As part of the acquisition of Energy Industries, the Company entered into a
noncompetition agreement with Mr. Holt. In exchange for Mr. Holt's covenant not
to compete with the Company's natural gas compression business for a three year
period after the closing date in the states of Arkansas, Louisiana, Kansas, New
Mexico, Oklahoma and Texas, the Company paid Mr. Holt $3,886,514. Also, in
connection with the acquisition of Energy Industries, the Company entered into a
three year Consulting Agreement with Mr. Holt. The terms of this Consulting
Agreement are explained more fully in "Board of Directors and Committees of the
Board - Compensation of Directors" in this proxy statement.
Pursuant to a real property purchase and sale agreement dated as of August
5, 1993, a subsidiary of the Company purchased five real estate properties from
Holt Commercial Properties, Ltd., an affiliate of Mr. Holt, for $3,400,000. The
purchase price was equal to the appraised value of the properties. These
properties are used in connection with Energy Industries' natural gas
Energy Industries, now a wholly-owned subsidiary of the Company, purchases
parts used in manufacturing and servicing compressors and for resale to its
customers from an affiliate of Mr. Holt. Energy Industries projects that it will
pay approximately $6.5 million to this affiliate of Mr. Holt in fiscal 1994. The
Company believes that such payments are comparable to those that would have been
made to other non-affiliated entities.
Mr. Holt also uses an aircraft of another affiliated company of his for
travel in connection with his duties at Energy Industries. Energy Industries
pays Mr. Holt's affiliate for this usage, the amount of which ranges from $5,000
to $10,000 per month. The Company believes that such payments are comparable to
those that would be made to other non-affiliated firms for comparable services.
Kristian Siem has been a director of the Company since 1993. Mr. Siem is
also the chairman and chief executive officer of Norex America. In May 1993, the
Company completed a refinancing of its senior debt. The Company raised a total
of $111.4 million from the issuance of debt and equity pursuant to the Second
Amended and Restated Master Restructuring Agreement dated as of April 16, 1993,
as amended (as so amended, the "Norex Agreement"), between the Company and Norex
Drilling, Ltd. ("Norex Drilling"), a wholly owned subsidiary of Norex America
(Norex America and Norex Drilling are collectively referred to herein as
Under the terms of the Norex Agreement, the Company issued $82.6 million in
principal amount of senior notes to Norex. The notes mature in three years and
bear interest at 13%. In addition, Norex purchased 15 million shares of Common
Stock for $11.25 million and 17.5 million shares of $1 Cumulative Exchangeable
Preference Stock ("$1 Preference Stock") for $17.5 million.
In August 1993, Norex exchanged all of the $1 Preference Stock for $17.5
million principal amount of 8.5% unsecured exchangeable notes, maturing in 1996.
Such notes are exchangeable into 673,077 shares of Tidewater, Inc. common stock
currently owned by the Company and set aside for this purpose. In December 1993,
the Company prepaid $68.5 million aggregate principal amount of the 13% senior
indebtedness to Norex, along with $1.7 million in accrued interest and a $3.5
million prepayment premium.