Each one in plain English, with the numbers worked through for a shareholder.
30 Mar 2011debt financing● Neutral
On March 30, 2011 Seitel offered to buy back any and all of its remaining 11.75% Senior Notes due 2011, because the indenture requires an offer when excess cash flow for 2010 exceeds $5.0 million. The price is $1,035.25 per $1,000 of notes including accrued interest, the offer expires April 29, 2011 with payment expected May 3, and the total cost will not exceed $2,070,500. Seitel says its payment obligations do not change unless a holder tenders. This is the first use of the notes' excess-cash-flow term from the indenture the company amended in January 2007; the outcome is not shown.
On December 22, 2009 Seitel signed a new $9.9 million secured credit facility with ValueAct Capital Management as lender and agent, maturing December 22, 2014. It replaces the Wells Fargo Foothill facility terminated in August 2009, which the earlier filing said had nothing outstanding. The loan is guaranteed by domestic subsidiaries and secured by substantially all assets, bears interest at 4% plus the greater of prime, fed funds plus 0.5%, or 7%, and carries a minimum EBITDA covenant. ValueAct is the controlling stockholder of Seitel's sole stockholder, so the lender is the owner's affiliate.
28 Aug 2009material agreement termination● Neutral
On August 24, 2009 Seitel told Wells Fargo Foothill it would end the Amended and Restated Loan and Security Agreement of February 14, 2007, effective August 28, 2009, ahead of its stated maturity. Nothing was outstanding and there are no penalties, though nominal fees and expenses are payable. This ends the credit facility set up in the 2007 buyout financing; the filing gives no reason for terminating it.
Seitel filed a registration statement to swap the $400 million of 9.75% Senior Notes due 2014 it issued in the February 2007 financing for identical notes registered with the SEC. This is the registered exchange offer promised in the registration rights agreement, and Seitel gets no proceeds from it. The fee table and cover describe the notes as 'Senior Subordinated' in places while the text says 'Senior Notes'; the text provided doesn't explain this. Subsidiary guarantors are listed as co-registrants. Seitel is now privately owned, so this affects noteholders rather than shareholders.
This final amendment to the going-private statement reports that shareholders voted for the merger on February 9, 2007 and it closed on February 14, 2007. Each public share became $3.70 cash, unvested restricted stock vested and was cashed out at $3.70, and the 100,000-share option was cancelled for $240,000. The six senior officers contributed Seitel shares to Parent for Parent equity just before closing, and the rollover investors were later granted options on about seven percent of Parent's voting securities. Seitel says it will file Form 15 to deregister its common stock. This resolves the Augenbaum-era open threads on the vote, rollover and closing.
Seitel completed its merger on February 14, 2007 and is now owned by Seitel Holdings, Inc. (formerly Seitel Holdings, LLC), affiliated with ValueAct. To fund the deal and the tender for the old 11.75% notes, Seitel issued $400.0 million of 9.75% Senior Notes due 2014 and signed a new Wells Fargo Foothill credit facility of up to $25.0 million maturing February 14, 2010. It also entered an advisory agreement with ValueAct and Parent with an initial ten-year term. The filing says stockholders approved the merger on February 9, 2007. This closes the merger thread and the debt financing condition.
Holders of $187,000,000 (98.94%) of the $189 million 11.75% Senior Notes tendered and consented by the January 30, 2007 deadline, and on January 31 Seitel signed a supplemental indenture with LaSalle Bank removing substantially all the restrictive covenants and certain default triggers. The changes take effect only if the notes are accepted for purchase, which depends on the ValueAct merger closing; the tender offer expires February 13, 2007. This resolves the open question of the notes' tender offer and consent solicitation terms; the pricing figures are in press releases whose text is not shown, except a $30 per $1,000 consent payment for early tenders.
Seitel filed its definitive proxy statement, setting the special stockholder meeting for February 9, 2007 at 9:00 a.m. in Houston to vote on the $3.70 cash ValueAct merger, with holders of record on January 8, 2007 entitled to vote. The board, with the three conflicted directors abstaining, recommends voting for it. It needs a majority of all outstanding shares (so not voting counts as against) and a majority of shares voted other than ValueAct's (where not voting has no effect). Stockholders who do not vote in favour can seek appraisal only if they deliver a written demand before the vote. This fills in the meeting date left blank in the preliminary proxy.
Amendment No. 2 to the going-private statement now accompanies the definitive proxy statement rather than a preliminary one. It says the six officers (Monson, Restrepo, Callaghan, Kendrick, Simon and Smith) 'will' invest by contributing Seitel shares to the buyer's parent, firmer than the earlier 'invited'. The $3.70 price and the fee figures are unchanged.
Amendment No. 1 to the going-private statement adds Kendrick, Simon and Smith, along with Monson, Restrepo and Callaghan, as filing persons, and says all six officers have been invited to invest in the buyer's parent by contributing Seitel shares. The $3.70 price and the other terms in the excerpt are unchanged, and the proxy is still described as preliminary.
Seitel, ValueAct and the buyer entities filed the going-private transaction statement that accompanies the preliminary proxy for the $3.70 cash merger. It repeats the terms: public shares (other than ValueAct's and appraisal shares) become $3.70 cash, unvested restricted stock vests and is paid $3.70 per share, and the one 100,000-share option at $1.30 is cashed out for $240,000. It also names Monson, Restrepo and Callaghan as officers invited to roll shares into the buyer's parent, which moves the earlier 'possible management rollover' from no agreements to named invitees. The filing mostly cross-references the proxy statement.
Seitel filed a preliminary proxy statement for a special stockholder meeting (date and place still blank) to vote on the ValueAct merger at $3.70 cash per share. The filing says 104,070,904 shares (excluding ValueAct's) are covered, for a transaction value of about $385.3 million. The vote needs a majority of all outstanding shares, plus a majority of the shares voted that are not held by ValueAct. Those who do not vote in favour may seek appraisal rights if they follow the required steps. The text provided also refers to a tender offer and consent solicitation, but its terms are not shown.
On November 6, 2006 a purported class action was filed in Harris County, Texas by stockholder Todd Augenbaum against Seitel, its directors, ValueAct, and the buyer entities. It alleges breach of fiduciary duty, failure to disclose material information, and that the $3.70 price is unfair and inadequate, and it seeks an injunction against the merger. Seitel says the suit is without merit and will defend it vigorously.
On October 31, 2006 Seitel signed a merger agreement with entities owned by ValueAct Capital under which every share not owned by ValueAct will be cancelled for $3.70 in cash. That is up from ValueAct's earlier $3.65 proposal. Completion requires a stockholder vote, including a majority of the shares voted that are not held by ValueAct, antitrust clearance and debt financing, and closing is expected by early 2007. A $17,000,000 termination fee can apply in specified circumstances. ValueAct will contribute 9,459,460 shares to the buyer and has agreed to vote in favour. William Blair gave a fairness opinion. Management may roll over part of their proceeds, but no agreements exist yet. The filing also includes a third-quarter 2006 results release, whose figures are not in the text provided.
A board committee approved a retention bonus program for eight key executives, with cash paid on a change in control and again a year later. It also removed a tax-deductibility payment limit from the employment agreements of Callaghan and Restrepo. The filing also discloses that ValueAct Capital Master Fund proposed to buy all shares it does not already own for $3.65 in cash, and that the committee is seeking alternative proposals through William Blair & Company. No deal is assured. This opens a sale process and the first mention of ValueAct's offer in this history.
Third Point LLC f/k/a Third Point Management Company L.L.C. I.D. #, Daniel S. Loeb reported a SEITEL INC shareholding of 6,688,100 shares (4.30% of votes) in a periodic institutional filing.
On May 15, 2006 Seitel awarded CFO William Restrepo 220,000 restricted shares under the 2004 Stock Option Plan, vesting in three equal installments from May 15, 2007 to 2009. This adds to the share count. The filing gives no reason for the award.
Seitel said it generated about $17,552,000 of excess cash flow in 2005, so its note indenture requires an offer to buy back up to $8,513,000 of the 11.75% Senior Notes at par plus accrued interest ($1,031.01 per $1,000). The offer expires April 17, 2006, with payment expected April 20. Its payment obligations change only if holders actually tender notes. This repeats the 2005 buyback, which was $4 million tendered of $4,759,000 offered, at a larger size. The press release also reports income from operations of $15,710,000 for 2005.
On February 9, 2006 the board awarded 2005 cash bonuses, restricted share grants and 5% salary increases to six executives. Monson received a $792,000 bonus and 459,870 shares, with a 2006 salary of $420,000. The filing says awards reflected targets met plus a discretionary 10%, and that 2005 performance for U.S. executives exceeded the maximum goals. Restrepo is now listed as CFO, EVP and Secretary and Kendrick as Chief Accounting Officer and Treasurer, which changes the acting titles in earlier records. The restricted shares vest in thirds over three years, apart from 22,613 unrestricted shares granted to Garis Smith.
On January 3, 2006 Seitel granted 20,465 restricted shares to CEO Robert Monson and 24,466 to William Restrepo as guaranteed key executive awards under the 2005 Incentive Plan. They vest one-third a year over three years, and vest fully on death, disability or just before a change in control. This is the first filing in this history to name Restrepo as an executive.
On January 3, 2006 Seitel granted 25,000 restricted shares to each of its seven non-employee directors (Black, Flannery, Golding, Holmes, Mouquin, Williams and Zeidman) under the 2004 Stock Option Plan. They vest one-third a year on each of the first three anniversaries, and vest fully on death, disability or just before a change in control. This adds to the share count and continues the pattern of stock awards to directors.
On September 12, 2005 the compensation committee awarded a discretionary cash bonus of C$101,724.53 to Garis Smith, president of Seitel's subsidiary Olympic Seismic Ltd.
On May 23, 2005 the independent directors voted to cut Chairman Fred Zeidman's pay from $250,000 to $100,000 a year, effective July 1, 2005, on the compensation committee's recommendation. The filing gives no further reason.
