<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the Quarterly Period Ended December 31, 1993.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the Transition Period From
_____________________________ to ____________________________
Commission file number 1-6311
TIDEWATER INC.
(Exact name of registrant as specified in its charter)
DELAWARE 72-0487776
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) (Identification Number)
1440 Canal Street, Suite 2100, New Orleans, Louisiana 70112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 568-1010
NOT APPLICABLE
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or of such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
________ ________
52,972,678 shares of Tidewater Inc. common stock $.10 par value per share were
outstanding on January 26, 1994. Registrant has no other class of common stock
outstanding.
-1-
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of dollars)
<TABLE>
<CAPTION>
December 31, March 31,
1993 1993
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash, including temporary cash investments $ 79,981 108,969
Trade and other receivables 148,150 149,010
Inventories 35,363 34,376
Other current assets 4,820 4,817
----------- ---------
Total current assets 268,314 297,172
----------- ---------
Investments in and advances to unconsolidated companies 21,346 24,424
Properties and equipment 1,293,872 1,287,565
Less accumulated depreciation 830,653 802,744
----------- ---------
Net properties and equipment 463,219 484,821
Other assets 43,936 32,331
----------- ---------
$ 796,815 838,748
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt 2,441 8,755
Accounts payable and accrued expenses 63,101 77,223
Income taxes 12,881 9,795
----------- ---------
Total current liabilities 78,423 95,773
----------- ---------
Deferred income taxes 48,567 44,045
Long-term debt 39,301 95,722
Accrued property and liability losses 29,702 20,594
Other liabilities and deferred credits 37,074 34,940
Stockholders' equity:
Common stock of $.10 par value; issued 53,571,703
shares at December and 53,495,491 shares at March 5,357 5,350
Additional paid-in capital 342,306 341,550
Retained earnings 238,589 222,730
----------- ---------
586,252 569,630
Less:
Cumulative foreign currency translation adjustment 11,361 11,112
Treasury stock, 614,037 common shares at December
and 611,661 common shares at March 11,143 10,844
----------- ---------
Total stockholders' equity 563,748 547,674
Commitments and other matters (Note 4)
----------- ---------
$ 796,815 838,748
=========== =========
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
-2-
<PAGE> 3
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands of dollars, except share and per share data)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
December 31, December 31,
---------------------------- ----------------------------
1993 1992 1993 1992
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Marine operations $ 118,971 107,149 354,946 309,454
Compression operations 14,002 17,363 41,353 45,962
---------- ---------- ---------- ----------
132,973 124,512 396,299 355,416
---------- ---------- ---------- ----------
Costs and expenses:
Marine operations 69,313 66,986 216,028 185,980
Compression operations 7,095 10,626 22,523 26,746
Depreciation 20,889 20,191 62,579 59,727
General and administrative 15,956 14,293 46,319 42,641
---------- ---------- ---------- ----------
113,253 112,096 347,449 315,094
---------- ---------- ---------- ----------
19,720 12,416 48,850 40,322
Other income (expenses):
Foreign exchange gain (loss) (362) (780) (627) (1,327)
Gain on sales of assets 1,578 361 4,295 2,971
Equity in net earnings of
unconsolidated companies 736 850 1,889 1,966
Minority interests (707) (589) (1,977) (1,497)
Interest and miscellaneous income 1,982 1,484 5,284 4,416
Other expense (953) --- (1,253) ---
Interest expense (1,476) (2,930) (6,736) (9,531)
---------- ---------- ---------- ----------
798 (1,604) 875 (3,002)
---------- ---------- ---------- ----------
Earnings from continuing operations
before income taxes 20,518 10,812 49,725 37,320
Income taxes:
On current earnings 6,976 3,495 16,906 11,966
Effect of 1993 tax law change --- --- 1,921 ---
---------- ---------- ---------- ----------
Earnings from continuing operations 13,542 7,317 30,898 25,354
---------- ---------- ---------- ----------
Income from discontinued Container
Shipping segment (net of income taxes) --- 463 --- 1,286
Extraordinary loss on early extinguishment
of debt (net of income taxes) --- --- (4,450) ---
Cumulative effect of accounting change
(net of income taxes) --- --- --- (6,640)
---------- ---------- ---------- ----------
Net earnings $ 13,542 7,780 26,448 20,000
========== ========== ========== ==========
Primary and fully-diluted earnings per
common share:
Continuing operations $ .25 .14 .58 .48
Income from discontinued Container
Shipping segment (net of incometaxes) --- .01 --- .03
Extraordinary loss on early extinguishment
of debt (net of income taxes) --- --- (.08) ---
Cumulative effect of accounting change
(net of income taxes) --- --- --- (.13)
---------- ---------- ---------- ----------
Net earnings $ .25 .15 .50 .38
========== ========== ========== ==========
Weighted average common shares and
equivalents 53,313,262 53,258,328 53,321,900 53,024,503
========== ========== ========== ==========
Cash dividends declared per share $ .10 .075 .20 .225
========== ========== ========== ==========
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated Financial
Statements.
-3-
<PAGE> 4
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of dollars)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
December 31, December 31,
------------------ -------------------
1993 1992 1993 1992
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Net cash provided by operating
activities $ 39,636 23,421 95,060 68,836
-------- ------ ------ -------
Cash flows from investing activities:
Proceeds from sales of assets 3,112 567 10,366 6,057
Additions to properties and equipment (17,897) (12,042) (44,831) (31,722)
Investments in unconsolidated companies,
net of dividends received 357 (245) (1,457) 1,981
Investment from minority interests, net
of dividends paid (336) --- (1,876) ---
-------- ------- ------- -------
Net cash used in investing activities (14,764) (11,720) (37,798) (23,684)
-------- ------- ------- -------
Cash flows from financing activities:
Principal payments on long-term debt (10,268) (5,242) (64,362) (44,544)
Prepayment penalty paid on early
extinguishment of debt --- --- (6,473) ---
Cash dividends paid (5,295) (3,956) (15,878) (7,894)
Other (95) 156 463 506
-------- ------- ------- -------
Net cash used in financing activities (15,658) (9,042) (86,250) (51,932)
-------- ------- ------- -------
Net increase (decrease) in cash, including
temporary cash investments 9,214 2,659 (28,988) (6,780)
-------- ------- ------- -------
Cash, including temporary cash investments
at beginning of period 70,767 103,941 108,969 113,380
-------- ------- ------- -------
Cash, including temporary cash investments
at end of period $ 79,981 106,600 79,981 106,600
======== ======= ======= =======
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ 2,505 3,865 7,984 10,138
Income taxes $ 2,332 2,326 11,020 7,675
======== ======= ======= =======
</TABLE>
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
-4-
<PAGE> 5
TIDEWATER INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Interim Financial Statements
The consolidated financial information for the interim periods
presented herein has not been audited by independent accountants, but
in the opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the
condensed consolidated balance sheets and the condensed consolidated
statements of earnings and cash flows at the dates and for the periods
indicated have been made. Results of operations for interim periods
are not necessarily indicative of results of operations for the
respective full years.
(2) Earnings per Share Data
Primary and fully diluted earnings per share data are computed on the
weighted average number of shares and dilutive equivalent shares of
common stock (stock options, restricted stock grants and shares
issuable on conversion of the convertible subordinated debentures)
outstanding during each period using the treasury stock method.
(3) Other Expense
During the third quarter of fiscal 1994 several employees of the
Compression segment elected early retirement as part of a
reorganization of Compression management. A charge of approximately
$953,000 ($629,000 net of income taxes, or $.01 per common share), was
recognized in the third quarter for severance costs associated with
the reorganization and is shown as Other Expense in the Condensed
Consolidated Statements of Earnings.
(4) Commitments and Other Matters
An employment and consulting agreement exists with the company's
chairman of the board, president and chief executive officer whereby
he will continue as an employee until September 1994, and thereafter
for a period of three years will serve as a consultant to the company.
The terms of the agreement provide, among other things, for an annual
salary/consulting fee. Compensation continuation agreements exist
with all other officers of Tidewater Inc., whereby each receives
compensation and benefits in the event that his or her employment is
terminated following certain events
-5-
<PAGE> 6
relating to a change in control of the company. The maximum
compensation amount that could be paid under the compensation
continuation agreements, based on present salary levels, is
approximately $6.2 million. The amount that could be paid for certain
benefits is not presently determinable.
(5) Income Taxes
Income tax expense for interim periods is based on estimates of the
effective tax rate for the entire fiscal year. The effective tax rate
on current earnings for the quarter and nine-month period ended
December 31, 1993, was 34%. The effective tax rate for the quarter
and nine-month period ended December 31, 1992 was 32%.
(6) Segment Information
The following table provides a comparison of revenues and operating
profits for the company's business segments. Compression operating
profit for the quarter ended December 31, 1993 includes the $953,000
of reorganization cost described previously.
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter Ended Nine Months Ended
December 31, December 31,
--------------------- -------------------
1993 1992 1993 1992
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Marine $118,971 107,149 354,946 309,454
Compression 14,002 17,363 41,353 45,962
-------- ------- ------- -------
$132,973 124,512 396,299 355,416
======== ======= ======= =======
Operating profit:
Marine $ 21,886 13,687 55,938 44,167
Compression $ 1,951 2,895 5,449 8,026
======== ======= ======= =======
</TABLE>
-6-
<PAGE> 7
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
of Tidewater Inc.
We have reviewed the condensed consolidated balance sheet of Tidewater Inc. and
subsidiaries as of December 31, 1993 and the related condensed consolidated
statements of earnings and cash flows for the three-month and nine-month
periods ended December 31, 1993 and 1992. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Tidewater Inc. as of March 31,
1993, and the related consolidated statements of earnings, stockholders'
equity, and cash flows for the year then ended (not presented herein); and in
our report dated May 5, 1993 we expressed an unqualified opinion on those
consolidated financial statements. In our opinion the information set forth in
the accompanying condensed consolidated balance sheet as of March 31, 1993 is
fairly presented, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
KPMG PEAT MARWICK
New Orleans, Louisiana
January 18, 1994
-7-
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS
This discussion and analysis provides information which management considers
helpful for a more complete understanding of financial position and results of
operations. It should be read in conjunction with the condensed consolidated
financial statements and the related disclosures.
Domestic demand for offshore marine services remained strong during the third
quarter of fiscal 1994 because favorable U.S. natural gas prices encouraged
continued natural gas exploration and production activity in the U.S. Gulf of
Mexico. Consequently, earnings from continuing operations for the quarter
ended December 31, 1993 rose above the fiscal 1993 third quarter and fiscal
1994 second quarter amounts. If U.S. natural gas prices remain at or climb
above the current level, they should be able to sustain or improve domestic
demand for offshore marine services which, in turn, should favorably impact
future operating results. Demand for offshore marine services in foreign
markets appears stable, although recent declines in the price of oil and the
future outlook for oil prices may adversely impact demand and, in turn, future
operating results. Third quarter and nine-month fiscal 1994 earnings from
continuing operations include a $629,000 after-tax charge, or $.01 per common
share, for severance costs associated with the reorganization of Compression
management.
LIQUIDITY AND CAPITAL RESOURCES
The following table compares selected financial ratios at December 31 and March
31 and highlights the company's financial condition.
<TABLE>
<CAPTION>
December March
--------------- -----
1993 1992 1993
---- ---- ----
<S> <C> <C> <C>
Cash to long-term debt 204% 109% 114%
Long-term debt to total capitalization
(long-term debt plus stockholders' equity) 7% 15% 15%
Stockholders' equity to total assets 71% 68% 65%
</TABLE>
Operating activities for the quarter and nine-month period ended December 31,
1993 generated net cash in excess of the amounts produced for the corresponding
periods of fiscal 1993. Operating activities for the current quarter also
generated net cash in excess of the fiscal 1994 second quarter amount. The
dominant factor which determines the amount of net cash provided by operating
activities is the level of Marine operating margins (revenues less operating
expenses, excluding depreciation). Higher fiscal 1994 third quarter Marine
operating margins compared with the preceding quarter and the same quarter of
fiscal 1993 are principally due to higher day rates and utilization for the
domestic-based vessel fleet. On a year-to-date basis Marine operating margins
were above the level for the corresponding period of fiscal 1993 which is also
primarily due to higher day rates and utilization for the domestic-based vessel
fleet. For the remainder of fiscal 1994 anticipated utilization and day/rental
- 8 -
<PAGE> 9
rates for the Marine vessel fleet and Compression rental equipment should
continue to produce cash in excess of the amount needed to satisfy current
obligations.
Investing activities for the quarter and nine-month period ended December 31,
1993 consumed a larger amount of net cash than the amounts used for the
corresponding periods of fiscal 1993. The following table compares additions
to properties and equipment for the company's business segments for the
quarters and nine-month periods ended December 31 and for the quarter ended
September 30, 1993:
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
--------------- ----------------- ---------
1993 1992 1993 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Business segment:
Marine $14,618 10,229 25,562 27,362 2,084
Compression 3,210 1,396 18,969 3,279 12,681
General corporate and other 69 417 300 1,081 106
------- ------ ------ ------ ------
$17,897 12,042 44,831 31,722 14,871
======= ====== ====== ====== ======
</TABLE>
Marine additions for the current quarter include the purchase of two vessels
for approximately $9.4 million. For the corresponding quarter of fiscal 1993
approximately $4.0 million was used for the purchase of several vessels. The
remainder of Marine additions for both quarters consists of additions and/or
modifications to the existing vessel fleet. Compression additions for the
quarter ended December 31, 1993 include approximately $1.6 million for
additional rental equipment. The remainder of Compression additions for the
current quarter and for the quarter ended December 31, 1992 were for additions
and/or modifications to the existing rental fleet. For the past several years
expansion of the Marine vessel fleet and Compression rental fleet has come
primarily from existing excess industry supplies. During the third quarter of
fiscal 1994 construction of new gas compressors began in order to take
advantage of upcoming opportunities. However, major new construction of
Compression rental equipment or Marine vessels will not begin until the
underlying economic circumstances generate an attainable return on investment
considered appropriate by management.
Proceeds from asset sales for the quarter and nine-month period ended December
31, 1993 were primarily the result of the disposal of Marine equipment whereas
proceeds from asset sales for the quarter and nine-month period ended December
31, 1992 were principally from the sale of Compression rental equipment.
Fiscal 1994 financing activities for the quarter and nine-month period ended
December 31, 1993 used a larger amount of net cash than the amount expended
during the corresponding periods of fiscal 1993. Fiscal 1994 and 1993 nine-
month periods include approximately $60.1 million and $35.0 million,
respectively, of long-term debt retired prior to maturity. For the quarter and
nine-month period ended December 31, 1993 principal payments include
- 9 -
<PAGE> 10
approximately $9.0 million for termination of capitalized lease obligations on
five marine service vessels. For the quarter and nine-month period ended
December 31, 1992 principal payments include approximately $2.9 million for the
redemption, at par value plus accrued interest, of the 7-3/4% convertible
subordinated debentures due 2005.
Several employees of the Compression segment elected early retirement from the
company in connection with a reorganization of Compression management in the
third quarter of fiscal 1994. A $629,000 after-tax charge, or $.01 per common
share, is included in fiscal 1994 third quarter earnings from continuing
operations for severance costs associated with the management reorganization.
The reorganization was done to reduce future overhead costs and to align
segment management more closely with market conditions.
RESULTS OF OPERATIONS
Fiscal 1994 year-to-date consolidated revenues and earnings from continuing
operations grew 11.5% and 21.9%, respectively, beyond the corresponding fiscal
1993 year-to-date amounts. Third quarter consolidated revenues and earnings
from continuing operations for fiscal 1994 rose 6.8% and 85.1%, respectively,
above the corresponding amounts for the third quarter of fiscal 1993. The
growth for both periods is primarily attributable to higher Marine revenues and
operating profits resulting from the considerable improvement in day rates and
utilization for the domestic-based vessel fleet. Other expense for the current
quarter includes approximately $953,000 of severance cost resulting from the
early retirement of several Compression employees. Fiscal 1994 year-to-date
Other expense also includes the reclassification from general and
administrative expense of approximately $300,000 of severance costs related to
the retirement of one Marine employee in the second quarter. The severance
costs have been included in Compression and Marine operating profits. Fiscal
1994 year-to-date net earnings include approximately $1.9 million of additional
income tax expense resulting from the revaluation of deferred tax assets and
liabilities at the higher statutory income tax rates contained in the August
1993 Omnibus Budget Reconciliation Act. Fiscal 1994 year-to-date net earnings
also include a $4.4 million extraordinary charge for prepayment penalties
resulting from the early extinguishment of $51.1 million of long-term debt.
Business segment and geographic distribution of revenues and operating profit
(loss) for the quarters and nine-month periods ended December 31 and for the
quarter ended September 30, 1993 are:
- 10 -
<PAGE> 11
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
---------------- ----------------- ---------
1993 1992 1993 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues:
Marine:
United States $ 52,879 35,732 146,314 96,214 49,895
Foreign 66,092 71,417 208,632 213,240 69,855
-------- ------- ------- ------- -------
118,971 107,149 354,946 309,454 119,750
Compression - United
States 14,002 17,363 41,353 45,962 14,419
-------- ------- ------- ------- -------
$132,973 124,512 396,299 355,416 134,169
======== ======= ======= ======= =======
Operating profit (loss):
Marine:
United States 13,558 314 28,779 (302) 8,464
Foreign 8,328 13,373 27,159 44,469 10,254
-------- ------- ------- ------- -------
21,886 13,687 55,938 44,167 18,718
-------- ------- ------- ------- -------
Compression 1,951 2,895 5,449 8,026 2,366
Equity in net earnings
of unconsolidated
companies 736 850 1,889 1,966 478
Other income (expense) 141 (981) 1,474 (170) 518
General corporate
expenses (2,720) (2,709) (8,289) (7,138) (2,835)
Interest expense (1,476) (2,930) (6,736) (9,531) (2,483)
-------- ------- ------- ------- -------
Earnings from continuing
operations before
income taxes 20,518 10,812 49,725 37,320 16,762
Income taxes:
On current earnings (6,976) (3,495) (16,906) (11,966) (5,699)
Effect of 1993 tax law
changes --- --- (1,921) --- (1,921)
-------- ------- ------- ------- -------
Earnings from
continuing
operations $ 13,542 7,317 30,898 25,354 9,142
======== ======= ======= ======= =======
</TABLE>
- 11 -
<PAGE> 12
General and administrative expenses for the quarters and nine-month periods
ended December 31 and for the quarter ended September 30, 1993 consist of the
following:
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
--------------- ----------------- ---------
1993 1992 1993 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Personnel costs $ 9,403 9,047 27,988 26,520 9,222
Office and property 2,434 2,502 7,165 7,246 2,494
Sales and marketing 1,069 1,064 3,099 3,162 1,027
Professional services 1,188 890 3,398 2,648 887
Taxes other than income taxes 633 458 1,777 1,355 593
Other 1,229 332 2,892 1,710 1,107
------- ------ ------ ------ ------
$15,956 14,293 46,319 42,641 15,330
======= ====== ====== ====== ======
</TABLE>
Personnel costs for the quarter and nine-month period ended December 31, 1993
include approximately $104,000 to settle former Zapata Gulf employee union
claims in Nigeria. In addition, fiscal 1994 nine-month personnel costs include
approximately $540,000 of severance payments to former Zapata Gulf employees in
Nigeria. The remainder of the increase from the December 31, 1992 year-to-
date period is primarily due to higher incentive plan expenses. Fiscal 1994
third quarter professional services include approximately $250,000 of costs
associated with a secondary stock offering in the third quarter. On a
year-to-date basis professional services include approximately $587,000 of
costs associated with two secondary stock offerings.
MARINE SEGMENT
The Marine segment provides a diverse range of services and equipment primarily
to the offshore oil and gas industry. Because operating costs and depreciation
do not change proportionally with changes in revenues, the amount of operating
profit for the Marine segment is primarily determined by utilization and day
rates for the fleet.
Marine segment revenues for the quarters and nine-month periods ended December
31 and for the quarter ended September 30, 1993 consist of the following:
- 12 -
<PAGE> 13
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
-------------------- -------------------- ---------
1993 1992 1993 1992 1993
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Owned or chartered vessels:
Domestic $ 49,246 34,960 134,294 96,099 44,642
Foreign 66,020 71,401 208,560 213,043 69,855
-------- ------- ------- ------- -------
115,266 106,361 342,854 309,142 114,497
Brokered vessels 2,909 2,578 8,109 5,914 2,772
Shipyard sales 796 989 3,983 2,517 2,481
Intercompany
eliminations(A) --- (2,779) --- (8,119) ---
-------- ------- ------- ------- -------
$118,971 107,149 354,946 309,454 119,750
======== ======= ======= ======= =======
</TABLE>
(A) Revenues earned from the charter of equipment to the discontinued
Container Shipping segment.
Marine fleet utilization is affected primarily by market conditions. It is
also influenced to a lesser degree by drydockings resulting from safety and
inspection requirements. Marine vessels must undergo periodic inspections to
remain properly classified and certified. These inspections, whenever
possible, are done during seasonally slow periods to minimize the impact on
vessel operations and are only done if the vessel is considered to have
continuing economic viability. The following table compares day-based Marine
fleet utilization percentages for the quarters and nine-month periods ended
December 31 and for the quarter ended September 30, 1993:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
-------------------- -------------------- ---------
1993 1992 1993 1992 1993
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Utilization:
Domestic fleet 85.1% 83.0% 84.5% 78.4% 84.8%
Foreign fleet 75.3% 85.4% 76.7% 83.3% 76.0%
Total fleet 79.0% 84.5% 79.5% 81.5% 79.2%
==== ==== ==== ==== ====
</TABLE>
The domestic fleet is comprised of vessels operating in U.S. waters while the
foreign fleet is comprised of vessels operating outside U.S. waters.
Improved utilization of the domestic-based vessel fleet in the current quarter
and nine-month period compared with the corresponding fiscal 1993 periods,
respectively, and for the current quarter compared with the preceding quarter
reflects the increase in demand for offshore marine services resulting from
higher natural gas exploration and drilling activity in the U.S. Gulf of
Mexico. Declining foreign fleet utilization for the three-month and nine-month
periods ended December 31, 1993 compared with the corresponding periods of
fiscal 1993, respectively, results primarily from softening demand for offshore
marine services in certain foreign markets, principally the West African
market.
- 13 -
<PAGE> 14
Marine vessel day rates are primarily determined by the demand created through
the level of offshore exploration, development and production spending by
energy exploration and production companies. Suitability of equipment, the
degree of service provided and the overall supply of marine service vessels
also influence vessel day rates. The following table provides a comparison of
average vessel day rates for the quarters and nine-month periods ended December
31 and for the quarter ended September 30, 1993:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
-------------------- -------------------- ---------
1993 1992 1993 1992 1993
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Average vessel day rates:
Domestic fleet $3,016 2,367 2,874 2,380 2,839
Foreign fleet 2,768 2,665 2,808 2,721 2,839
Total fleet 2,868 2,559 2,834 2,605 2,839
====== ===== ===== ===== =====
</TABLE>
The domestic fleet is comprised of vessels operating in U.S. waters while the
foreign fleet is comprised of vessels operating outside U.S. waters.
Considerable improvements in average vessel day rates for the domestic-based
vessel fleet for the current quarter over the preceding quarter and for the
current quarter and nine-month period over the corresponding periods of fiscal
1993 is reflective of the favorable shift in the supply/demand relationship
brought about by the increase in natural gas offshore exploration and drilling
activity in the U.S. Gulf of Mexico. Increases in average vessel day rates for
the foreign-based vessel fleet for the current quarter and nine-month period
above levels generated for the corresponding periods of fiscal 1993,
respectively, are principally due to the mix of different vessel types working
in foreign locations and greater demand for offshore marine services in certain
foreign operating areas. Lower average day rates for the foreign-based vessel
fleet in the current quarter below the fiscal 1994 second quarter level is
primarily due to an unfavorable shift in the mix of vessels working in certain
foreign locations.
The following table compares the average number of vessels by class and
geographic distribution during the quarters and nine-month periods ended
December 31 and for the quarter ended September 30, 1993 and the actual
December 31, 1993 vessel count:
- 14 -
<PAGE> 15
<TABLE>
<CAPTION>
Average Number of Vessels During
Actual ---------------------------------------------------
vessel Nine Months Quarter
count at Quarter Ended Ended Ended
Dec. 31, December 31, December 31, Sept. 30,
---------- ---------------- ----------------- ---------
1993 1993 1992 1993 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Class:
Towing Supply/Supply 312 313 305 314 308 314
Crew/Utility 99 100 96 98 90 99
Offshore Tugs 98 98 86 98 86 98
Other 98 98 103 98 102 98
--- --- --- --- --- ---
Total 607 609 590 608 586 609
=== === === === === ===
Geographic:
Domestic 210 208 193 201 187 201
Foreign 341 345 341 352 342 352
--- --- --- --- --- ---
Owned or chartered
vessels included in
marine revenues 551 553 534 553 529 553
Vessels withdrawn from
active service 13 13 13 12 14 13
Joint venture owned
vessels 43 43 43 43 43 43
--- --- --- --- --- ---
Total 607 609 590 608 586 609
=== === === === === ===
</TABLE>
Changes in fleet size and utilization are the principal factors which cause
fluctuations in the amount of crew costs. Higher crew costs for the
three-month and nine-month periods ended December 31, 1993 compared with the
respective fiscal 1993 periods are principally due to a larger average fleet
size and the higher activity level of the domestic-based vessel fleet which
generally has higher crewing costs than the foreign-based vessel fleet.
Fluctuations in the level of repair and maintenance expense are primarily due
to an increase in the average age and size of the company's marine fleet and
normal inflationary effects. Currently, the average age of the company's
vessel fleet is approximately 15 years. Scheduling of vessel drydockings,
though primarily dictated by regulatory agencies, affects the amount of repair
and maintenance expense in any period and is also done to minimize any impact
on vessel revenues. Higher fiscal 1994 third quarter and nine-month insurance
costs compared with the same periods of fiscal 1993 are in part the result of a
much tougher insurance market which is unwilling to provide past levels of
coverage at the same rates enjoyed in prior periods. The following table
compares major components of Marine operating costs, the percentage change in
Marine operating costs of owned or chartered vessels compared to the same
period of the prior fiscal year, and provides a comparison of Marine operating
costs of owned or chartered vessels as a percentage of Marine revenues of owned
or chartered vessels for the quarters and nine-month periods ended December 31
and for the quarter ended September 30, 1993:
- 15 -
<PAGE> 16
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
---------------- ----------------- ---------
1993 1992 1993 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Crew costs $33,294 31,561 101,491 90,034 34,213
Repair and maintenance 16,144 16,945 52,530 48,445 17,510
Vessel insurance 6,413 6,053 18,921 16,305 6,362
Fuel, lube, and supplies 5,236 5,206 16,441 15,200 5,463
Charter fees, mobilization/
demobilization 2,085 2,781 5,988 6,289 2,045
Other 2,881 4,164 9,358 10,577 3,379
------- ------ ------- ------ ------
Total operating costs of
owned or chartered vessels 66,053 66,710 204,729 186,850 68,972
Brokered vessels costs 2,633 1,845 7,471 4,865 2,610
Shipyard costs 627 816 3,828 1,973 2,496
Intercompany eliminations(A) --- (2,385) --- (7,708) ---
------- ------ ------- ------ ------
$69,313 66,986 216,028 185,980 74,078
======= ====== ======= ======= ======
For owned or chartered vessels:
Overall increase (decrease)
in operating costs (1.0%) 14.2% 9.6% 8.5% 13.1%
------- ------ ------- ------ ------
Operating costs as a
percentage of related
revenues 57.3% 62.7% 59.7% 60.4% 60.2%
======= ====== ======= ======= ======
</TABLE>
(A) Costs incurred from the charter of equipment to the discontinued Container
Shipping segment.
Gains on asset sales contributed approximately $3.0 million and $1.6 million to
Marine operating profits for the year-to-date periods ended December 31, 1993
and 1992, respectively. For the current quarter gains on asset sales were
approximately $1.0 million. Gains on asset sales for the third quarter of
fiscal 1993 were negligible. Operating margins from brokered vessel and
shipyard activities generally contribute nominally to Marine operating profits.
COMPRESSION SEGMENT
The Compression segment provides natural gas and air compression services and
equipment for a variety of applications primarily in the oil and gas industry
and also designs, fabricates and installs engineered compressor systems.
Compression segment operating profit is significantly affected by the mix of
sales and rental revenues. Gross margins on sales are generally less than
operating margins for rental revenues.
The following table compares Compression revenues on a dollar and percentage
basis for the quarters and nine-month periods ended December 31 and for the
quarter ended September 30, 1993:
- 16 -
<PAGE> 17
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
---------------- ----------------- ---------
1993 1992 1993 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Rentals:
Gas compressors $ 8,067 6,657 22,719 19,825 7,668
Air compressors 1,186 1,281 3,166 3,841 1,114
------- ------ ------ ------ ------
Total rental revenues 9,253 7,938 25,885 23,666 8,782
Equipment and parts sales 4,125 8,952 13,922 20,871 5,126
Repair and service 624 473 1,546 1,425 511
------- ------ ------ ------ ------
$14,002 17,363 41,353 45,962 14,419
======= ====== ====== ====== ======
As a percentage of total
Compression revenues:
Rental revenues 66% 46% 63% 52% 61%
Equipment and parts sales 30% 52% 34% 45% 36%
Repair and service 4% 2% 3% 3% 3%
------- ------ ------ ------ ------
100% 100% 100% 100% 100%
======= ====== ====== ====== ======
</TABLE>
Gas compressor utilization is affected primarily by the number and age of
producing oil and gas wells which, in turn, is affected by the price level of
oil and natural gas. Gas compressor rentals are generally for a longer term
than are air compressor rentals. Air compressor utilization is heavily
dependent upon short-term customer needs. Suitability, availability and rental
rates for equipment are the major factors which affect utilization of both gas
and air compression equipment. The following table compares utilization,
average rental rates and average fleet size for gas and air compressors for the
quarters and nine-month periods ended December 31 and for the quarter ended
September 30, 1993:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
----------------- ----------------- ---------
1993 1992 1993 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gas Compressors:
(Horsepower based
statistics)
Utilization 89.8% 77.8% 84.9% 76.7% 85.5%
Average rental rate $ 16.53 16.84 16.63 16.79 16.58
Average fleet size 181,159 169,419 178,766 171,052 180,307
======== ======= ======= ======= =======
Air Compressors:
(Cubic feet per minute
based statistics)
Utilization 36.0% 41.3% 35.1% 39.5% 39.6%
Average rental rate $ .23 .21 .21 .22 .20
Average fleet size 158,550 161,500 155,117 159,833 155,350
======== ======= ======= ======= =======
</TABLE>
The significant increase in gas compressor utilization for the quarter and
nine-month period of fiscal 1994 above the corresponding levels experienced for
- 17 -
<PAGE> 18
the quarter and nine-month period of fiscal 1993, and increased utilization in
the current quarter compared with the preceding quarter is due to higher demand
for natural gas compression services as a result of the continued favorable
level of U.S. natural gas prices. In addition to the benefits provided to gas
compression rental revenues from higher utilization, gas compressor rental
revenues in the current quarter and nine-month period have also grown as a
result of a larger compression fleet. Air compression utilization for the
three-month and nine-month periods of fiscal 1994 was below the prior
three-month and nine-month levels, and current quarter utilization was below
the preceding quarter due to weakened demand for air compression services. The
air compression market during fiscal 1994 has generally suffered from stagnant
demand and any improvement is not anticipated in the foreseeable future.
Average rental rates for gas compressors were fairly consistent for all periods
presented and reflects demand for gas compression services given the recent
history of U.S. natural gas prices. Air compressor rental rates have not
significantly changed over the past 12 months which generally reflects the
stagnant market for air compression services.
Revenues from equipment and parts sales for fiscal 1994 have not contributed as
much as in the prior year or quarter primarily due to reduced sales of
engineered products.
Gains on asset sales for the current quarter and nine-month period have
contributed $.6 million and $1.4 million, respectively, to segment operating
profits. Gains on asset sales for the three-month and nine-month periods ended
December 31, 1992 contributed $.4 million and $1.3 million, respectively.
Compression segment operating costs consist of the following for the quarters
and nine-month periods ended December 31 and September 30, 1993:
<TABLE>
<CAPTION>
(thousands of dollars)
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept. 30,
----------------- ----------------- ---------
1993 1992 1993 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Field operating expenses:
Wages and benefits $1,527 1,419 4,639 4,173 1,572
Repairs and maintenance 1,475 1,343 4,415 4,359 1,523
Other 781 683 2,171 2,048 706
------ ----- ------ ------ -----
3,783 3,445 11,225 10,580 3,801
Costs of sales 3,312 7,181 11,298 16,166 4,293
------ ----- ------ ------ -----
$7,095 10,626 22,523 26,746 8,094
====== ====== ====== ====== =====
Field operating costs as a
percentage of rental and
repair and service
revenue 38.3% 41.0% 40.9% 42.2% 40.9%
====== ====== ====== ====== =====
Costs of sales as a
percentage of related
revenues 80.3% 80.2% 81.2% 77.5% 83.7%
====== ====== ====== ====== =====
</TABLE>
- 18 -
<PAGE> 19
Field operating expenses relate to gas and air compressor rental operations.
Field operating expenses are generally consistent on a period-to-period basis
and usually vary in the short-term as a result of fluctuations in the level of
repairs and maintenance of compression equipment. Long-term growth in field
operating expenses will occur primarily as a result of increased fleet size and
general inflationary factors. Cost of sales consist primarily of wages and
benefits and material costs associated with the design, fabrication and
installation of packaged compressor systems. Increased costs of sales as a
percentage of related revenues during the current quarter and nine-month period
compared to the same periods a year ago are due to reduced demand for equipment
and parts sales which resulted from more competitive pricing.
INFLATION AND CURRENCY FLUCTUATIONS
Because of its significant foreign operations, the company is exposed to
currency fluctuations and exchange risks. To minimize the financial impact of
these items the company attempts to contract a majority of its services in
United States dollars.
Day-to-day operating costs are generally affected by inflation. However,
because the energy services industry requires specialized goods and services,
general economic inflationary trends may not affect the company's operating
costs. The major impact on operating costs is the level of offshore
exploration and development spending by energy exploration and production
companies. As this spending increases, prices of goods and services used by
the oil and gas industry and the energy services industry will increase.
Future improvements in vessel day rates and compressor rental rates may buffer
the company from the inflationary effects on operating costs.
ENVIRONMENTAL MATTERS
During the ordinary course of business the company's operations are subject to
a wide variety of environmental laws and regulations. The company attempts to
comply with these laws and regulations in order to avoid costly accidents and
related environmental damage. The company is currently involved in litigation
with the Environmental Protection Agency concerning the disposal of oil field
waste from drilling sites it previously operated. Given the company's small
participation in the wells, management believes that the ultimate resolution of
this litigation will not have a material adverse affect on the company's
financial position.
- 19 -
<PAGE> 20
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
A. At page 22 of this report is the index for those exhibits required to
be filed as a part of this report.
B. The company's report on Form 8-K dated December 28, 1993 reported that
Ward W. Woods, Jr. resigned from the company's Board of Directors
effective December 28, 1993.
C. The company's report on Form 8-K dated December 2, 1993 reported that
William M. Wiseman, Senior Vice President, Donald S. White, Vice
President, and Robert Ashton, Vice President took early retirement
from the company effective around January 31, 1994.
D. The company's report on Form 8-K dated November 9, 1993 reported that
R. C. Lassiter resigned from the company's Board of Directors
effective November 9, 1993.
- 20 -
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TIDEWATER INC.
-----------------------------------
(Registrant)
Date: January 26, 1994 /s/ KEN C.TAMBLYN
-----------------------------------
Ken C. Tamblyn
Executive Vice President and
Chief Financial Officer
Date: January 26, 1994 /s/ VICTOR I.KOOCK
-----------------------------------
Victor I. Koock
Senior Vice President, Secretary,
and Co-General Counsel
- 21 -
<PAGE> 22
EXHIBIT INDEX
The index below describes each exhibit filed as a part of this report.
Exhibit
Number
- -------
4 - Restated Rights Agreement dated December 17, 1993
between Tidewater Inc. and The First National Bank of Boston.
10 - First Amendment to $60,000,000 Amended and Restated
Revolving Credit and Term Loan Agreement dated
September 14, 1993.
11 - Statement - Computation of Per Share Earnings.
- 22 -
<PAGE> 23
TIDEWATER INC.
EXHIBITS FOR THE
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED DECEMBER 31, 1993
<PAGE> 24
EXHIBIT INDEX
The index below describes each exhibit filed as a part of this report.
Exhibit
Number
- -------
4 - Restated Rights Agreement dated December 17, 1993
between Tidewater Inc. and The First National Bank of Boston.
10 - First Amendment to $60,000,000 Amended and Restated
Revolving Credit and Term Loan Agreement dated
September 14, 1993.
11 - Statement - Computation of Per Share Earnings.
<PAGE> 1
EXHIBIT 4
TIDEWATER INC.
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
RESTATED RIGHTS AGREEMENT
Dated as of
December 17, 1993
THIS IS A RESTATEMENT OF A RIGHTS AGREEMENT ORIGINALLY DATED AS OF APRIL 24,
1990 BETWEEN TIDEWATER INC. AND MANUFACTURERS HANOVER TRUST COMPANY, AS RIGHTS
AGENT, TOGETHER WITH ALL AMENDMENTS ADOPTED AFTER APRIL 24, 1990 AND PRIOR TO
THE DATE OF THIS RESTATEMENT. CERTAIN OF THE AMENDMENTS TO THE RIGHTS
AGREEMENT ADOPTED BY THE BOARD OF DIRECTORS ARE INTERPRETATIONS OF PROVISIONS
OF THE RIGHTS AGREEMENT OR SPECIFIC EXCEPTIONS OR EXCLUSIONS TO CERTAIN
PROVISIONS OF THE RIGHTS AGREEMENT. REFERENCE IS MADE TO SECTION 34 OF THIS
RESTATED RIGHTS AGREEMENT, WHERE SUCH PROVISIONS HAVE BEEN SET FORTH. TO THE
EXTENT THAT TERMS USED IN THE AMENDMENTS INCORPORATED INTO THIS RESTATED RIGHTS
AGREEMENT WERE DEFINED IN THE RECITALS TO SUCH AMENDMENTS, CONFORMING CHANGES
HAVE BEEN MADE SOLELY FOR THE PURPOSE OF CONSISTENTLY DEFINING SUCH TERMS IN
THIS RESTATEMENT. IN ADDITION, CERTAIN CONFORMING CHANGES TO THE EXHIBITS HAVE
BEEN MADE TO CONFORM TO THE TERMS OF THE RESTATED RIGHTS AGREEMENT.
<PAGE> 2
RESTATED RIGHTS AGREEMENT
THIS RESTATED RIGHTS AGREEMENT, dated as of December 17, 1993 (the
"Agreement"), between Tidewater Inc., a Delaware corporation (the "Company"),
and The First National Bank of Boston, a national bank (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on April 24, 1990 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of common stock, par value $.50 per
share, of the Company (the "Common Stock") outstanding at the close of business
on May 7, 1990 (the "Record Date"), such Rights being issued upon the terms and
subject to the conditions of a Rights Agreement dated as of April 24, 1990 (the
"Original Rights Agreement"), between the Company and Manufacturers Hanover
Trust Company, a New York banking corporation and the predecessor-in-interest
to the Rights Agent; and
WHEREAS, on the Rights Dividend Declaration Date the Board of
Directors of the Company authorized the issuance of one Right (as such number
may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof)
for each share of Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's treasury) and the
Distribution Date, each Right initially representing the right to purchase one
two-hundredth of a share of Series A Participating Preferred Stock of the
Company having the rights, powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights attached hereto as Exhibit
A, upon the terms and subject to the conditions hereinafter set forth (the
"Rights"); and
WHEREAS, the Original Rights Agreement has been amended by the
following amendments: (i) First Amendment to Rights Agreement dated as of June
19, 1991; (ii) Second Amendment to Rights Agreement dated as of January 7,
1992; (iii) Third Amendment to Rights Agreement dated January 15, 1992; (iv)
Fourth Amendment to Rights Agreement dated September 24, 1992; (v) Fifth
Amendment to Rights Agreement dated February 11, 1993 and (vi) Sixth Amendment
to Rights Agreement dated May 13, 1993; and
WHEREAS, the Board of Directors desires to restate the Original Rights
Agreement to incorporate cumulatively the provisions of the six amendments;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 16% or more of the
<PAGE> 3
shares of Common Stock then outstanding, but shall not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended and in effect on the date of
this Agreement (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing;provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of
this
3
<PAGE> 4
paragraph (c) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (c) shall cause a
person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
New York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Common Stock" shall mean the common stock, par value $.10 per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
(g) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(h) "Preferred Stock" shall mean shares of Series A Participating
Preferred Stock, without par value, of the Company, and, to the extent that
there are not a sufficient number of shares of Series A Participating Preferred
Stock authorized to permit the full exercise of the Rights, any other series of
Preferred Stock of the Company designated for such purpose contained terms
substantially similar to the terms of the Series A Participating Preferred
Stock.
(i) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(j) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
(k) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(l) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by such Person.
(m) "Triggering Event" shall mean any section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and
4
<PAGE> 5
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the tenth
day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date), or (ii) the close of business on the tenth business day (or such
later date as the Board shall determine) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 16% or more of the shares of Common Stock then
outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable
after the Distribution Date, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as of
the close of business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit B hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock outstanding
as of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates for the Common Stock and the registered holders
of the Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration Date (as
such item is defined in Section 7 hereof), the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to
5
<PAGE> 6
the earlier of the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Tidewater Inc. (the "Company") and Manufacturers Hanover Trust Company
(the "Rights Agent") dated as of April 24, 1990 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or any Affiliate or
Associates thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or
by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates shall
be evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of one two-hundredths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such exercise price
per one two-hundredth of a share, the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or
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<PAGE> 7
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 7(e) hereof, and
any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, President or
any Senior Vice President, either manually or by facsimile signature, and shall
have affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned, either manually or by facsimile, by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed such
Rights Certificates had not ceased to be such officer of the Company; and any
Rights Certificates may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
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<PAGE> 8
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one two-hundredths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Rights Certificate
if mutilated, the Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one two-hundredths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the close of business on May 1,
2000 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being
herein referred to as the "Expiration Date").
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<PAGE> 9
(b) The Purchase Price for each one two-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $50.00,
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised, of
the Purchase Price per one two-hundredth of a share of Preferred Stock (or
other shares, securities, cash (payable by check only) or other assets, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of one
two-hundredths of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of shares of Preferred Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one two-hundredths of a share of Preferred
Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the Company the amount
of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash,
if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified
bank check or bank draft payable to the order of the Company. In the event that
the Company is obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section 9(a)
or Section 11(a) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The Company reserves
the right to require prior to the occurrence of a Triggering Event that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or
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<PAGE> 10
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered
for such exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event or as
required by the last sentence of this Section 9(a), out of its authorized and
unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event or as
required by the last sentence of this Section 9(a), Common Stock and/or other
securities) that, as provided in this Agreement including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights. In the event that the issuance of shares of Preferred Stock by the
Company upon the exercise of a Right would not be permitted under the Exchange
Act, the rules and regulations thereunder or
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<PAGE> 11
rules of any national securities exchange on which any securities of the
Company are listed, the Company shall make adequate provision to substitute for
such shares of Preferred Stock: (1) Common Stock or other equity securities of
the Company, (2) debt securities of the Company, (3) other assets, or (4) any
combination of the foregoing, having an aggregate value equal to the shares of
such Preferred Stock to be issued, where such aggregate value has been
determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event or as required by the last sentence of Section
9(a) hereunder, Common Stock and/or other securities) issuable and deliverable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii) hereof, a registration statement under the Securities Act of 1933
(the "Act"), with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the
date of the expiration of the Rights. The Company will also take such action as
may be appropriate under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the first sentence
of this Section 9(c), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may temporarily suspend
the exercisability of the Rights until such time as a registration statement
has been declared effective. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one two-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event or as
required by the last sentence of Section 9(a) hereunder, Common Stock and/or
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
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(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one two-hundredths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of one two-hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in respect
of a name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of one two-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a name other
than that of the registered holder upon the exercise of any Rights until such
tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificate for a number of one two-hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof,
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<PAGE> 13
the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a
time when the Preferred Stock transfer books of the Company were open,
he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii) In the event any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms
of any such plan), alone or together with its Affiliates and
Associates, shall, at any time after the Rights Dividend Declaration
Date, become the Beneficial Owner of 16% or more of the shares of
Common Stock then outstanding, unless the event causing the 16%
threshold to be crossed is a transaction set forth in Section 13(a)
hereof, or is an acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding shares of Common
Stock at a price and on terms determined by the Board of Directors,
after receiving advice from one or more investment banking firms, to
be (a) at a price which is fair to stockholders (taking into account
all factors which such members of the Board deem relevant including,
without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of the
Company and its stockholders, then, promptly following the date of the
occurrence of an event described in Section 11(a)(ii) hereof, proper
provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of a
number of one two-hundredths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of one two-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph
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(ii) of this Section 11(a), the Company shall (A) determine the excess
of (1) the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread") and (B) with respect to each Right (subject to
Section 7(e) hereof), make adequate provision to substitute for the
Adjustment Shares, upon the exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock, such as the Preferred Stock, which the Board has
deemed to have essentially the same value or economic rights as shares
of Common Stock (such shares of preferred stock being referred to as
"Common Stock Equivalents")), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value (less the amount of any
reduction in the Purchase Price), where such aggregate value has been
determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board;provided,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board determines in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but
not more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder approval for the
authorization of such additional shares (such thirty (30) day period,
as it may be extended, is herein called the "Substitution Period"). To
the extent that action is to be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (1) shall
provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek such shareholder approval for such
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. For purposes of this section 11(a)(iii), the value of each
Adjustment Share shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share
or per unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common Stock on such
date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Preferred Stock (or shares having the
same rights, privileges and preferences as the shares of Preferred Stock
("equivalent
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<PAGE> 15
preferred stock")) or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock) less
than the Current Market Price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock
and/or equivalent preferred stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or equivalent preferred
stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of
which may be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Market Price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of Preferred Stock
and the denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Purchase Price
shall be adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and for
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<PAGE> 16
purposes of computations made pursuant to Section 11(a)(iii) hereof, the
Current Market Price per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common Stock for
the ten (10) consecutive Trading Days immediately following such date;
provided, however, that in the event that the Current Market Price per share of
the Common Stock is determined during a period following the announcement by
the issuer of such Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification shall not have occurred prior to
the commencement of the requisite thirty (30) Trading Day or ten (10) Trading
Day period, as set forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex- dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System or such other system then in use, or, if on any such date the shares of
Common Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board. If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board shall be used. The
term "Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, Current Market Price per share shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the
Current Market Price per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in clause
(i) of this Section 11(d) (other than the last sentence thereof). If
the Current Market Price per share of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
200 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to
the Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common Stock.
If neither the Common Stock nor the Preferred Stock is publicly held
or so listed
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<PAGE> 17
or traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. For
all purposes of this Agreement, the Current Market Price of a Unit
shall be equal to the Current Market Price of one share of Preferred
Stock divided by 200.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one two-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one two-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one two-hundredths
of a share covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one two-hundredths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of one
two-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the
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<PAGE> 18
number of Rights shall become that number of Rights (calculated to the nearest
one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders
of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one two-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one two-hundredths of a
share and the number of one two-hundredths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one two-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one two-hundredths of
a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one two-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one two-hundredths of a share of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments
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<PAGE> 19
expressly required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors of the Company shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less
than the Current Market Price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale, the shareholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or
issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and Section
13 hereof, the Company shall (a)
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promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the Preferred Stock and the
Common Stock, a copy of such certificate, and (c) mail a brief summary thereof
to each holder of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(o) hereof), then, and in each such case
(except as may be contemplated by Section 13(d) hereof), proper provision shall
be made so that: (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the Principal
Party (as such item is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase Price
by the number of one two-hundredths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
two-hundredths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its
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<PAGE> 21
Common Stock) in connection with the consummation of any such transaction as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided,
however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market
value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will (i) prepare and file a
registration statement under the Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and (ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
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(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a tender
offer or exchange offer for all outstanding shares of Common Stock which
complies with the provisions of Section 11(a)(ii) hereof (or a wholly owned
subsidiary of any such Person or Persons), (ii) the price per share of Common
Stock offered in such transaction is not less than the price per share of
Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
two-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one two-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one two-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one two-hundredth of a share
of Preferred Stock. For purposes of this Section 14(b), the current market
value of one
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<PAGE> 23
two-hundredth of a share of Preferred Stock shall be one two-hundredth of the
closing price of a share of Preferred Stock (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one (1) share of Common Stock. For
purposes of this Section 14(c), the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the
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Distribution Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be
required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
two-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 24 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper
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or document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Rights Certificates
shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Market Price) be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant
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<PAGE> 26
Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock
or Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Preferred Stock
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President, any Senior
Vice President or the Secretary of the Company, and to apply to such officers
for advice or instructions suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
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(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder
of any Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of New York),
in good standing, having a principal office in the State of New York, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and the Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
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Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price");
provided, however, that if, following the occurrence of a Stock Acquisition
Date and following the expiration of the right of redemption hereunder but
prior to any Triggering Event, (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of Common Stock in
one transaction or series of transactions, not directly or indirectly involving
the Company or any of its Subsidiaries, which did not result in the occurrence
of a Triggering Event such that such Person is thereafter a Beneficial Owner of
10% or less of the outstanding shares of Common Stock, and (ii) there are no
other Persons, immediately following the occurrence of the event described in
clause (i), who are Acquiring Persons, then the right of redemption shall be
reinstated and thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Market Price, as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
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<PAGE> 29
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price
for each Right so held. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions, of more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions, each of which complies with Section 11(o) hereof), or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such
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<PAGE> 30
other action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Preferred Stock, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Tidewater, Inc.
1440 Canal Street
New Orleans, Louisiana 70112
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
The First National Bank of Boston
150 Royall Street
Canton, Massachusetts 02021
Attention: Corporate Trust
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company
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<PAGE> 31
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with
the terms of this Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes the Redemption
Price, the Final Expiration Date, the Purchase Price or the number of one
two-hundredths of a share of Preferred Stock for which a Right is exercisable
provided, however, that prior to the Distribution Date the Company may amend
the terms and conditions of the Preferred Stock or change the series or class
of preferred stock which shall constitute the Preferred Stock. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including,
for
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<PAGE> 32
purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board to any liability to
the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board of
Directors.
Section 31. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Certain Amendments adopted by Board of Directors.
The Board of Directors has adopted the following provisions through amendments
effected on the dates indicated below, all of which form a part of this Rights
Agreement:
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(a) Notwithstanding any provision of the Rights Agreement to the
contrary, none of Zapata Gulf Marine Corporation ("Zapata Gulf"), BC Partners,
L.P., Corporate Partners, L.P., Corporate Offshore Partners, L.P., The State
Board of Administration of Florida and Zapata Corporation (the "Stockholders"),
or any of their respective stockholders, partners or affiliates (collectively,
Zapata Gulf, the Stockholders and their respective stockholders, partners or
affiliates being referred to herein as the "Zapata Gulf Entities") shall be
deemed to be an Acquiring Person and neither a Triggering Event nor a
Distribution Date shall be deemed to have occurred solely by virtue of (i) the
announcement or the execution of the Agreement and Plan of Merger dated as of
June 19, 1991 (the "Merger Agreement") by and among the Company and Tidewater
Expansion, Inc., on the one hand and Zapata Gulf and the Stockholders on the
other hand, (ii) the announcement of any of the transactions contemplated by
the Merger Agreement (including, without limitation, any Zapata Gulf Entity's
right to acquire shares of Common Stock pursuant to the merger of Tidewater
Expansion, Inc. with and into Zapata Gulf (the "Merger")), (iii) the fact that
any officer, director or affiliate of any Zapata Gulf Entity is an officer,
director or affiliate of another Zapata Gulf Entity or (iv) the existence of
any agreement, arrangement or understanding between or among any of the Zapata
Gulf Entities relating to shares of Zapata Gulf common stock, $1.00 par value
per share, existing on the date hereof or at any time through and including the
Effective Time of the Merger (as defined in the Merger Agreement). (This
provision was effective as of June 19, 1991.)
(b) Discussions between or among the Stockholders (as defined in
Section 34(a)), Bessemer Capital Partners, L.P. ("Bessemer"), or any of their
respective stockholders, partners, affiliates, directors, officers, employees
or representatives relating to the Company or their respective investments in
the Company shall not, in and of themselves, be deemed to (a) make any
Stockholder the Beneficial Owner of any Common Stock owned by any other
Stockholder, or (b) constitute an agreement, arrangement or understanding among
any two or more Stockholders of the type referred to in paragraphs (ii) or
(iii) of Section 1(c) of the Rights Agreement. (This provision was effective
as of January 8, 1992).
(c) In determining the number of shares of which Corporate
Partners, L.P. ("Corporate Partners") or Corporate Offshore Partners, L.P.
("Corporate Offshore") is the Beneficial Owner, neither Corporate Partners nor
Corporate Offshore will be deemed to be a Beneficial Owner of shares of Common
Stock (i) owned by The State Board of Administration of Florida ("SBAF"), or
(ii) solely because of the activities of Lazard Freres & Co. ("Lazard") or
Lazard Freres Asset Management ("LFAM") with respect to such shares in the
conduct in the ordinary course of their underwriting, brokerage, trading or
asset management businesses, including the holding of such shares as principal
or agent; as long as such shares of Common Stock are not owned, controlled,
managed or voted by or at the direction of Corporate Partners or Corporate
Offshore.
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In addition, neither Lazard nor LFAM will be deemed to be a Beneficial Owner of
shares of Common Stock beneficially owned by Corporate Partners, Corporate
Offshore or SBAF solely because Lazard or LFAM, acting in the ordinary course
of their underwriting, brokerage, trading or asset management business (whether
in their capacity as principal or agent), shall hold shares of Common Stock.
(This provision was effective as of January 8, 1992).
(d) None of the Stockholders (as defined in Section 34(a)) shall
be deemed to be an Acquiring Person and neither a Section 11(a)(ii) Event, a
Triggering Event nor a Distribution Date shall be deemed to have occurred
solely by virtue of (i) the exercise of their rights pursuant to the
Stockholder Agreements between the Company and each of the Stockholders, or
(ii) any increase in the percentage of the outstanding Common Stock
beneficially owned by any Stockholder resulting from any decrease in the number
of outstanding shares of Common Stock, or (iii) the existence of, or actions by
any Stockholder under, the voting agreement dated as of May 31, 1991 by
Corporate Partners (as defined in Section 34(c)), Corporate Offshore (as
defined in Section 34(c)), SBAF (as defined in Section 34(c)), and B.C.
Partners, L.P., as grantors, as in effect on the date of the execution of the
Merger Agreement (as defined in Section 34(a)) and the revocable proxy granted
pursuant thereto. (This provision was effective as of January 8, 1992).
(e) In determining the number of shares of Common Stock of which
Bessemer (as defined in Section 34(b)) is the Beneficial Owner, Bessemer will
not be deemed to be a Beneficial Owner of any shares of Common Stock solely
because of the activities of The Bessemer Group, Incorporated and its
subsidiaries ("The Bessemer Group") with respect to such shares in the conduct
in the ordinary course of its brokerage, trading or asset management
businesses, including the holding of such shares as principal or agent, as long
as such shares of Common Stock are not owned, controlled, managed or voted by
or at the direction of Bessemer. In addition, The Bessemer Group will not be
deemed to be a Beneficial Owner of shares of Common Stock beneficially owned by
Bessemer solely because The Bessemer Group, acting in the ordinary course of
its brokerage, trading or asset management business (whether in its capacity as
principal or agent) shall hold shares of Common Stock. (This provision was
effective as of January 15, 1992).
(f) Each of Corporate Partners (as defined in Section 34(c)) and
Corporate Offshore (as defined in Section 34(c)), shall, with respect to the
shares held by Lazard (as defined in Section 34(c)) and LFAM (as defined in
Section 34(c)) and Bessemer (as defined in Section 34(b)) shall, with respect
to the shares held by The Bessemer Group (as defined in Section 34(e)), provide
such evidence as is reasonably requested by the Company from time to time, in
form and substance reasonably satisfactory to the Company, to demonstrate that
the shares of Common Stock held by Lazard, LFAM and The Bessemer Group, as
applicable, are held solely in the ordinary course of its brokerage, trading or
asset management businesses, and that such shares are not owned, controlled,
managed
34
<PAGE> 35
or voted by or at the direction of Corporate Partners, Corporate Offshore or
Bessemer, as applicable. (This provision was effective as of January 15,
1992).
(g) Manufacturers Hanover Trust Company (the "Collateral Agent")
will not be deemed to be a Beneficial Owner of any shares of Common Stock of
which Zapata Corporation is the Beneficial Owner and neither a Section
11(a)(ii) Event, a Triggering Event nor a Distribution Date shall be deemed to
have occurred solely by virtue of (i) the pledge of such shares to the
Collateral Agent to secure Zapata Corporation's obligations under that certain
Restated Master Restructuring Agreement dated as of December 19, 1990 (as
amended, supplemented or modified from time to time, the "Master Restructuring
Agreement") by and between, among other parties, Zapata Corporation and the
Collateral Agent or (ii) the foreclosure or the taking of possession of such
shares by the Collateral Agent pursuant to the terms of such Master
Restructuring Agreement or any collateral instrument pursuant to which such
shares have been pledged. (This provision was effective as of January 15,
1992).
(h) Malcolm I. Glazer ("Glazer") shall not be deemed to be an
Acquiring Person under the Rights Agreement, nor shall a Section 11(a)(ii)
Event, a Triggering Event or a Distribution Date be deemed to have occurred,
solely by virtue of Glazer's acquisition and Beneficial Ownership of the
51,976,923 shares of Zapata Corporation common stock, $.25 par value per share,
disclosed in the Schedule 13D filed by Glazer as of September 24, 1992;
provided, however, that the Company reserves the right to make a public
announcement that Glazer has become an Acquiring Person or that a Trigger Event
has occurred if (i) Zapata breaches any of its covenants set forth in that
certain Standstill Agreement dated as of November 11, 1992 (the "Standstill
Agreement") by and between the Company and Zapata Corporation, or (ii) Glazer,
or any of his Affiliates or Associates, take any actions, directly or
indirectly, that are described in Section 5.2 of the Standstill Agreement.
(This provision was effective as of December 17, 1992).
35
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
TIDEWATER INC.
By: /s/VICTOR I. KOOCK
-----------------------------------
Victor I. Koock,
Senior Vice President and
Co-General Counsel
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/ JEANNE ROSS
-----------------------------------
Name: Jeanne Ross
Title: Administrative Manager
36
<PAGE> 1
EXHIBIT 10
FIRST AMENDMENT
TO AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT, dated as of November 22, 1993 (this "Amendment"), by and among
Tidewater Inc., a Delaware corporation (the "Company"), the Domestic
Subsidiaries (as hereinafter defined) of the Company named on Exhibit "A"
attached hereto and made a part hereof, which Domestic Subsidiaries constitute
all of the Domestic Subsidiaries of the Company (herein together with the
Company called the "Companies"), and First National Bank of Commerce, a
national banking association, as agent (the "Agent"), and First National Bank
of Commerce, AmSouth Bank N.A., The First National Bank of Boston and Whitney
National Bank (the "Lenders").
RECITALS
A. The Companies and the Lenders have executed an Amended and
Restated Revolving Credit and Term Loan Agreement, dated September 14, 1993
(the "Credit Agreement") providing for loans and extensions of credit of up to
the aggregate principal sum of $60,000,000.
B. The Companies have requested that the Credit Agreement be
amended to exempt funds in rabbi trusts (established pursuant to its
supplemental executive retirement plan and early retirement incentive programs)
from the investment limitations imposed on the Companies pursuant to the Credit
Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements and undertakings herein contained, the Companies and Lenders hereby
agree as follows:
1. Section 6.10(c) (Liens, Debt and Other Restrictions -
Permitted Investments) is hereby amended to add the following as an additional
paragraph at the end thereof:
The foregoing restrictions on investments by the Companies shall not
apply to funds maintained in rabbi trusts established by the Companies
for supplemental executive retirement plans and early retirement
incentive programs.
2. The Company certifies and acknowledges to the Lenders as of
the date of this Amendment, as follows: (i) all of the representatives and
warranties contained in Section 5 of the Credit
<PAGE> 2
Agreement are true and correct as of the date hereof; (ii) the Companies are in
compliance with all the covenants, terms and conditions of the Credit
Agreement; and (iii) no Default or Event of Default has occurred or in
continuing.
3. Except as otherwise specifically amended hereby, all of the
covenants, terms and conditions of the Credit Agreement shall remain in full
force and effect.
4. All capitalized terms contained herein and not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.
5. This Amendment may be executed in two or more counterparts,
and it shall not be necessary that the signatures of all parties hereto be
contained in any one counterpart hereof; each counterpart shall be deemed an
original, but all of such counterparts together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
date first written above.
TIDEWATER INC.
By:/s/ KEN C. TAMBLYN
--------------------------------
Name: Ken C. Tamblyn
Title: Executive Vice President
and Chief Financial Officer
EASTERN BOAT OPERATORS INC.
GULF FLEET SUPPLY VESSELS, INC.
HILLIARD OIL & GAS, INC.
HILLIARD PROPERTIES, INC.
J & H INVESTMENT PROPERTIES, INC.
JACKSON MARINE CORPORATION
JAVA BOAT CORPORATION
MARINE LEASING COMPANY
OFFSHORE EQUIPMENT COMPANY
QUALITY SHIPYARDS, INC.
S.O.P., INC.
SCHOPCO, INC.
SEAFARER BOAT CORPORATION
TIDE OIL, INC.
TIDEWATER ASIA/CHINA, INC.
TIDEWATER ASSETS, INC.
- 2 -
<PAGE> 3
TIDEWATER BARGES, INC.
TIDEWATER COMPRESSION SERVICE, INC.
TIDEWATER CONTRACTORS, INC.
TIDEWATER ENTERPRISES, INC.
TIDEWATER FLEETS, INC.
TIDEWATER GRAND ISLE, INC.
TIDEWATER MARINE, INC.
TIDEWATER MARINE ATLANTIC, INC.
TIDEWATER MARINE PACIFIC, INC.
TIDEWATER MARINE SERVICE, INC.
TIDEWATER MARINE TOWING, INC.
TIDEWATER MARINE WESTERN, INC.
TIDEWATER MEDITERRANEAN, INC.
TIDEWATER NAVIGATORS, INC.
TIDEWATER NW JAVA, INC.
TIDEWATER PACIFIC, INC.
TIDEWATER REALTY, INC.
TIDEWATER RESOURCES, INC.
TIDEWATER SE SUMATRA, INC.
TIDEWATER SERVICES, INC.
TIDEWATER TRADERS, INC.
TIDEWATER VENICE, INC.
TIDEWATER VENTURES, INC.
TIDEWATER VESSELS, INC.
TMS ACQUISITION CORPORATION
TT BOAT CORPORATION
TWENTY GRAND MARINE SERVICE, INC.
TWENTY GRAND OFFSHORE, INC.
ZAPATA GULF MARINE CORPORATION
ZAPATA GULF MARINE OPERATORS, INC.
ZAPATA GULF PACIFIC, INC.
ZAPATA MARINE (U.S.) INC.
By:/s/ KEN C. TAMBLYN
--------------------------------
Name: Ken C. Tamblyn
Title: Authorized Officer
FIRST NATIONAL BANK OF COMMERCE,
as Agent and Lender
By:/s/ J. CHARLES FREEL, JR.
---------------------------------
Name: J. Charles Freel, Jr.
Title: Vice President
- 3 -
<PAGE> 4
AMSOUTH BANK N.A., as Lender
By:/s/ ANDREW W. BRASWELL
---------------------------------
Name: Andrew W. Braswell
Title: Commercial Loan Officer
THE FIRST NATIONAL BANK OF BOSTON,
as Lender
By:/s/ DANIEL O'CONNOR
---------------------------------
Name: Daniel O'Connor
Title: Director
WHITNEY NATIONAL BANK
as Lender
By:/s/ DONALD J. ZORNMAN
---------------------------------
Name: Donald J. Zornman
Title: Vice President
- 4 -
<PAGE> 5
EXHIBIT A
LIST OF DOMESTIC SUBSIDIARIES
<TABLE>
<CAPTION>
State of
Name Incorporation
- ---- -------------
<S> <C>
Eastern Boat Operators, Inc. Louisiana
Gulf Fleet Supply Vessels, Inc. Louisiana
Hilliard Oil & Gas, Inc. Nevada
Hilliard Properties, Inc. Louisiana
J & H Investment Properties, Inc. Louisiana
Jackson Marine Corporation Delaware
Java Boat Corporation Louisiana
Marine Leasing Company Missouri
Offshore Equipment Company Delaware
Quality Shipyards, Inc. Louisiana
S.O.P., Inc. Louisiana
Schopco, Inc. Louisiana
Seafarer Boat Corporation Louisiana
Tide Oil, Inc. Texas
Tidewater Asia/China, Inc. Louisiana
Tidewater Assets, Inc. Louisiana
Tidewater Barges, Inc. Louisiana
Tidewater Compression Service, Inc. Texas
Tidewater Contractors, Inc. Louisiana
Tidewater Enterprises, Inc. Louisiana
Tidewater Fleets, Inc. Louisiana
Tidewater Grand Isle, Inc. Louisiana
Tidewater Marine, Inc. Louisiana
Tidewater Marine Atlantic, Inc. Delaware
Tidewater Marine Pacific, Inc. California
Tidewater Marine Service, Inc. Louisiana
Tidewater Marine Towing, Inc. Louisiana
Tidewater Marine Western, Inc. Texas
Tidewater Mediterranean, Inc. Louisiana
Tidewater Navigators, Inc. Louisiana
Tidewater NW Java, Inc. Louisiana
Tidewater Pacific, Inc. Missouri
Tidewater Realty, Inc. Louisiana
Tidewater Resources, Inc. Louisiana
Tidewater SE Sumatra, Inc. Louisiana
Tidewater Services, Inc. Louisiana
Tidewater Traders, Inc. Louisiana
Tidewater Venice, Inc. Louisiana
Tidewater Ventures, Inc. Louisiana
Tidewater Vessels, Inc. Louisiana
TMS Acquisition Corporation Louisiana
TT Boat Corporation Louisiana
Twenty Grand Marine Service, Inc. Louisiana
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
<S> <C>
Twenty Grand Offshore, Inc. Louisiana
Zapata Gulf Marine Corporation Delaware
Zapata Gulf Marine Operators, Inc. Delaware
Zapata Gulf Pacific, Inc. Delaware
Zapata Marine (U.S.) Inc. Delaware
</TABLE>
- 6 -
<PAGE> 1
EXHIBIT 11
TIDEWATER INC.
COMPUTATION OF EARNINGS AND SHARES USED IN ARRIVING
AT PRIMARY AND FULLY DILUTED EARNINGS PER SHARE FOR THE
QUARTER AND NINE-MONTH PERIODS ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Nine Months
Quarter Ended Ended
Dec. 31, 1993 Dec. 31, 1993
------------- -------------
<S> <C> <C>
Earnings from continuing operations $ 13,542,000 30,898,000
Extraordinary item --- (4,450,000)
------------ -----------
Net earnings $ 13,542,000 26,448,000
============ ===========
Computation of weighted average
number of shares outstanding:
Issued: 53,571,703 shares
Weighted average shares outstanding 52,951,826 52,929,979
Add: Incremental shares applicable
to stock options 361,436 391,921
------------ -----------
Weighted average shares & equivalents 53,313,262 53,321,900
============ ===========
Primary and fully diluted earnings
per share:
Continuing operations $ .25 .58
Extraordinary item --- (.08)
------------ -----------
Net earnings $ .25 .50
============ ===========
The above earnings per share (EPS)
calculations are submitted in accordance
with APB Opinion No. 15. An EPS
calculation in accordance with Regulation
S-K item 601(b)(11) is not shown above
because it produces an anti-dilutive
result. The following information is
disclosed for purposes of calculating
the anti-dilutive EPS:
For primary and fully diluted EPS:
Shares attributable to assumed
conversion of 7.0% convertible
subordinated debentures 1,885,400 1,885,400
============ ===========
Interest expense applicable to
convertible subordinated debentures,
net of income taxes $ 639,000 1,918,000
============ ===========
</TABLE>
