Certain Relationships and Related Party Transactions
Stockholders’ Agreement
On March 29, 2022, the Company and the other parties thereto amended and restated the Previous Stockholders’ Agreement and entered into the Stockholders’ Agreement to, among other things, (i) terminate the rights of the Apollo Funds under the Previous Stockholders’ Agreement and (ii) eliminate the requirement that the Board consist of ten members. As a result of the Apollo Funds’ reduced ownership after recent share sales from long-dated funds holding their Company shares, the directors associated with the Apollo Funds resigned from the Board, effective December 8, 2021. Thereafter, the Board determined, pursuant to the Bylaws, that the size of the Board shall consist of seven members.
Termination of Stockholders’ Agreement
On September 21, 2022, we executed a merger agreement to acquire EnVen, a private operator in the Deepwater U.S. Gulf of Mexico, for stock and cash consideration. In connection with the $1.0 billion EnVen Acquisition, which closed on February 13, 2023, the Company and the Riverstone Funds agreed to terminate the Stockholders’ Agreement, which eliminated the Riverstone Funds’ designation rights with respect to the Company’s Board of Directors. Subsequent to the termination of the Stockholders’ Agreement, the Riverstone Funds’ designee to the Company’s Board of Directors, Mr. Robert M. Tichio, immediately tendered his resignation in connection with the closing of the EnVen Acquisition. See “—Riverstone Support Agreement” below for additional information.
Additionally, pursuant to the Merger Agreement, effective as of February 13, 2023, we caused (a) the number of directors constituting the Board of Directors to be increased to eight and (b) two individuals designated by EnVen to be appointed as members of the Board of Directors. Shandell Szabo and Richard Sherrill were appointed to fill the two vacancies on our Board, to serve until the Annual Meeting of Stockholders or until their successors shall be elected and qualified, or, if earlier, until their respective deaths, disability, resignations, disqualifications or removals from office.
The Riverstone Funds had agreed to vote their shares of the Company’s common stock in favor of any nominee designated and nominated for election to the Board of Directors in accordance with the terms of the Stockholders’ Agreement, prior to its termination in February 2023, and in a manner consistent with the recommendation of the Nominating and Governance Committee with respect to all other nominees.
In connection with the EnVen Acquisition, the Company and the Riverstone Funds agreed to terminate the Stockholders’ Agreement, which eliminated the Riverstone Funds’ designation rights with respect to the Company’s Board of Directors. Subsequent to the termination of the Stockholders’ Agreement, the Riverstone Funds’ previous designee to the Company’s Board of Directors, Mr. Robert M. Tichio, immediately tendered his resignation. The termination of the Stockholders’ Agreement was contingent upon the successful closing of the EnVen Acquisition.
On February 13, 2023, in conjunction with the closing of the EnVen Acquisition, the Stockholders’ Agreement was terminated and Mr. Robert M. Tichio resigned from the Company’s Board of Directors. See “—Riverstone Support Agreement & Letter Agreement” for additional information.
Riverstone Support Agreement & Letter Agreement
In connection with the EnVen Acquisition, we, EnVen and the Riverstone Funds entered into the Riverstone Support Agreement pursuant to which the Riverstone Funds agreed, among other things, to (i) vote all shares of Company common stock beneficially owned (a) in favor of the share issuance to EnVen equityholders, (b) in favor of the amendment and/or restatement of the Company’s organizational documents as necessary or appropriate to reflect the termination of the Stockholders’ Agreement, (c) in favor of any other proposals necessary or appropriate in connection with the EnVen Acquisition and (d) against, among other things, (A) any Acquisition Proposal (as defined in the Merger Agreement) with respect to the Company and (B) any other proposal that could reasonably be expected to materially impede or delay the EnVen Acquisition or result in a breach of any representation or covenant of the Company under that certain Merger Agreement, (ii) terminate the Stockholders’ Agreement, and (iii) cause Mr. Tichio to resign from the Company’s Board of Directors, in each case of the foregoing clauses (ii) and (iii), effective immediately prior to, but conditioned on, the occurrence of the closing of the EnVen Acquisition.
The EnVen Acquisition closed on February 13, 2023, and in connection therewith, we and the Riverstone Funds entered into a Letter Agreement, dated February 13, 2023, pursuant to which we and the Riverstone Funds agreed to execute and deliver such additional documents and take all such further action as may be reasonably necessary to cause the Stockholders’ Agreement to be terminated without any further force and effect.