towing Safety Advisory Committee.
Mr. Hvide is a graduate of the University of Miami School of Business
Administration.
NOMINEES FOR CLASS B DIRECTORS
THOMAS M. FERGUSON Director since August, 1996
Palm Beach, Florida Age 57
Mr. Ferguson has been the Company's Chairman since February 7, 1997, and
President and Chief Executive Officer since August 14, 1996. Since 1992, he
has been a director, Chairman and President of First Stanford Corporation, a
private advisory company engaged in providing services principally with
respect to maritime transactions and the development of business and financial
plans and strategies for national and international companies, as well as
restructuring programs for privately held companies. From 1987 to 1992, he was
director and Chairman and President of FTM Holdings Inc., a privately held
financial holding company engaged in the development and capitalization of
transportation and financial services companies. Mr. Ferguson is the sole
stockholder of First Magnum Corporation, and its sole director and officer.
Mr. Ferguson received a B.A. degree from Florida State University.
4
<PAGE>
DONALD L. CALDERA Director since August, 1996
Ft. Lauderdale, Florida Age 61
Mr. Caldera was Chairman of the Company from August 14, 1996, to February 7,
1997. Mr. Caldera is Executive Vice President, Development, of Hvide, and
since June 1993 has been President of Hvide Holdings, Inc. He has been a
director of Hvide since April 1994. From November 1990 to January 1992, he was
Chief Executive Officer of Global Sovcruise Lines, a Swiss-Soviet shipping
venture. Between 1985 and June 1990, he was Chairman and Chief Executive of
Norex-America, Inc. (formerly Bermuda Star Lines, Inc.) a publicly traded
cruise ship line. Mr. Caldera received his B.S. in Naval Architecture from The
Webb Institute and his J.D. from Yale Law School.
To the best knowledge of the Company, other than as stated here, or in
"Executive Officers and Pre-Sale Directors," no other director of the Company
is a director of any other company with a class of securities registered under
Section 12 of the Securities Exchange Act of 1934 or subject to the
requirements of Section 15(d) of that Act or any company registered under the
Investment Company Act of 1940.
PRE-SALE DIRECTORS
Information regarding the members of the Board of Directors prior to August
14, 1996, is contained in the section below entitled "Executive Officers and
Pre-Sale Directors."
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held 11 meetings during 1996. All
directors attended 90% of the aggregate number of meetings of the Board of
Directors, except Russell S. Moody. Mr. Moody did not attend any meetings
during 1996. Prior to August 14, 1996, the Board of Directors had a standing
Executive Committee and Audit Committee. At the present time, the Board of
Directors has a Compensation Committee, but due to the close working
relationship between the members of the Board of Directors, the Executive
Committee and the Audit Committee were disbanded in August and have not been
re-formed.
The Executive Committee which consisted from January 1, 1996, to August 14,
1996, of Messrs. Bissell, MacDonald, Mrs. Moody and Ms. Salinas, met 4 times
in that period. The Executive Committee's functions included exercising the
powers of the Board of Directors in the management of the business and affairs
of the Company, in the intervals between meetings of the Board of Directors.
The Audit Committee which consisted from January 1, 1996 to August 14, 1996,
of Messrs. Pauls, MacDonald, Smith, and Moody, Jr., met 4 times during that
period. The Audit Committee's functions consisted of recommending to the Board
of Directors a firm of certified public accountants to conduct audits of the
accounts and affairs of the Company, reviewing accounting objectives and
procedures of the Company and the findings and reports of the independent
certified public accountants, and making such reports and recommendations to
the Board of Directors as it deemed appropriate.
The Compensation Committee is currently comprised of Mr. Hvide and Mr.
Caldera, and will also be so comprised following the 1997 Annual Meeting of
Stockholders. The member or members of the Committee are appointed annually by
the full Board. The Committee will review existing and proposed compensation
plans, programs and arrangements both for officers of the Company and for
certain nonofficer employees. The Committee will also grant stock options and
award restricted stock to key employees, including officers and members of the
Board, in accordance with the terms of the 1997 Incentive Option Plan. The
full Board of Directors, and not the Committee, is authorized to grant or
award compensation, options or restricted stock to any officer or employee who
is also a director and a member of the Compensation Committee. The
Compensation Committee was not formed until 1997.
5
<PAGE>
Abstentions or broker non-votes to the election of directors will not affect
the election of the candidates receiving the plurality of votes.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES FOR
CLASS A AND CLASS B DIRECTOR. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED
WILL BE VOTED "FOR" THE NOMINEES.
6
<PAGE>
EXECUTIVE OFFICERS AND PRE-SALE DIRECTORS
The following sets forth certain information with respect to Seal Fleet's
present executive officers. Following the sale of certain assets of the
Company to Hvide Marine Incorporated, as approved by the stockholders of the
Company at the Annual Meeting of Stockholders held July 12, 1996 (the "Sale"),
the following persons were appointed to the positions set forth below.
<TABLE>
<CAPTION>
YEARS OF
NAME POSITION AGE SERVICE OFFICER SINCE
---- -------- --- -------- -------------
<S> <C> <C> <C> <C>
Thomas M. Ferguson...... Chairman of the Board, President 57 8/14/96- 8/14/96
and Chief Executive Officer (Chairman since
2/7/97)
Donald L. Caldera....... Chairman of the Board 61 8/14/96-2/7/97 N/A
James S. Goodner........ Vice President, Chief Financial 55 8/14/96- 8/14/96
Officer, Treasurer and Secretary
</TABLE>
Donald L. Caldera was appointed Chairman of the Board on the closing of the
Sale, and remained Chairman under February 7, 1997, when Thomas M. Ferguson
was appointed Chairman of the Board, President and Chief Executive Officer.
Mr. Caldera and Mr. Ferguson are also directors of the Company and their
business experience is described above.
James S. Goodner joined the Company as Chief Financial Officer in August,
1996. On August 14, 1996, he became Vice President, Chief Financial Officer,
Treasurer and Secretary. Mr. Goodner has served as an advisor to domestic and
international firms from 1986 to 1996, most recently as a partner of Hockaday-
Goodner Associates. Among many assignments, in 1994-1995 he served as interim
Chief Financial Officer during the privatization of La Caja de Ahorro y
Seguro, Argentina's largest insurance company. In 1991-1992, he assisted
Global Sovcruise Lines and Inter Maritime Management, Inc., both of Geneva, in
the development of Swiss-Soviet joint ventures in cruise, shipping and port
operations. Mr. Goodner lived in Venezuela from 1970 to 1985, where he has
Chief Financial Officer for the Seagram Company Limited subsidiary in
Venezuela and, before that, Marketing Manager and Controller for the Eminca
Group, a Westinghouse group of major appliance manufacturing and distribution
companies in Venezuela. Mr. Goodner is an Adjunct Professor of International
Marketing and International Business at Jersey City State College. He received
his B.A. and M.B.A. degrees from Indiana University.
Mr. Ferguson and Mr. Goodner have been employed by Seal Fleet in management
positions since August 14, 1996. Information as to the Company's working
arrangements with Mr. Ferguson and Mr. Goodner is provided under "Certain
Relationships and Related Transactions."
Prior to the Sale, the Company's executive officers were as set forth in the
following table. All of the pre-Sale executive officers resigned following the
Sale, as detailed in the Proxy Statement dated June 17, 1996.
<TABLE>
<CAPTION>
OFFICER FROM
YEARS OF (ALL UNTIL
NAME POSITION AGE SERVICE AUGUST 14, 1996)
---- -------- --- -------- ----------------
<S> <C> <C> <C> <C>
John W. Bissell......... Chairman, President and CEO 68 21 1975
Carl H. Haglund......... Executive Vice President 53 25 1991
Trinidad Salinas........ Vice President, Treasurer and 56 19 1981
Assistant Secretary
Ralph McIngvale......... Vice President, Sales, Sealcraft 40 4 1992
Operators, Inc.
Ann McLeod Moody........ Secretary 59 21 1975
</TABLE>
7
<PAGE>
All of the above executive officers were employed by Seal Fleet in
management positions for more than five years prior to their resignations.
Carl Haglund had been employed with the Company in management positions since
1971.
Mr. Bissell, Ms. Salinas, Mr. McIngvale and Mr. Haglund devoted their full
working time to the Company until August 14, 1996. Information as to the
Company's arrangements with Ann McLeod Moody is provided under "Certain
Transactions."
Mr. McIngvale had been Vice President, Sales, of Sealcraft Operations, Inc.,
a subsidiary of the Company since March, 1992. Prior thereto, he was Vice
President, Sales, of Kilgore Offshore, Inc., which owns, operates and brokers
supply vessels.
Prior to the Sale, the Company's Board of Directors was comprised of the
following directors, who resigned following close of the Sale, as detailed in
the Proxy Statement dated June 17, 1996.
CLASS A DIRECTORS
John W. Bissell Director from 1981 to August, 1996
League City, Texas Age 68
Mr. Bissell was Chairman of the Board of Seal Fleet, Inc. for the five years
preceding the Sale. He served as director, President and Chief Executive
Officer of the Company from 1981 until August, 1996. Before then, he served in
other executive and management positions with the Company from 1975. Mr.
Bissell also served as a member of the Executive Committee of the Company.
Harold C. MacDonald Director from 1981 to August, 1996
Houston, Texas Age 63
Mr. MacDonald, for the past thirty-three years, has been Comptroller of The
Moody Foundation, a charitable foundation based in Galveston, Texas. Mr.
MacDonald served as a director of the Company from 1981 to August, 1996. He
was a member of the Executive Committee and Audit Committee of the Company.
Gerald J. Smith Director from 1980 to August, 1996
Galveston, Texas Age 62
Mr. Smith, for the past seventeen years, has been Program Officer of The
Moody Foundation, a charitable foundation based in Galveston, Texas. Mr. Smith
had been a director of the Company since 1980. He was a member of the Audit
Committee of the Company.
CLASS B DIRECTORS
Ann McLeod Moody Director from 1975 to August, 1996
Galveston, Texas Age 59
Mrs. Moody served as Corporate Secretary and director of the Company from
1975 to August, 1996, Mrs. Moody was a member of the Executive Committee of
the Company.
Robert L. Moody, Jr. Director from 1980 to August, 1996
Galveston, Texas Age 37
Mr. Moody, Jr., for the past seven years, has been President of Moody
Insurance Group. He had served as director of the Company since 1980. Mr.
Moody was a member of the Audit Committee of the Company.
8
<PAGE>
Russell S. Moody Director from 1982 to August, 1996
Austin, Texas Age 35
Russell S. Moody had served as director of the Company since 1982. He serves
as director of American National Insurance Company.
Louis E. Pauls, Jr. Director from 1970 to August, 1996
Galveston, Texas Age 61
Mr. Pauls, for the past eleven years, has been President of Louis Pauls &
Company, an investment brokers firm based in Galveston. Mr. Pauls had served
as director of the Company since 1970. He also serves as director of National
Western Live Insurance Company. Mr. Pauls was a member of the Audit Committee
of the Company.
Ann McLeod is the wife, and Robert L. Moody, Jr. and Russell S. Moody are
the sons, of Robert L. Moody, settlor of the Trusts discussed on page 12.
There is no other relationship by birth or marriage among the directors or
executive officers.
Robert L. Moody is an officer and director of National Western Life
Insurance Company, American National Insurance Company and Moody National
Bank, and he and his son, Ross Moody, and his mother are the trustees of The
Moody Foundation.
Russell S. Moody suffered a serious automobile accident in 1980, which
resulted in his confinement to a hospital for more than a year. After the
accident, his father, Robert L. Moody was appointed his guardian for limited
purposes. This limited guardianship was still in effect as of August 14, 1996.
9
<PAGE>
EXECUTIVE COMPENSATION
The following table provides information as to the compensation paid by the
Company and its subsidiaries, for the three fiscal years ended December 31,
1996, to its Chief Executive Officers, and other executive officers whose
remuneration exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION
-------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS/SARS
--------------------------- ---- -------- ------- --------------- ------------
<S> <C> <C> <C> <C> <C>
John W. Bissell.............. 1996 $ 77,142 $71,142 $10,875
Chairman, President and CEO 1995 $ 96,000 $10,000
(through 8/14/96) 1994 $ 88,000 $10,000
Thomas M. Ferguson .......... 1996 $ 18,138 240,000
Chairman, President and CEO
(from 8/14/96)
Ralph McIngvale(2)........... 1996 $461,748
Vice President, Sales 1995 $542,000
(through 8/14/96) 1994 $717,000
Trinidad Salinas............. 1996 $ 47,858 $40,431 $16,650
1995 $ 57,458 incl.
1994 $ 51,195 incl.
Edward Schreiber............. 1996 $ 50,646 $59,952 $17,545
1995 $ 83,814 incl.
1994 $ 79,385 incl.
Phillip Miranda.............. 1996 $ 43,476 $55,070
1995 $ 69,280
1994 $ 69,508
</TABLE>
- --------
(1) The Company has not provided any long-term compensation plan, stock
options, stock appreciation rights, long-term incentive plan, defined
benefit or actuarial plan, employment contract or termination of employment
or change in control agreements with any executive officer other than Mr.
McIngvale (see footnote 2 below) and other than the options described on
page 18. Although the terms of the 1996 Long-Term Incentive Plan described
below ("1996 LTIP") provided for several types of awards, the Board of
Directors awarded only those options set forth in the Option Table on page
18. No further awards of any kind will be made under the 1996 LTIP. The
Company sponsors a 401(k) Plan for all employees but makes no contributions
thereto. Mr. Bissell received director's fees of $2,120 in 1996, and $1,765
in 1995 and 1994, which are included in his salary. Other Annual
Compensation for Mr. Bissell includes the cost and operating expense of an
automobile which totaled to $10,875, $10,000 and $10,000 in 1996, 1995 and
1994, respectively.
(2) The Company entered into a renewal employment agreement with Mr. McIngvale
on January 1, 1996. The agreement provided for a minimum salary of $3,500
per month plus certain commission, provided that the total salary plus
commissions would not be less than $100,000 per annum. This agreement was
terminated on August 14, 1996. The Company transferred the boat brokerage
business to Mr. McIngvale in connection with the Sale on August 14, 1996.
Pursuant to the terms of the Company's agreement with him, in connection
with the transfer of the business Mr. McIngvale collected the receivables,
paid the payables, and paid the Company 50% of the difference.
10
<PAGE>
The directors are currently compensated at the rate of $500 for regular
meetings and $250 for each special meeting which they attend, and are also
reimbursed for expenses. Since becoming a director on August 14, 1996, Mr.
Ferguson has elected to forego receiving his director's fees.
The Board of Directors has adopted the Seal Fleet, Inc. Long Term Incentive
Plan ("1996 LTIP"). Under the 1996 LTIP, executive officers and non-employee
Directors were awarded stock options with respect to the Class A Common Stock
of the Company. The following table shows the aggregate number of options
granted under the 1996 LTIP to both executive officers and non-employee
Directors. Following adoption of the 1997 Incentive Option Plan, no further
awards or grants of any kind will be made under the 1996 LTIP. For information
regarding awards and grants possible under the 1997 Incentive Option Plan,
please see Proposal 7, "1997 Incentive Option Plan," below.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
(c)
% OF TOTAL
(b) OPTIONS GRANTED (d)
(a) NUMBER OF TO EMPLOYEES IN EXERCISE PRICE (e)
NAME AND POSITION SHARES(1) FISCAL YEAR PER SHARE EXPIRATION DATE
----------------- --------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Thomas M. Ferguson...... 240,000(2) 60% $.50 August 14, 2006
Chairman, President and
CEO
James S. Goodner........ 80,000 20% $.50 August 14, 2006
V.P., CFO, Treasurer
and Secretary
J. Erik Hvide........... 40,000 10% $.50 August 14, 2006
Director
Donald L. Caldera....... 40,000 10% $.50 August 14, 2006
Director
</TABLE>
- --------
(1) Each option has a ten-year term. Each option may be terminated prior to
August 14, 1997, by the optionee's termination of employment, retirement
or death as provided in the 1996 LTIP and the optionee's option agreement.
The exercise price may be paid in cash or in shares. Withholding taxes due
on exercise may be paid in cash, with previously owned shares, or by
having shares withheld. Upon an optionee's termination of employment,
retirement or disability, options may be exercised only to the extent
exercisable on the date of such termination of employment, retirement or
death. No stock appreciation rights ("SARs" were granted to the officers
and directors listed in the table during 1996.
(2) Mr. Ferguson exercised all of options referenced above on March 25, 1997,
thereby acquiring 240,000 shares of Class A Common Stock.
The number and price of options stated above and the total number of shares
that may be granted or sold under the 1996 LTIP shall be proportionally
adjusted to reflect any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization or similar event, including the stock
splits to be effected should Proposal 4 below be approved. If Proposal 4 is
approved, the optionholders listed above will be entitled to exercise options
to acquire the following number of shares of Class A Common Stock: Mr.
Caldera--20,000; Mr. Goodner--40,000; and Mr. Hvide--20,000. Mr. Ferguson's
options under the 1996 were exercised on March 25, 1997.
Under Section 162(m) of the Internal Revenue Code, amounts treated as
compensation to optionees pursuant to the exercise of options under the 1996
LTIP may not be fully deductible by the Company as executive compensation. A
company may not deduct certain executive compensation in excess of $1,000,000.
This limitation applies to compensation paid to the Company's Chief Executive
Officer and to each of its next four most highly compensated executive
officers. Amounts treated as compensation pursuant to the exercise of stock
options are subject to the deduction limit, unless certain procedures have
been followed and the exercise price is set at least equal to the fair market
value of the underlying stock on the date of the grant. Due to the procedure
by which the options were granted, amounts treated as compensation pursuant to
the exercise of the options granted under the 1996 LTIP will be subject to the
deduction limit.
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as of March 25, 1997 with respect
to ownership by management, nominees for director and by any person who is
known by the Company to be the beneficial owner of more than five percent of
the outstanding Class A Common Stock or Class B Common Stock. Unless otherwise
indicated, these persons possess sole voting and investment power with respect
to the shares they beneficially own. The table sets forth the number of shares
and options over shares held by the listed stockholders prior to the 1 for
fifty, then 25 for 1 stock splits discussed in Proposal 4 above.
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS OF BENEFICIAL AMOUNT AND NATURE OF
CLASS OWNER(1) BENEFICIAL OWNERSHIP PERCENT OF CLASS
- -------- ------------------------------ -------------------- ----------------
<S> <C> <C> <C>
A Common J. Erik Hvide(2) 316,055(3) 11.9
A Common Thomas M. Ferguson(4) 555,378 20.9
B Common Thomas M. Ferguson(4) 50,000 100.0
A Common James S. Goodner 80,000(5) 3.0
A Common Donald L. Caldera 40,000(6) 1.5
A Common All officers and directors as a group 991,433 37.2
B Common All officers and directors as a group 50,000 100.0
</TABLE>
- --------
(1) The address of Mr. Hvide and of Hvide Marine Incorporated is 2200 Eller
Drive, Ft. Lauderdale, Florida, 33316. The address of Mr. Ferguson and
First Magnum Company is P.O.B. 1147, Palm Beach, FL, 33480-1147. The
address of Mr. Caldera is 2200 South Ocean Lane, #1109, Ft. Lauderdale, FL
33316.
(2) The figures for Mr. Hvide include 276,055 shares held by Hvide Marine
Incorporated. Mr. Hvide may be deemed to control Hvide Marine Incorporated
and therefore has voting and investment power over Hvide Marine
Incorporated's shares of the Common Stock of the Company.
(3) Includes 40,000 shares subject to options that are exercisable as of March
21, 1997.
(4) All of the shares shown to be held by Mr. Ferguson, except the shares
acquired pursuant to the exercise of options as discussed above, are held
by First Magnum Incorporated. As sole stockholder of First Magnum
Incorporated, Mr. Ferguson has voting and investment power over First
Magnum Incorporated's shares of the Common Stock of the Company.
(5) Includes 80,000 shares subject to options that are exercisable as of March
21, 1997.
(6) Includes 40,000 shares subject to options that are exercisable as of March
21, 1997.
CHANGE IN CONTROL WITHIN LAST FISCAL YEAR
As approved by the stockholders at the Annual Meeting of Stockholders held
July 17, 1996, pursuant to the sale of assets of the Company (the "Sale") to
Hvide Marine Incorporated ("Hvide"), four trusts established by Robert L.
Moody for the benefit of his children (the "Trusts") sold to Hvide all of the
Trust's holdings of the Company's Common Stock. The Common Stock acquired by
Hvide was subsequently sold, as detailed in the Proxy Statement dated June 17,
1996, to First Magnum, a Company wholly owned by Thomas M. Ferguson. Hvide
acquired the Class A and Class B Common Stock of the Company held by the
Trusts for nominal consideration as a part of the Sale. Hvide, and J. Erik
Hvide, its controlling stockholder, and First Magnum and Thomas M. Ferguson,
its sole stockholder, now directly and indirectly own beneficially, or have
rights to acquire, 32.8% of the Class A Common Stock of the Company, and 100%
of the Class B Common Stock of the Company.
The Company is not aware of any contractual arrangement whose operation may
at a subsequent date result in a change in control of the Company.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following paragraphs describe certain transactions or relationships
between the Company and its officers, directors and certain related parties
which occurred or have continued since January 1, 1996.
In August of 1996, the Company sold certain vessels and related marine
business (the "Sale") to Hvide Marine Incorporated, ("Hvide"). J. Erik Hvide,
a director of the Company, is Chairman, President and Chief Executive Officer
of Hvide, and owns beneficially (directly and as trustee of certain Hvide
family trusts), as of February 21, 1997, approximately 51.7% of Hvide's Class
B Common Stock, and 38.6% of the total voting power of that company. Donald L.
Caldera, a director of the Company, is Executive Vice President and a Director
of Hvide. Thomas M. Ferguson, a director and Chairman, President and Chief
Executive Officer of the Company, is the principal of First Stanford
Corporation, a consulting firm engaged by Hvide to provide advisory services.
First Stanford Corporation was paid partly in cash and partly in Class A
Common Stock of Hvide for its services, and as of February 21, 1997, holds
less than 1% of Hvide's Class A Common Stock.
In connection with the exercise of his options to acquire shares of Class A
Common Stock discussed above, on March 25, 1997 the Company made a loan to Mr.
Ferguson of $120,000, evidenced by a promissory note and secured by a pledge
of the shares acquired on exercise of the options. The loan bears interest at
a rate per annum equal to the sum of one percent (1%) and the discount from
face value at which 90-day United States treasury bills have most recently
been sold at government auction, such rate estimated to be 6.25 on March 25,
to be readjusted thereafter at the end of each successive 180-day period.
Interest shall be payable no less frequently than annually, and principal
shall be payable in full on the earlier to occur of the termination of Mr.
Ferguson's employment with the Company or March 21, 1999.
All of the Company's present directors and officers are associated with
other firms or occupations involving other business activities. Because of
these affiliations and because these individuals will devote only part time to
the affairs of the Company, there are potential inherent conflicts of interest
in their acting as directors and officers of the Company and of other
entities. All of the Company's directors and officers may be directors or
controlling stockholders of other entities engaged in a variety of businesses
which may have various transactions with the Company. The Company is
considering engaging First Stanford Corporation, a company wholly owned by
Thomas M. Ferguson, to provide advisory services with respect to one or more
future business combinations (see Proposal 6). Additional conflicts of
interest and non-arm's length transactions may also arise in the future in the
event the Company's officers or directors are involved in the management of
firms with which the Company transacts business. The Company may pay finder's
fees or other fees to its officers, directors, or affiliates in connection
with any potential business combination involving the Company.
Prior to the Sale, the following transactions had occurred between
directors, officers and certain stockholders of the Company:
A subsidiary of the Company had a management consulting agreement with
Robert L. Moody, which was terminated on August 14, 1996. Under such agreement
fees of $29,000 and $50,000 were paid in 1996 and 1995, respectively. The
agreement also provided that the Company indemnify Mr. Moody against
liabilities incurred by him under such agreement.
Ann McLeod Moody (Robert L. Moody's wife) was Corporate Secretary of the
Company until August 14, 1996, and was paid a salary of $9,784 plus a
termination bonus of $11,290 during 1996. During 1995 she received a salary of
$16,000. Her duties as Corporate Secretary required only a minor portion of
her time. Mrs. Moody was also a director of the Company until August 14, 1996,
and in such capacity received the same fees as other directors.
Irwin M. Herz, Jr., trustee of the Three R Trusts, is a member of the law
firm which served as the Company's legal counsel on certain matters through
August 14, 1996. Such firm provided legal services for which it accrued and
received approximately $1,600 during 1996.
13
<PAGE>
Through October 31, 1996, when the lease expired, the Company's offices
occupied a steel and masonry building on a 29,000 square foot tract of land
owned by a partnership of which one member is Robert L. Moody. The lease
provided a minimum monthly rental of $1,655 ($20,000 per year) and gave the
Company the option to extend the lease for four additional five year periods.
The Company paid all repair costs, insurance and taxes. The Company believes
that the terms of this lease were as favorable as those which it could have
reasonably obtained from an unaffiliated party. Because of the Company's move
to Florida, the lease was not renewed.
The Company managed and operated various ships owned by the Three R Trusts.
The Company earned fees based on 6% of the ships' revenues. Fees earned on the
Three R Trusts' ships totaled $248,000 and $325,000 during 1996 and 1995,
respectively.
On behalf of the related parties, the Company collected revenues and paid
expenses for the management of these ships through August 14, 1996. This
activity resulted in a receivable from the Three R Trusts of $758,000 at
December 31, 1995. There was no balance at December 31, 1996.
The Company had a note payable to the Three R Trusts, face amount of
$5,925,000, stated interest at 7%, collateralized by the common stock of six
subsidiaries of the Company. The note was originally discounted $1,330,000
using an imputed rate of 10%. This discount was fully amortized in 1989.
Principal payments were due in two equal installments on December 27, 1990 and
1991. The Company was unable to make these principal payments to the Three R
Trusts putting the Company in default. This note was paid in full on August
14, 1996.
During each of the years 1986 through 1989, the Company paid one-half the
interest due to the Three R Trusts during the year and gave a promissory note
for the remainder totaling $208,000 per year. The total of these notes is
$829,000, and they were due on December 27, 1991. Interest expense on all
these notes was $284,000 in 1996 and $489,000 in 1995. The Company also paid
an additional $154,000 in interest when it was determined that interest paid
at closing of the Sale had been calculated as "simple" when it should have
been "compounded."
SECTION 16(a)--BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3 and 4 and amendments thereto furnished
to the Company during the 1996 fiscal year, and on Forms 5 received in regard
to the 1996 fiscal year, and any written representations, the Company is not
aware of the failure of any "Reporting Person" (as defined in Section 16(a) of
the Securities and Exchange Act 1934) to file on a timely basis reports
required by Section 16(a).
14
<PAGE>
PROPOSAL THREE
APPOINTMENT OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP has been approved by the Board of
Directors to serve as independent auditors of the Company for the fiscal year
ended December 31, 1997, subject to approval by the affirmative vote of a
majority of the outstanding shares of the Company's Common Stock represented
at the Annual Meeting. Management is not aware of direct or indirect financial
interest or any other relationship Ernst & Young LLP may have with the Company
or its subsidiaries except in the firm's proposed capacity as the Company's
independent auditor.
The independent auditors of the Company for 1996 were Pannell Kerr Forster
of Texas, P.C., who have audited the financial statements of the Company for
the recently completed 1996 fiscal year. The reason for the change in
independent auditors is the Board of Directors' determination that the
Company's present and future needs would be best served by a firm located near
the Company's new head office, in Florida.
During the fiscal years ended December 31, 1996 and 1995, neither the
Company nor anyone on its behalf consulted the proposed new independent
auditor, Ernst & Young LLP regarding the application of accounting principles
to a specific completed or contemplated transaction, or the type of audit
opinion that might be rendered on the Company's financial statements, and no
advice was provided by Ernst & Young LLP in reaching a decision as to
accounting, auditing or financial reporting issues. During this period there
were no disagreements with the former independent auditors on any matter of
accounting principles, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to the former auditor's satisfaction, would
have caused it to make reference to the subject matter of the disagreement in
connection with its report.
One or more representatives of the Company's current principal independent
auditors, Pannell Kerr Forster of Texas, P.C., as well as a representative of
Ernst & Young LLP will be present at this year's Annual Meeting of
Stockholders. Each will have an opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
Ratification of the appointment of the independent auditors must be approved
by a majority of the shares of Common Stock present, in person or by proxy, at
the Annual Meeting and entitled to vote. If the stockholders should not ratify
the appointment of Ernst & Young LLP the Board of Directors will reconsider
the appointment.
Abstentions will be counted for purposes of determining the number of shares
present and entitled to vote and will have the effect of a vote against
Proposal 3. Broker non-votes, if any, will not be counted in determining the
number of shares present and entitled to vote on Proposal 3.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF
PROPOSAL 3. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED WILL BE VOTED
"FOR" APPROVAL.
15
<PAGE>
PROPOSAL FOUR
ONE FOR TWO SPLIT OF THE COMPANY'S COMMON STOCK
In order to decrease the Company's administrative expenses and to increase
potential earnings per share and book value per share, the Board of Directors
proposes to effect a one for fifty reverse split of the Class A and Class B
Stock followed by a twenty-five for one forward stock split of the Class A
Stock and Class B Stock. The net effect of the two stock splits will be a one
for two reverse stock split, which will reduce the number of stockholders. The
stock split is being accomplished in two parts in order to achieve a greater
reduction in stockholders and corresponding cost savings than would otherwise
be possible.
The purpose of the reverse stock split is (i) to reduce the number of
holders of Class A Stock and thereby reduce the Company's administrative
costs; and (ii) to increase the potential earnings per share and book value
per share of the shares outstanding after the reverse split. As of February
21, 1997, the closing bid and asked price of the Class A Stock, as reported by
Compuserve's database of historical stock prices, were $.50 and $.75,
respectively. Many stockholders own a very small number of shares of Class A
Stock. The existence of a very large number of stockholders owning a small
number of shares (relative to the size of the Company) increases the Company's
administrative expenses. In addition, the Board of Directors believes that the
total number of shares outstanding is excessive relative to the assets and
potential earnings of the Company.
The following table shows the distribution of record ownership of the Class
A Stock as of February 25, 1997 (as reported by the Company's transfer agent):
<TABLE>
<CAPTION>
NUMBER PERCENT
NUMBER OF OF
OF SHARES HOLDERS CLASS
--------- ------- -------
<S> <C> <C>
0-24....................................................... 2,468 49.0
25-49...................................................... 884 17.5
50-99...................................................... 802 15.9
100 to 199................................................. 439 8.7
200 & Over................................................. 448 8.9
Total...................................................... 5,040 100.0
</TABLE>
The Board of Directors has determined that a one-for-two reverse split would
produce a total number of outstanding shares more appropriate, in its opinion,
to the Company's potential earnings and assets. In order to maximize the
savings in administrative costs through a reduction in the number of
stockholders, the Company proposes to accomplish a one-for-two reverse split
in the following steps: (i) a one-for-fifty reverse split, with the purchase
by the Company of all fractional shares created by the reverse stock split,
and (ii) thereafter, a twenty-five-for-one forward split of the shares
resulting from the one-for-fifty reverse split.
16
<PAGE>
The following table, based on information as of February 25, 1997, shows
some of the approximate net results of effecting the one-for-fifty reverse
split and the subsequent twenty-five-for-one forward split. The amount of
stock held and the percentages provided are as of March 25, 1997.
<TABLE>
<CAPTION>
AFTER 1 FOR 50 AFTER 25
PRESENT REVERSE SPLIT FOR 1 SPLIT
--------- -------------- -----------
<S> <C> <C> <C>
Number of Shares Outstanding
Class A Common Stock.................. 2,502,405 50,049 1,251,202
Class B Common Stock.................. 50,000 1,000 25,000
Number of Holders
Class A Common Stock.................. 5,040 1,688(a) 1,688(a)
Class B Common Stock.................. 1 1 1
Number of Shares Held by
Officers and Directors(b)
Class A Common Stock.................. 831,433 16,628 415,700
Class B Common Stock.................. 50,000 1,000 25,000
Percentage of Class Held by
Officers and Directors
Class A Common Stock.................. 33.22% 33.22% 33.22%
Class B Common Stock.................. 100.00% 100.00% 100.00%
</TABLE>
- --------
(a) This figure assumes that all fractional share interests will be paid in
cash as described below.
(b) Includes shares held by First Magnum Corporation, a company wholly-owned
by Mr. Thomas M. Ferguson, shares held directly by Thomas M. Ferguson, and
shares held by Hvide Marine Corporation, a corporation controlled by J.
Erik Hvide. This figure includes 240,000 shares acquired by Mr. Ferguson
on March 25, 1997, but does not include any other shares subject to
outstanding options.
There is no assurance that the reverse stock split will be reflected in a
proportionate increase in the price per share of the shares of Class A Stock
remaining outstanding, or that the shares remaining outstanding will trade at
an aggregate price equivalent to the aggregate price for all the shares prior
to such split. It is likely that the future price of the Class A Stock will
depend on the future earnings of the Company as well as stock market
conditions, the number and type of brokerage firms (if any) making a market in
the Class A Common Stock and other factors beyond the control of the Company
or its management.
After the stock splits become effective, the Class A Stock will still be
held of record in more than 1,700 accounts, and the Company will continue to
be subject to the reporting, proxy solicitation and other rules under the
Securities Exchange Act of 1934. Since both the Class A Stock and the Class B
Stock will be involved in the reverse stock split, the relative ownership of
the Company between the two classes of shares will not be affected.
Fractional shares resulting from the one-for-fifty reverse spit will not be
issued. The cash value of fractional interests will be based on the mean
between the bid and asked price of the Class A Stock for the ten business days
preceding the meeting.
The proposed stock split will be achieved by filing a certificate with the
office of the Secretary of State of the State of Nevada, providing that the
corporation shall have authority to issue 74,000 shares of Class A Stock,
$5.00 par value per share, and 1,000 shares of Class B Stock, $5.00 par value
per share; and that each share of Class A Stock, par value $.10 per share, and
each share of Class B Stock, par value $.10 per share, outstanding immediately
prior to the effectiveness of the certificate will be automatically converted
into one-fiftieth of one share of Class A Stock, $5.00 par value per share, or
one-fiftieth of one share of Class B Common Stock, $5.00 par value per share,
respectively. Following the reverse stock split, the Company will purchase any
fractional shares created by the reverse stock split at a price equal to the
arithmetic average of the daily arithmetic average of the bid and asked prices
for the ten trading days prior to the effective date of the reverse stock
split as evidenced by the filing of the certificate. Immediately following the
filing of the certificate referred to above, a further certificate will be
filed with the same office providing that the corporation shall have authority
to issue
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1,850,000 shares of Class A Common Stock, $.20 par value per share, and 25,000
shares of Class B Common Stock, $.20 par value per share; and that each share
of Class A Common Stock, par value $5.00 per share, and each share of Class B
Common Stock, $5.00 par value per share, outstanding immediately prior to the
effectiveness of the certificate shall be automatically converted into 25
shares of Class A Common Stock, $.20 par value per share, and 25 shares of
Class B Common Stock, $.20 par value per share, respectively.
Proposal 4 must be approved by a majority of shares of the Common Stock
present, in person or by Proxy, at the Annual Meeting and entitled to vote.
Abstentions will be counted for purposes of determining the number of shares
present and entitled to vote and will have the effect of a vote against
Proposal 4. Broker non-votes will not be counted in determining the number of
shares present and entitled to vote on Proposal 4.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF
PROPOSAL 4. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED WILL BE VOTED
"FOR" APPROVAL.
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PROPOSAL FIVE
REINCORPORATION IN DELAWARE
At the Annual Meeting, the stockholders of each of Class A and Class B
Common Stock will be asked to approve the reincorporation of the Company in
Delaware, an accompanying increase in the authorized Class A Stock of the
Company, the creation of a class of Preferred Stock and the merger of the
Company with its wholly owned subsidiary, Seal Holdings Corporation.
The Board of Directors believes that reincorporation in Delaware will allow
it to more effectively perform its duties. Although the General Corporation
Law of Nevada (the "Nevada Code") is similar to the Delaware General
Corporation Law ("Delaware GCL"), there is a lack of predictability under
Nevada law resulting from the limited body of case law interpreting the Nevada
Code. The Board of Directors recommends the Company change its state of
incorporation to the State of Delaware due to the predictability of Delaware
law.
The Board of Directors has adopted and approved, subject to stockholder
approval, an increase in the aggregate number of authorized Class A Stock, and
the authorization of a class of Preferred Stock. The Board of Directors
believes that the present level of authorized Class A Stock of the Company is
insufficient if additional equity is required to be raised in connection with
a major business combination. A business combination might also require or be
more easily accomplished through the issuance of preferred stock. The
Company's current Articles of Incorporation do not provide for the issuance of
preferred stock. Thus, in connection with the reincorporation, the Board of
Directors has approved an increase in the authorized number of Class A shares,
and has approved the creation of a class of Preferred Stock.
The following discussion summarizes certain aspects of the proposed
reincorporation of the Company in Delaware. If approved by the Company's
stockholders, the proposed reincorporation would be effected by merging the
Company into a wholly owned subsidiary of the Company (the "Surviving
Corporation"), which has been incorporated under the laws of Delaware for the
purpose of effecting the proposed merger (the "Merger"). The Merger would be
accomplished pursuant to the terms of an Agreement and Plan of Merger between
the Company and the Surviving Corporation in substantially the form attached
hereto as Appendix D (the "Merger Agreement"). The Surviving Corporation will
continue under the name Seal Holdings Corporation.
At the effective time of the Merger, the Surviving Corporation will be
governed by the Delaware GCL and by the new Certificate of Incorporation (the
"Delaware Certificate") attached hereto as Appendix B and the new Bylaws (the
"Delaware Bylaws") attached hereto as Appendix C. With certain exceptions, the
Delaware GCL is substantially similar to the Nevada Code. For a discussion of
certain differences in stockholders' rights and the powers of management under
the Delaware GCL and the Nevada Code, see "Differences Between the Corporation
Laws of Delaware and Nevada," below. Except for changes in the corporate name
to Seal Holdings Corporation and in the number of the Company's authorized
Class A Common Stock, and the addition of a class of preferred stock, assuming
stockholder approval, and except to the extent that changes are dictated by
the application of the Delaware GCL, the Delaware Certificate will be
substantially similar to the Company's present Articles of Incorporation (the
"Nevada Articles"). See "Differences Between the Charter of the Company and
the Surviving Corporation," below. In order to conform the Company's present
Bylaws to the Delaware GCL, and to improve the administration of the Company
by the clarification of certain procedures, the Bylaws of the Surviving
corporation contain certain changes and additions from the Company's present
Bylaws (the "Delaware Bylaws" and the "Nevada Bylaws," respectively). See
"Differences Between the Bylaws of the Company and the Surviving Corporation,"
below.
Upon effectiveness of the Merger, each share of Class A Common Stock of the
Company will automatically be converted into a share of Class A Common Stock
of the Surviving Corporation, each share of Class B Common Stock of the
Company will automatically be converted into a share of Class B Common Stock
of the Surviving Corporation, and stockholders of the Company will
automatically become stockholders of the Surviving Corporation. Certificates
for the Common Stock of the Company will be deemed to represent the same
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number of shares as represented by the Company's certificates, immediately
prior to the Merger (and following the stock splits, if approved, set out in
Proposal 4).
Under Nevada law, the affirmative vote of a majority of the outstanding
shares of each class of common stock is required for approval of the proposed
Merger and reincorporation, including the authorization of additional shares of
Class A Common Stock and the authorization of a class of Preferred Stock. If
approved by the stockholders at the Annual Meeting, it is anticipated that the
reincorporation will be completed as soon thereafter as practicable. The
proposed Merger and reincorporation may be abandoned or the Merger Agreement
may be amended (with certain exceptions), either before or after stockholder
approval has been obtained, if, in the opinion of the Board of Directors,
circumstances arise that make such action advisable.
Adoption and approval of the Merger will affect certain rights of
stockholders. Accordingly, stockholders are urged to read carefully this entire
Proposal 5 and the appendices hereto before voting on this Proposal 5.
PRINCIPAL REASONS FOR THE REINCORPORATION
The primary reason for the Board's recommendation of the reincorporation is
the well-developed case law interpreting the Delaware GCL, which the Board
believes will allow it to perform its duties more effectively. Although the
Nevada Code is relatively similar to the Delaware GCL, there is a lack of
predictability under Nevada law resulting from the limited body of case law
interpreting the Nevada Code. The Delaware GCL and the court decisions
construing it, on the other hand, are widely regarded as the most extensive and
well-defined body of corporate law in the United States. This body of case law
is based in part on Delaware's long-established policy of encouraging companies
to incorporate in that state. In furtherance of that policy, Delaware has been
a leader in adopting comprehensive, modern and flexible corporate laws which
are periodically updated and revised to meet changing business needs. As a
result, many major corporations have initially chosen Delaware for their
domicile or have subsequently reincorporated in Delaware in a manner similar to
that proposed by the Company. Following from these conditions, Delaware's
courts have developed considerable expertise in dealing with corporate issues,
and a substantial body of case law has developed construing Delaware law and
establishing public policies with respect to corporate legal issues. Thus, for
example, relative to other states Delaware provides greater guidance to
directors in the context of dealing with major transactions, including
potential changes in corporate control, along with more general corporate
matters. The Board therefore believes that the overall effect of the
reincorporation will be to enhance the Board's ability to consider all
appropriate courses of action with respect to significant transactions,
including takeover attempts, for the benefit of all stockholders. Moreover, the
Board believes that enhanced certainty with respect to the duties of directors
is a significant benefit to the Company and its stockholders and could be an
important factor in attracting and retaining quality persons to serve on the
Board of Directors.
CERTAIN CONSEQUENCES OF THE MERGER
In connection with the Merger, the Company's corporate name will be changed
from Seal Fleet, Inc. to Seal Holdings Corporation. The Merger will not result
in any other change in the business, management, assets, liabilities or net
worth of the Company. The Company will continue to maintain its executive
offices in Palm Beach, Florida. The capitalization, consolidated financial
condition and results of operations of the Surviving Corporation immediately
after consummation of the Merger will be the same as those of the Company
immediately prior to the consummation of the Merger.
Consummation of the Merger is subject to stockholder approval. Upon
satisfaction of that condition, the Merger will be consummated as follows:
Effective Date. The Merger will take effect at the later of the date on which
a Certificate of Ownership and Merger is filed with the Secretary of State of
Delaware and Articles of Merger are filed with the Secretary of State of Nevada
(the "Effective Date"), which filing is anticipated to be made as soon as
practicable after the adoption and approval of the Merger Agreement by the
stockholders of the Company. On the Effective Date of the Merger, the separate
corporate existence of the Company will cease, and stockholders of the Company
will become stockholders of the Surviving Corporation.
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Management After the Merger. Upon effectiveness of the Merger, the Board of
Directors of the Surviving Corporation will consist of those persons elected
to the Board of Directors of the Company at the Annual Meeting. Such persons
and their respective terms of office are set forth under the caption "Election
of Directors," above. The directors will continue to hold office as directors
of the Surviving Corporation for the same term for which they would otherwise
serve as directors of the Company. The individuals serving as executive
officers of the Company immediately prior to the Merger will serve as
executive officers of the Surviving Corporation upon the effectiveness of the
Merger.
Capitalization of the Surviving Corporation; Stock Certificates. The
authorized number of shares of Class A common stock of the Surviving
Corporation will be 14,975,000, $.20 par value, and the authorized number of
shares of the Class B common stock of the Surviving Corporation will be
25,000, $.20 par value (the "Surviving Corporation Common Stock"). This will
represent an increase in the authorized number of shares of Class A Common
Stock from the authorized amount following the reverse stock split proposed
herein. The Surviving Corporation will have an identical number of shares of
authorized Class B common stock as will the Company following the reverse
stock split herein proposed. The Surviving Corporation will also have
3,000,000 shares, $0.001 par value, of authorized but unissued Preferred
Stock. See, "Differences Between the Charter of the Company and the Surviving
Corporation," "Differences Between the Charter of the Company and the
Surviving Corporation," and "Differences Between the Bylaws of the Company and
the Surviving Corporation," below.
In the Merger, Company Common Stock (Class A and Class B) will be converted,
share for share, without any action on the part of the holder thereof, into
the Surviving Corporation Common Stock (Class A and Class B). The Surviving
Corporation Common Stock will not have preemptive rights and will not be
subject to assessment. All shares of the Surviving Corporation Common Stock to
be issued in the Merger will be fully paid and nonassessable. As holders of
stock in a Delaware corporation, the stockholders will have the rights
provided by the Delaware GCL, the Delaware Certificate, and the Delaware
Bylaws of the Company. See "Differences Between the Corporation Laws of Nevada
and Delaware" below.
Indebtedness of the Company. All indebtedness of the Company outstanding on
the Effective Date will be assumed by the Surviving Corporation in connection
with the Merger. To the Company's knowledge, no indebtedness of the Company
will be accelerated as a result of the Merger.
Trading of the Surviving Corporation Common Stock. It is anticipated that
the Surviving Corporation Common Stock will be quoted on the National Daily
Quotation Service (the "Pink Sheets"), and that such market will consider the
delivery of existing stock certificates of the Company as constituting "good
delivery" of shares of the Surviving Corporation in transactions subsequent to
the Merger.
Amendment, Deferral or Termination of the Agreement of Merger. The Merger
Agreement provides that the Board of Directors of the Company may amend the
Merger Agreement prior to or after approval of the Merger by the stockholders
of the Company but not later than the Effective Date; provided that no such
amendment may be made that is not approved by the stockholders if it would
affect the principal terms of the Merger Agreement.
The Merger Agreement also provides that the Board of Directors of the
Company may terminate and abandon the Merger or defer its consummation for a
reasonable period, notwithstanding stockholder approval, if in the opinion of
the Board of Directors such action would be in the best interests of the
Company.
Federal Income Tax Consequences. It is anticipated that the Merger will be
treated as a tax-free reorganization under the Internal Revenue Code of 1986,
as amended. Accordingly, no gain or loss will be recognized by holders of
Company Common Stock or by the Company or the Surviving Corporation as a
result of the consummation of the Merger. Each former holder of Company Common
Stock will have the same tax basis in the Surviving Corporation Common Stock
received pursuant to the Merger as it has in Company Common Stock held by it
at the time of the consummation of the Merger. Each stockholder's holding
period with respect to the Surviving Corporation Common Stock will include the
period during which it held the
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corresponding Company Common Stock, provided the latter is held as a capital
asset at the time of consummation of the Merger. The foregoing is only a
summary of the federal income tax consequences and is not tax advice. The
Company has not obtained and will not seek a ruling from the Internal Revenue
Service or an opinion of legal or tax counsel with respect to the tax
consequences of the Merger. Shareholders should consult their own tax advisors
regarding the specific tax consequences to them of the merger, including the
applicability of the laws of any state or other jurisdiction.
Differences Between the Charter of the Company and the Surviving Corporation
Except to the extent that changes are dictated by the application of the
Delaware GCL, and the additional changes discussed below and in "Differences
Between the Bylaws of the Company and the Surviving Corporation" below, the
provisions of the Delaware Certificate and the Delaware Bylaws will be
substantially similar to the provisions of the Nevada Articles and the Nevada
Bylaws. The par value of the authorized shares of the Surviving Corporation
Common Stock will be $.20 per share, and the par value of the Surviving
Corporation Preferred Stock will be $0.001 per share. The low par value of the
Preferred Stock is designed to decrease initial Delaware franchise taxes. The
number of authorized Class A Common Stock will be increased. There will be a
class of authorized but unissued Preferred Stock.
Shareholder Voting Procedures--Clarification
The Nevada Articles could be interpreted to allow the stockholders of the
Company to vote as a class on certain actions, whether or not the Nevada Code
required stockholder approval as a condition on the Company's ability to take
those actions. The Delaware Certificate has been prepared so as to make clear
that the stockholders have the right to vote as a class on certain matters,
provided the Delaware GCL requires stockholder approval of those matters in a
given situation. The Board of Directors believes this change will clarify the
relationship between this provision and the Delaware GCL.
Differences Between the Corporation Laws of Delaware and Nevada
In many instances, the Nevada Code is substantially similar to the Delaware
GCL. Although it is impractical to note all of the differences between the
corporation statutes of Delaware and Nevada, the most significant differences,
in the judgment of the management of the Company, are summarized below. The
summary is not intended to be complete and reference should be made to the
Delaware GCL and the Nevada Code.
Indemnification of Officers and Directors and Advancement of
Expenses. Delaware and Nevada have nearly identical provisions regarding
indemnification by a corporation of its officers, directors, employees and
agents, except Nevada provides broader indemnification in connection with
stockholder derivative lawsuits.
Delaware and Nevada law differ in their provisions for advancement of
expenses incurred by an officer or director in defending a civil or criminal
action, suit or proceeding. The Delaware GCL provides that expenses incurred
by an officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation in
advance of the final disposition of the action, suit or proceeding upon
receipt of an undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined that he is not entitled to be
indemnified by the corporation. Thus, a corporation has the discretion to
decide whether or not to advance expenses.
Under the Nevada Code, the articles of incorporation, Bylaws or an agreement
made by the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit or proceeding
MUST be paid by the corporation as such expenses are incurred and in advance
of the final disposition of the action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if
it is ultimately determined that he is not entitled to be indemnified by the
corporation. Thus, a corporation may have no discretion to decide whether or
not to advance expenses.
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Limitation on Personal Liability of Directors. Delaware corporations are
permitted to adopt charter provisions limiting, or even eliminating, the
liability of a director to a company and its stockholders for monetary damages
for breach of fiduciary duty as a director, provided that such liability does
not arise from (i) a breach of the duty of loyalty to the corporation or its
stockholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) liability for
unlawful payment of dividends or unlawful purchase or redemption of the
corporation's stock or (iv) any transaction from which the director derived an
improper personal benefit.
While the Nevada Code has a similar provision permitting the adoption of
provisions in the articles of incorporation limiting personal liability, the
Nevada provision differs in two respects. First, the Nevada provision applies
to both directors and officers. Second, while the Delaware provision excepts
from the limitation on liability a breach of the duty of loyalty and any
transaction from which the director derived an improper personal benefit, the
Nevada counterpart does not contain these exceptions. Thus, the Nevada
provision permits a corporation to limit the liability of officers, as well as
directors, and permits limitation of liability arising from a breach of the
duty of loyalty and improper personal benefits.
The Delaware Certificate, like the Nevada Articles, contains a provision
limiting the personal liability of directors. However, unlike the Delaware
Certificate, the Nevada Articles also limit the liability of officers. Under
the laws of either state, the charter provision will not have any effect on
the availability of equitable remedies such as an injunction or rescission
based upon a breach of the duty of care, or for liabilities which arise under
certain federal statutes such as the securities laws.
Dividends. Under the Delaware GCL, unless otherwise provided in the
certificate of incorporation, a corporation may declare and pay dividends, out
of surplus, or if no surplus exists, out of net profits for the fiscal year in
which the dividend is declared and/or the preceding fiscal year (provided that
the amount of capital of the corporation following the declaration and payment
of the dividend is not less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets). In addition, the Delaware GCL
provides, with limited exceptions, that a corporation may redeem or repurchase
its shares only out of surplus.
The Nevada Code provides that no distribution (including dividends on, or
redemption or repurchases of, shares of capital stock) may be made if after
giving effect to such distribution, the corporation would not be able to pay
its debts as they become due in the usual course of business, or except as
otherwise specifically allowed by the articles of incorporation, the
corporation's total assets would be less than the sum of its total liabilities
plus the amount that would be needed at the time of a dissolution to satisfy
the preferential rights of stockholders whose preferential rights are superior
to those receiving the distribution.
The provisions of the Delaware GCL are more restrictive than the provisions
of the Nevada Code and could conceivably affect future dividends or other
distributions. Neither the Company nor the Surviving Corporation currently
intends to pay dividends or make distributions on its Common Stock.
Restrictions on Business Combinations/Corporation Control. Both the Delaware
GCL and the Nevada Code contain provisions restricting the ability of a
corporation to engage in business combinations with an interested stockholder.
Under the Delaware GCL, except under certain circumstances, a corporation is
not permitted to engage in a business combination with any interested
stockholder for a three-year period following the date such stockholder became
an interested stockholder. The Delaware GCL defines an interested stockholder
generally as a person who owns 15% or more of the outstanding shares of such
corporation's voting stock.
Under the provisions of the Nevada Code, except under circumstances which
vary from the exceptions under the Delaware GCL, business combinations with
interested stockholders are not permitted for a period of three years
following the date such stockholder became an interested stockholder and
thereafter only if certain conditions are met. Restrictions also apply with
respect to business combinations after such three-year period. The Nevada Code
defines an interested stockholder, generally, as a person who owns 10% or more
of the outstanding shares of the corporation's voting stock.
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Additionally, the Nevada Code generally disallows the exercise of voting
rights with respect to "control shares" of an "issuing corporation" held by an
"acquiring person," unless such voting rights are conferred by a majority vote
of the disinterested stockholders. An "issuing corporation" is a Nevada
corporation that has 200 or more shareholder with at least 100 of those
shareholders being stockholders of record and residents of Nevada and that
does business in Nevada directly or through an affiliated corporation.
"Control shares" are the voting shares of an issuing corporation acquired in
connection with the acquisition of a "controlling interest." "Controlling
interest" is defined in terms of threshold levels of voting share ownership,
which thresholds, whenever each may be exceeded, trigger applications of the
voting bar with respect to the shares newly acquired.
Rights of Dissenting Stockholders
Stockholders who oppose the proposed Merger will have the right to receive
payment for the value of their shares as set forth in Sections 92A.300 through
92A.500 of the Nevada Code, which are attached under Appendix E to this Proxy
Statement. Under the Nevada Code, to assert dissenters' rights a stockholder
of the Company must refrain from voting in favor of the Merger and must
deliver a written notice to the Company prior to the vote on the Merger of his
intention to demand payment for his shares if the Merger is effectuated
(a negative vote by a stockholder will not constitute the required notice). A
stockholder who holds his shares beneficially, and not of record, may assert
his dissenters' rights only by submitting with his written notice the written
consent of the stockholder of record to the dissent, and must exercise his
dissenters' rights for all the shares of which he is the beneficial owner of
which he has power to direct the vote.
If the proposed Merger is approved by the required vote at the Annual
Meeting, the Company is required to deliver a written dissenter's notice to
all stockholders who gave due notice of their intention to demand payment and
who refrained from voting in favor of the Merger. The notice shall state where
a demand for payment shall be sent and where and when certificates shall be
deposited in order to obtain payment; shall include a form for demanding
payment which includes a request for certification of the date on which the
stockholder or the person on whose behalf the stockholder dissents acquired
beneficial ownership of the shares; shall set a date by which the corporation
must receive the demand for payment; and shall be accompanied by a copy of
Sections 92A.300 through 92A.500 of the Nevada Code. The date set for receipt
of the demand for payment from the dissenting stockholders shall be not less
than 30 nor more than 60 days from the mailing of the notice. Stockholders who
fail to demand payment or fail to deposit certificates, as required by the
notice mailed to the dissenting stockholders, shall have no right to receive
payment for their shares.
Within 30 days following the date on which demand for payment is received
from dissenting stockholders who have deposited their certificates with the
Company, all in accordance with the notice of the Company, the Company shall
remit to the dissenting stockholders the amount which the Company estimates to
be the fair value of the shares, with interest. The remittance shall be
accompanied by: (1) the Company's closing balance sheet and statements of
income and stockholders' equity for a fiscal year ending not more than 16
months before the date of remittance, together with the latest available
interim financial statements; (2) a statement of the Company's estimate of the
fair value of the shares; (3) an explanation of how the interest was
calculated; (4) a statement of the dissenters' right to demand payment; and
(5) a copy of Sections 92A-300 through 92A-500 of the Nevada Code. The Company
may elect, however, to withhold remittance from any dissenter with respect to
shares of which the dissenter or the person on whose behalf the dissenter acts
was not the beneficial owner on the date of the first announcement to the news
media or to stockholders of the terms of the proposed Merger.
If the dissenting stockholders believe that the amount remitted is less than
the fair value of their shares, they may, within 30 days after the date of
mailing of the Company's remittance, mail to the Company their own estimate of
the value of the deficiency. If a dissenting stockholder fails to do so, he
shall be entitled to no more than the amount remitted. If a demand for payment
remains unsettled for 60 days after such demand is made by a dissenting
stockholder, the Company shall file in an appropriate court a petition
requesting that the fair value of the shares and interest thereon be
determined by the court. All dissenters are entitled to judgment for the
amount by which the fair value of their shares is found to exceed the amount
previously remitted, with interest. If the Company fails to file a petition,
each dissenter who has made a demand and who has not already settled
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his claim against the Company shall be paid by the Company the amount demanded
by him with interest and may sue thereafter in an appropriate court.
The Merger Agreement provides that the Board of Directors may, in its
discretion, terminate the Merger notwithstanding stockholder approval. This
provision enables the Board to evaluate the potentia1 burden to the Company
arising from the exercise of dissenters' rights, and abandon the Merger if the
burden to the Company is too great in the opinion of the Board.
Name Change
Given that the Company is no longer engaged in the marine business, the
Board of Directors has determined that it is in the best interests of the
Company to change its corporate name. The Board of Directors has approved,
subject to stockholder approval of the Merger, a change in the Company's
corporate name to Seal Holdings Corporation. Seal Holdings Corporation will be
the name of the Surviving Corporation if the reincorporation is approved by
the Company's stockholders.
Increase in Number of Authorized Shares of Common Stock
The Board of Directors has adopted, subject to stockholder approval of the
Merger, an increase in the Company's authorized number of shares of Class A
Stock from 1,850,000 shares following the reverse stock split, if ratified by
Proposal 4 above, to 14,975,000 shares of Class A Stock, par value $.20. If
approved, this increase in the authorized Common Stock of the Company will be
provided for in the Certificate of Incorporation of Seal Holdings Corporation
and will become part of the Certificate of Incorporation of the Company
following the Reincorporation Merger.
The additional Class A Stock to be authorized will have rights identical to
the currently outstanding Class A Stock of the Company. Adoption of the
proposed increase of the Common Stock would not affect the rights of the
holders of currently outstanding Common Stock of the Company, except for
effects incidental on the issuance of the shares authorized, in increasing the
number of shares of the Company's Common Stock outstanding.
Although the Board of Directors has no present plans to issue the additional
authorized shares of Common Stock, it desires to have such shares available to
provide additional flexibility to use its capital stock for business and
financial purposes. The additional shares may be used, without further
stockholder approval, for various purposes including, without limitation,
issuing dividends in the form of stock splits, raising capital, providing
equity incentives to employees, officers or directors, establishing strategic
relationships with other companies and expanding the Company's business or
product lines through the acquisition of other businesses or products.
The additional shares of Class A Stock that would become available for
issuance if this proposal were adopted could also be used by the Company to
oppose a hostile takeover attempt or delay or prevent changes in control or
management of the Company. For example, without further stockholder approval,
the Board could strategically sell shares of Class A Stock in a private
transaction to purchasers who would oppose a takeover or favor the current
Board. Although this proposal to increase the authorized Class A Stock has
been prompted by business and financial considerations and not by the threat
of any hostile takeover attempt (nor is the Board currently aware of any such
attempts directed at the Company), nevertheless, stockholders should be aware
that approval of this proposal could facilitate future efforts by the Company
to deter or prevent changes in control of the Company, including transactions
in which the stockholders might otherwise receive a premium for their shares
over then current market prices.
Blank Check Preferred Stock
As part of the Reincorporation Proposal, the Certificate of Incorporation of
Seal Holdings Corporation authorizes the issuance by the Company's Board of
Directors, without the necessity of further notice of authorization by
stockholders, of up to 3,000,000 shares of Preferred Stock, with a par value
of $.001. The
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Preferred Stock may be issued from time to time in one or more series and may
have such voting powers, preferences and relative rights, designations,
qualifications and limitations as the Board of Directors may fix by resolution
at the time of issuance. The authorization of a class of preferred stock may be
viewed as potentially having the effect of discouraging an unsolicited attempt
by any person or entity to acquire control of the Company. Authorized shares of
preferred stock can be issued, and have in the past been issued by some
corporations, with voting or conversion privileges intended to make the
acquisition of the issuer more difficult or costly. By allowing the Board of
Directors to establish a class or series of preferred stock without stockholder
approval, the terms of the Company's Certificate of Incorporation following the
Merger could in the future discourage such an attempt to acquire control of the
Company or limit the stockholders' ability to participate in certain types of
transactions (such as an unsolicited tender offer at a premium price to
market), whether or not such transactions are favored by a majority of the
stockholders, and, as a result, could enhance the ability of officers and
directors to retain their positions.
The Company's audited consolidated financial statements, management's
discussion and analysis of financial condition and results of operations, and
certain supplementary financial information contained in pages 12-27 of the
Company's 1996 Annual Report to Stockholders on Form 10-K SB are incorporated
herein by reference.
Differences Between the Bylaws of the Company and the Surviving Corporation
The Delaware Bylaws, while substantially similar to the Nevada Bylaws,
include additional provisions and some changes from the language of the Nevada
Bylaws, all of which are intended to conform to Delaware law and to clarify the
rights and duties of the Board of Directors, officers and stockholders. In many
cases, the new language merely sets forth procedures which would be followed by
Delaware law even in the absence of such provisions, and which would also have
been followed under Nevada law. The Board of Directors believes that it is in
the best interests of the Company to describe Company procedures as clearly as
possible in the Delaware Bylaws.
The following provisions have been included in the Delaware Bylaws: (i) the
designation of the Company's principal place of business has been changed to
Florida; (ii) the Annual Meeting is no longer required to be held on a
specified day; (iii) the procedure with respect to setting record dates, making
stockholder lists available, establishing a quorum, and accepting proxies has
been set forth in detail; (iv) a requirement that directors be elected by
written ballot, if required by the Board of Directors, has been added; (v) the
procedure to be followed in the election of directors and in adjourned meetings
has been clarified; (vi) the procedure to be followed at stockholders' meetings
has been set forth in detail; (vii) the procedure to be followed at directors'
meetings has been set forth in detail, including the requirement that 1/3 of
the fixed number of directors constitute a quorum for questions regarding
indemnification; (viii) the procedure for committees of directors, and their
meetings and the compensation of their members has been clarified; (ix) the
procedure for the resignation of directors and of officers has been set forth
in detail; (x) the rights, duties and compensation of the various Company
officers, and the powers granted to the Board of Directors in respect thereto,
has been set forth in detail; (xi) the procedure for removal of officers has
been expanded and clarified; (xii) the requirements of notice, the procedures
for giving notice, and the requirements of waivers of notice have been set
forth in detail; (xiii) the procedure for the execution of Company documents
and the voting of Company securities is set forth in detail; (xiv) the language
to be inserted in every stock certificate is set forth in detail; (xv) the
procedure for execution of securities is clarified; (xvi) a limitation has been
placed on the ability of the directors to amend the Bylaws, disallowing
retroactive amendments to the indemnification provisions; (xvii) the funds from
which dividends may be paid are no longer restricted to earned surplus; (xviii)
the Company's ability to enter into agreements with stockholders regarding
transfers of Company stock is set forth in detail; and (xix) the provisions
regarding the indemnification of corporate agents (discussed above in detail)
have been drafted so as to allow indemnification to the fullest extent
permitted by Delaware law.
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Exchange of Certificates
As soon as practicable after the Effective Date, the Surviving Corporation
will furnish a letter of transmittal to stockholders for use in exchanging
their stock certificates (each a "Letter of Transmittal"), which will contain
instructions with respect to the surrender of Company Common Stock certificates
and the distribution of Surviving Corporation Common Stock certificates. The
Company's stockholders should not send in certificates until they receive the
Letter of Transmittal. The Company's stockholders who fail to exchange their
Company Common Stock certificates on or after the Effective Date by
surrendering such certificates, together with a properly completed Letter of
Transmittal, to the agent designated by the Company and the Surviving
Corporation (the "Exchange Agent") will not receive their Surviving Corporation
Common Stock until such time as their Company Common Stock certificates are
later surrendered to the Exchange Agent for transfer, accompanied by such
instruments of transfer and supporting evidence as the Surviving Corporation
may reasonably require. Any dividends declared or distributions made on shares
of Surviving Corporation Common Stock which such holders have a right to
receive will be retained by the Surviving Corporation until such holders
surrender their Company Common Stock certificates in exchange for Surviving
Corporation Common Stock certificates or until paid to a public official
pursuant to applicable abandoned property, escheat or similar laws. No interest
will accrue or be payable with respect to any dividends or distributions
retained on unissued Company Common Stock certificates.
On the Effective Date, holders of certificates representing Company Common
Stock will cease to have any rights with respect to such shares, and each such
certificate will be deemed for all corporate purposes to evidence only the
right to receive shares of Surviving Corporation Common Stock for which such
shares may be exchanged. The stock transfer books of the Company will be closed
at the close of business on the business day immediately preceding the
Effective Date, and the holders of record of Company Common Stock as of the
Effective Date will be the stockholders entitled to exchange their shares of
Company Common Stock for shares of Surviving Corporation Common Stock as
provided in the Merger Agreement. No transfer or assignment of any shares of
Company Common Stock will take place after the Effective Date until the
certificates for such shares are exchanged pursuant to the Merger Agreement. In
the event of a transfer of ownership of any such shares which is not registered
in the stock transfer records of the Company, no shares of Surviving
Corporation Common Stock exchangeable for such shares will be issued to the
transferee until the certificate or certificates representing such transferred
shares are delivered to the Exchange Agent, together with all documents
required to evidence and effect such transfer. In addition, it will be a
condition to the issuance of any certificate for any shares of Surviving
Corporation Common Stock in a name other than the name in which the surrendered
Company Common Stock is registered that the person requesting the issuance of
such certificate either pay to the Exchange Agent any transfer or other taxes
required by reason of the issuance of a certificate of Surviving Corporation
Common Stock in a name other than the registered holder of the certificate
surrendered, or establish to the satisfaction of the Exchange Agent that such
tax has been paid or is not applicable.
In no event will the Exchange Agent, the Company or the Surviving Corporation
be liable to any holder of Company Common Stock for shares of the Surviving
Corporation Common Stock, or dividends or distributions thereon, delivered in
good faith to a public official pursuant to any applicable abandoned property,
escheat or similar law. All shares of the Surviving Corporation Common Stock
issued upon the surrender of shares of Company Common Stock shall be deemed to
have been issued in full satisfaction of all rights pertaining to such shares
of Company Common Stock.
A vote for the Reincorporation Proposal will constitute specific approval of
the Merger Agreement, the name change, the increase in authorized Class A
Stock, the authorization of a class of Preferred Stock, and all other
transactions and proceedings related to the reincorporation. The
Reincorporation Proposal requires the affirmative vote of (i) a majority of the
outstanding shares of Class A Common Stock and (ii) a majority of the
outstanding shares of Class B Common Stock, each voting separately as a class.
Abstentions and broker non-votes as to this Proposal 5 will be treated as votes
against Proposal 5.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
REINCORPORATION PROPOSAL. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED WILL
BE VOTED "FOR" APPROVAL.
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PROPOSAL SIX
AUTHORIZATION OF INITIAL ACQUISITION
The Board of Directors believes that opportunities may exist for the Company
to make acquisitions of certain types of companies. If attractive markets are
identified which would operate effectively within the Company's organizational
structure, the Board of Directors may consider opportunities through
acquisitions, internal growth or direct investment. No agreements, commitments
or understandings have been made with any acquisition candidates. No
assurances can be made that future discussions will result in definitive
agreements, or that any of the Company's expansion plans will be realized or,
if realized, will prove profitable for the Company. It is the Board of
Directors' intention to proceed diligently with the Company's business plan.
The Company stated in its Proxy Statement dated June 17, 1996, that the
stockholders would be asked to approve the Company's initial significant
business combination. The officers and directors of the Company (who will
control in the aggregate 415,700 shares of the Class A Common Stock (33.22%)
and 25,000 shares of Class B Common Stock (100%), following the stock split
referred to in Proposal 4 above), agreed to vote their respective shares of
Common Stock in accordance with the vote of the majority of all voting non-
affiliated holders of the Company with respect to the initial significant
business combination.
The Board of Directors has determined that, in order to compete with other
companies who are embarked on a program of external growth through
acquisitions and who are able to act promptly, the Company must be able to
consummate a business combination in a time frame shorter than would allow for
approval by the stockholders. Thus, the Company requests that the stockholders
remove the stockholder approval requirement on the Board of Directors' ability
to conclude an initial business acquisition. If this Proposal 6 is approved,
the Board of Directors will be able to complete an initial business
acquisition without stockholder approval, if such business combination would
not otherwise require stockholder approval under applicable law.
The Board of Directors intends to seek only those business combinations
between the Company and a target entity which meet criteria acceptable to the
Board; among them that the target entity pass satisfactory and customary due
diligence investigation, that there be management expertise within the entity,
that there be the potential for growth of the entity both internally as well
as through the subsequent acquisition of additional companies of like type or
business, that relatively low initial capital or funding be required and be
available, and that potential exists for price appreciation of the Company's
values. A business combination acceptable to the Board of Directors shall be a
"Qualifying Business Combination."
The Board of Directors has discussed the possibility of appointing First
Stanford Corporation as an advisor to assist the Board in identifying and
evaluating acquisition opportunities, and in concluding acquisitions
identified by the Board as advantageous. Mr. Thomas M. Ferguson as sole
stockholder of First Stanford Corporation has a financial interest in any
transaction or relationship between the Company and First Stanford.
RISK FACTORS
If a Qualifying Business Combination is consummated, the Company will be
entering into a new industry, which carries certain risks. Consequently, the
following risk factors should be considered by each stockholder in determining
whether to remove the requirement of stockholder approval, thereby permitting
the Company's entry into a Qualifying Business Combination.
No Agreement for Business Combination or Other Transaction. The Company has
no arrangement, agreement or understanding with respect to a merger with, or
acquisition of, any entity. There can be no assurance the Company will be
successful in identifying a Qualifying Business Combination target, or in
concluding a Qualifying Business Combination on terms favorable to the
Company.
No Operating History. The Company's business will be changed if any
Qualifying Business Combination is effected. The Company will have no
operating history in its new line of business, and there can be no assurance
that the Company's activities will be profitable.
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Limited Financial Resources. The Company currently has a limited net worth.
Any business activity the Company chooses to undertake through a Qualifying
Business Combination will depend to a considerable extent on the Company's
ability to acquire additional capital, which may be difficult to obtain or not
available in light of the Company's financial condition. The Company's ongoing
ability to meet its obligations will depend on its ability to successfully
complete a business combination with an entity with sufficient cash flow to
meet the Company's obligations.
Speculative Nature. The success of the Company will depend to a great extent
on the operations, financial condition and management of the company or
companies with which the Company may merge or which it may acquire. In the
event the Company completes a Qualifying Business Combination, the success of
its operations will be dependent upon management of the successor firm and
numerous other factors beyond the Company's control.
Dilution. The Company anticipates that it will issue authorized but unissued
Class A Common Stock and/or Preferred Stock of the Company to stockholders of
an acquisition target to effect a Qualifying Business Combination. The issuance
of previously authorized and unissued or newly authorized Common Stock of the
Company or the issuance of newly authorized Preferred Stock would result in
substantial dilution to present stockholders of the Company, and may also
result in a change in control of the Company, or a change in the Company's
management.
Dependence on Inexperienced Management. Current management may have no
experience or background in the business in which a Qualifying Business
Combination is being sought. Once the Company acquires a business, the
Company's current management may resign. In order to supplement the business
experience of management, the Company may employ accountants, technical
experts, appraisers, attorneys or other consultants and advisors. The selection
of such advisors will be made by management and without any control from
stockholders. Additionally, such persons may be engaged by the Company on an
independent basis without a continuing fiduciary or other obligation to the
Company.
Effect of Limited Time Devoted to the Company. Some or all of the Company's
officers and directors have commitments with other organizations. As a result
of the limited amount of time devoted to the Company by management, a merger or
acquisition opportunity may be lost or delayed, and a Qualifying Business
Combination may never take place.
Conflicts of Interest. All of the directors and officers of the Company
following a Qualifying Business Combination may be associated with other firms
or occupations involving other business activities. These are, therefore,
potential conflicts of interest in their acting as directors and officers of
the Company and of other entities. All of the Company's directors and officers
may be directors or controlling stockholders of other entities engaged in a
variety of businesses which may in the future share various transactions with
the Company as it may exist following a Qualifying Business Combination.
Additional conflicts of interest and non-arm's-lengths transactions may also
arise in the future in the event the Company's officers or directors are
involved in the management of any firms with which the Company, following a
Qualifying Business Combination, should do business. The Company may pay
finder's fees or other fees to its officers, directors or affiliates in
connection with a Qualifying Business Combination, and First Stanford
Corporation, a company wholly owned by Mr. Thomas Ferguson, may be retained to
render advisory services to the Company regarding proposed acquisitions.
No Dividends. Dividends following a Qualifying Business Combination will
depend on earnings, if any, of the combined business, its financial
requirements, and to a great extent on the management of the combined business.
Management of the Company following a Qualifying Business Combination may not
deem it advisable to declare dividends in the foreseeable future.
Possible Lack of Diversification. Once a Qualifying Business Combination is
made, the Company may be unable to diversify its business activities and, as a
result, may suffer a total loss to the Company and the
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stockholders. The Company's failure or inability to diversify its activities
into a number of areas may subject the Company to economic fluctuations within
its particular industry and, therefore, increase the risks associated with the
Company's operations.
Regulation. In the event a Qualifying Business Combination results in the
Company holding passive investment interest in a number of entities, the
Company could become subject to regulation under the Investment Company Act of
1940, which would require the Company to register as an investment company and
incur substantial fees and compliance costs. Any violation of the Act would
subject the Company to material adverse consequences.
Probable Change in Control and Management. A Qualifying Business Combination
may result in stockholders of a target company obtaining a controlling interest
in the Company. The resulting change in control of the Company could result in
removal of the Company's officers and directors and a corresponding reduction
in the future affairs of the Company. It is impossible to predict the extent to
which current management will participate in the future affairs of the Company
following a Qualifying Business Combination.
The Company's management is actively seeking to identify and conclude a
Qualifying Business Combination. If this Proposal is adopted, the Company
intends to conclude a Qualifying Business Combination as soon as reasonably
possible. Any changes to the Company to be brought about by a Qualifying
Business Combination, including those changes discussed in "Risk Factors"
above, may affect the Company in the near future.
Approval of this Proposal 6 to remove the stockholder approval requirement on
an initial significant business combination will constitute specific approval
of the Purchase Agreement or other operative document by which the Company and
the target business will be combined, the issuance of authorized Class A Stock
or Preferred Stock, and all other transactions and proceedings related to the
business combination. An affirmative vote of the majority of the voting non-
affiliated holders of the shares of the Common Stock present in person or
represented by proxy and entitled to vote on Proposal 6 is required for
approval. Abstentions will be counted for purposes of determining the number of
shares present and entitled to vote and will have the effect of a vote against
Proposal 6. Broker non-votes, if any, will not be counted in determining the
number of shares present and entitled to vote on Proposal 6.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF
PROPOSAL 6. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED WILL BE VOTED "FOR"
APPROVAL.
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PROPOSAL SEVEN
1997 INCENTIVE OPTION PLAN
The Company's stockholders are asked to approve the Seal Fleet, Inc. 1997
Incentive Option Plan (the "1997 Plan") and the reservation of One Million Two
Hundred Thousand (1,2000,000) shares of authorized Common Stock for issuance
thereunder. The Board of Directors believes that equity incentives will enable
the Company to attract and retain the talent which it requires. By linking the
compensation of executive officers, key employees, directors and outside
consultants to corporate performance, the reward is directly related to the
Company's success. The Company believes the use of equity incentives increases
motivation to improve stockholder value.
The purpose of the 1997 Plan is to enable the Company and its affiliates to
recruit and retain capable employees for the successful conduct of its
business and to provide an additional incentive to officers and other eligible
key employees, consultants and advisors and non-employee directors ("Outside
Directors") upon whom rest major responsibilities for the successful operation
and management of the Company and its affiliates. The 1997 Plan is intended to
enable the Company to attract qualified personnel in a highly competitive
labor market. The Company intends future increases in the value of securities
granted under the 1997 Plan to form part of the compensation for services to
be rendered by such persons in the future.
The Board of Directors adopted the 1997 Plan effective March 21, 1997,
subject to stockholder approval. Below is a summary of the principal
provisions of the 1997 Plan and its operation. A copy of the 1997 Plan is set
forth in full in Appendix A to the Proxy Statement, and the following
description of the 1997 Plan is qualified in its entirety by reference to that
Appendix.
SUMMARY DESCRIPTION OF THE 1997 PLAN
Number of Shares Subject to the 1997 Plan. The 1997 Plan reserves for
issuance up to One Million Two Hundred Thousand (1,200,000) shares of the
Company's Class A Common Stock pursuant to the exercise of options granted
under such plan. The number of shares is subject to adjustment for any future
stock dividends, splits, mergers, combinations, or other changes in
capitalization as described in the 1997 Plan. The market value of the
Company's Class A Common Stock as reported on the National Daily Quotation
Service ("Pink Sheets") as of February 21, 1997 was $.50 per share.
In order to comply with the requirements for deductibility under Section
162(m) of the Code, the maximum number of shares which may be granted to an
individual under the 1997 Plan during the full ten-year terms of the 1997 Plan
is 600,000 shares.
Administration and Duration of the 1997 Plan. Authority to administer the
1997 Plan and to grant awards rests with the Board of Directors, although the
Board may delegate its authority to grant awards to a Committee of the Board.
The 1997 Plan will terminate on March 20, 2007, but the Board retains the
right to suspend, terminate or amend the plan at any time. On termination of
the plan, outstanding awards remain in effect until they expire by their
terms, are forfeited or otherwise terminate.
Eligibility for Participation. Options may be granted under the 1997 Plan to
executive officers, key employees, consultants and directors of the Company
and any subsidiary of the Company. Management estimates that as many as 2 of
its present employees are currently eligible to receive awards under the 1997
Plan. However, depending upon numerous factors, awards may be granted to a
significantly larger or smaller number of employees. Management is not able to
estimate the number of consultants and advisors that may be eligible for the
grant of options.
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Terms of Options. Options granted to employees may be either incentive stock
options ("ISOs") which satisfy the requirements of Code Section 422 or
nonstatutory options ("NSOs") which are not intended to satisfy such
requirements. Options granted to Outside Directors, consultants and advisors
may only be NSOs.
The option exercise price of ISOs may not be less than the fair market value
of the Company's common stock on the date of grant of the ISO. The option
exercise price of NSOs is within the discretion of the Board. Payment of the
exercise price may be made in cash, by certified check, promissory note, or
other shares of the Company's common stock. The term of an ISO may not exceed
ten years. The term of an NSO may not exceed the period determined by the
Board in the grant of the option.
Options may be made exercisable under such conditions as the Board or its
delegate may establish, such as if the optionee remains employed until a
specified date, or if specified performance goals have been met. If an
optionee's employment terminates because of misconduct, such option terminates
immediately. If an optionee's employment terminates for any reason other than
misconduct, the option remains exercisable for a fixed period of three months
(twelve months where employment has terminated because of death or disability)
or a longer period to be fixed by the Board or its delegate up to the
remainder of the option's term. In no case may an option be exercised after
the expiration of the option term. An option may be exercised by the optionee
or his guardian or legal representative.
Federal Tax Consequences--Nonstatutory Options. No taxable income is
recognized by an optionee upon the grant of an NSO. The optionee generally
will recognize ordinary income in the year in which the option is exercised
equal to the excess of the fair market value of the purchased shares at the
date of exercise over the exercise price, and the optionee will be required to
satisfy the tax withholding requirements applicable to such income which the
optionee may elect to satisfy by having the Company withhold shares from the
shares otherwise due or by delivering a sufficient number of previously owned
shares of the Company's common stock to the Company. On ultimate sale of the
shares, the optionee will generally recognize as capital gain or loss the
difference between the fair market value on the date of exercise and the
ultimate sales price.
Incentive Stock Options. No taxable income is recognized by the optionee at
the time of the grant of an ISO and, except in determining alternative minimum
tax, no taxable income is recognized at the time the ISO is exercised. The
optionee will, however, recognize taxable income or loss in the year in which
the purchased shares are sold or otherwise made the subject of disposition.
For federal tax purposes, dispositions of ISOs are divided into two
categories: qualifying and disqualifying. The optionee will make a qualifying
disposition of the purchased shares if the sale or other taxable disposition
of such shares is made more than two years after the grant date of the option
and more than one year after the exercise date. If the optionee fails to
satisfy either of these two holding periods prior to the sale or other
disposition of the purchased shares, then a disqualifying disposition will
result.
Upon a qualifying disposition of the shares, the optionee generally will
recognize long-term capital gain in an amount equal to the excess of (i) the
amount realized upon the sale or other disposition over (ii) the option price
paid for the shares. If there is a disqualifying disposition of the shares,
then the excess of (i) the fair market value of the shares at the date of
exercise (or, if lower, the fair market value of the shares on the date of
disposition) over (ii) the option price paid therefor will be taxable as
ordinary income. Any additional gain recognized upon the disposition will be a
capital gain, and such gain will be long-term if the shares have been held for
more than one year following exercise of the option.
Alternative Minimum Tax. The difference between the fair market value of
shares subject to an ISO on the date of exercise and the exercise price of
such shares is an adjustment to income for purposes of the alternative minimum
tax (the "AMT"). The AMT (imposed to the extent it exceeds the taxpayer's
regular tax) is 26% of an individual taxpayer's alternative minimum taxable
income (28% in the case of alternative minimum taxable income in excess of
$175,000). Alternative minimum taxable income is determined by adjusting
regular taxable income for certain items, increasing that income by certain
tax preference items (including the difference between
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the fair market value of the shares subject to the ISO on the date of exercise
and the exercise price) and reducing this amount by the applicable exemption
amount ($45,000 in case of a joint return, subject to reduction under certain
circumstances). If a disqualifying disposition of the shares subject to an ISO
occurs in the same calendar year as exercise of the ISO, there is no AMT
adjustment with respect to those shares. Also, upon a sale of such shares that
is a qualifying disposition, alternative minimum taxable income is reduced in
the year of sale by the excess of the fair market value of the shares subject
to the ISO at exercise over the amount paid for such shares.
Deduction to the Company. The Company will be entitled to an income tax
deduction equal to the amount of ordinary income recognized by the optionee in
connection with the exercise of an NSO. The deduction generally will be
allowed for the taxable year of the Company in which occurs the last day of
the calendar year in which the optionee recognizes ordinary income in
connection with such exercise.
If the optionee makes a disqualifying disposition of the shares purchased on
exercise of an ISO, then the Company will be entitled to an income tax
deduction for the taxable year in which such disposition occurs, equal to the
amount which is taxable to the employee as ordinary income. In no other
instance will the Company be allowed a deduction with respect to the
optionee's disposition of the shares purchased upon exercise of an ISO.
Under Section 162(m) of the Code, the Company is not entitled to a deduction
for certain executive compensation in excess of $1,000,000. This limitation
applies to compensation paid to the Company's Chief Executive Officer and to
each of its next four most highly compensated executive officers. Amounts
treated as compensation pursuant to the exercise of stock options are subject
to the deduction limit, unless the option exercise price is at least equal to
the fair market value of the underlying stock on the date of grant or is made
subject to objective performance criteria. In addition, the grant of options
must be made by a committee of at least two "outside directors" as defined
under Code Section 162(m).
REQUIRED VOTE
An affirmative vote of the holders of a majority of the shares of the Common
Stock present in person or represented by proxy and entitled to vote on the
1997 Plan is required for approval. Abstentions will be counted for purposes
of determining the number of shares present and entitled to vote and will have
the effect of a vote against the 1997 Plan. Broker non-votes, if any, will not
be counted in determining the number of shares present and entitled to vote on
the 1997 Plan.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
1997 PLAN. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED WILL BE VOTED "FOR"
APPROVAL.
PROPOSALS BY STOCKHOLDERS
Stockholders who wish to present proposals at the 1998 annual meeting of
stockholders and to have proposals described in the Company's proxy materials
must submit their proposals to the Company not later than December 10, 1997.
THE TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors has no
knowledge of any other business which will be presented for consideration at
the meeting. If any other business properly comes before the meeting, it is
the intention of the persons named in the enclosed proxy card to vote the
shares they represent as the Board of Directors of the Company may recommend.
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FORM 10-K
MANAGEMENT WILL, UPON REQUEST, FURNISH WITHOUT COST TO INTERESTED SECURITY
HOLDERS A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR 1996. YOU MAY
REQUEST A COPY OF THIS REPORT BY WRITING TO MS. RITA SIMPSON, SEAL FLEET, INC.,
P. O. BOX 3248, PALM BEACH, FLORIDA, 33480-3248, OR BY TELEPHONING MS. SIMPSON
AT (561) 833-5111.
/s/ James S. Goodner
--------------------
James S. Goodner
Secretary
April 9, 1997
Palm Beach, Florida
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APPENDIX A
SEAL FLEET, INC.
1997 INCENTIVE OPTION PLAN
1. PURPOSE
(a) The purpose of this Incentive Option Plan (the "Plan") is to provide a
method whereby directors, executive officers, key employees and outside
consultants of Seal Fleet, Inc. and its affiliates (hereinafter collectively
referred to as the "Company"), who are presently making and are expected to
make substantial contributions to the Company's future management and growth,
may be offered incentives, and may be stimulated by increased personal
involvement in the fortunes and success of the Company to continue in its
service, thereby advancing the interests of the Company and its stockholders.
(b) The word "affiliate," as used in the Plan, means any bank or Company in
any unbroken chain of banks or Companies beginning or ending with the Company,
if at the time of the granting of an option, each such bank or Company other
than the last in that chain owns stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
banks or Companies in the chain.
2. ADMINISTRATION
The following provisions shall govern the administration of the Plan:
(a) The Plan shall be administered by the Board of Directors or a duly
appointed committee of the Board. The Board of Directors may from time to time
remove members from or add members to the committee. Vacancies on the
committee, however caused, shall be filled by the Board of Directors. The
Board of Directors may designate a Chairman and Vice-Chairman of the committee
from among the committee members. Acts of the committee (i) at a meeting, held
at a time and place and in accordance with rules adopted by the committee, at
which a quorum of the committee is present and acting, or (ii) reduced to and
approved in writing by all members of the committee, shall be the valid acts
of the committee. The Board and any such committee is referred to hereinafter
as the "Committee," except where otherwise expressly provided or where the
context requires otherwise.
(b) The Committee shall effect the grant of options under the Plan by
execution of instruments in writing in a form approved by the Committee. The
Committee's determination on the matters set forth in this section shall be
conclusive. Subject to the express terms and conditions of the Plan, the
Committee shall have full power to construe the Plan and the terms of any
option granted under the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan or such options and to make all other
determinations necessary or advisable for the Plan's administration,
including, without limitation, the power to:
(i) determine which persons meet the requirements of Section 3 hereof for
selection as participants in the Plan;
(ii) determine to whom of the eligible persons, if any, options shall be
granted under the Plan;
(iii) establish the terms and conditions required or permitted to be
included in every option agreement or any amendments thereto, including
whether options to be granted thereunder shall be "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code") or nonstatutory stock options not described in
Sections 422(b) or 423(a) of the Code;
(iv) specify the number of shares to be covered by each option;
(v) determine the fair market value of shares of the Company's common
stock for any purpose under this Plan;
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(vi) take appropriate action to amend any option hereunder, provided that
no such action may be taken without the written consent of the affected
optionee;
(vii) cancel outstanding options and issue replacement options therefor
with the consent of the affected optionee, and
(viii) make all other determinations deemed necessary or advisable for
administering the Plan.
3. ELIGIBILITY
The persons who shall be eligible to receive the discretionary grant of
options under this Plan shall be those directors, executive officers, key
employees and outside consultants of the Company selected for participation by
the Committee. Notwithstanding any other provision of this Plan no person
shall be granted options to purchase more than an aggregate of six hundred
thousand (600,000) shares of the Company's common stock under this Plan, as
adjusted pursuant to Section 7.
4. THE SHARES
The shares of stock subject to options authorized to be granted under the
Plan shall consist of One Million Two Hundred Thousand (1,200,000) shares of
the Company's Class A, common stock (the "Shares"), or the number and kind of
shares of stock or other securities which shall be substituted for such Shares
or to which such Shares shall be adjusted as provided in Section 7 hereof.
Upon the expiration or termination for any reason of an outstanding option
under the Plan which has not been exercised in full, all unissued Shares
thereunder shall again become available for the grant of options under the
Plan. Shares of the Company's common stock which are (i) delivered by an
optionee in payment of the exercise price of an option, or (ii) delivered by
an optionee, or withheld by the Company from the shares otherwise due upon
exercise of an option, in satisfaction of applicable withholding taxes shall
again become available for the grant of options under the Plan as permitted by
applicable law.
5. GRANTS TO EMPLOYEES
Options, in the discretion of the Committee, may be granted at any time
prior to the termination of the Plan to persons who are employees of the
Company, including employees who are also directors of the Company. Options
granted by the Committee to employees pursuant to the Plan shall be subject to
the following terms and conditions:
(a) Grant of Options. Options granted to employees pursuant to the Plan may
be either incentive stock options or nonstatutory stock options. If the
aggregate fair market value of the shares issuable upon exercise of incentive
stock options which are exercisable for the first time during any one calendar
year under all incentive stock options held by an optionee exceeds $100,000
(determined at the time of the grant of the options), such options shall be
treated as nonstatutory stock options to the extent of such excess.
(b) Option Price. The purchase price under each incentive stock option shall
not be less than one hundred percent of the fair market value of the Shares
subject thereto on the date the option is granted; provided, however, that the
purchase price of an incentive stock option granted to an individual who owns
stock possessing more than ten percent of the total combined voting power of
all classes of stock of the Company shall not be less than one hundred ten
percent of the fair market value of the Shares subject thereto on the date the
option is granted. For any purposes under this Plan, fair market value per
share shall mean, where there is a public market for the Company's common
stock, the mean of the bid and asked prices (or the closing price if listed on
a stock exchange or The Nasdaq National Market) of the Company's common stock
for the date of grant, as reported in the Wall Street Journal (or, if not so
reported, as otherwise reported by The Nasdaq Stock Market or the National
Quotation Bureau or the Company's primary market maker.) If such information
is not available for the date of grant, then such information for the last
preceding date for which such information is available shall be considered as
the fair market value. If there is no public market for the Company's common
stock, the fair market
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<PAGE>
value thereof shall be determined by the Committee using any reasonable
valuation method. The purchase price for nonstatutory options shall be
established by the Committee in its discretion.
(c) Duration of Options. Each option shall be for a term determined by the
Committee; provided, however, that the term of any incentive stock option may
not exceed ten years and, provided further, that the term of any incentive
stock option granted to an individual who owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company shall not exceed five years. Each option shall vest in such manner and
at such time as the Committee shall determine and the Committee may accelerate
the time of exercise of any option.
(d) Termination of Employment. Upon the termination of an optionee's status
as an employee of the Company, his or her rights to exercise an option then
held shall be only as follows:
DEATH OR DISABILITY: If an optionee's employment is terminated by death
or disability, such optionee or such optionee's qualified representative
(in the event of the optionee's mental disability) or the optionee's estate
(in the event of optionee's death) shall have the right for a period of
twelve (12) months (or such longer period as the Committee may determine at
the date of grant or during the term of the option) following the date of
such termination to exercise the option to the extent the optionee was
entitled to exercise such option on the date of such termination; provided
the actual date of exercise is in no event after the expiration of the term
of the option. To the extent the option is not exercised within such period
the option will terminate. An optionee's "estate" shall mean the optionee's
legal representative or any person who acquires the right to exercise an
option by reason of the optionee's death.
CAUSE: If an optionee's employment is terminated because such optionee is
determined by the Board to have committed an act of embezzlement, fraud,
dishonesty, breach of fiduciary duty to the Company, or to have
deliberately disregarded the rules of the Company which resulted in loss,
damage or injury to the Company, or if an optionee makes any unauthorized
disclosure of any of the secrets or confidential information of the
Company, induces any client or customer of the Company to break any
contract with the Company or induces any principal for whom the Company
acts as agent to terminate such agency relations, or engages in any conduct
which constitutes unfair competition with the Company, or if an optionee is
removed from any office of the Company by any bank regulatory agency, the
optionee shall have the right for a period of thirty days to exercise the
option to the extent the option was exercisable on the date of termination;
provided that the date of exercise is in no event after the expiration of
the term of the option. To the extent the option is not exercised within
such period the option will terminate. For the purpose of this paragraph,
termination of employment shall be deemed to occur when the Company
dispatches notice or advice to the optionee that the optionee's employment
is terminated, and not at the time of optionee's receipt thereof.
OTHER REASONS: If an optionee's employment is terminated for any reason
other than those mentioned above under "Death or Disability" and "Cause,"
the optionee may, within three months (or such longer period as the
Committee may determine at the date of grant or during the term of the
option) following such termination, exercise the option to the extent such
option was exercisable on the date of termination of the optionee's
employment; provided the date of exercise is in no event after the
expiration of the term of the option and provided further that any option
which is exercised more than three months following termination shall be
treated as a nonstatutory option whether or not it was designated as such
at the time it was granted. To the extent the option is not exercised
within such period the option will terminate.
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<PAGE>
6. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS
The following terms and conditions shall apply to all options granted
pursuant to the Plan:
(a) Exercise of Options. To the extent the right to purchase Shares has
vested under an optionee's stock option agreement, options may be exercised
from time to time by delivering payment therefor in cash, certified check,
official bank check, or the equivalent thereof acceptable to the Company,
together with written notice to the Secretary of the Company, identifying the
option or part thereof being exercised and specifying the number of Shares for
which payment is being tendered. An optionee may also exercise an option by
the delivery and surrender of shares of Company common stock which (a) have
been owned by the optionee for at least six months or such other period as the
Committee may require; and (b) have an aggregate fair market value on the date
of surrender equal to the exercise price. In addition, an option may be
exercised by delivering to the Company (i) an exercise notice instructing the
Company to deliver the certificates for the Shares purchased to a designated
brokerage firm and (ii) a copy of irrevocable instructions delivered to the
brokerage firm to sell the Shares acquired upon exercise of the option and to
deliver to the Company from the sale proceeds sufficient cash to pay the
exercise price and applicable withholding taxes arising as a result of the
exercise.
The Company shall deliver to the optionee, which delivery shall be not less
than fifteen (15) days and not more than thirty (30) days after the giving of
such notice, without transfer or issue tax to the optionee (or other person
entitled to exercise the option), at the principal office of the Company, or
such other place as shall be mutually acceptable, a certificate or
certificates for such Shares dated the date the options were validly
exercised; provided, however, that the time of such delivery may be postponed
by the Company for such period as may be required for it with reasonable
diligence to comply with any requirements of law.
(b) Transferability of Option and Shares. Each option shall be transferable
only by will or the laws of descent and distribution and shall be exercisable
during the optionee's lifetime only by the optionee, or in the event of
disability, the optionee's qualified representative. In addition, in order for
Shares acquired upon exercise of incentive stock options to receive the tax
treatment afforded such Shares, the Shares may not be disposed of within two
years from the date of the option grant nor within one year after the date of
transfer of such Shares to the optionee.
(c) Withholding. The Company shall have the right to condition the issuance
of Shares upon exercise of an option upon payment by the optionee of any
applicable taxes required to be withheld under federal, state or local tax
laws or regulations in connection with such exercise. An optionee may elect to
pay such tax by (i) requesting the Company to withhold a sufficient number of
Shares from the total number of Shares issuable upon exercise of the option or
(ii) delivering a sufficient number of shares of Company common stock (which
have been held by the optionee for such period as the Committee may require)
to the Company. The value of shares withheld or delivered shall be the fair
market value of such shares on the date the exercise becomes taxable as
determined by the Committee. Such an election is subject to approval or
disapproval by the Committee for any reason.
(d) Other Terms and Conditions. Options may also contain such other
provisions, which shall not be inconsistent with any of the foregoing terms,
as the Committee shall deem appropriate. No option, however, nor anything
contained in the Plan, shall confer upon any optionee any right to continue in
the employ or in the status as a director of the Company, nor limit in any way
the right of the Company to terminate an optionee's employment at any time.
7. ADJUSTMENT OF, AND CHANGES IN, THE SHARES
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding
option, and the number of Shares which have been authorized for issuance under
the Plan but as to which no options have yet been granted, as well as the
price per share of common stock covered by each such outstanding option, shall
be proportionately adjusted for any change in the outstanding shares of common
stock resulting from a stock split, reverse stock split, stock dividend,
recapitalization, combination or reclassification of the common stock, or any
other change affecting the
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<PAGE>
outstanding shares of common stock as a class effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board of Directors, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of common
stock subject to an option.
(b) Dissolution, Liquidation, Sale or Merger. In the event of a proposed
dissolution or liquidation of the Company, options outstanding under the Plan
shall terminate immediately before the consummation of such proposed action.
The Board will, in such circumstances, provide written notice to the optionees
of the expected dates of termination of outstanding options and consummation
of the proposed dissolution or liquidation. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another Company in a transaction in which the Company is
not the surviving Company, outstanding options may be assumed or equivalent
options may be substituted by the successor Company (or a parent or subsidiary
of the successor Company), unless the successor Company does not agree to
assume the options or to substitute equivalent options. If outstanding options
are not assumed or substituted by equivalent options, all outstanding options
shall terminate immediately before the consummation of such sale or merger
(subject to the actual consummation of the sale or merger) and the Company
shall provide written notice to the optionees of the expected dates of
termination of the options and consummation of such transaction. If the
transaction is not consummated, unexercised options shall continue in
accordance with their original terms.
(c) Notice of Adjustments, Fractional Shares. To the extent the foregoing
adjustments relate to stock or securities of the Company, such adjustments
shall be made by the Committee, whose determination in that respect shall be
final, binding and conclusive. No right to purchase fractional shares shall
result from any adjustment in options pursuant to this Section 7. In case of
any such adjustment, the shares subject to the option shall be rounded down to
the nearest whole share. Notice of any adjustment shall be given by the
Company to each holder of an option which was in fact so adjusted and such
adjustment (whether or not such notice is given) shall be effective and
binding for all purposes of the Plan. Any issue by the Company of shares of
stock of any class, or securities convertible into shares of any class, shall
not affect the number or price of shares of common stock subject to the
option, and no adjustment by reason thereof shall be made. The grant of an
option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or
assets.
8. AMENDMENT AND TERMINATION OF THE PLAN
The Board shall have complete power and authority to terminate or amend the
Plan; provided, however, that the Board shall not, without the approval of the
stockholders of the Company, amend the Plan in a manner that requires
stockholder approval for continued compliance with the terms of Rule 16b-3, as
promulgated under the Securities Exchange Act of 1934, Section 422 of the
Code, any successor rules, or other regulatory authority; and provided further
that the provisions of Section 5 shall not be amended more than once every six
months, other than to comport with changes in the Code, or the rules
thereunder. Except as provided in Section 7, no termination, modification or
amendment of the Plan may, without the consent of the optionee to whom such
option was previously granted under the Plan, adversely affect the rights of
such optionee. Any consent required by the preceding sentence may be obtained
in any manner deemed appropriate by the Committee.
The Plan, unless sooner terminated, shall terminate on March 20, 2007, ten
years from the date the Plan was originally adopted by the Board. An option
may not be granted under the Plan after the Plan is terminated.
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<PAGE>
9. EFFECTIVENESS OF THE PLAN
The Plan will become effective upon its approval by the Company's
stockholders within twelve months of the date the Plan was adopted by the
Board.
10. PRIVILEGES OF STOCK OWNERSHIP
No optionee shall be entitled to the privileges of stock ownership as to any
Shares not actually issued and delivered to the optionee; provided, however,
the Company shall provide annual financial statements to each optionee during
the period for which he or she has one or more outstanding options. The grant
of options and the issuance of Shares pursuant to the exercise of options
granted under the Plan shall be conditioned upon the registration of the
Shares with the SEC and qualification of the options and underlying Shares
under the California securities laws, unless in the opinion of counsel to the
Company such registration or qualification is not necessary. The Company shall
diligently endeavor to comply with all applicable securities laws before any
options are granted under the Plan and before any Shares are issued pursuant
to the exercise of such options.
11. NOTICE OF SALE
The optionee shall give the Company notice of any sale or other disposition
of any Shares acquired upon exercise of an incentive stock option not more
than five days after such sale or disposition.
12. INDEMNIFICATION
To the extent permitted by applicable law in effect from time to time, no
member of the Board or the Committee shall be liable for any action or
omission of any other member of the Board or Committee nor for any act or
omission on the member's own part, excepting only the member's own willful
misconduct or gross negligence. The Company shall pay expenses incurred by,
and satisfy a judgment or fine rendered or levied against, a present or former
director or member of the Committee in any action against such person (whether
or not the Company is joined as a party defendant) to impose liability or a
penalty on such person for an act alleged to have been committed by such
person while a director or member of the Committee arising with respect to the
Plan or administration thereof or out of membership on the Committee or by the
Company, or all or any combination of the preceding; provided the director or
Committee member was acting in good faith, within what such director or
Committee member reasonably believed to have been within the scope of his or
her employment or authority and for a purpose which he or she reasonably
believed to be in the best interests of the Company or its stockholders.
Payments authorized hereunder include amounts paid and expenses incurred in
settling any such action or threatened action. This section does not apply to
any action instituted or maintained in the right of the Company by a
stockholder or holder of a voting trust certificate representing shares of the
Company. The provisions of this section shall apply to the estate, executor,
administrator, heirs, legatees or devisees of a director or Committee member,
and the term "person" as used in this section shall include the estate,
executor, administrator, heirs, legatees or devisees of such person.
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<PAGE>
APPENDIX B
CERTIFICATE OF INCORPORATION
OF SEAL HOLDINGS CORPORATION
The undersigned, being a natural person (the "Sole Incorporator"), for the
purpose of organizing a corporation to conduct the business and promote the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware hereby certifies that:
I.
The name of this Corporation is Seal Holdings Corporation.
II.
Its registered office in the State of Delaware is to be located at 1209
Orange Street, Wilmington, New Castle County, Delaware 19801, and the
Registered Agent in charge thereof is The Corporation Trust Company, 1209
Orange Street, Wilmington, Delaware 19801.
III.
The purpose of this Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
the State of Delaware.
IV.
A. This Corporation is authorized to issue three classes of stock to be
designated, respectively, "Class A Common Stock," "Class B Common Stock" and
"Preferred Stock." The total number of shares which the Corporation is
authorized to issue is eighteen million (18,000,000) shares. Fourteen million,
nine hundred seventy-five thousand (14,975,000) shares shall be Class A Common
Stock, which shall have a par value of twenty cents ($.20) per share, twenty-
five thousand (25,000) shares shall be Class B Common Stock, which shall have
a par value of twenty cents ($.20) per share, and three million (3,000,000)
shares shall be Preferred Stock, which shall have a par value of one-tenth of
one cent ($.001) per share.
B. The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized, by filing a certificate
(a "Preferred Stock Designation") pursuant to the Delaware General Corporation
Law, to fix or alter from time to time the designation, powers, preferences
and rights of the shares of each such series and the qualifications,
limitations or restrictions of any wholly unissued series of Preferred Stock,
and to establish from time to time the number of shares constituting any such
series or any of them; and to increase or decrease the number of shares of
such series then-outstanding. In case the number of shares of any series shall
be decreased in accordance with the foregoing sentence, the shares
constituting such decrease shall resume the status that they had prior to the
adoption of the resolution originally fixing the number of shares of such
series.
C. The shares of Class A and Class B Common Stock shall be entitled in all
respect to equal rights and privileges except as otherwise expressly set forth
in this Article IV. In the event that any dividends in the shares of this
Corporation shall be declared upon the shares outstanding, the shares issued
to the holders of Class A shares shall consist of Class A shares, and the
shares issued to holders of Class B shares shall consist of Class B shares.
D. The holders of the outstanding shares of each class of stock shall be
entitled to vote as a class upon the following matters, provided that Delaware
law requires the matter be approved by vote of the stockholders, and further
provided, in the case of Preferred Stock, that the relevant Preferred Stock
Designation provides for such vote: (1) sale, lease, exchange, mortgage,
pledge or other disposition of all, or substantially all, of the property and
assets, with or without the goodwill, of the Corporation, (2) creation of
bonded indebtedness or increase in capital stock, (3) merger, consolidation or
reorganization, (4) dissolution or liquidation, and (5) any amendment to the
Certificate of Incorporation.
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E. Each share of each class of stock entitled to vote on a matter requiring
vote or action of the stockholders, shall be entitled to one vote for each
share.
F. The holders of the outstanding Class A voting common stock shall be
entitled, as a class, to nominate and elect at least one director at each
Annual or Special Meeting called for the purpose of electing directors, and in
all events shall have the right to nominate and elect at an election held for
that purpose that number of persons as directors which is not exclusively
nominated and elected by the Class B shareholders as provided in the following
paragraph, and in the event that the Class B stock has not been issued and is
not outstanding, the Class A shareholders shall elect all of the Directors.
Such directors so nominated and elected shall be known as Class A Directors.
G. The holders of the outstanding Class B common stock shall have the right,
as a class, to nominate and elect at least two directors, and in any event,
shall have the exclusive right and authority to nominate and elect a simple
majority of all of the directors of the Corporation regardless of their total
number, but said Class B shareholders shall not vote on the number of
directors reserved for nomination and election by the Class A shareholders.
The directors so nominated and elected by the Class B shareholders shall be
known as the Class B Directors.
H. Once established by the Certificate of Incorporation or by the Bylaws, or
any amendment thereto, the total number of directors of the Corporation shall
not be reduced except by vote of the holders of a majority of the shares of
each class of voting common stock, present and voting at a meeting, called for
the purpose, and at which a quorum shall be present.
I. A quorum at all meetings of stockholders shall consist of the holders of
a majority of the outstanding shares of Class A voting common stock, present
in person or by proxy, and a majority of the holders of the outstanding shares
of the Class B voting common stock present in person or by proxy, except that
at any meeting called to elect Class A Directors only, a quorum shall consist
of a majority of the Class A voting common stock; and at a meeting called to
elect Class B Directors only a quorum shall consist of the holders of a
majority of the Class B voting common stock.
V.
Cumulative voting of shares of any class in the election of directors is
prohibited.
VI.
There shall be no preemptive rights of any nature attaching to any class of
the Corporation's stock or to any securities issued by it.
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<PAGE>
VII.
The name and mailing address of the Sole Incorporator, whose power shall
terminate upon the filing of the certificate of incorporation, is as follows:
<TABLE>
<C> <S>
William T. Manierre Bronson, Bronson & McKinnon LLP
505 Montgomery Street
San Francisco, CA 94111
The names and mailing addresses of the initial directors, who will serve
until the first annual meeting of stockholders or until their successors are
elected and qualify, are as follows:
Class B Directors Mailing Address
----------------- ---------------
Donald L. Caldera 2200 South Ocean Lane, #109
Fort Lauderdale, FL 33316
Thomas M. Ferguson 125 Worth Avenue, Suite 314
Palm Beach, FL 33480
Class A Director Mailing Address
---------------- ---------------
J. Erik Hvide c/o Hvide Marine Incorporated
2200 Eller Drive
Fort Lauderdale, FL 33316
</TABLE>
VIII.
For the management of the business and for the conduct of the affairs of the
Corporation, and in further definition, limitation and regulation of the
powers of the Corporation, of its directors and of its stockholders or any
class thereof, as the case may be, it is further provided that:
(a) The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. Except as set forth
herein, the number of directors which shall constitute the whole Board of
Directors shall be fixed by the Board of Directors in the manner provided
in the Bylaws.
(b) The Bylaws may be altered, amended or repealed, in accordance with
the Bylaws.
IX.
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon the
stockholders herein are granted subject to this right.
X.
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived
an improper benefit. If the Delaware General Corporation Law is amended after
approval by the stockholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of this Article shall be prospective and shall
not affect the rights under this Article in effect at the time of the alleged
occurrence of any act or omission to act giving rise to liability or
indemnification.
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XI.
The Corporation shall indemnify its officers, directors, employees and
agents to the extent not prohibited by the Delaware General Corporation Law,
and as provided in its Bylaws.
IN WITNESS WHEREOF, this Certificate has been subscribed this day
of , 1997, by the undersigned who affirms that the statements
made herein are true and correct.
-------------------------------------
William T. Manierre, Sole
Incorporator
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<PAGE>
APPENDIX C
BYLAWS
OF
SEAL HOLDINGS CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I--OFFICES........................................................ 1
SECTION 1--REGISTERED OFFICE............................................ 1
SECTION 2--OTHER OFFICES................................................ 1
ARTICLE II--MEETINGS OF STOCKHOLDERS...................................... 1
SECTION 1--PLACE OF MEETINGS............................................ 1
SECTION 2--ANNUAL MEETINGS.............................................. 1
SECTION 3--SPECIAL MEETINGS............................................. 1
SECTION 4--NOTICE OF MEETINGS........................................... 1
SECTION 5--QUORUM....................................................... 1
SECTION 6--STOCKHOLDERS ENTITLED TO VOTE................................ 2
SECTION 7--ORGANIZATION................................................. 2
ARTICLE III--DIRECTORS.................................................... 3
SECTION 1--NUMBER OF DIRECTORS......................................... 3
SECTION 2--VACANCIES AND REMOVAL....................................... 3
SECTION 3--POWERS...................................................... 3
SECTION 4--PLACE OF MEETING............................................ 3
SECTION 5--ORGANIZATION MEETING........................................ 4
SECTION 6--REGULAR MEETINGS............................................ 4
SECTION 7--SPECIAL MEETINGS............................................ 4
SECTION 8--QUORUM...................................................... 4
SECTION 9--ACTION WITHOUT MEETING...................................... 4
SECTION 10--PARTICIPATION IN MEETINGS................................... 4
SECTION 11--COMMITTEES OF DIRECTORS..................................... 5
SECTION 12--ORGANIZATION................................................ 5
SECTION 13--MINUTES OF MEETINGS......................................... 6
SECTION 14--COMPENSATION OF DIRECTORS................................... 6
SECTION 15--ADVISORY BOARD.............................................. 6
SECTION 16--RESIGNATION................................................. 6
ARTICLE IV--OFFICERS...................................................... 6
SECTION 1--OFFICERS.................................................... 6
SECTION 2--ELECTION.................................................... 6
SECTION 3--SALARIES.................................................... 6
SECTION 4--CHAIRMAN OF THE BOARD....................................... 7
SECTION 5--PRESIDENT................................................... 7
SECTION 6--VICE PRESIDENTS............................................. 7
SECTION 7--SECRETARY................................................... 7
SECTION 8--ASSISTANT SECRETARIES....................................... 7
SECTION 9--TREASURER OR CHIEF FINANCIAL OFFICER........................ 7
SECTION 10--ASSISTANT TREASURERS........................................ 7
SECTION 11--RESIGNATIONS................................................ 8
SECTION 12--REMOVAL..................................................... 8
ARTICLE V--EXECUTION OF CORPORATE INSTRUMENT AND VOTING OF SECURITIES
OWNED BY THE CORPORATION................................................. 8
SECTION 1--EXECUTION OF CORPORATE INSTRUMENT............................ 8
SECTION 2--VOTING OF SECURITIES OWNED BY THE CORPORATION................ 8
</TABLE>
i
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TABLE OF CONTENTS--(CONTINUED)
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE VI--STOCK AND CERTIFICATES........................................ 9
SECTION 1--FORM AND EXECUTION........................................... 9
SECTION 2--LOST CERTIFICATES............................................ 9
SECTION 3--TRANSFER OF SHARES........................................... 9
SECTION 4--REGISTERED STOCKHOLDERS...................................... 9
SECTION 5--FIXING RECORD DATES.......................................... 10
ARTICLE VII--OTHER SECURITIES OF THE CORPORATION.......................... 10
SECTION 1--EXECUTION OF OTHER SECURITIES................................ 10
ARTICLE VIII--GENERAL PROVISIONS.......................................... 11
SECTION 1--DIVIDENDS.................................................... 11
SECTION 2--FISCAL YEAR ................................................. 11
SECTION 3--SEAL......................................................... 11
SECTION 4--NOTICES...................................................... 11
SECTION 5--WAIVER OF NOTICE............................................. 12
SECTION 6--BOND......................................................... 13
SECTION 7--APPROVAL OF ACTS............................................. 13
ARTICLE IX--INDEMNIFICATION............................................... 13
SECTION 1--INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER
AGENTS........................................................ 13
ARTICLE X--AMENDMENTS..................................................... 16
SECTION 1--BY STOCKHOLDERS.............................................. 16
SECTION 2--BY DIRECTORS................................................. 16
</TABLE>
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BYLAWS
OF
SEAL HOLDINGS CORPORATION
ARTICLE I--OFFICES
SECTION 1--REGISTERED OFFICE
The registered office shall be in the City of Wilmington, County of New
Castle, State of Delaware. (Del. Code Ann., tit. 8, (S) 131)
SECTION 2--OTHER OFFICES
The Corporation shall also have and maintain an office or principal place of
business in 125 Worth Avenue, Suite 314, Palm Beach, Florida, or at such place
as may be fixed by the Board of Directors, and may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require. (Del. Code Ann., tit. 8, (S) 122(B))
ARTICLE II--MEETINGS OF STOCKHOLDERS
SECTION 1--PLACE OF MEETINGS
All meetings of stockholders for the election of directors shall be held at
such place either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors or, if not so
designated, then at the office of the Corporation maintained pursuant to
Article I, Section 1 hereof. (Del. Code Ann., (S) 211(a))
SECTION 2--ANNUAL MEETINGS
The annual meetings of stockholders for the election of directors and for
such other business as may properly be brought before the meeting shall be
held on such date and at such time as shall be designated from time to time by
the Board of Directors. (Del. Code Ann., tit. 8, (S) 211(b))
SECTION 3--SPECIAL MEETINGS
Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute or by the Certificate of Incorporation or
these Bylaws, may be called by the Chairman of the Board of Directors, the
President, the Board of Directors, or the holders of not less than one-tenth
of all the shares entitled to vote at the meeting. (Del. Code Ann., tit. 8,
(S) 211(d))
SECTION 4--NOTICE OF MEETINGS
Except as otherwise provided by law or the Certificate of Incorporation,
written notice of each meeting of stockholders stating the place, date and
hour of the meeting and, in the case of Special Meeting, the purpose or
purposes for which the meeting is called shall be given to each stockholder
entitled to vote at the meeting not less than ten (10) or more than sixty (60)
days before the date of the meeting. Notice of the time, place and purpose of
any meeting of stockholders may be waived in writing, signed by the person
entitled to notice thereof, either before or after such meeting. Any
stockholder so waiving notice of such meeting shall be bound by the
proceedings of any such meeting in all respects as if the notice thereof had
been given. (Del. Code Ann., tit. 8, (S)(S) 222, 229)
SECTION 5--QUORUM
At all meetings of stockholders, except where otherwise provided by statute
or by the Certificate of Incorporation or by these Bylaws, the presence, in
person or by proxy duly authorized, of the holders of a majority of the
outstanding shares of the Class A voting common stock, and a majority of the
outstanding shares
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of the Class B voting common stock, entitled to vote, shall constitute a
quorum for the transaction of business. Any shares, the voting of which at
said meeting has been enjoined, or which for any reason cannot be lawfully
voted at such meeting, shall not be counted to determine a quorum at such
meeting. The stockholders present at any duly called or convened meeting at
which a quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum. Except as otherwise provided by law, the Certificate of Incorporation
or these Bylaws, all action taken by the holders of a majority of the voting
power represented at any meeting at which a quorum is present shall be valid
and binding upon the Corporation, provided, however, that directors shall be
elected by a plurality of the votes of each class of shares present in person
or represented by proxy at the meeting and entitled to vote on the election of
directors, in accordance with Article IV of the Certificate of Incorporation.
Where a separate vote by a class or classes is required, a majority of the
outstanding shares of each class or classes, present in person or represented
by proxy, shall constitute a quorum entitled to take action with respect to
that vote on that matter, and the affirmative vote of the majority (plurality,
in the case of the election of directors) of shares of such class or classes,
present or in person or represented by proxy at the meeting shall be the act
of such class. Cumulative voting for directors shall not be permitted. (Del.
Code Ann., tit. 8, (S) 216)
If however, such quorum shall not be present or represented at any meeting
of the stockholders, the chairman of the meeting or the vote of the holders of
a majority of the shares represented shall have the power to adjourn the
meeting without notice other than announcement at the meeting, until such time
as when a quorum shall be present or represented. At such adjourned meeting at
which a quorum shall be present or represented any business may be transacted
which might have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting. (Del. Code Ann., tit. 8, (S) 216, 222(c))
SECTION 6--STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the Corporation shall
prepare and make, at least ten (10) days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of the name
of each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the place of the meeting during the whole time thereof, and may be inspected
by any stockholder who is present. (Del. Code Ann., tit. 8, (S) 219(a))
Each outstanding share, regardless of class, if entitled to vote on a
matter, shall be entitled to one vote on such matter submitted to a vote at a
meeting of stockholders. At any meeting of the stockholders, every stockholder
having the right to vote shall be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder, or by
his duly authorized agent. Such proxy shall be filed with the Secretary of the
Corporation prior to or at the time of the meeting. An agent so appointed need
not be a stockholder. No proxy shall be voted after three (3) years from its
date of creation, unless the proxy provides for a longer period. All elections
of directors shall be by written ballot, if so required by the Board of
Directors. (Del. Code Ann., tit. 8, (S)(S) 211(e), 212(b))
SECTION 7--ORGANIZATION
(a) At every meeting of stockholders, the Chairman of the Board of
Directors, or, if a Chairman has not been appointed or is absent, the
President, or, if the President is absent, the most senior Vice President
present, or in the absence of any such officer, a chairman of the meeting
chosen by a majority in interest of the stockholders entitled to vote, present
in person or by proxy, shall act as chairman. The Secretary, or, in his
absence, an Assistant Secretary directed to do so by the President, shall act
as a secretary of the meeting.
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(b) The Board of Directors of the Corporation shall be entitled to make such
rules or regulations for the conduct of meetings of stockholders as it shall
deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Directors, if any, the chairman of the meeting
shall have the right and authority to prescribe such rules, regulations and
procedures and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the meeting,
including, without limitation, establishing an agenda or order of business for
the meeting, rules and procedures for maintaining order at the meeting and the
safety of those present, limitations on participation in such meeting to
stockholders of record of the Corporation and their duly authorized and
constituted proxies, and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the commencement
thereof, limitations on the time allotted to questions or comments by
participants and regulation of the opening and closing of the polls for
balloting on matters which are to be voted on by ballot. Unless, and to the
extent determined by the Board of Directors of the chairman of the meeting,
meetings of stockholders shall not be required to be held in accordance with
rules of parliamentary procedure.
ARTICLE III--DIRECTORS
SECTION 1--NUMBER OF DIRECTORS
The Board of Directors shall consist of not less than three (3) and not more
than twenty-one (21) directors. Within the limits specified, the number of
directors may be determined by resolution of the Board of Directors. The
limits on the number of authorized directors may be modified from time to time
by amendment of this Article III, Section 1, in accordance with Article X
hereof, and with the Certificate of Incorporation. The directors shall be
elected at the annual meeting of the stockholders, except as hereinafter
provided, and each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders. If for any cause
directors shall not have been elected at the annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of stockholders
called for that purpose. No reduction of the authorized number of directors
shall have the effect of removing any director before the director's term of
office expires unless such removal is made pursuant to these Bylaws. (Del.
Code Ann., tit. 8, (S)(S) 141(b), 211(b), (c))
SECTION 2--VACANCIES AND REMOVAL
Any director may be removed either for or without cause, at any special
meeting of stockholders by the affirmative vote of a majority in number of
shares of the stockholders present in person or by proxy at such meeting and
entitled to vote for the election of such director, if notice of the intention
to act upon such matter shall have been given in the notice calling such
meeting. Any director may be removed either for or without cause, at any
meeting of directors, by the affirmative vote of two-thirds of all members of
the Board of Directors. If any vacancies occur in the Board of Directors
because of death, resignation, retirement, disqualification or removal from
office of any director or otherwise, a majority of the directors then in
office, though less than a quorum, may choose a successor or successors, or a
successor or successors may be chosen at a special meeting of stockholders
called for that purpose; and each successor director so chosen shall be
elected for the unexpired term of his predecessor in office. Any directorship
to be filled by reason of an increase in the number of directors may be filled
by election at any meeting of stockholders, or may be filled by affirmative
vote of a majority of all members of the Board of Directors then in office.
SECTION 3--POWERS
The business and property of the Corporation shall be managed by or under
the direction of its Board of Directors which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by statute
or by the Certificate of Incorporation or by these Bylaws directed or required
to be exercised or done by the stockholders. (Del. Code Ann., tit. 8,
(S) 41(a))
SECTION 4--PLACE OF MEETING
The Board of Directors of the Corporation may hold meetings, both regular
and special, within or without the State of Delaware.
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SECTION 5--ORGANIZATION MEETING
The first meeting of each newly elected Board of Directors shall be held at
such time and place as shall be fixed by the vote of the stockholders at the
annual meeting and no notice of such meeting shall be necessary to the newly
elected directors in order to legally constitute the meeting, provided a
quorum shall be present. In the event of the failure of the stockholders to
fix the time or place of such first meeting of the newly elected Board of
Directors, or in the event such meeting is not held at the time and place so
fixed by the stockholders, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for special
meetings of the Board of Directors, or as shall be specified in a written
waiver signed by all of the directors.
SECTION 6--REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice at
such time and at such place as shall from time to time be determined by the
Board. (Del. Code Ann., tit. 8, (S) 141(a))
SECTION 7--SPECIAL MEETINGS
Special meetings of the Board may be called at any time by the Chairman of
the Board on one (1) day's notice to each director, either personally or by
mail or telegram; special meetings shall be called by the Chairman of the
Board in like manner and on like notice on the written request of four or more
directors. Except as may be otherwise expressly provided by statute, or by the
Certificate of Incorporation, or by these Bylaws, neither the business to be
transacted at, nor the purpose of, any special meeting of directors need be
specified in a notice or waiver of notice.
SECTION 8--QUORUM
At all meetings of the Board, a majority of the exact number of directors
fixed from time to time in accordance with Article III, Section 1 hereof shall
be necessary to constitute a quorum for the transaction of business and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute, by the Certificate of Incorporation, or by
these Bylaws. With respect to indemnification questions arising under Article
IX, Section 1 hereof, a quorum shall be 1/3 of the exact number of directors
fixed from time to time in accordance with Article III, Section 1 hereof, but
not less than one (1). If a quorum shall be present or otherwise at any
meeting of the Board of Directors, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting. (Del. Code Ann., tit. 8, (S) 141(b))
SECTION 9--ACTION WITHOUT MEETING
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting,
if all members of the Board or committee, as the case may be, consent thereto
in writing, and such writing or writings are to be filed with the minutes of
proceedings of the Board or committee. (Del. Code Ann., tit. 8, (S) 141(f))
SECTION 10--PARTICIPATION IN MEETINGS
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, members of the Board of Directors, or any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors, or
any committee, by means of conference telephone or similar communications
equipment if, by such means, all persons participating in the meeting can hear
each other. Such participation in a meeting shall constitute presence in
person at the meeting. (Del. Code Ann., tit. 8, (S) 141(i))
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SECTION 11--COMMITTEES OF DIRECTORS
(a) The Board of Directors may, by resolution passed by a majority of the
whole Board, designate an Executive Committee, to consist of not less than
five directors of the Corporation, one of whom shall be the Chairman of the
Board of Directors. The Executive Committee shall have and may exercise all of
the authority of the Board of Directors in the management of the business and
affairs of the Corporation, except where action of a majority of all members
of the Board of Directors is required by statute, by the Certificate of
Incorporation, or by these Bylaws, and the said Executive Committee shall have
power to authorize the seal of the Corporation to be affixed to all papers
which may require it. (Del Code. Ann., tit. 8, (S) 141(c))
(b) The Board of Directors may, by resolution passed by a majority of the
whole Board, from time to time appoint such other committees as may be
permitted by law. Such other committees shall consist of one or more of the
directors of the corporation, and shall have such power and perform such
duties as may be prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers denied to the
Executive Committee. (Del. Code Ann., tit. 8, (S) 141(c))
(c) The members of all committees of the Board of Directors shall serve a
term coexistent with that of the Board of Directors which shall have appointed
such committee. The Board of Directors, subject to the provisions of
subsections (a) or (b) of this Article III, Section 11, may at any time
increase or decrease the number of members of a committee or terminate the
existence of a committee. The membership of a committee member shall terminate
on the date of his death or voluntary resignation from the committee or from
the Board of Directors. The Board of Directors may at any time for any reason
remove any individual committee member and the Board of Directors may fill any
committee vacancy created by death, resignation, removal or increase in the
number of members of the committee. The Board of Directors may designate one
or more Directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee, and, in
addition, in the absence or disqualification of any member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. (Del. Code Ann., tit. 8, (S) 141(c))
(d) Unless the Board of Directors shall otherwise provide, regular meetings
of the Executive Committee or any other committee appointed pursuant to this
Article III, Section 11 shall be held at such times and places as are
determined by the Board of Directors, or by any such committee, and when
notice thereof has been given to each member of such committee, no further
notice of such regular meetings need be given thereafter. Special meetings of
any such committee may be held at any place which has been determined from
time to time by such committee, and may be called by any director who is a
member of such committee, upon written notice to the members of such committee
of the time and place of such special meeting given in the manner provided for
the giving of written notice to members of the Board of Directors of the time
and place of special meetings of the Board of Directors. Notice of any special
meeting of any committee may be waived in writing at any time before or after
the meeting and will be waived by any director by attendance thereat, except
when the director attends such special meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority of the
authorized number of members of any such committee shall constitute a quorum
for the transaction of business, and the act of a majority of those present at
any meeting at which a quorum is present shall be the act of such committee.
(Del. Code. Ann., tit. 8, (S)(S) 141(c), 229)
SECTION 12--ORGANIZATION
At every meeting of the directors, the Chairman of the Board of Directors,
or, if a Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in the absence of
any such officer, a chairman of the meeting chosen by a majority of the
directors present, shall preside over the meeting. The Secretary, or in his
absence, an Assistant Secretary directed to do so by the President, shall act
as secretary of the meeting.
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SECTION 13--MINUTES OF MEETINGS
Each committee shall keep regular minutes of its meetings and report the
same to the Board of Directors when required.
SECTION 14--COMPENSATION OF DIRECTORS
Directors, as such, shall not receive any stated salary for their services,
but, by resolution of the Board, a fixed sum and expenses of attendance, if
any, may be allowed for attendance at each regular or special meeting of the
Board and at any meeting of a committee of the Board; provided that nothing
herein contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. (Del.
Code Ann., tit. 8, (S) 141(h))
SECTION 15--ADVISORY BOARD
The Chairman of the Board may appoint an advisory Board, to act in an
advisory capacity to the Board of Directors.
SECTION 16--RESIGNATION
Any Director may resign at any time by delivering his written resignation to
the Secretary, such resignation to specify whether it will be effective at a
particular time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed effective
at the pleasure of the Board of Directors. When one or more Directors shall
resign from the Board of Directors, effective at a future date, a majority of
the Directors then in office, including those who have so resigned, shall have
the power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective, and each
Director so chosen shall hold office for the unexpired portion of the term of
the Director whose place shall be vacated and until his successor shall have
been duly elected and qualified. (Del. Code Ann., tit. 8, (S)(S) 141(b),
223(d))
ARTICLE IV--OFFICERS
SECTION 1--OFFICERS
The officers of the corporation shall be chosen by the Board of Directors
and shall consist of a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary and a Treasurer. The Board of Directors may also
choose one or more Assistant Vice Presidents, and one or more Assistant
Secretaries and Assistant Treasurers and such other officers and agents with
such powers and duties as it shall deem necessary. Any two or more offices may
be held by the same person, unless specifically prohibited by law, and except
that the offices of President and Secretary shall not be held by the same
person. (Del. Code. Ann., tit. 8, (S)(S) 122(5), 142(a), (b))
SECTION 2--ELECTION
The Board of Directors at its first meeting after each annual meeting of the
stockholders shall choose the said officers and the Chairman of the Board and
a President selected from the Board of its members. Each officer of the
Corporation shall hold office until his successor is chosen and qualified in
his stead or until his death or until his resignation or removal from office.
Any officer elected or appointed by the Board of Directors may be removed at
any time by the vote of the Board of Directors. Any vacancy occurring in any
office of the Corporation may be filled by the Board of Directors.
SECTION 3--SALARIES
The salaries and other compensation of all officers of the Corporation shall
be fixed in the manner designated by the Board of Directors. (Del. Code Ann.,
tit. 8, (S) 122(5))
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SECTION 4--CHAIRMAN OF THE BOARD
The Chairman of the Board shall be the Chief Executive Officer of the
Corporation and preside at all meetings of the Board of Directors. He shall
also perform such other duties as required of him by the Bylaws and as might
from time to time be assigned to him by the Board of Directors. (Del. Code
Ann., tit. 8, (S) 142(a))
SECTION 5--PRESIDENT
The President, in the absence or disability of the Chairman of the Board,
shall perform the duties and exercise the powers of the Chairman of the Board.
He shall have general and active management of the business and affairs of the
Corporation, shall see that all orders and resolutions of the Board of
Directors are carried into effect, and shall perform such other duties and
shall have such other powers the Bylaws or the Board of Directors may from
time to time prescribe. (Del. Code Ann., tit. 8, (S) 142(a))
SECTION 6--VICE PRESIDENTS
The order of the seniority of the Vice Presidents shall be in the order of
their nomination, unless otherwise determined by the Board of Directors. The
Vice Presidents, in the order of their seniority, may assume and perform the
duties of the President in the absence or disability of the President or when
the office of President is vacant. Each Vice President shall have such powers
and shall perform such duties commonly incident to his office and as the Board
of Directors may from time to time prescribe or as the President may from time
to time delegate to him. (Del. Code Ann., tit. 8, (S) 142(a))
SECTION 7--SECRETARY
The Secretary shall attend all sessions of the Board of Directors and all
meetings of the stockholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose. The Secretary shall give,
or cause to be given, notice of all meetings of the stockholders and all
meetings of the Board of Directors and any committee thereof requiring notice,
and shall perform such other duties commonly incident to his office and as may
be prescribed by the Board of Directors or the President, under whose
supervision he shall be. He shall keep in safe custody the minute book and
seal of the Corporation and affix the seal to any instrument requiring it and
when so affixed, it shall be attested by his signature or by the signature of
the Treasurer or an Assistant Secretary. (Del. Code Ann., tit. 8, (S) 142(a))
SECTION 8--ASSISTANT SECRETARIES
Each Assistant Secretary shall have such powers and perform such duties as
the Board of Directors may from time to time prescribe or as the President may
from time to time delegate to him. (Del. Code Ann., tit. 8, (S) 142(a))
SECTION 9--TREASURER
The Treasurer shall, subject to the order of the Board of Directors, have
custody of all funds and securities of the corporation. The Treasurer shall
keep or cause to be kept the books of account of the corporation in a thorough
and proper manner, and shall render statements of the financial affairs of the
corporation in such form and as often as required by the Board of Directors or
the President. The Treasurer shall perform such other duties commonly incident
to his office and perform such other duties and share such other powers as the
Board of Directors or the President may from time to time designate.
SECTION 10--ASSISTANT TREASURERS
Each Assistant Treasurer shall have such powers and perform such duties as
the Board of Directors may from time to time prescribe. (Del. Code Ann., tit.
8, (S) 142(a))
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SECTION 11--RESIGNATIONS
Any officer may resign at any time by giving written notice to the Board of
Directors or to the President or to the Secretary. Any such resignation shall
be effective when received by the person or persons to whom such notice is
given, unless a later time is specified therein, in which event the
resignation shall become effective at such later time. Unless otherwise
specified in such notice, the acceptance of any such resignation shall not be
necessary to make it effective. Any resignation shall be without prejudice to
the rights, if any, of the corporation under any contract with the resigning
officer. (Del. Code Ann., tit. 8, (S) 142(b))
SECTION 12--REMOVAL
Any officer may be removed from office at any time, either with or without
cause, by the vote or written consent of a majority of the directors in office
at the time, or by any committee or superior officers upon whom such power of
removal may have been conferred by the Board of Directors.
ARTICLE V--EXECUTION OF CORPORATE INSTRUMENT AND VOTING OF SECURITIES OWNED BY
THE CORPORATION
SECTION 1--EXECUTION OF CORPORATE INSTRUMENT
The Board of Directors may, in its discretion, determine the method and
designate the signatory officer of officers, or other person or persons, to
execute on behalf of the corporation any corporate instrument or document, or
to sign on behalf of the corporate name without limitation, or to enter into
contracts on behalf of the corporation, except where otherwise provided by law
or these Bylaws, and such execution or signature shall be binding upon the
corporation. (Del. Code Ann., tit. 8, (S)(S) 103(a), 142(a), 158)
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and
other evidence of indebtedness of the corporation, and other corporate
instruments or documents requiring the corporate seal, and certificates of
shares of stock owned by the corporation, shall be executed, signed or
endorsed by the Chairman of the Board of Directors, or the President or any
Vice President, and by the Secretary or Chief Financial Officer or Treasurer
or any Assistant Secretary or Assistant Treasurer. All other instruments and
documents requiring the corporate signature, but not requiring the corporate
seal, may be executed as aforesaid or in such other manner as may be directed
by the Board of Directors. (Del. Code Ann., tit. 8, (S)(S) 103(a), 142(a),
158)
All checks and drafts drawn on banks or other depositaries on funds to the
credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so
to do.
Unless authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount. (Del.
Code Ann., tit. 8, (S)(S) 103(a), 142(a), 158)
SECTION 2--VOTING OF SECURITIES OWNED BY THE CORPORATION
All stock and other securities of other corporations owned or held by the
corporation for itself, or for other parties in any capacity, shall be voted,
and all proxies with respect thereto shall be executed, by the person
authorized so to do by resolution of the Board of Directors, or, in the
absence of such authorization, by the Chairman of the Board of Directors, the
President, or any Vice President. (Del. Code Ann., tit. 8, (S) 123)
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ARTICLE VI--STOCK AND CERTIFICATES
SECTION 1--FORM AND EXECUTION
Certificates in such form as may be determined by the Board of Directors
shall be delivered representing all shares to which stockholders are entitled.
Such certificates shall be consecutively numbered and shall be entered in the
books of the Corporation as they are issued. Each certificate shall state on
the face thereof the holder's name, the number and class of shares, and the
par value of such shares or a statement that such shares are without par
value. They shall be signed by the President or a Vice President and the
Secretary or an Assistant Secretary and may be sealed with the seal of the
Corporation or a facsimile thereof. If any certificate is countersigned by a
transfer agent, or an assistant transfer agent, or by a transfer clerk, the
signature of any such officer may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue. (Del. Code Ann., tit. 8, (S) 158)
Each certificate shall state upon the face or back therein, in full or in
summary, all of the powers, limitations or restrictions and relative rights of
the shares authorized to be issued, provided that, except as otherwise
provided by law, in lieu of the foregoing requirements, there may be set forth
on the face or back of the certificate a statement that the Corporation will
furnish without charge to each stockholder who so requests the voting powers,
designations, preferences, limitations, restrictions and relative rights of
each class of stock or series thereof.
SECTION 2--LOST CERTIFICATES
The Board of Directors may direct a new certificate representing shares to
be issued in place of any certificate theretofore issued by the Corporation
alleged to have lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificates to be lost or destroyed. When
authorizing such issue of a new certificate, the Board of Directors, in its
discretion and as a condition precedent to the issuance thereof, may require
the owner of such lost or destroyed certificate, or his legal representative,
to advertise the same in such manner as it shall require and/or give the
Corporation a bond in such form in such sum, and with such surety or sureties
as it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost or
destroyed. (Del. Code Ann., tit. 8, (S) 167)
SECTION 3--TRANSFER OF SHARES
Shares of stock shall be transferable only on the books of the Corporation
by the holder thereof in person or by his duly authorized attorney. Upon the
surrender to the Corporation or the transfer agent of the Corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation or the transfer agent to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon
its books. (Del. Code Ann., tit. 8,(S)(S) 201, 401(1))
The Corporation shall have power to enter into and perform any agreement
with any number of stockholders of any one or more classes of stock of the
Corporation to restrict the transfer of shares of stock of the Corporation of
any one or more classes owned by such stockholders in any manner not
prohibited by the General Corporation Laws of Delaware. (Del. Code Ann., tit.
8, (S) 160(a))
SECTION 4--REGISTERED STOCKHOLDERS
The Corporation shall be entitled to treat the holder of record of any share
or shares as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Delaware.
(Del. Code Ann., tit. 8, (S)(S) 213(a), 219)
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SECTION 5--FIXING RECORD DATES
(a) In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix, in advance, a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) nor less than ten (10) days before the date of
such meeting. If no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of
Directors may fix, in advance, a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors, and which date shall not be more than ten (10) days
after the date upon which the resolution fixing the record date is adopted by
the Board of Directors. If no record date has been fixed by the Board of
Directors, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the
Board of Directors is required by law, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken
is delivered to the Corporation by delivery to its registered office in the
State of Delaware, its principal place of business or an officer or agent of
the Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
(c) In order that the corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted, and which record date shall be not more than sixty
(60) days prior to such action. If no record date is fixed, the record date
for determining stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto. (Del. Code Ann., tit. 8, (S) 213)
ARTICLE VII--OTHER SECURITIES OF THE CORPORATION
SECTION 1--EXECUTION OF OTHER SECURITIES
All bonds, debentures and other corporate securities of the Corporation,
other than stock certificates, may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, or the Chief Financial Officer or
Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the
manual signature of a trustee under an indenture pursuant to which such bond,
debenture or other corporate security shall be issued, the signatures of the
person signing and attesting the corporate seal on such bond, debenture or
other corporate security may be the imprinted facsimile of the signatures of
such persons. Interest coupons appertaining to any such bond, debenture or
other corporate security, authenticated by a trustee as aforesaid, shall be
signed by the Treasurer or an Assistant
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Treasurer of the corporation or such other person as may be authorized by the
Board of Directors, or bear imprinted thereon the facsimile signature of such
person. In case any officer who shall have signed or attested any bond,
debenture or other corporate security, or whose facsimile signature shall
appear thereon or on any such interest coupon, shall have ceased to be such
officer before the bond, debenture or other corporate security so signed or
attested shall have been delivered, such bond, debenture or other corporate
security nevertheless may be adopted by the corporation and issued and
delivered as though the person who signed the same or whose facsimile
signature shall have been used thereon had not ceased to be such officer of
the corporation.
ARTICLE VIII--GENERAL PROVISIONS
SECTION 1--DIVIDENDS
Dividends upon the outstanding shares of the Corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting. Dividends may be paid in
cash, in property, or in shares of the Corporation, subject to the provisions
of the statutes and the Certificate of Incorporation. (Del. Code Ann., tit. 8,
(S)(S) 170, 173)
There may be set aside out of any funds of the corporation available for
dividends such sum or sums as the directors from time to time, in their
absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purpose as the directors
shall think conducive to the interest of the Corporation, and the directors
may modify or abolish any such reserve in the manner in which it was created.
(Del. Code Ann., tit. 8, (S) 171)
SECTION 2--FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution of the Board
of Directors.
SECTION 3--SEAL
The corporate seal shall have inscribed thereon the name of the Corporation,
the year of its organization and the words "Corporate Seal, Delaware." The
seal may be used by causing it or a facsimile thereof to be impressed,
affixed, reproduced. (Del. Code Ann., tit. 8, (S) 122(3))
SECTION 4--NOTICES
(a) Notice to Stockholders. Whenever, under any provisions of these Bylaws,
notice is required to be given to any stockholder, it shall be given in
writing, timely and duly deposited in the United States mail, postage prepaid,
and addressed to his last known post office address as shown by the stock
record of the Corporation or its transfer agent. (Del. Code Ann., tit. 8,
(S) 222)
(b) Notice to Directors. Any notice required to be given to any director may
be given by the method stated in subsection (a), or by facsimile, telex or
telegram, except that such notice other than one which is delivered personally
shall be sent to such address as such director shall have filed in writing
with the Secretary, or, in the absence of such filing, to the last known post
office address of such director.
(c) Address Unknown. If no address of a stockholder or director be known,
notice may be sent to the office of the Corporation required to be maintained
pursuant to Section 2 hereof.
(d) Affidavit of Mailing. An affidavit of mailing, executed by a duly
authorized and competent employee of the Corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name and
address or the names and addresses of the stockholder or stockholders, or
director or directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall be conclusive evidence of
the statements therein contained. (Del. Code Ann., tit. 8, (S) 222)
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(e) Time Notices Deemed Given. All notices given by mail, as above provided,
shall be deemed to have been given as at the time of mailing, and all notices
given by facsimile, telex or telegram shall be deemed to have been given as of
the sending time recorded at time of transmission.
(f) Methods of Notice. It shall not be necessary that the same method of
giving notice be employed in respect of all directors, but one permissible
method may be employed in respect of any one or more, and any other
permissible method or methods may be employed in respect of any other or
others.
(g) Failure to Receive Notice. The period or limitation of time within which
any stockholder may exercise any option or right, or enjoy any privilege or
benefit, or be required to act, or within which any director may exercise any
power or right, or enjoy any privilege, pursuant to any notice sent him in the
manner above provided, shall not be affected or extended in any manner by the
failure of such stockholder or such director to receive such notice.
(h) Notice to Person With Whom Communication Is Unlawful. Whenever notice is
required to be given, under any provision of law or of the Certificate of
Incorporation or Bylaws of the Corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall not
be required, and there shall be no duty to apply to any governmental authority
or agency for a license or permit to give such notice to such person. Any
action or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same force and
effect as if such notice had been duly given. In the event that the action
taken by the Corporation is such as to require the filing of a certificate
under any provision of the Delaware General Corporation Law, the certificate
shall state, if such is the fact and if notice is required, that notice was
given to all persons entitled to receive notice except such persons with whom
communication is unlawful.
(i) Notice to Person With Undeliverable Address. Whenever notice is required
to be given, under any provision of law or the Certificate of Incorporation or
Bylaws of the Corporation, to any stockholder to whom (i) notice of two
consecutive annual meetings, and all notices of meetings or of the taking of
action by written consent without a meeting to such person during the period
between such two consecutive annual meetings, or (ii) all, and at least two,
payments (if sent by first-class mail) of dividends or interest on securities
during a twelve-month period, have been mailed addressed to such person at his
address as shown on the records of the Corporation and have been returned
undeliverable, the giving of such notice to such person shall not be required.
Any action or meeting which shall be taken or held without notice to such
person shall have the same force and effect as if such notice had been duly
given. If any such person shall deliver to the Corporation a written notice
setting forth his then current address, the requirement that notice be given
to such person shall be reinstated. In the event that the action taken by the
Corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate need not
state that notice was not given to persons to whom notice was not required to
be given pursuant to this paragraph. (Del. Code Ann., tit. 8, (S) 230)
SECTION 5--WAIVER OF NOTICE
Whenever any notice is required to be given to any stockholder or director
of the Corporation under the provisions of the statute or of the Certificate
of Incorporation, or of these Bylaws, a waiver thereof in writing signed by
the person or persons entitled to said notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.
Attendance at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of objecting
at the beginning of the meeting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver unless so required by the Certificate of
Incorporation or these Bylaws. (Del. Code Ann., tit. 8, (S) 229)
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SECTION 6--BOND
Each officer and each employee shall give the Corporation a bond in such
form, in such sum, and with such surety or sureties as shall be satisfactory
to the Board for the faithful performance of the duties of his office and for
the restoration to the Corporation in case of his death, resignation,
retirement, or removal from office of all books, papers, vouchers, money and
other property, of whatever kind, in his possession or under his control
belonging to the Corporation. The Corporation shall pay all insurance premiums
for such bonds.
SECTION 7--APPROVAL OF ACTS
The Corporation shall be deemed to have waived any claim against any officer
of the Corporation for any act or deed approved or ratified by the Board of
Directors, and the Corporation and all stockholders shall be deemed to have
waived any claim against any director or officer of the Corporation for any
act or deed approved or ratified by a majority of the stockholders present in
person or by proxy at any meeting of stockholders of the Corporation, whether
or not such meeting was called for such purposes and whether or not the notice
of such meeting specifies that such matter is to be considered or voted upon.
ARTICLE IX--INDEMNIFICATION
SECTION 1--INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS
(a) Directors, and Executive Officers. The Corporation shall indemnify its
Directors and executive officers to the fullest extent not prohibited by the
Delaware General Corporation Law; provided, however, that the Corporation may
limit the extent of such indemnification by individual contracts with its
Directors and executive officers; and, provided, further, that the Corporation
shall not be required to indemnify any Director or executive officer in
connection with any proceeding (or part thereof) initiated by such person or
any proceeding by such person against the Corporation or its Directors,
officers, employees or other agents unless (i) such indemnification is
expressly required to be made by law, (ii) the proceeding was authorized by
the Board of Directors of the Corporation or (iii) such indemnification is
provided by the Corporation, in its sole discretion, pursuant to the powers
vested in the Corporation under the Delaware General Corporation Law.
(b) Other Officers, Employees and Other Agents. The Corporation shall have
power to indemnify its other officers, employees and other agents as set forth
in the Delaware General Corporation Law.
(c) Good Faith.
(1) For purposes of any determination under this Bylaw, a Director or
executive officer shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding,
to have had no reasonable cause to believe that his conduct was unlawful,
if his action is based on information, opinions, reports and statements,
including financial statements and other financial data, in each case
prepared or presented by:
(a) one or more officers or employees of the Corporation whom the
Director or executive officer believed to be reliable and competent in
the matters presented;
(b) counsel, independent accountants or other persons as to matters
which the Director or executive officer believed to be within such
person's professional competence; and
(c) with respect to a Director, a committee of the Board upon which
such Director does not serve, as to matters within such Committee's
designated authority, which committee the Director believes to merit
confidence; so long as, in each case, the Director or executive officer
acts without knowledge that would cause such reliance to be
unwarranted.
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(2) The termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not,
of itself, create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the
best interests of the Corporation, and, with respect to any criminal
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
(3) The provisions of this paragraph (3) shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth by the
Delaware General Corporation Law.
(d) Expenses. The Corporation shall advance, prior to the final disposition
of any proceeding, promptly following request therefor, all expenses incurred
by any Director or executive officer in connection with such proceeding upon
receipt of an undertaking by or on behalf of such person to repay said amounts
if it should be determined ultimately that such person is not entitled to be
indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
paragraph (e) of this Bylaw, no advance shall be made by the corporation if a
determination is reasonably and promptly made (1) by the Board of Directors by
a majority vote of a quorum consisting of Directors who were not parties to
the proceeding, or (2) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, that the facts known to the decision-
making party at the time such determination is made demonstrate clearly and
convincingly that such person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation.
(e) Enforcement. Without the necessity of entering into an express contract,
all rights to indemnification and advances to Directors and executive officers
under this Bylaw shall be deemed to be contractual rights and be effective to
the same extent and as if provided for in a contract between the Corporation
and the Director or executive officer. Any right to indemnification or
advances granted by this Bylaw to a Director or executive officer shall be
enforceable by or on behalf of the person holding such right in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made
within ninety (90) days of request therefor. The claimant in such enforcement
action, if successful in whole or in part, shall be entitled to be paid also
the expense of prosecuting his claim. The Corporation shall be entitled to
raise as a defense to any such action that the claimant has not met the
standards of conduct that make it permissible under the Delaware General
Corporation Law for the Corporation to indemnify the claimant for the amount
claimed. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or
create a presumption that claimant has not met the applicable standard of
conduct.
(f) Non-Exclusivity of Rights. The rights conferred on any person by this
Bylaw shall not be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The Corporation is
specifically authorized to enter into individual contracts with any or all of
its Directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Delaware General
Corporation Law.
(g) Survival of Rights. The rights conferred on any person by this Bylaw
shall continue as to a person who has ceased to be a Director, officer,
employee or other agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
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(h) Insurance. To the fullest extent permitted by the Delaware General
Corporation Law, the Corporation, upon approval by the Board of Directors, may
purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this Bylaw.
(i) Amendments. Any repeal or modification of this Bylaw shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the Corporation.
(j) Saving Clause. If this Bylaw or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Corporation
shall nevertheless indemnify each Director and executive officer to the full
extent not prohibited by any applicable portion of this Bylaw that shall not
have been invalidated, or by any other applicable law.
(k) Certain Definitions. For the purposes of this Bylaw, the following
definitions shall apply:
(1) The term "proceeding" shall be broadly construed and shall include,
without limitation, the investigation, preparation, prosecution, defense,
settlement, arbitration and appeal of, and the giving of testimony in, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(2) The term "expenses" shall be broadly construed and shall include,
without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of
any nature or kind incurred in connection with any proceeding.
(3) The term the "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority
to indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Bylaw with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(4) References to a "director," "officer," "employee," or "agent" of the
corporation shall include, without limitation, situations where such person
is serving at the request of the corporation as a director, officer,
employee, trustee or agent of another corporation, partnership, joint
venture, trust or other employee.
(5) References to "other enterprises" shall include benefit plans;
references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with
respect to an employee benefit plan, its participants, or beneficiaries;
and a person who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the
best interests of the corporation" as referred to in this Bylaw.
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ARTICLE X--AMENDMENTS
SECTION 1--BY STOCKHOLDERS
These Bylaws may be altered, amended or repealed at any meeting of the
stockholders at which a quorum is present or represented, by the affirmative
vote of the holders of a majority of the shares present or represented at such
meeting and entitled to vote thereat.
SECTION 2--BY DIRECTORS
Except as otherwise provided in Article IX, Section 1(i) of these Bylaws,
these Bylaws may be altered, amended or repealed at any meeting of the Board
of Directors at which a quorum is present, by the affirmative vote of a
majority of the directors present at such meeting, provided notice of the
proposed alteration, amendment or repeal be contained in the notice of such
meeting.
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APPENDIX D
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of
, 1997, is between Seal Fleet, Inc., a Nevada corporation (the
"Company"), with its principal place of business at 125 Worth Ave., Suite 314,
Palm Beach, Florida, and Seal Holdings Corporation, a Delaware corporation
(the "Subsidiary," and together with the Company, the "Constituent
Corporations"), with its principal place of business at 125 Worth Ave., Suite
314, Palm Beach, Florida.
WHEREAS, the respective boards of directors of the Constituent Corporations
deem it advisable and to the advantage of the Constituent Corporations that
the Company merge with and into the Subsidiary upon the terms and conditions
provided herein;
NOW, THEREFORE, in consideration of the foregoing and the agreements herein,
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE 1--THE MERGER
1.1 The Merger. At the Effective Time (as hereafter defined), the Company
shall merge with and into the Subsidiary (the "Merger") and the Subsidiary
shall be the surviving corporation (the "Surviving Corporation") and the
separate existence of the Company shall cease.
1.2 Succession. At the Effective Time, the separate corporate existence of
the Company shall cease, and the Surviving Corporation shall possess all the
rights, privileges, powers, immunities and franchises, and shall be subject to
all the restrictions, disabilities and duties of the Constituent Corporations,
and all the property, real, personal and mixed of the Constituent
Corporations, and all debts due to any of the Constituent Corporations shall
be vested in the Surviving Corporation without the necessity for any separate
transfer. The Surviving Corporation shall thereafter be responsible and liable
for all debts, liabilities and duties of the Constituent Corporations, and
neither the rights of creditors nor any liens on the property of the
Constituent Corporations shall be impaired by the Merger. The employees and
agents of the Company shall become the employees and agents of the Subsidiary
and continue to be entitled to the same rights and benefits which they enjoyed
as employees and agents of the Company. The requirements of any plans or
agreements of the Company involving the issuance or purchase by the Company of
certain shares of its capital stock shall be satisfied by the issuance or
purchase of like number of shares of the subsidiary.
1.3 Common Stock of the Company and the Subsidiary. Subject to Section 1.4,
at the Effective Time, by virtue of the Merger and without any further action
on the part of the Constituent Corporations or their stockholders, (i) each
share of Class A Common Stock, $.20 par value, and each share of Class B
Common Stock, $.20 par value ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time shall be changed and converted into
and become one fully paid and nonassessable share of the Class A and Class B
Common Stock, $.20 par value, respectively, of the Subsidiary ("Subsidiary
Common Stock") and (ii) each share of common stock of the Subsidiary issued
and outstanding immediately prior to the Effective Time shall be canceled and
returned to the status of authorized but unissued shares, without the payment
of consideration therefor.
1.4 Right to Dissent. Notwithstanding anything in this Agreement to the
contrary, shares, if any, of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time and that are held by a
stockholder who has delivered to the Company, before the vote of the
stockholders of the Company with respect to the Merger is taken, written
notice of his intent to demand payment for his shares if the Merger is
effectuated and has not voted his shares in favor of the Merger in the manner
provided by Nevada Revised Statute 92A.300 to 92A.500 ("Dissenting Shares")
shall not be converted into Subsidiary Common Stock, but the holders of the
Dissenting Shares shall be entitled to obtain the fair value of such shares in
accordance with
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Nevada Revised Statute 92A.300 to 92A.500 unless and until such holder shall
have failed to perfect or shall have effectively withdrawn or lost his right
to dissent and payment under the Nevada General Corporation Law. If such
holder shall have so failed to perfect or shall have effectively withdrawn or
lost such right, his shares of Company Common Stock shall thereupon be deemed
to have been converted, at the Effective Time, into shares of Subsidiary
Common Stock.
1.5 Exchange of Stock Certificates.
(a) At or prior to the Effective Time, the Subsidiary shall appoint a bank
or trust company selected by the Subsidiary as exchange agent ("Exchange
Agent") for the purpose of facilitating the exchange of certificates
representing shares of Company Common Stock ("Company Certificates") for
certificates representing shares of Subsidiary Common Stock ("Subsidiary
Certificates").
(b) As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of Company Certificates a form letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Company Certificates shall pass, only upon delivery of
the Company Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the Company Certificates in exchange for Subsidiary
Certificates. Upon proper surrender of a Company Certificate for exchange and
cancellation to the Exchange Agent, together with such properly completed
letter of transmittal, duly executed, the holder of such Company Certificate
shall be entitled to receive in exchange therefor a Subsidiary Certificate
representing a number of shares of Subsidiary Common Stock equal to the number
of shares of Company Common Stock represented by the surrendered Company
Certificate.
(c) No dividends or other distributions declared after the Effective Time
with respect to Subsidiary Common Stock shall be paid to the holder of any
unsurrendered Company Certificate until the holder thereof shall surrender
such Company Certificate in accordance with paragraph (b). After the surrender
of a Company Certificate in accordance with paragraph (b), the record holder
thereof shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable with respect to shares of Subsidiary Common Stock represented by such
Company Certificate. Notwithstanding the foregoing, none of Subsidiary, the
Company, the Exchange Agent or any other person shall be liable to any former
holder of shares of Company Common Stock for any amount properly delivered to
a public official pursuant to applicable abandoned property, escheat or
similar laws.
(d) If any Subsidiary Certificate is to be issued in a name other than that
in which the Company Certificate surrendered in exchange therefor is
registered, it shall be a condition of the issuance thereof that the Company
Certificate so surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form for transfer,
and that the person requesting such exchange shall pay to the Exchange Agent
in advance any transfer or other taxes required by reason of the issuance of a
Subsidiary Certificate in any name other than that of the registered holder of
the Company Certificate surrendered, or required for any other reason, or
shall establish to the satisfaction of the Exchange Agent that such tax has
been paid or is not payable.
(e) After the Effective Time, there shall be no transfers on the stock
transfer books of the Company of the shares of Company Common Stock which were
issued and outstanding immediately prior to the Effective Time. If, after the
Effective Time, Company Certificates representing such shares are presented
for transfer, no transfer shall be effected on the stock transfer books of
Subsidiary with respect to such shares and no Subsidiary Certificate shall be
issued representing the shares of Subsidiary Common Stock exchangeable for
such shares of Company Common Stock unless and until such Company Certificate
is delivered to the Exchange Agent together with properly completed and duly
executed copies of all documents required by paragraph (b) (or such other
documents as are satisfactory to Subsidiary and the Exchange Agent in their
sole discretion).
(f) In the event any Company Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Company Certificate to be lost, stolen or destroyed and, if required by
Subsidiary, the posting by such person of a bond in such amount as Subsidiary
may determine is
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reasonably necessary as indemnity against any claim that may be made against
it with respect to such Company Certificate, the Exchange Agent will issue, in
exchange for such lost, stolen, or destroyed Company Certificate, a Subsidiary
Certificate representing the shares of Subsidiary Common Stock deliverable in
respect of such Company Certificate pursuant to this Agreement.
1.6 Options. At the Effective Time, the Surviving Corporation will assume
the obligations and succeed to the rights of the Company under the Company's
1996 Long-Term Incentive Plan and 1997 Incentive Option Plan (the "Plans"). At
the Effective Time, by virtue of the Merger, each outstanding and unexercised
portion of all options to purchase shares of Company Common Stock outstanding
under the Plans shall become options to purchase the same number of shares of
Subsidiary Common Stock with no other changes in the terms and conditions of
such options, including exercise prices.
1.7 Acts, Plans, Policies, Agreements, Etc. All corporate acts, plans,
policies, agreements, arrangements, approvals, and authorizations of the
Company, its stockholders, Board of Directors and committees thereof, officers
and agents which were valid and effective immediately prior to the Effective
Time shall be taken for all purposes as the acts, plans, policies, agreements,
arrangements, approvals and authorizations of the Surviving Corporation and
shall be as effective and binding thereon as the same were with respect to the
Company.
ARTICLE 2--EFFECTIVE TIME
2.1 Stockholder Approval. Subsequent to the execution of this Agreement,
each of the Constituent Corporations shall submit this Agreement to their
respective stockholders for approval pursuant to the applicable provisions of
the General Corporation Law of the State of Nevada and the General Corporation
Law of the State of Delaware. The Company covenants and agrees that it will,
as sole stockholder of Subsidiary, vote the Subsidiary Common Stock owned by
it to approve this Agreement as provided by law.
2.2 Effective Time. Following approval of this Agreement in accordance with
Section 2.1 above, and provided that:
(a) the conditions specified in Section 5.1 hereof have been fulfilled or
waived, and
(b) this Agreement has not been terminated and abandoned pursuant to
Section 5.4 hereof;
the Subsidiary shall cause a Certificate of Ownership and Merger to be
executed, acknowledged and filed with the Secretary of State of Delaware in
accordance with the Delaware General Corporation Law and shall cause Articles
of Merger to be executed, acknowledged and filed with the Secretary of State
of Nevada in accordance with the Nevada General Corporation Law.
2.3 Effective Time. The "Effective Time" shall be the later of the time a
Certificate of Ownership and Merger is filed with the Delaware Secretary of
State or the time Articles of Merger are filed with the Nevada Secretary of
State.
ARTICLE 3--COVENANTS AND AGREEMENTS
3.1 Assumption by Subsidiary. Subsidiary covenants and agrees that as the
Surviving Corporation, it shall be liable for all the obligations of the
Constituent Corporations outstanding as of the Effective Time and hereby
expressly assume all such obligations as of the Effective Time.
ARTICLE 4--CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
4.1 Certificate of Incorporation. The Certificate of Incorporation of the
Subsidiary as constituted at the Effective Time shall thereafter be the
Certificate of Incorporation of the Surviving Corporation until such time as
it shall be amended in accordance with the provisions thereof and applicable
law.
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4.2 Bylaws. The bylaws of the Subsidiary as constituted at the Effective
Time shall be the bylaws of the Surviving Corporation, subject to alteration,
amendment or repeal from time to time by the Board of Directors or the
stockholders of the Surviving Corporation in accordance with the provisions
thereof and applicable law.
4.3 Directors and Officers. From and after the Effective Time, the Board oft
Directors of the Surviving Corporation will consist of the members of the
Board of Directors of the Company immediately prior to the Merger. The
directors will continue to hold office as directors of the Surviving
Corporation for the same term for which they would otherwise serve as
directors of the Company. From and after the Effective Time, individuals
serving as officers of the Company immediately prior to the Merger will serve
as officers of the Surviving Corporation, holding the same titles and
positions which such officers held at the Company upon the effectiveness of
the Merger.
ARTICLE 5--MISCELLANEOUS
5.1 Conditions. The respective obligations of the Constituent Corporations
to consummate the Merger are subject to the following conditions, each of
which (other than paragraph (c)) may be waived by the Constituent
Corporations:
(a) All material third party consents which are required in order to
consummate the Merger and to effectuate the contemplated transactions
incidental or related thereto shall have been obtained;
(b) Holders of no more than 1% of the Company Common Stock shall have
asserted the right to dissent with respect to the Merger in accordance with
the Nevada General Corporation Law; and
(c) Each of the Constituent Corporations shall have received the approval
of its stockholders.
5.2 Further Assurances. From time to time, and when required by the
Subsidiary or by its successors and assigns, there shall be executed and
delivered on behalf of the Company such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other action, as
shall be appropriate and necessary in order to vest or perfect, or to confirm
of record or otherwise, in the Subsidiary the title to and possession of all
the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of the Company and otherwise to carry out the
purposes of this Agreement, and the directors and officers of the Company are
fully authorized in the name and on behalf of the Company or otherwise to take
any and all such action and to execute and deliver any and all such deeds and
other instruments.
5.3 Amendments. To the fullest extent permitted by applicable law, at any
time before or after approval by the stockholders of the Company, this
Agreement may be amended in any manner as may be determined in the judgment of
the respective boards of directors of the Constituent Corporations to be
necessary, desirable or expedient, whether or not the stockholders of the
Constituent Corporations, or either of them, shall have approved this
Agreement.
5.4 Abandonment. At any time before the Effective Time, this Agreement may
be terminated and the Merger may be abandoned by the Board of Directors of the
Company, notwithstanding the approval of this Agreement by the stockholders of
the Company, or the consummation of the Merger may be deferred for a
reasonable period if, in the opinion of the Board of Directors of the Company,
such action would be in the best interests of the Constituent Corporations.
5.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and, to the extent
applicable, the Nevada General Corporation Law.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
the respective officers thereunto duly authorized and their respective
corporate seals affixed, all as of the day and year first above written.
SEAL FLEET, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SEAL HOLDINGS CORPORATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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APPENDIX E
NEVADA REVISED STATUTES (NRS)
RIGHTS OF DISSENTING OWNERS
92A.300. Definitions. As used in NRS 92A.300 to 92A.500, inclusive, unless
the context otherwise requires, the words and terms defined in NRS 92A.305 to
92A.335, inclusive, have the meanings ascribed to them in those sections.
92A.305. "Beneficial stockholder" defined. "Beneficial stockholder" means a
person who is a beneficial owner of shares held in a voting trust or by a
nominee as the stockholder of record.
92A.310. "Corporate action" defined. "Corporate action" means the action of
a domestic corporation.
92A.315. "Dissenter" defined. "Dissenter" means a stockholder who is
entitled to dissent from a domestic corporation's action under NRS 92A.380 and
who exercises that right when and in the manner required by NRS 92A.410 to
92A.480, inclusive.
92A.320. "Fair value" defined. "Fair value," with respect to a dissenter's
shares, means the value of the shares immediately, before the effectuation of
the corporate action to which he objects, excluding any appreciation or
depreciation in anticipation of the corporate action unless exclusion would be
inequitable.
92A.325. "Stockholder" defined. "Stockholder" means a stockholder of record
or a beneficial stockholder of a domestic corporation.
92A.330. "Stockholder of record" defined. "Stockholder of record" means the
person in whose name shares are registered in the records of a domestic
corporation or the beneficial owner or shares to the extent of the rights
granted by a nominee's certificate on file with the domestic corporation.
92A.335. "Subject corporation" defined. "Subject corporation" means the
domestic corporation which is the issuer of the shares held by a dissenter
before the corporate action creating the dissenter's rights becomes effective
or the surviving or acquiring entity of that issuer after the corporate action
becomes effective.
92A.340. Computation of interest. Interest payable pursuant to NRS 92A.300
to 92A.500, inclusive, must be computed from the effective date of the action
until the date of payment, at the average rate currently paid by the entity on
its principal bank loans or, if it has no bank loans, at a rate that is fair
and equitable under all of the circumstances.
92A.350. Rights of dissenting partner of domestic limited partnership. A
partnership agreement of a domestic limited partnership or, unless otherwise
provided in the partnership agreement, an agreement of merger or exchange, may
provide that contractual rights with respect to the partnership interest of a
dissenting general or limited partner of a domestic limited partnership are
available for any class or group of partnership interests in connection with
any merger or exchange in which the domestic limited partnership is a
constituent entity.
92A.360. Rights of dissenting member of domestic limited-liability
company. The articles of organization or operating agreement of a domestic
limited-liability company or, unless otherwise provided in the articles of
organization or operating agreement, an agreement of merger or exchange, may,
provide that contractual rights with respect to the interest of a dissenting
member are available in connection with any merger or exchange in which the
domestic limited-liability company is a constituent entity.
92A.370. Rights of dissenting member of domestic nonprofit corporation.
1. Except as otherwise provided in subsection 2, and unless otherwise
provided in the articles or bylaws, any member of any constituent domestic
nonprofit corporation who voted against the merger may, without prior notice,
but within 30 days after the effective date of the merger, resign from
membership and is thereby excused
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from all contractual obligations to the constituent or surviving corporations
which did not occur before his resignation and is thereby entitled to those
rights, if any, which would have existed if there had been no merger and the
membership had been terminated or the member had been expelled.
2. Unless otherwise provided in its articles of incorporation or bylaws, no
member of a domestic nonprofit corporation, including, but not limited to, a
cooperative corporation, which supplies services described in chapter 704 of
NRS to its members only, and no person who is a member of a domestic nonprofit
corporation as a condition of or by reason of the ownership of an interest in
real property, may resign and dissent pursuant to subsection 1.
92A.380. Right of stockholder to dissent from certain corporate actions and
to obtain payment for shares.
1. Except as otherwise provided in NRS 92A.370 and 92A.390, a stockholder is
entitled to dissent from, and obtain payment of the fair value of his shares
in the event of any of the following corporate actions:
(a) Consummation of a plan of merger to which the domestic corporation is
a party:
(1) If approval by the stockholders is required for the merger by NRS
92A.120 to 92A.160, inclusive, or the articles of incorporation and he
is entitled to vote on the merger; or
(2) If the domestic corporation is a subsidiary and is merged with
its parent under NRS 92A.180.
(b) Consummation of a plan of exchange to which the domestic corporation
is a party as the corporation whose subject owner's interests will be
acquired, if he is entitled to vote on the plan.
(c) Any corporate action taken pursuant to a vote of the stockholders to
the event that the articles of incorporation, bylaws or a resolution of the
board of directors provides that voting or nonvoting stockholders are
entitled to dissent and obtain payment for their shares.
2. A stockholder who is entitled to dissent and obtain payment under NRS
92A.300 to 92A.500, inclusive, may not challenge the corporate action creating
his entitlement unless the action is unlawful or fraudulent with respect to
him or the domestic corporation.
92A.390. Limitations on right of dissent: Stockholders of certain classes or
series; action of stockholders not required for plan of merger.
1. There is no right of dissent with respect to a plan of merger or exchange
in favor of stockholders of any class or series which, at the record date
fixed to determine the stockholders entitled to receive notice of and to vote
at the meeting at which the plan of merger or exchange is to be acted on, were
either listed on a national securities exchange, included in the national
market system by the National Association of Securities Dealers, Inc., or held
by at least 2,000 stockholders of record, unless:
(a) The articles of incorporation of the corporation issuing the shares
provide otherwise; or
(b) The holders of the class or series are required under the plan of
merger or exchange to accept for the shares anything except:
(1) Cash, owner's interests or owner's interests and cash in lieu of
fractional owner's interests of:
(I) The surviving or acquiring entity; or
(II) Any other entity which, at the effective date of the plan of
merger or exchange, were either listed on a national securities
exchange, included in the national market system by the National
Association of Securities Dealers, Inc., or held of record by a
least 2,000 holders of owner's interests of record; or
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(2) A combination of cash and owner's interests of the kind described
in sub-subparagraphs (I) and (II) of subparagraph (1) of Paragraph (b).
2. There is no right of dissent for any holders of stock of the surviving
domestic corporation if the plan of merger does not require action of the
stockholders of the surviving domestic corporation under NRS 92A.130.
92A.400. Limitations on right of dissent: Assertion as to portions only to
shares registered to stockholder; assertion by beneficial stockholder.
1. A stockholder of record may assert dissenter's rights as to fewer than
all of the shares registered in his name only if he dissents with respect to
all shares beneficially owned by any one person and notifies the subject
corporation in writing of the name and address of each person on whose behalf
he asserts dissenter's rights. The rights of a partial dissenter under this
subsection are determined as if the shares as to which he dissents and his
other shares were registered in the names of different stockholders.
2. A beneficial stockholder may assert dissenter's rights as to shares held
on his behalf only if:
(a) He submits to the subject corporation the written consent of the
stockholder of record to the dissent not later than the time the beneficial
stockholder asserts dissenter's rights; and
(b) He does so with respect to all shares of which he is the beneficial
stockholder or over which he has power to direct the vote.
92A.410. Notification of stockholders regarding right of dissent.
1. If a proposed corporate action creating dissenters' rights is submitted
to a vote at a stockholders' meeting, the notice of the meeting must state
that stockholders are or may be entitled to assert dissenters' rights under
NRS 92A.300 to 92A.500, inclusive, and be accompanied by a copy of those
sections.
2. If the corporate action creating dissenters' rights if taken without a
vote of the stockholders, the domestic corporation shall notify in writing all
stockholders entitled to assert dissenters' rights that the action was taken
and send them the dissenter's notice described in NRS 92A.430.
92A.420. Prerequisite to demand for payment for shares.
1. If a proposed corporate action creating dissenters' rights is submitted
to a vote at a stockholders' meeting, a stockholder who wishes to assert
dissenter's rights:
(a) Must deliver to the subject corporation, before the vote is taken,
written notice of his intent to demand payment for his shares if the
proposed action is effectuated; and
(b) Must not vote his shares in favor of the proposed action.
2. A stockholder who does not satisfy the requirements of subsection 1 is
not entitled to payment for his shares under this chapter.
92A.430. Dissenter's notice: Delivery to stockholders entitled to assert
rights; contents.
1. If a proposed corporate action creating dissenters' rights is authorized
at a stockholders' meeting, the subject corporation shall deliver a written
dissenter's notice to all stockholders who satisfied the requirements to
assert those rights.
2. The dissenter's notice must be sent no later than 10 days after the
effectuation of the corporate action, and must:
(a) State where the demand for payment must be sent and where and when
certificates, if any, for shares must be deposited;
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(b) Inform the holders of shares not represented by certificates to what
extent the transfer of the shares will be restricted after the demand for
payment is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement to the news media or to the stockholders of the terms of
the proposed action and requires that the person asserting dissenter's
rights certify whether or not he acquired beneficial ownership of the
shares before that date;
(d) Set a date by which the subject corporation must receive the demand
for payment, which may not be less than 30 nor more than 60 days after the
date the notice is delivered; and
(e) Be accompanied by a copy of NRS 92A.300 to 92A.500 inclusive.
92A.440. Demand for payment and deposit of certificates; retention of rights
of stockholder.
1. A stockholder to whom a dissenter's notice is sent must:
(a) Demand payment;
(b) Certify whether he acquired beneficial ownership of the shares before
the date required to be set forth in the dissenter's notice for this
certification; and
(c) Deposit his certificates, if any, in accordance with the terms of the
notice.
2. The stockholder who demands payment and deposits his certificates, if
any, retains all other rights of a stockholder until those rights are canceled
or modified by the taking of the proposed corporate action.
3. The stockholder who does not demand payment or deposit his certificates
where required, each by the date set forth in the dissenter's notice, is not
entitled to payment for his shares under this chapter.
92A.450. Uncertificated shares: Authority to restrict transfer after demand
for payment; retention of rights of stockholder.
1. The subject corporation may restrict the transfer of shares not
represented by a certificate from the date the demand for their payment is
received.
2. The person for whom dissenter's rights are asserted as to shares not
represented by a certificate retains all other rights of a stockholder until
those rights are canceled or modified by the taking of the proposed corporate
action.
92A.460. Payment for shares: General requirements.
1.1. Except as otherwise provided in NRS 92A.470, within 30 days after
receipt of a demand for payment, the subject corporation shall pay each
dissenter who complied with NRS 92A.440 the amount the subject corporation
estimates to be the fair value of his shares, plus accrued interest. The
obligation of the subject corporation under this subsection may be enforced by
the district court:
(a) Of the county where the corporation's registered office is located;
or
(b) At the election of any dissenter residing or having its registered
office in this state, of the county where the dissenter resides or has its
registered office. The court shall dispose of the complaint promptly.
2. The payment must be accompanied by:
(a) The subject corporation's balance sheet as of the end of a fiscal
year ending not more than 16 months before the date of payment, a statement
of income for that year, a statement of changes in the stockholders' equity
for that year and the latest available interim financial statements, if
any;
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(b) A statement of the subject corporation's estimate of the fair value
of the shares:
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's rights to demand payment under NRS
92A.480; and
(e) A copy of NRS 92A.300 to 92A.500, inclusive.
92A.470. Payment for shares: Shares acquired on or after date of dissenter's
notice.
1. A subject corporation may elect to withhold payment from a dissenter
unless he was the beneficial owner of the shares before the date set forth in
the dissenter's notice as the date of the first announcement to the news media
or to the stockholders of the terms of the proposed action.
2. To the extent the subject corporation elects to withhold payment, after
taking the proposed action, it shall estimate the fair value of the shares,
plus accrued interest, and shall offer to pay this amount to each dissenter
who agrees to accept it in full satisfaction of his demand. The subject
corporation shall send with its offer a statement of its estimate of the fair
value of the shares, an explanation of how the interest was calculated, and a
statement of the dissenters' right to demand payment Pursuant to NRS 92A.480.
92A.480. Dissenter's estimate of fair value: Notification of subject
corporation; demand for payment of estimate.
1. A dissenter may notify the subject corporation in writing of his own
estimate of the fair value of his shares and the amount of interest due, and
demand payment of his estimate, less any payment pursuant to NRS 92A.460, or
reject the offer pursuant to NRS 92A.470 and demand payment of the fair value
of his shares and interest due, if he believes that the amount paid pursuant
to NRS 92A.460 or offered pursuant to NRS 92A.470 is less than the fair value
of his shares or that the interest due is incorrectly calculated.
2. A dissenter waives his right to demand payment pursuant to this section
unless he notifies the subject corporation of his demand in writing within 30
days after the subject corporation made or offered payment for his shares.
92A.490. Legal proceeding to determine fair value: Duties of subject
corporation; powers of court; rights of dissenter.
1. If a demand for payment remains unsettled, the subject corporation shall
commence a proceeding within 60 days after receiving the demand and petition
the court to determine the fair value of the shares and accrued interest. If
the subject corporation does not commence the proceeding within the 60-day
period, it shall pay each dissenter whose demand remains unsettled the amount
demanded.
2. A subject corporation shall commence the proceeding in the district court
of the county where its registered office is located. If the subject
corporation is a foreign entity without a resident agent in the state, it
shall commence the proceeding in the county where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
entity was located.
3. The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the proceeding
as in an action against their shares. All parties must be served with a copy
of the petition. Nonresidents may be served by registered or certified mail or
by publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced under
subsection 2 is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend a decision on the
question of fair value. The appraisers have the powers described in the order
appointing them, or any amendment thereto. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
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5. Each dissenter who is made a party to the proceeding is entitled to a
judgment:
(a) For the amount, if any, by which the court finds the fair value of
his shares, plus interest, exceeds the amount paid by the subject
corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired
shares for which the subject corporation elected to withhold payment
pursuant to NRS 92A.470.
92A.500. Legal proceeding to determine fair value: Assessment of costs and
fees.
1. The court in a proceeding to determine fair value shall determine all of
the costs of the proceeding, including the reasonable compensation and
expenses of any appraisers appointed by the court. The court shall assess the
costs against the subject corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable,
to the extent the court finds the dissenters acted arbitrarily, vexatiously or
not in good faith in demanding payment.
2. The court may also assess the fees and expenses of the counsel and
experts for the respective parties, in amounts the court finds equitable:
(a) Against the subject corporation and in favor of all dissenters if the
court finds the subject corporation did not substantially comply with the
requirements of NRS 92A.300 to 92A 500, inclusive; or
(b) Against either the subject corporation or a dissenter in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith
with respect to the rights provided by NRS 92A.300 to 92A.500, inclusive.
3 If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the subject corporation, the
court may award to those counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefited.
4. In a proceeding commenced pursuant to NRS 92A.460, the court may assess
the costs against the subject corporation, except that the court may assess
costs against all or some of the dissenters who are parties to the proceeding,
in amounts the court finds equitable, to the extent the court finds that such
parties did not act in good faith in instituting the proceeding.
5. This section does not preclude any party in a proceeding commenced
pursuant to NRS 92A.460 or 92A.490 from applying the provisions of N.R.C.P. 68
or NRS 17.115.
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SEAL FLEET, INC.
125 Worth Avenue, Suite 314
Palm Beach, Florida 33480
Telephone No. (561) 833-5111
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 14, 1997
The undersigned hereby appoints Thomas M. Ferguson and James S. Goodner and
either of them acting alone or, in the event of their inability or unwillingness
to serve, such other individuals as the Board of Directors may designate, as
Proxyholders, each with full power of substitution and resubstitution, and
hereby authorizes any proxyholder to represent and vote, as designated below,
all of the shares of Common Stock of the Company that the undersigned held on
the Record Date at the Annual Meeting to be held on May 14, 1997, which includes
any continuation of such meeting pursuant to any adjournment of it to another
time. Terms beginning with initial capital letters that are used but not
defined in this Proxy Card have the meanings given to them in the Proxy
Statement for the Annual Meeting.
The Board of Directors recommends a vote "FOR" the following proposals:
1. Proposal to amend the Bylaws of the Company to reduce the minimum number of
authorized directors to three (3).
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Proposal to elect the following nominees as directors of the company: Class
A director-J. Erik Hvide. The undersigned may withhold authority to vote for
any nominee or nominees by lining through or otherwise striking out the name or
names of such nominee or nominees above.
[ ] FOR the nominee [ ] WITHHOLD AUTHORITY to vote for the nominee
3. Proposal to ratify the appointment of ____________________ as the company's
independent auditors for the fiscal year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Proposal to ratify a reverse and forward stock split of the Company's Class
A and Class B Common Stock, as described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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5. The Reincorporation Proposal, as described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. Proposal to remove a restriction requiring the Board of Directors to seek
stockholder approval of an initial acquisition.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
7. Proposal to approve the 1997 Incentive Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Proxyholders are authorized to vote in their discretion (a) upon such
other matters presented at the meeting that the Board of Directors did not know
would be presented a reasonable time before this solicitation, (b) to approve
the minutes of the last annual meeting of stockholders (which approval will not
amount to ratification of the action taken at that meeting), (c) for the
election of such substitute nominees for director as the Board of Directors may
propose if any of the nominees listed above are unavailable to stand for
election as a result of unforeseen circumstances and (d) upon matters incident
to the conduct of the meeting.
THE PROXYHOLDERS WILL VOTE THE UNDERSIGNED'S SHARES OF COMMON STOCK IN THE
MANNER DIRECTED ON THIS PROXY CARD. IF THE UNDERSIGNED DOES NOT GIVE DIRECTIONS
ON THIS PROXY CARD WITH RESPECT TO PROPOSAL 1, 2, 3, 4, 5, 6 OR 7, THE
PROXYHOLDERS WILL VOTE SUCH SHARES FOR PROPOSAL 1, 2, 3, 4, 5, 6 OR 7,
RESPECTIVELY.
All other proxies heretofore given by the undersigned to vote shares of the
Company, which the undersigned would be entitled to vote if personally present
at the Annual Meeting or any adjournment or postponement thereto, are hereby
expressly revoked.
Please sign and date below. When shares are held by joint tenants, both
joint tenants should sign. When signing as administrator, attorney-in-fact,
executor, fiduciary, guardian, officer, trustee, or other person acting in a
representative capacity, please give your full title. If a corporation, an
authorized officer should sign in the name of the corporation. If a
partnership, a general partner should sign in the name of the partnership.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
_________________________________________
Signature
_________________________________________
Signature if held jointly
Dated: ____________________________, 1997
