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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXXX INDUSTRIES, INC.,
NABORS ACQUISITION CORP. VII
and
BAYARD DRILLING TECHNOLOGIES, INC.
Dated as of October 19, 1998
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TABLE OF CONTENTS
ARTICLE I THE MERGER...............................................................................................1
1.1. THE MERGER.................................................................................................1
1.2. CLOSING/EFFECTIVE TIME.....................................................................................1
1.3. EFFECT OF THE MERGER.......................................................................................2
1.4. CERTIFICATE OF INCORPORATION; BYLAWS.......................................................................2
1.5. DIRECTORS AND OFFICERS OF MERGER SUB.......................................................................2
ARTICLE II CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES......................................................2
2.1. CONVERSION OF SECURITIES...................................................................................2
2.2. EXCHANGE OF CERTIFICATES...................................................................................3
2.3. STOCK TRANSFER BOOKS.......................................................................................5
2.4. DISSENTING SHARES..........................................................................................5
2.5. COMPANY STOCK OPTIONS; COMPANY WARRANTS....................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.................................................6
3.1. ORGANIZATION, QUALIFICATION, ETC...........................................................................6
3.2. CAPITAL STOCK..............................................................................................7
3.3. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT; NO VIOLATION...............................................7
3.4. REPORTS AND FINANCIAL STATEMENTS...........................................................................8
3.5. NO UNDISCLOSED LIABILITIES.................................................................................8
3.6. NO VIOLATION OF LAW........................................................................................8
3.7. ENVIRONMENTAL LAWS AND REGULATIONS.........................................................................8
3.8. NO UNDISCLOSED EMPLOYEE BENEFIT PLAN LIABILITIES OR SEVERANCE ARRANGEMENTS.................................9
3.9. ABSENCE OF CERTAIN CHANGES OR EVENTS.......................................................................9
3.10. LITIGATION.................................................................................................9
3.11. LACK OF OWNERSHIP OF COMPANY COMMON STOCK..................................................................9
3.12. TAX MATTERS................................................................................................9
3.13. REQUIRED VOTE.............................................................................................10
3.14. INSURANCE.................................................................................................10
3.15. INTELLECTUAL PROPERTY.....................................................................................11
3.16. MATERIAL CONTRACTS........................................................................................11
3.17. OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES..............................................................12
3.18. BROKERS...................................................................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................12
4.1. ORGANIZATION, QUALIFICATION, ETC..........................................................................12
4.2. CAPITAL STOCK.............................................................................................13
4.3. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT; NO VIOLATION..............................................13
4.4. REPORTS AND FINANCIAL STATEMENTS..........................................................................14
4.5. NO UNDISCLOSED LIABILITIES................................................................................14
4.6. NO VIOLATION OF LAW.......................................................................................15
4.7. ENVIRONMENTAL LAWS AND REGULATIONS........................................................................15
4.8. NO UNDISCLOSED EMPLOYEE BENEFIT PLAN LIABILITIES OR SEVERANCE ARRANGEMENTS................................15
4.9. ABSENCE OF CERTAIN CHANGES OR EVENTS......................................................................15
4.10. LITIGATION................................................................................................15
4.11. COMPANY RIGHTS PLAN.......................................................................................15
4.12. LACK OF OWNERSHIP OF PARENT COMMON STOCK..................................................................16
4.13. TAX MATTERS...............................................................................................16
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4.14. REQUIRED VOTE.............................................................................................17
4.15. INSURANCE.................................................................................................17
4.16. INTELLECTUAL PROPERTY.....................................................................................17
4.17. MATERIAL CONTRACTS........................................................................................17
4.18. BROKERS...................................................................................................18
4.19. OPINION OF FINANCIAL ADVISOR..............................................................................18
ARTICLE V COVENANTS...............................................................................................19
5.1. AFFIRMATIVE COVENANTS OF THE COMPANY......................................................................19
5.2. NEGATIVE COVENANTS OF THE COMPANY.........................................................................19
5.3. NEGATIVE COVENANTS OF PARENT..............................................................................21
5.4. ACCESS AND INFORMATION....................................................................................21
5.5. REGISTRATION RIGHTS.......................................................................................21
5.6. NO SOLICITATION...........................................................................................22
5.7. CONFIDENTIALITY...........................................................................................23
ARTICLE VI ADDITIONAL AGREEMENTS..................................................................................23
6.1. SPECIAL MEETING OF COMPANY STOCKHOLDERS...................................................................23
6.2. REGISTRATION STATEMENT; PROXY STATEMENT...................................................................23
6.3. APPROPRIATE ACTION; CONSENTS; FILINGS.....................................................................25
6.4. TAX TREATMENT; AFFILIATES.................................................................................25
6.5. PUBLIC ANNOUNCEMENTS......................................................................................26
6.6. AMEX LISTING..............................................................................................26
6.7. INDEMNIFICATION OF DIRECTORS AND OFFICERS.................................................................26
6.8. AGREEMENT TO DEFEND.......................................................................................27
6.9. OBLIGATIONS OF MERGER SUB.................................................................................27
6.10. ACCOUNTING FOR MERGER.....................................................................................27
6.11. EXECUTIVE EMPLOYMENT AGREEMENT............................................................................27
6.12 TAKEOVER STATUTES.........................................................................................28
6.13. EMPLOYEE MATTERS..........................................................................................28
6.14. STOCKHOLDER AGREEMENTS....................................................................................28
ARTICLE VII CLOSING CONDITIONS....................................................................................28
7.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY UNDER THIS AGREEMENT..............................................28
7.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT............................................................29
7.3. ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY.......................................................29
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.....................................................................30
8.1. TERMINATION...............................................................................................30
8.2. EFFECT OF TERMINATION.....................................................................................31
8.3. AMENDMENT.................................................................................................31
8.4. WAIVER....................................................................................................32
8.5. FEES; EXPENSES AND OTHER PAYMENTS.........................................................................32
ARTICLE IX GENERAL PROVISIONS......................................................................................32
9.1. EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS...............................................32
9.2. NOTICES...................................................................................................33
9.3. CERTAIN DEFINITIONS.......................................................................................33
9.4. HEADINGS..................................................................................................34
9.5. SEVERABILITY..............................................................................................34
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9.6. ENTIRE AGREEMENT..........................................................................................34
9.7. ASSIGNMENT................................................................................................34
9.8. PARTIES IN INTEREST.......................................................................................34
9.9. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.....................................................34
9.10. GOVERNING LAW.............................................................................................35
9.11. JURISDICTION..............................................................................................35
9.12. COUNTERPARTS..............................................................................................35
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EXHIBITS
1.4A RESTATED CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION
1.4B BYLAWS OF SURVIVING CORPORATION
6.4 Form of Affiliate Letter
6.11A&B Forms of Employment Agreement
6.13 Employee Matters
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER dated as of October 19, 1998 (this
"Agreement"), is entered into among XXXXXX INDUSTRIES, INC., a Delaware
corporation ("Parent"), NABORS ACQUISITION CORP. VII, a Delaware corporation
("Merger Sub") and a wholly owned subsidiary of Parent, and BAYARD DRILLING
TECHNOLOGIES, INC., a Delaware corporation (the "Company").
WHEREAS, upon the terms and subject to the conditions of this Agreement
and in accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), Merger Sub will merge with and into the Company (the
"Merger");
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have determined the Merger to be advisable and in the best interests
of their respective corporations and stockholders and to be consistent with, and
in furtherance of, their respective business strategies and goals, and, by
resolutions duly adopted, have approved and adopted this Agreement;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the United States Internal Revenue Code of 1986, as amended (the "Code"), and
that this Agreement shall constitute a "plan of reorganization" for the purposes
of Section 368 of the Code; and
WHEREAS, as a condition of the willingness of Parent to enter into this
Agreement, the Company and Parent will, simultaneously with the execution of
this Agreement, enter into a stock option agreement (the "Company Stock Option
Agreement"), pursuant to which the Company will grant Parent the option (the
"Company Option") to purchase shares of Company Common Stock (as defined in
Section 2.1(a)), upon the terms and subject to the conditions set forth therein;
and
WHEREAS, as a condition of the willingness of Parent to enter into this
Agreement, certain stockholders of the Company will, simultaneously with the
execution of this Agreement, enter into Stockholder Agreements with Parent,
dated as of the date hereof (the "Stockholder Agreements"), which provide, among
other things, that, subject to the terms and conditions thereof, such
stockholders will vote their shares of Company Common Stock in favor of the
Merger and approval and adoption of this Agreement and the transactions
contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with Delaware Law, at the Effective Time
(as defined in Section 1.2), Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the surviving corporation in
the Merger (the "Surviving Corporation").
1.2. Closing/Effective Time. Subject to the terms and conditions of
this Agreement, the closing of the Merger (the "Closing") shall take place (a)
at the offices of Xxxxx & XxXxxxxx, Two Xxxxx Center, Houston, Texas, at 9:00
a.m., local time, on the first business day immediately following the day on
which the last to be fulfilled or waived of the conditions set forth in Article
VII shall be fulfilled or waived in accordance
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with this Agreement or (b) at such other time, date or place as Parent and the
Company may agree. The date on which the Closing occurs is referred to in this
Agreement as the "Closing Date". As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing of
the certificate of merger (the "Certificate of Merger") with the Secretary of
State of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, Delaware Law. The Merger shall
become effective at the time of filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with Delaware Law, or
at such later time that the parties hereto shall have agreed upon and designated
in such filing as the effective time of the Merger (the "Effective Time").
1.3. Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the property, rights,
privileges, powers and franchises of Merger Sub and the Company shall vest in
the Surviving Corporation, and all debts, liabilities and duties of Merger Sub
and the Company shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4. Certificate of Incorporation; Bylaws. At the Effective Time, each
of the Restated Certificate of Incorporation, as amended, and the Amended and
Restated Bylaws of the Company shall be amended and restated in its entirety to
read as set forth in Exhibit 1.4A and Exhibit 1.4B, respectively, and as so
amended shall be the Restated Certificate of Incorporation and Bylaws of the
Surviving Corporation.
1.5. Directors and Officers of Merger Sub. The directors of Merger Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, each to hold office in accordance with the Restated Certificate of
Incorporation and Bylaws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the officers of the
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
2.1. Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or the
holders of any of the following securities:
(a) Each share of common stock, par value $.01 per share, of the
Company ("Company Common Stock") issued and outstanding immediately prior to the
Effective Time (excluding any treasury shares held by the Company or any of its
Subsidiaries, shares held by Parent or any of its Subsidiaries and Dissenting
Shares (as defined in Section 2.4)), shall be converted into the right to
receive (i) 0.375 fully paid, non-assessable shares of common stock (the
"Exchange Ratio"), par value $.10 per share, of Parent ("Parent Common Stock")
and (ii) $0.30 in cash (the "Cash Consideration").
(b) If between the date of this Agreement and the Effective Time the
outstanding shares of Parent Common Stock or Company Common Stock shall have
been changed into a different number of shares or a different class, by reason
of any stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares or if a "Flip-In Event" or "Flip-Over Event"
(each as defined under the Company Rights Plan (as defined in Section 4.2))
shall have occurred under the Company Rights Plan, the Exchange Ratio shall be
correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares or
event.
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(c) All such shares of Company Common Stock shall no longer be
outstanding, shall automatically be canceled and retired and shall cease to
exist, and each certificate previously evidencing any such shares shall
thereafter represent the right to receive the Merger Consideration (as defined
in Section 2.2(b)). The holders of such certificates previously evidencing such
shares of Company Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such shares of Company
Common Stock, except as otherwise provided herein or by law. Such certificates
previously evidencing shares of Company Common Stock shall be exchanged for
certificates evidencing whole shares of Parent Common Stock and payment of the
Cash Consideration in accordance with the allocation procedures of this Section
2.1 upon the surrender of such certificates in accordance with the provisions of
Section 2.2, without interest. No fractional shares of Parent Common Stock shall
be issued, and, in lieu thereof, a cash payment shall be made pursuant to
Section 2.2(e).
(d) Each share of Company Common Stock held in the treasury of the
Company and each share of Company Common Stock owned by Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company immediately prior
to the Effective Time shall be canceled and extinguished without any conversion
thereof and no payment shall be made with respect thereto.
(e) Each share of common stock, par value $.10 per share, of Merger Sub
issued and outstanding at the Effective Time shall be converted into one share
of common stock of the Surviving Corporation.
2.2. Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Parent shall deposit, or
shall cause to be deposited, with First Chicago Trust Company of New York or
such other bank or trust company designated by Parent and reasonably acceptable
to the Company (the "Exchange Agent"), for the benefit of the holders of shares
of Company Common Stock, for exchange in accordance with this Article II through
the Exchange Agent (i) certificates evidencing such number of whole shares of
Parent Common Stock equal to the Exchange Ratio multiplied by the number of
shares of Company Common Stock outstanding (other than (x) shares described in
Section 2.1(d) and (y) Dissenting Shares), (ii) an amount in cash equal to the
Cash Consideration multiplied by the number of shares of Company Common Stock
outstanding (other than (x) shares described in Section 2.1(d) and (y)
Dissenting Shares) and (iii) additional cash in consideration of fractional
shares as provided in Section 2.2(e) (such Parent Common Stock and cash being
hereinafter referred to as the "Exchange Fund"). The Exchange Agent shall,
pursuant to irrevocable instructions, deliver the Parent Common Stock and cash
out of the Exchange Fund. Except as contemplated by Section 2.2(e) and (f)
hereof, the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent will instruct the Exchange Agent to mail to each holder
of record of a certificate or certificates which immediately prior to the
Effective Time evidenced outstanding shares of Company Common Stock (the
"Certificates"), (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Parent may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates evidencing shares of Parent Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent together with
such letter of transmittal, duly executed, and such other customary documents as
may be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange (A) an amount in cash and certificates
evidencing that number of whole shares of Parent Common Stock, which such holder
has the right to receive in respect of the shares of Company Common Stock
formerly evidenced by such Certificate in accordance with Section 2.1, and (B)
cash in lieu of fractional shares of Parent Common Stock to which such
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holder is entitled pursuant to Section 2.2(e) (such shares of Parent Common
Stock and cash being collectively, the "Merger Consideration"), and the
Certificate so surrendered shall be canceled. In the event of a transfer of
ownership of shares of Company Common Stock which is not registered in the
transfer records of the Company, a certificate evidencing the proper number of
shares of Parent Common Stock may be issued in accordance with this Article II
to a transferee if the Certificate evidencing such shares of Company Common
Stock is presented to the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.2, each Certificate (other than Certificates representing Dissenting Shares)
shall be deemed at any time after the Effective Time to evidence only the right
to receive, upon such surrender, the Merger Consideration. The Exchange Agent
shall not be entitled to vote or exercise any rights of ownership with respect
to the Parent Common Stock held by it from time to time hereunder, except that
it shall receive and hold all dividends or other distributions paid or
distributed with respect thereto for the account of the persons entitled
thereto.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect to
Parent Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock evidenced thereby, and no other part of the Merger Consideration
shall be paid to any such holder, until the holder of such Certificate shall
surrender such Certificate, at which time, subject to the effect of applicable
laws, there shall be issued to the holder (i) certificates evidencing whole
shares of Parent Common Stock issued in exchange therefor, the amount of cash
payable with respect to the Cash Consideration and the amount of any cash
payable with respect to a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and the amount of dividends or
other distributions with a record date after the Effective Time then paid with
respect to such whole shares of Parent Common Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions (without interest
thereon), with a record date after the Effective Time but prior to surrender and
a payment date occurring after surrender, payable with respect to such whole
shares of Parent Common Stock. No interest shall be paid on any such amounts.
(d) No Further Rights in Company Common Stock. All shares of Parent
Common Stock issued and cash paid upon conversion of the shares of Company
Common Stock in accordance with the terms of this Agreement shall be deemed to
have been issued or paid in full satisfaction of all rights pertaining to such
shares of Company Common Stock.
(e) No Fractional Shares.
(i) No certificates or scrip evidencing fractional shares of Parent
Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the
owner thereof to vote or to any rights of a stockholder of Parent.
(ii) Each holder of a Certificate having a fractional interest arising
upon the conversion of such Certificate shall, at the time of surrender of
the Certificate, be paid by the Exchange Agent an amount in cash equal to
the value of such fractional interest based on the average closing price
per share of Parent Common Stock as reported by The Wall Street Journal
(Northeast edition) for the ten consecutive trading days ending on and
including the fifth trading day prior to the Closing Date, appropriately
adjusted for any stock splits, reverse stock splits, stock dividends,
recapitalizations or other similar transactions. No interest shall be paid
on any such amounts. All fractional shares to which a single record holder
would be entitled shall be aggregated.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains
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undistributed to the holders of Company Common Stock for one year after the
Effective Time shall be delivered to Parent, upon demand, and any holders of
Company Common Stock who have not then complied with this Article II shall
thereafter look only to Parent for the Merger Consideration to which they are
entitled.
(g) No Liability. Neither Parent nor the Surviving Corporation shall be
liable to any holder of shares of Company Common Stock for any shares of Parent
Common Stock or cash (or dividends or distributions with respect thereto)
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(h) Lost Certificates. In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Parent Common Stock, the Cash Consideration and cash
in lieu of fractional shares, and unpaid dividends and distributions on shares
of Parent Common Stock as provided above, deliverable in respect thereof
pursuant to this Agreement.
2.3. Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of shares of Company Common Stock thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Exchange Agent or Parent for any reason shall be canceled and exchanged for the
Merger Consideration.
2.4. Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are held by stockholders who
have properly exercised appraisal rights with respect thereto under Section 262
of Delaware Law (the "Dissenting Shares") shall not be converted into the right
to receive the consideration therefor specified in Section 2.1, but the holders
of Dissenting Shares shall be entitled to receive such payment as shall be
determined pursuant to Section 262 of Delaware Law; provided, however, that if
any such holder shall have failed to perfect or shall withdraw or lose the right
to appraisal and payment under Delaware Law, each such holder's shares of
Company Common Stock shall thereupon be deemed to have been converted as of the
Effective Time into the right to receive the consideration therefor specified in
Section 2.1, without any interest thereon, as provided in Section 2.2, and such
shares shall no longer be Dissenting Shares.
2.5. Company Stock Options; Company Warrants.
(a) At the Effective Time each outstanding Company Stock Option (as
defined in Section 4.2) to purchase shares of Company Common Stock, by virtue of
the Merger and without further action on the part of the Company or the holder
of any Company Stock Option, shall be converted into an option to purchase
Parent Common Stock ("Parent Stock Option") exercisable for that number of whole
shares of Parent Common Stock equal to the product of the number of shares of
Company Common Stock covered by Company Stock Option immediately prior to the
Effective Time multiplied by the Exchange Ratio rounded up to the nearest whole
number of shares of Parent Common Stock, and the per share exercise price for
the shares of Parent Common Stock issuable upon the exercise of such Parent
Stock Options shall be equal to the quotient determined by dividing (i) the
amount obtained by subtracting (A) the Cash Consideration from (B) the exercise
price per share of Company Common Stock specified for such Company Stock Option
under the applicable Company Stock Option plan or agreement immediately prior to
the Effective Time, by (ii) the Exchange Ratio (rounding the resulting exercise
price up to the nearest whole cent). The date of grant of the
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Parent Stock Option shall be the date on which Company Stock Option was
originally granted. Parent shall reserve for issuance the number of shares of
Parent Common Stock that will become issuable upon the exercise of Parent Stock
Options pursuant to this Section 2.5. The Parent Stock Options granted pursuant
hereto shall have the same schedule of vesting and same period for exercise as
applies to Company Stock Options granted prior to the date of this Agreement;
provided, however, that, with respect to the employee holders of Company Stock
Options identified in Section 4.2, paragraph 1 of the Company Disclosure
Schedule (as defined in the first clause of Article IV) who are still employed
by the Company immediately prior to the Effective Time, should such an employee
holder be terminated by the Surviving Corporation without cause during the
one-year period immediately following the Effective Time, then the number of
Parent Stock Options received by such employee holder in exchange for such
employee holder's Company Stock Options in accordance with this Section 2.5(a)
shall immediately and fully vest upon such termination. As soon as practicable
after the Effective Time, Parent shall file a registration statement on Form S-8
(or any successor form), or another appropriate form with respect to the shares
of Parent Common Stock subject to such options and shall use its best efforts to
maintain the effectiveness of such registration statement or registration
statements for so long as such options remain outstanding. Except as otherwise
expressly provided herein, the Parent Stock Options shall be subject to the
terms and conditions of Parent's 1998 Employee Stock Option Plan or a similar
plan, and except as otherwise contemplated by Parent and consistent with this
Section 2.5(a), the form of stock option agreement shall be Parent's standard
form as in effect on the date hereof. If Parent requests, Parent and the Company
will negotiate in good faith to modify this Section 2.5(a) so that, in lieu of
converting Company Stock Options into Parent Stock Options, Parent will adopt
the Company Stock Option plans, subject to the changes in the terms of the
Company Stock Options described above.
(b) The Company shall (i) take all necessary action pursuant to the
Company's stock option plans or otherwise and (ii) to the extent necessary under
the terms of the applicable stock option plans and agreements, shall use its
best reasonable efforts to cause the holders of Company Stock Options to execute
any documents necessary, in each case, to effectuate the provisions of this
Section 2.5.
(c) At the Effective Time each outstanding Company Warrant (as defined
in Section 4.2) to purchase shares of Company Common Stock, by virtue of the
Merger and without further action on the part of the Company or the holder of
any Company Warrant, shall remain outstanding on the same terms as in effect
immediately prior to the Effective Time, but shall thereafter only be
exercisable for (i) that number of whole shares of Parent Common Stock equal to
the product of the number of shares of Company Common Stock covered by the
Company Warrant immediately prior to the Effective Time multiplied by the
Exchange Ratio rounded up to the nearest whole number of shares of Parent Common
Stock, and (ii) that amount of cash equal to the product of the number of shares
of Company Common Stock covered by the Company Warrant immediately prior to the
Effective Time multiplied by the Cash Consideration. Parent shall reserve for
issuance the number of shares of Parent Common Stock that will become issuable
upon the exercise of the Company Warrants pursuant to this Section 2.5.
(d) The Company shall (i) take all necessary action pursuant to the
Company's warrant agreements or otherwise and (ii) to the extent necessary under
the terms of the applicable Company Warrants, shall use its best reasonable
efforts to cause the holders of Company Warrants to execute any documents
necessary, in each case, to effectuate the provisions of this Section 2.5.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth on the Disclosure Schedule delivered by Parent to
the Company prior to the execution of this Agreement (the "Parent Disclosure
Schedule"), each of Parent and Merger Sub jointly and severally represents and
warrants to the Company that:
3.1. Organization, Qualification, Etc. Each of Parent and Merger Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to own its properties and assets and to carry on its business as it is
now being conducted and is duly qualified to do business and is in good standing
in each jurisdiction in which the ownership of its properties or the conduct of
its business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below) on Parent. As used
in this Agreement, any reference to any state of facts, event, change or effect
having a "Material Adverse Effect" on or with respect to Parent or the Company,
as the case may be, means such state of facts, event, change or effect that has
had, or would reasonably be expected to have, a material adverse effect on the
business, results of operations or financial condition of the applicable entity
and its Subsidiaries (as defined in Section 9.3(g)), taken as a whole, exclusive
of such effects on general economic conditions or the oil and gas or contract
drilling industries in general. A Material Adverse Effect shall be deemed to
exist if there shall occur any event which causes or may reasonably be expected
to cause or result in actual monetary loss which exceeds $75 million, in the
case of Parent, or $7.5 million, in the case of the Company. The copies of
Parent's Restated Certificate of Incorporation and By-laws which have been
delivered to the Company are complete and correct and in full force and effect
on the date hereof. Each of Parent's Significant Subsidiaries (as defined in
Section 9.3(f)) is a corporation duly organized, validly existing and (if
applicable) in good standing under the laws of its jurisdiction of incorporation
or organization, has the requisite power and authority to own its properties and
to carry on its business as it is now being conducted, and is duly qualified to
do business and is (if applicable) in good standing in each jurisdiction in
which the ownership of its property or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to be so qualified
or in good standing (if applicable) would not, individually or in the aggregate,
have a Material Adverse Effect on Parent. All the outstanding shares of capital
stock of, or other ownership interests in, Parent's Significant Subsidiaries are
validly issued, fully paid and non-assessable and are owned by Parent, directly
or indirectly, free and clear of all liens, claims, charges or encumbrances,
except for restrictions contained in credit agreements and similar instruments
to which Parent is a party under which no event of default has occurred or
arisen. There are no existing options, rights of first refusal, preemptive
rights, calls or commitments of any character relating to the issued or unissued
capital stock or other securities of, or other ownership interests in, any
Significant Subsidiary of Parent.
3.2. Capital Stock. The authorized stock of Parent consists of
200,000,000 shares of common stock, par value $.10 per share ("Parent Common
Stock"), 10,000,000 shares of preferred stock, par value $.10 per share ("Parent
Preferred Stock"), and 8,000,000 shares of Class B Stock, par value $.10 per
share ("Parent Class B Stock"). As of August 4, 1998, 100,860,903 shares of
Parent Common Stock were issued and outstanding and no shares of Parent
Preferred Stock or Parent Class B Stock were issued or outstanding. All the
outstanding shares of Parent Common Stock have been validly issued and are fully
paid and non-assessable. As of August 4, 1998, there were no outstanding
subscriptions, convertible or exchangeable securities, options, warrants, calls,
rights or other arrangements or commitments obligating Parent to issue, deliver
or sell any shares of its capital stock or debt securities, or any securities of
any kind convertible into its capital stock, or obligating Parent to grant,
extend or enter into any such subscription, option, warrant, call, right or
other arrangement or commitment other than: (a) options and other rights to
receive or acquire 21,155,747 shares of Parent Common Stock granted on or prior
to August 4, 1998,
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pursuant to employee incentive or benefit plans, programs and arrangements and
non-employee director plans; (b) warrants to purchase 200,000 shares of Parent
Common Stock issued to the former stockholders of an acquired entity; and (c)
rights to acquire shares of Parent Common Stock upon conversion of Parent's 5%
Convertible Subordinated Notes due May 15, 2006. Except for the issuance of
shares of Parent Common Stock pursuant to the options and other rights referred
to in clauses 3.2(a), (b) and (c), since August 4, 1998, no shares of Parent
Common Stock, Parent Preferred Stock or Parent Class B Stock have been issued
and no options, warrants or other securities convertible into shares of capital
stock of Parent have been issued or granted. The shares of Parent Common Stock
to be issued as consideration in the Merger are duly authorized and, when issued
in accordance with the terms of this Agreement, will be validly issued, fully
paid and nonassessable. Parent has not granted any registration rights with
respect to its securities that are currently exercisable.
3.3. Corporate Authority Relative to this Agreement; No Violation.
Parent has the corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of Parent and no other
corporate proceedings on the part of Parent are necessary to authorize the
consummation of the transactions contemplated hereby. The Boards of Directors of
Parent and Merger Sub have determined that the transactions contemplated by this
Agreement are in the best interests of such entities and their respective
stockholders. This Agreement has been duly and validly executed and delivered by
Parent and Merger Sub and, assuming this Agreement constitutes a valid and
binding agreement of the Company, this Agreement constitutes a valid and binding
agreement of Parent and Merger Sub, enforceable against them in accordance with
its terms (except insofar as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, or by principles governing the availability of
equitable remedies). Neither Parent nor Merger Sub is subject to or obligated
under any charter, by-law or contract provision or any license, franchise or
permit, or subject to any order or decree, which would be breached or violated
by its executing or carrying out the transactions contemplated by this
Agreement, except for any breaches or violations which would not, individually
or in the aggregate, have a Material Adverse Effect on Parent. Other than in
connection with or in compliance with the provisions of Delaware Law, the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), Section 4043 of
ERISA (as defined in Section 3.8) and the securities or blue sky laws of the
various states (collectively, the "Parent Required Approvals"), no
authorization, consent or approval of, or filing with, any governmental body or
authority is necessary for the consummation by Parent of the transactions
contemplated by this Agreement, except for such authorizations, consents,
approvals or filings, the failure to obtain or make which would not,
individually or in the aggregate, have a Material Adverse Effect on Parent or
substantially impair or delay the consummation of the transactions contemplated
hereby.
3.4. Reports and Financial Statements. Parent has previously furnished
to the Company true and complete copies of: (a) Parent's Annual Reports on Form
10-K filed with the Securities and Exchange Commission (the "SEC") for each of
the years ended September 30, 1995 through 1997; (b) Parent's Quarterly Reports
on Form 10-Q filed with the SEC for the quarters ended December 31, 1997, March
31, 1998 and June 30, 1998; (c) each definitive proxy statement filed by Parent
with the SEC since September 30, 1995; (d) each final prospectus filed by Parent
with the SEC since September 30, 1995, except any final prospectus on Form S-8;
and (e) all Current Reports on Form 8-K filed by Parent with the SEC since
October 1, 1997. As of their respective dates, such reports, proxy statements
and prospectuses (collectively, the "Parent SEC Reports") (i) complied as to
form in all material respects with the applicable requirements of the Securities
Act, the Exchange Act and the rules and regulations promulgated thereunder and
(ii) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
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misleading. Except to the extent that information contained in any Parent SEC
Report has been revised or superseded by a later filed Parent SEC Report, none
of the Parent SEC Reports contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The audited consolidated financial statements
and unaudited consolidated interim financial statements included in the Parent
SEC Reports (including any related notes and schedules) have been prepared in
accordance with and fairly present the financial position of Parent and its
consolidated subsidiaries as of the dates thereof and the results of operations
and cash flows for the periods or as of the dates then ended (subject, where
appropriate, to normal year-end adjustments), in each case in accordance with
past practice and generally accepted accounting principles in the United States
("GAAP") consistently applied during the periods involved (except (i) as
otherwise disclosed in the notes thereto, (ii) in the case of unaudited interim
financial statements, such differences in presentation or omissions as are
permitted by Rule 10-01 of Regulation S-X promulgated by the SEC and (iii) the
unaudited interim financial statements do not contain all notes required by
GAAP). Since October 1, 1996, Parent has timely filed all material reports,
registration statements and other filings required to be filed by it with the
SEC under the rules and regulations of the SEC.
3.5. No Undisclosed Liabilities. Neither Parent nor any of its
Subsidiaries has any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, of a type required to be reflected on a
balance sheet prepared in accordance with GAAP, except (a) liabilities or
obligations reflected in the Parent SEC Reports filed after September 30, 1997
but prior to the date hereof ("Parent Filed SEC Reports"), (b) liabilities and
obligations incurred under this Agreement and fees and expenses related thereto,
(c) liabilities and obligations incurred in the ordinary course of business
after June 30, 1998 and (d) liabilities or obligations which are not reasonably
expected, individually or in the aggregate, to have a Material Adverse Effect on
Parent.
3.6. No Violation of Law. The businesses of Parent and its Subsidiaries
are not being conducted in violation of any law, ordinance or regulation of any
governmental body or authority (provided that no representation or warranty is
made in this Section 3.6 with respect to Environmental Laws (as defined in
Section 3.7)) except (a) as described in the Parent Filed SEC Reports and (b)
for violations or possible violations which would not, individually or in the
aggregate, have a Material Adverse Effect on Parent.
3.7. Environmental Laws and Regulations. Except as described in the
Parent Filed SEC Reports, (a) Parent and each of its Subsidiaries is in
compliance with all applicable international, federal, state, local and foreign
laws and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) (collectively, "Environmental Laws"),
which compliance includes, but is not limited to, the possession by Parent and
its Subsidiaries of all material permits and other governmental authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof, except for noncompliance which would not, individually or in
the aggregate, have a Material Adverse Effect on Parent; (b) neither Parent nor
any of its Subsidiaries has received written notice of, or, to the knowledge of
Parent, is the subject of, any actions, causes of action, claims,
investigations, demands or notices by any Person asserting an obligation to
conduct investigations or clean-up activities under Environmental Law or
alleging liability under or noncompliance with any Environmental Law
(collectively, "Environmental Claims") which would, individually or in the
aggregate, have a Material Adverse Effect on Parent; and (c) to the knowledge of
Parent, there are no facts, circumstances or conditions in connection with the
operation of its business or any currently or formerly owned, leased or operated
facilities that are reasonably likely to lead to any such Environmental Claims
in the future, except for any such Environmental Claims which would not,
individually or in the aggregate, have a Material Adverse Effect on Parent.
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3.8. No Undisclosed Employee Benefit Plan Liabilities or Severance
Arrangements. Except as described in the Parent Filed SEC Reports, all "employee
benefit plans," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained or contributed to by
Parent or its Subsidiaries are in compliance with all applicable provisions of
ERISA and the Code, and Parent and its Subsidiaries do not have any liabilities
or obligations with respect to any such employee benefit plans, whether accrued,
contingent or otherwise, except (a) as described in the Parent Filed SEC
Reports, and (b) for instances of noncompliance or liabilities or obligations
that would not, individually or in the aggregate, have a Material Adverse Effect
on Parent. No employee of Parent will be entitled to any additional benefits or
any acceleration of the time of payment or vesting of any benefits under any
employee incentive or benefit plan, program or other arrangement as a result of
the transactions contemplated by this Agreement.
3.9. Absence of Certain Changes or Events. Other than as disclosed in
the Parent Filed SEC Reports, since October 1, 1997 the businesses of Parent and
its Subsidiaries have been conducted in all material respects in the ordinary
course consistent with past practice, and there has not been any event,
occurrence, development or state of circumstances or facts that has had, or
would have, a Material Adverse Effect on Parent.
3.10. Litigation. Except as described in the Parent Filed SEC Reports,
there are no actions, suits or proceedings pending (or, to Parent's knowledge,
threatened) against or affecting Parent or its Subsidiaries, or any of their
respective properties at law or in equity, or before any federal, state, local
or foreign governmental body or authority, which, individually or in the
aggregate, are reasonably likely to have a Material Adverse Effect on Parent. On
or before October 31, 1998, Parent will provide to the Company a complete list
of all pending or threatened actions, suits or proceedings involving amounts in
excess of $250,000.
3.11. Lack of Ownership of Company Common Stock. Except for the Company
Option, neither Parent nor any of its Subsidiaries owns any shares of Company
Common Stock or other securities convertible into shares of Company Common
Stock.
3.12. Tax Matters.
(a) All federal, state, local and foreign Tax Returns (as defined in
Section 3.12(d)) required to be filed by or on behalf of Parent, each of its
Subsidiaries, and each affiliated, combined, consolidated or unitary group of
which Parent or any of its Subsidiaries (i) is a member (a "Current Parent
Group") or (ii) has been a member within six years prior to the date hereof but
is not currently a member, but only insofar as any such Tax (as defined in
Section 3.12(d)) relates to a taxable period ending on a date within the last
six years (a "Past Parent Group", and together with Current Parent Groups, an
"Parent Affiliated Group") have been timely filed, and all returns filed are
complete and accurate except to the extent any failure to file or any
inaccuracies in filed returns would not, individually or in the aggregate, have
a Material Adverse Effect on Parent (it being understood that the
representations made in this Section 3.12, to the extent that they relate to
Past Parent Groups, or to any Subsidiary of Parent for periods prior to the time
such Subsidiary was acquired by Parent, are made to the knowledge of Parent).
All Tax Returns include any required disclosure of all positions taken therein
that could give rise to a substantial underpayment penalty within Section 6662
of the Code or similar provision of state, local, foreign or other law. All
Taxes due and owing by Parent, any Subsidiary of Parent or any Parent Affiliated
Group have been paid, or adequately reserved for, except to the extent any
failure to pay or reserve would not, individually or in the aggregate, have a
Material Adverse Effect on Parent. There is no audit examination, deficiency,
refund litigation, proposed adjustment or matter in controversy with respect to
any Taxes due and owing by Parent, any Subsidiary of Parent or any Parent
Affiliated Group which would, individually or in the aggregate, have a Material
Adverse Effect on Parent. All
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assessments for Taxes due and owing by Parent, any Subsidiary of Parent or any
Parent Affiliated Group with respect to completed and settled examinations or
concluded litigation have been paid. As soon as practicable after the public
announcement of the execution of this Agreement, Parent will provide the Company
with written schedules of (i) the taxable years of Parent for which the statutes
of limitations with respect to federal income Taxes have not expired, and (ii)
with respect to federal income Taxes, those years for which examinations have
been completed, those years for which examinations are presently being
conducted, and those years for which examinations have not yet been initiated.
Parent and each of its Subsidiaries have complied in all material respects with
all rules and regulations relating to the withholding of Taxes, except to the
extent any such failure to comply would not, individually or in the aggregate,
have a Material Adverse Effect on Parent.
(b) None of Parent nor any of its Subsidiaries knows of any fact or has
taken any action that could reasonably be expected to prevent the Merger from
constituting transactions described in Section 368(a) of the Code.
(c) Any amount or other entitlement that could be received (whether in
cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or director
of Parent or any of its affiliates who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employee benefit plan or other compensation arrangement currently in effect
would not be characterized as an "excess parachute payment" or a "parachute
payment" (as such terms are defined in Section 280G(b)(1) of the Code).
(d) For purposes of this Agreement: (i) "Taxes" means any and all
federal, state, local, foreign or other taxes of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without limitation,
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth, and taxes or other charges in the nature of excise, withholding,
ad valorem or value added, and (ii) "Tax Return" means any return, report or
similar statement (including the attached schedules) required to be filed with
respect to any Tax, including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
3.13. Required Vote. No vote of the stockholders of Parent is required
by law, the charter or by-laws of Parent or otherwise in order to consummate
the Merger and the transactions contemplated hereby.
3.14. Insurance. The Parent Disclosure Schedule sets forth all material
policies of insurance or programs of self-insurance by which Parent or any of
its Subsidiaries or any of their respective properties or assets are covered
against present losses, all of which are now in full force and effect. Parent
agrees to maintain such policies (or policies of substantially the same nature)
in full force and effect at all times until the Effective Time. On or before
October 31, 1998, Parent will provide the Company a schedule which shall set
forth for the current policy year and each of the preceding five policy years
(i) a summary of the loss experience under each policy; (ii) a statement
describing each claim under an insurance policy which sets forth the name of the
claimant, a description of the policy, and the amount and a brief description of
the claim; and (iii) a statement describing the loss experience for all claims
that were self-insured, including the number and aggregate cost of such claims.
Neither Parent nor any of its Subsidiaries have received any refusal of coverage
or any notice that a defense will be afforded with reservation of rights.
3.15. Intellectual Property. Parent and its Subsidiaries own or possess
adequate licenses or other valid rights to use all patents, patent rights,
trademarks, trademark rights and proprietary information used or held for use in
connection with their respective business as currently being conducted, except
where
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the failure to own or possess such licenses and other rights would not have,
individually or in the aggregate, a Material Adverse Effect on Parent, and there
are no assertions or claims challenging the validity of any of the foregoing
which are likely to have, individually or in the aggregate, a Material Adverse
Effect on Parent. The conduct of Parent's and its Subsidiaries' businesses as
currently conducted does not conflict with any patents, patent rights, licenses,
trademarks, trademark rights, trade names, trade name rights or copyrights of
others in any way likely to have, individually or in the aggregate, a Material
Adverse Effect on Parent. The systems, processes, and computer software and
hardware used, operated, sold or licensed by Parent or its Subsidiaries that is
material to its business or its internal operations is capable of providing or
is being or will be adapted, or is capable of being replaced, to provide
uninterrupted millennium functionality to record, store, process and present
calendar dates falling on or after January 1, 2000 in substantially the same
manner and with substantially the same functionality as such systems, processes,
software and hardware records, stores, processes and presents such calendar
dates falling on or before December 31, 1999, except as would not have a
Material Adverse Effect on Parent. The costs of the adaptations and replacements
referred to in the prior sentence will not have a Material Adverse Effect on
Parent.
3.16. Material Contracts. The Parent Disclosure Schedule lists the
following contracts and other agreements to which Parent or any of its
Subsidiaries is a party (other than intercompany arrangements) as of the date
hereof (collectively, the "Parent Contracts"):
(a) any agreement (or group of related agreements) for the lease of
personal property to or from any person providing for lease payments in excess
of $5,000,000 per annum and a term of more than one year;
(b) any agreement (or group of related agreements) for the purchase or
sale of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing or receipt of services, the performance of which
has a term more than six months, and involves consideration in excess of
$5,000,000.
(c) any partnership or joint venture agreement;
(d) any agreement (or group of related agreements) under which it has
created, incurred, assumed, or guaranteed any indebtedness for borrowed money,
or any capitalized lease obligation, in excess of $5,000,000, or under which it
has imposed a lien, security interest or other encumbrance on any of its assets,
tangible or intangible, to secure such indebtedness or obligations;
(e) any agreement which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of the
business of Parent and its Subsidiaries, taken as a whole, or the Company and
its Subsidiaries, taken as a whole, is conducted;
(f) any agreement with any of the stockholders of Parent and their
affiliates relating to the voting, transfer or disposition of Parent's
securities;
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance or other material plan or
arrangement (including any employee benefit plan) for the benefit of its current
or former directors, officers and employees;
(h) any collective bargaining agreement;
(i) all turnkey and footage drilling contracts and all daywork drilling
contracts for amounts in excess of $2,000,000 or that are not terminable or
subject to completion within 90 days;
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(j) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect on Parent; or
(k) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $5,000,000 other than
agreements entered into in the ordinary course.
Except as disclosed in the Parent Disclosure Schedule, there is no contract or
agreement that is material to the business, financial condition or results of
operations of Parent and its Subsidiaries, taken as a whole. Neither Parent nor
any of its Subsidiaries is in violation or default under (nor does there exist
any condition which upon the passage of time or the giving of notice would cause
a violation or default under) any Parent Contract, other than such violations or
defaults as would not have a Material Adverse Effect on Parent. To the knowledge
of Parent, none of the other parties to the Parent Contracts are in violation of
or in default under (nor does there exist any condition which upon the passage
of time or the giving of notice would cause a violation or default under) any
Parent Contract, other than such violations or defaults as would not have a
Material Adverse Effect on Parent.
3.17. Ownership of Merger Sub; No Prior Activities. Merger Sub is a
direct, wholly owned subsidiary of Parent. Except for obligations or liabilities
incurred in connection with its incorporation or organization and the
transactions contemplated by this Agreement and except for this Agreement and
any other agreements or arrangements contemplated by this Agreement, Merger Sub
has not and will not have incurred, directly or indirectly, through any
Subsidiary or affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
3.18. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Merger Sub.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule delivered by the Company to
Parent prior to the execution of this Agreement (the "Company Disclosure
Schedule" and together with the Parent Disclosure Schedule, the "Disclosure
Schedule"), the Company represents and warrants to Parent and Merger Sub that:
4.1. Organization, Qualification, Etc. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to own its
properties and assets and to carry on its business as it is now being conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its properties or the conduct of its
business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. The copies of the
Company's Restated Certificate of Incorporation, as amended, and Amended and
Restated Bylaws which have been delivered to Parent are complete and correct and
in full force and effect on the date hereof. Each of the Company's Significant
Subsidiaries is duly organized, validly existing and (if applicable) in good
standing under the laws of its jurisdiction of incorporation or organization,
has the power and authority to own its properties and to carry on its business
as it is now being conducted, and is duly qualified to do business and is (if
applicable) in good standing in each jurisdiction in which the ownership of its
property or the conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified or (if applicable) in good
standing would not, individually or in the
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aggregate, have a Material Adverse Effect on the Company. All the outstanding
shares of capital stock of, or other ownership interests in, the Company's
Significant Subsidiaries are validly issued, fully paid and non-assessable and
are owned by the Company, directly or indirectly, free and clear of all liens,
claims, charges or encumbrances, except for restrictions contained in credit
agreements and similar instruments to which the Company is a party under which
no event of default has occurred or arisen. There are no existing options,
rights of first refusal, preemptive rights, calls or commitments of any
character relating to the issued or unissued capital stock or other securities
of, or other ownership interests in, any Significant Subsidiary of the Company.
4.2. Capital Stock. The authorized capital stock of the Company
consists of 100,000,000 shares of Company Common Stock, and 20,000,000 shares of
preferred stock, par value $.01 per share ("Company Preferred Stock"), of which
1,000,000 shares have been designated as Series A Junior Participating Preferred
Stock ("Company Series A Preferred Stock"). As of August 21, 1998, 18,193,945
shares of Company Common Stock and no shares of Company Preferred Stock were
issued and outstanding, and no shares of Company Common Stock were held in the
Company's treasury. All the outstanding shares of Company Common Stock have been
validly issued and are fully paid and nonassessable. As of August 21, 1998,
there were no outstanding subscriptions, convertible or exchangeable securities,
options, warrants, or other rights, arrangements or commitments obligating the
Company to issue, deliver or sell any shares of its capital stock or debt
securities, or any securities of any kind convertible into its capital stock, or
obligating the Company to grant, extend or enter into any such subscription,
option, warrant, or other right, arrangement or commitment, other than: (a)
rights ("Company Rights") to acquire shares of the Company Series A Preferred
Stock pursuant to the Rights Agreement, dated as of August 21, 1998, between the
Company and Norwest Bank Minnesota, N.A. (the "Company Rights Plan"); (b)
options and other similar rights (the "Company Stock Options") to receive or
acquire 1,296,600 shares of the Company Common Stock granted on or prior to
August 21, 1998, pursuant to employee incentive or benefit plans, programs and
arrangements and nonemployee director plans; and (c) warrants to purchase an
aggregate of 397,000 shares of Company Common Stock (the "Company Warrants").
Except for the issuance of shares of the Company Common Stock pursuant to the
options, warrants and other rights referred to in clauses 4.2(a), (b) and (c),
since August 21, 1998, no shares of Company Common Stock or Company Preferred
Stock have been issued and no options, warrants or other securities convertible
into shares of capital stock of the Company have been issued or granted. Section
4.2 of the Company Disclosure Schedule sets forth a true and complete list of
all Company Stock Options and Company Warrants, showing for each holder the
number and type of Company Stock Options and Company Warrants held, the exercise
prices thereof, and the dates of grant, expiration and vesting thereof. The
Company has made available to Parent complete and correct copies of all
agreements evidencing the Company Stock Options and Company Warrants. The
Company has not granted any registration rights with respect to its securities
that are currently exercisable.
4.3. Corporate Authority Relative to this Agreement; No Violation. The
Company has the requisite corporate power and authority to execute and deliver
this Agreement and the Company Stock Option Agreement, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Company Stock Option Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors of the Company and, except for the adoption
of this Agreement by its stockholders, no other corporate proceedings on the
part of the Company are necessary to authorize the consummation of the
transactions contemplated hereby and thereby. The Board of Directors of the
Company has taken all appropriate action so that none of the Company, Parent or
Merger Sub will be subject to the limitations on "business combinations" set
forth in Section 203 of Delaware Law by virtue of (a) the Company, Parent and
Merger Sub entering into this Agreement, (b) the Company and Parent entering
into the Company Stock Option Agreement, (c) Parent and the parties thereto
entering into the Stockholder Agreements and (d) the consummation by the parties
to the agreements referred to in clauses (a), (b) and (c) of the transactions
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contemplated hereby and thereby. The Board of Directors of the Company has
determined that the transactions contemplated by this Agreement are advisable
and in the best interests of the Company and its stockholders and to recommend
to such stockholders that they adopt this Agreement. Neither the Company nor any
affiliate or associate of the Company has, at any time during the last three
years, owned in excess of 15% of the Parent Common Stock. This Agreement and the
Company Stock Option Agreement have been duly and validly executed and delivered
by the Company and, assuming this Agreement and the Company Stock Option
Agreement, as applicable, constitutes a valid and binding agreement of the other
parties hereto and thereto, this Agreement and the Company Stock Option
Agreement constitute valid and binding agreements of the Company, enforceable
against the Company in accordance with their terms (except insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
The Company is not subject to or obligated under any charter, by-law or contract
provision or any license, franchise or permit, or subject to any order or
decree, which would be breached or violated by its executing or, subject to the
adoption of this Agreement by its stockholders, carrying out the transactions
contemplated by this Agreement and the Company Stock Option Agreement, except
for any breaches or violations which would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Other than in
connection with or in compliance with the provisions of Delaware Law, the
Securities Act, the Exchange Act, the HSR Act, Section 4043 of ERISA and the
securities or blue sky laws of the various states (collectively, the "Company
Required Approvals"), no authorization, consent or approval of, or filing with,
any governmental body or authority is necessary for the consummation by the
Company of the transactions contemplated by this Agreement, except for such
authorizations, consents, approvals or filings, the failure to obtain or make
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company or substantially impair or delay the consummation of the
transactions contemplated hereby.
4.4. Reports and Financial Statements. The Company has previously
furnished to Parent true and complete copies of: (a) the Company's Annual Report
on Form 10-K filed with the SEC for the year ended December 31, 1997; (b) the
Company's Quarterly Reports on Form 10-Q filed with the SEC for the quarters
ended March 31, 1998 and June 30, 1998; (c) the definitive proxy statement filed
by the Company on April 13, 1998; (d) each final prospectus filed by the Company
with the SEC since November 1, 1997, except any final prospectus on Form S-8;
and (e) all Current Reports on Form 8-K filed by the Company with the SEC since
January 1, 1998. As of their respective dates, such reports, proxy statements
and prospectuses (collectively, "Company SEC Reports") (i) complied as to form
in all material respects with the applicable requirements of the Securities Act,
the Exchange Act, and the rules and regulations promulgated thereunder and (ii)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any Company SEC
Report has been revised or superseded by a later filed Company SEC Report, none
of Company SEC Reports contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in order
to make the statement therein, in light of the circumstances under which they
were made, not misleading. The audited consolidated financial statements and
unaudited consolidated interim financial statements included in the Company SEC
Reports (including any related notes and schedules) have been prepared in
accordance with and fairly present the financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the results of their
operations and their cash flows for the periods or as of the dates then ended
(subject, where appropriate, to normal year-end adjustments), in each case in
accordance with past practice and GAAP consistently applied during the periods
involved (except (i) as otherwise disclosed in the notes thereto, (ii) in the
case of unaudited interim financial statements, such differences in presentation
or omissions as are permitted by Rule 10-01 of Regulation S-X promulgated by the
SEC and (iii) the unaudited interim financial statements do not contain all
notes required by GAAP). Since November 4, 1997, the Company has timely filed
all material reports, registration statements and other filings required to be
filed by it with the SEC under the rules and regulations of the SEC.
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4.5. No Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, of a type required to be reflected on a
balance sheet prepared in accordance with GAAP, except (a) liabilities or
obligations reflected in Company SEC Reports filed after December 31, 1997 but
prior to the date hereof ("Company Filed SEC Reports"), (b) liabilities and
obligations incurred under this Agreement and fees and expenses related thereto,
(c) liabilities and obligations incurred in the ordinary course of business
after June 30, 1998 and (d) liabilities or obligations which are not reasonably
expected, individually or in the aggregate, to have a Material Adverse Effect on
the Company.
4.6. No Violation of Law. The businesses of the Company and its
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental body or authority (provided that no
representation or warranty is made in this Section 4.6 with respect to
Environmental Laws) except (a) as described in the Company Filed SEC Reports and
(b) for violations or possible violations which would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
4.7. Environmental Laws and Regulations. Except as described in the
Company Filed SEC Reports, (a) the Company and each of its Subsidiaries is in
compliance with all applicable Environmental Laws, which compliance includes,
but is not limited to, the possession by the Company and its Subsidiaries of all
material permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof, except
for non-compliance which would not, individually or in the aggregate, have a
Material Adverse Effect on the Company; (b) neither the Company nor any of its
Subsidiaries has received written notice of, or, to the knowledge of the
Company, is the subject of, any Environmental Claims which would, individually
or in the aggregate, have a Material Adverse Effect on the Company; and (c) to
the knowledge of the Company, there are no facts, circumstances or conditions in
connection with the operation of its business or any currently or formerly
owned, leased or operated facilities that are reasonably likely to lead to any
such Environmental Claims in the future, except for any such Environmental
Claims which would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
4.8. No Undisclosed Employee Benefit Plan Liabilities or Severance
Arrangements. Except as described in the Company Filed SEC Reports, all
"employee benefit plans," as defined in Section 3(3) of ERISA, maintained or
contributed to by the Company or its Subsidiaries are in compliance with all
applicable provisions of ERISA and the Code, and the Company and its
Subsidiaries do not have any liabilities or obligations with respect to any such
employee benefit plans, whether accrued, contingent or otherwise, except (a) as
described in the Company Filed SEC Reports and (b) for instances of
non-compliance or liabilities or obligations that would not, individually or in
the aggregate, have a Material Adverse Effect on the Company. No employee of the
Company will be entitled to any additional benefits or any acceleration of the
time of payment or vesting of any benefits under any employee incentive or
benefit plan, program or arrangement as a result of the transactions
contemplated by this Agreement.
4.9. Absence of Certain Changes or Events. Other than as disclosed in
the Company Filed SEC Reports, since January 1, 1998 the businesses of the
Company and its Subsidiaries have been conducted in all material respects in the
ordinary course consistent with past practice, and there has not been any event,
occurrence, development or state of circumstances or facts that has had, or
would have, a Material Adverse Effect on the Company.
4.10. Litigation. Except as described in the Company Filed SEC Reports
or previously disclosed in writing to Parent, there are no actions, suits or
proceedings pending (or, to the Company's knowledge, threatened) against or
affecting the Company or its Subsidiaries, or any of their respective properties
at law or in equity, or before any federal, state, local or foreign governmental
body or authority
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which, individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect on the Company. On or before October 31, 1998, the
Company will provide to Parent a complete list of all pending or threatened
actions, suits or proceedings involving amounts in excess of $250,000.
4.11. Company Rights Plan. Under the terms of the Company Rights Plan,
as amended prior to the execution of this Agreement, the execution and delivery
of this Agreement, the Company Stock Option Agreement and the Stockholder
Agreements, the performance of the transactions contemplated by this Agreement
or such other agreements in accordance with the terms hereof and thereof will
not (except to the extent caused by Parent's becoming the beneficial owner of
any Company Common Stock other than in accordance with this Agreement, the
Company Stock Option Agreement or the Stockholder Agreements) cause (i) Company
Rights to become exercisable under the Company Rights Plan or (ii) a
"Distribution Date", "Stock Acquisition Date", "Flip-In Trigger Date", "Flip-In
Event" or "Flip-Over Event" (as such terms are defined in the Company Rights
Plan) to occur upon the consummation of any such transactions. In addition, the
Company Rights Plan has been amended so that the Company Rights will expire
immediately prior to the Effective Time.
4.12. Lack of Ownership of Parent Common Stock. Neither the Company nor
any of its Subsidiaries owns any shares of Parent Common Stock or other
securities convertible into shares of Parent Common Stock.
4.13. Tax Matters.
(a) All federal, state, local and foreign Tax Returns required to be
filed by or on behalf of the Company, each of its Subsidiaries, and each
affiliated, combined, consolidated or unitary group of which the Company or any
of its Subsidiaries (i) is a member (a "Current Company Group") or (ii) has been
a member within six years prior to the date hereof but is not currently a
member, but only insofar as any such Tax relates to a taxable period ending on a
date within the last six years (a "Past Company Group" and together with Current
Company Groups, a "Company Affiliated Group") and Anadarko Drilling Company have
been timely filed, and all returns filed are complete and accurate except to the
extent any failure to file or any inaccuracies in filed returns would not,
individually or in the aggregate, have a Material Adverse Effect on the Company
(it being understood that the representations made in this Section 4.13, to the
extent that they relate to Past Company Groups and Anadarko Drilling Company, or
to any Subsidiary of the Company for periods prior to the time such Subsidiary
was acquired by the Company, are made to the knowledge of the Company). All Tax
Returns include any required disclosure of all positions taken therein that
could give rise to a substantial underpayment penalty within Section 6662 of the
Code or similar provision of state, local, foreign or other law. All Taxes due
and owing by the Company, any Subsidiary of the Company or any Company
Affiliated Group and Anadarko Drilling Company have been paid, or adequately
reserved for, except to the extent any failure to pay or reserve would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
There is no audit examination, deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any Taxes due and owing by
the Company, any Subsidiary of the Company or any Company Affiliated Group which
would, individually or in the aggregate, have a Material Adverse Effect on the
Company. All assessments for Taxes due and owing by the Company, any Subsidiary
of the Company or any Company consolidated group with respect to completed and
settled examinations or concluded litigation have been paid. As soon as
practicable after the public announcement of the execution of this Agreement,
the Company will provide Parent with written schedules of (i) the taxable years
of the Company for which the statutes of limitations with respect to federal
income Taxes have not expired, and (ii) with respect to federal income Taxes,
those years for which examinations have been completed,those years for which
examinations are presently being conducted, and those years for which
examinations have not yet been initiated. The Company and each of its
Subsidiaries have complied in all material respects with all rules and
regulations relating to the withholding of Taxes, except to the extent any such
failure to comply would not,
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individually or in the aggregate, have a Material Adverse Effect on the Company.
Neither the Company nor any Subsidiary is (nor has it ever been) a party to any
tax sharing agreement and has not assumed the tax liability of any other person
under a contract; has ever filed a consent under Section 341(f) of the Code; is
required to make any adjustment under Section 481(a) of the Code for any tax
year ending after the Effective Time by reason of a change in method of
accounting or otherwise; or is required to make a payment with respect to the
remuneration of an employee which would result in non-deductible expense
pursuant to Section 162(m) of the Code. Neither the Company nor any Subsidiary
is (nor has it ever been) a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii).
(b) None of the Company nor any of its Subsidiaries knows of any fact
or has taken any action that could reasonably be expected to prevent the Merger
from constituting transactions described in Sections 368(a) of the Code.
(c) Any amount or other entitlement that could be received (whether in
cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or director
of the Company or any of its affiliates who is a "disqualified individual" (as
such term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employee benefit plan or other compensation arrangement currently in effect
would not be characterized as an "excess parachute payment" or a "parachute
payment" (as such terms are defined in Section 280G(b)(1) of the Code).
4.14. Required Vote. The affirmative vote of the holders of a majority
of the outstanding shares of the Company Common Stock (the "Company Stockholder
Approval") is required to adopt the Merger Agreement. No other vote of the
stockholders of the Company is required by law, the charter or by-laws of the
Company or otherwise in order for the Company to consummate the Merger and the
transactions contemplated hereby and by the Company Stock Option Agreement.
4.15. Insurance. The Company Disclosure Schedule sets forth all
material policies of insurance or programs of self-insurance by which the
Company or any of its Subsidiaries or any of their respective properties or
assets are covered against present losses, all of which are now in full force
and effect. The Company agrees to maintain such policies (or policies of
substantially the same nature) in full force and effect at all times until the
Effective Time. On or before October 31, 1998, the Company will provide Parent a
schedule which shall set forth for the current policy year and each other policy
year since November 1996 (i) a summary of the loss experience under each policy;
(ii) a statement describing each claim under an insurance policy; and (iii) a
statement describing the loss experience for all claims that were self-insured,
including the number and aggregate cost of such claims. Neither the Company nor
any of its Subsidiaries have received any refusal of coverage or any notice that
a defense will be afforded with reservation of rights.
4.16. Intellectual Property. The Company and its Subsidiaries own or
possess adequate licenses or other valid rights to use all patents, patent
rights, trademarks, trademark rights and proprietary information used or held
for use in connection with their respective business as currently being
conducted, except where the failure to own or possess such licenses and other
rights would not have, individually or in the aggregate, a Material Adverse
Effect on the Company, and there are no assertions or claims challenging the
validity of any of the foregoing which are likely to have, individually or in
the aggregate, a Material Adverse Effect on the Company. The conduct of the
Company's and its Subsidiaries' businesses as currently conducted does not
conflict with any patents, patent rights, licenses, trademarks, trademark
rights, trade names, trade name rights or copyrights of others in any way likely
to have, individually or in the aggregate, a Material Adverse Effect on the
Company. The systems, processes, and computer software and hardware used,
operated, sold or licensed by the Company or its Subsidiaries that is material
to its business or its internal operations is capable of providing or is being
or will be adapted, or is capable of being replaced, to
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provide uninterrupted millennium functionality to record, store, process and
present calendar dates falling on or after January 1, 2000 in substantially the
same manner and with substantially the same functionality as such systems,
processes, software and hardware records, stores, processes and presents such
calendar dates falling on or before December 31, 1999, except as would not have
a Material Adverse Effect on the Company. The costs of the adaptations and
replacements referred to in the prior sentence will not have a Material Adverse
Effect on the Company.
4.17. Material Contracts. The Company Disclosure Schedule lists the
following contracts and other agreements to which the Company or any of its
Subsidiaries is a party (other than intercompany arrangements) as of the date
hereof (collectively, the "Company Contracts"):
(a) any agreement (or group of related agreements) for the lease of
personal property to or from any person providing for lease payments in excess
of $500,000 per annum and a term of more than one year;
(b) any agreement (or group of related agreements) for the purchase or
sale of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing or receipt of services, the performance of which
has a term more than six months, and involves consideration in excess of
$500,000;
(c) any partnership or joint venture agreement;
(d) any agreement (or group of related agreements) under which it has
created, incurred, assumed, or guaranteed any indebtedness for borrowed money,
or any capitalized lease obligation, in excess of $500,000, or under which it
has imposed a lien, security interest or other encumbrance on any of its assets,
tangible or intangible, to secure such indebtedness or obligations;
(e) any agreement which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of the
business of the Company and its Subsidiaries, taken as a whole, or Parent and
its Subsidiaries, taken as a whole, is conducted;
(f) any agreement with any of the stockholders of the Company and their
affiliates relating to the voting, transfer or disposition of the Company's
securities;
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan or
arrangement (including any employee benefit plan) for the benefit of its current
or former directors, officers, and employees;
(h) any collective bargaining agreement;
(i) all turnkey and footage drilling contracts and all daywork drilling
contracts for amounts in excess of $2,000,000 or that are not terminable or
subject to completion within 90 days;
(j) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect on the Company; or
(k) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $500,000, other than
agreements entered into in the ordinary course.
Except as disclosed in the Company Disclosure Schedule, there is no contract or
agreement that is material
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to the business, financial condition or results of operations of the Company and
its Subsidiaries, taken as a whole. Neither the Company nor any of its
Subsidiaries is in violation or default under (nor does there exist any
condition which upon the passage of time or the giving of notice would cause a
violation or default under) any Company Contract, other than such violations or
defaults as would not have a Material Adverse Effect on the Company. To the
knowledge of the Company, none of the other parties to the Company Contracts are
in violation of or in default under (nor does there exist any condition which
upon the passage of time or the giving of notice would cause a violation or
default under) any Company Contract, other than such violations or defaults as
would not have a Material Adverse Effect on the Company.
4.18. Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
4.19 Opinion of Financial Advisor. The Company has received the opinion
of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (a copy of which has been
delivered to Parent) to the effect that the consideration to be received in the
Merger is fair to the holders of Company Common Stock from a financial point of
view.
ARTICLE V
COVENANTS
5.1. Affirmative Covenants of the Company. The Company hereby covenants
and agrees that, prior to the Effective Time, unless otherwise expressly
contemplated by this Agreement or consented to in writing by Parent, the Company
will and will cause its Subsidiaries to:
(a) operate its business only in the usual and ordinary course
consistent with past practices.
(b) use its commercially reasonable efforts to preserve substantially
intact its business organizations, maintain its rights and franchises, retain
the services of its officers and key employees and maintain its material
relationships with its customers and suppliers.
(c) use its commercially reasonable efforts to maintain and keep its
properties and assets in as good repair and condition in all material respects
as at present, ordinary wear and tear excepted.
(d) use its commercially reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage to that
currently maintained; provided, however, that, in the event the Company deems it
necessary to take certain actions that would otherwise be proscribed by clauses
5.1(a) through (c), the Company shall consult with Parent and Parent shall
consider in good faith the Company's request to take such actions and not
unreasonably withhold its consent.
5.2. Negative Covenants of the Company. Except as expressly
contemplated by this Agreement, as set forth in the Company Disclosure Schedule
or otherwise consented to in writing by Parent, from the date of this Agreement
until the Effective Time, the Company will not directly or indirectly, and will
not permit any of its Subsidiaries to directly or indirectly, do any of the
following:
(a) (i) increase the compensation payable to, or to become payable to,
any director or executive officer; (ii) grant any severance or termination pay
(other than pursuant to the normal severance policy of the Company or its
Subsidiaries as in effect on the date of this Agreement) to, or enter into any
employment or severance agreement with, any director, officer or employee; or
(iii) establish, adopt, enter into
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or amend any employee benefit plan or arrangement except as may be required by
applicable law.
(b) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of capital stock, except for dividends by a
Subsidiary of the Company to the Company or another Subsidiary of the Company.
(c) (i) redeem, purchase or otherwise acquire any shares of its or any
of its Subsidiaries' capital stock or any securities or obligations convertible
into or exchangeable or exercisable for any shares of its or its Subsidiaries'
capital stock including, but not limited to, options, warrants and other rights
to acquire securities (other than any such acquisition directly from any wholly
owned Subsidiary of the Company in exchange for capital contributions or loans
to such Subsidiary), (ii) effect any recapitalization; or (iii) split, combine
or reclassify any of its or its respective Subsidiaries' capital stock or issue
or authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its or its respective Subsidiaries'
capital stock.
(d) (i) issue, deliver, award, grant or sell, or authorize or propose
the issuance, delivery, award, grant or sale (including the grant of any
security interests, liens, claims, pledges or other encumbrances) of, any shares
of any class of its or its Subsidiaries' capital stock (including shares held in
treasury), any securities convertible into or exercisable or exchangeable for
any other shares, or any rights, warrants or options to acquire, any such shares
(except for the issuance of shares upon the exercise of Company Stock Options
outstanding on the date of this Agreement in accordance with their terms or
issuances by any Subsidiary of the Company to the Company or any other
Subsidiary of the Company); (ii) amend or otherwise modify the terms of any such
rights, warrants or options the effect of which shall be to make such terms more
favorable to the holders thereof (including, without limitation, declaring a
"change of control" or similar event thereunder); or (iii) take any action to
accelerate the vesting of any Company Stock Options.
(e) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest valued in excess of $1 million or portion of the
assets (for a purchase price in excess of $1 million) of, or by any other
manner, any corporation, partnership, association or other business,
organization or division (other than a wholly owned Subsidiary) thereof, or
otherwise acquire or agree to acquire any assets of any other person (other than
the purchase of assets from suppliers or vendors in the ordinary course of
business and consistent with past practice) which are material, individually or
in the aggregate, to the Company and its Subsidiaries, taken as a whole.
(f) other than (i) dispositions or proposed dispositions set forth on
the Company Disclosure Schedule, (ii) as may be necessary or required by law to
consummate the transactions contemplated hereby or (iii) dispositions in the
ordinary course of business consistent with past practice not to exceed $50,000
individually or $250,000 in the aggregate, sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, or agree to sell, lease, exchange,
mortgage, pledge, transfer or otherwise dispose of, any of its material assets
or any material assets of any of the Company's Significant Subsidiaries.
(g) propose or adopt any amendments to its Restated Certificate of
Incorporation, as amended, or, as to its Amended and Restated Bylaws, any
amendments that would have an adverse impact on the consummation of the
transactions contemplated by this Agreement.
(h) (i) change any of its methods of accounting in effect at December
31, 1997 or (ii) make or rescind any express or deemed election relating to
taxes, settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes (except where
the amount of such settlements or controversies, individually or in the
aggregate, does not exceed $250,000), or change
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any of its methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income tax
returns for the taxable year ended December 31, 1997, except, in the case of
clause (i) or clause (ii), as may be required by Law or generally accepted
accounting principles.
(i) (A) spend or commit to spend more than $1 million in the aggregate
on the purchase of new or used equipment, supplies (including drill pipe and
other capital expenditures not referred to in (ii) below) (provided that the
Company shall inform Parent prior to committing to make capital expenditures in
excess of $500,000 in the aggregate), except for (i) capital expenditures
heretofore approved by the Company's Board of Directors and described in the
Company Disclosure Schedule; and (ii) sustaining capital expenditures for
drilling equipment in the ordinary course of business consistent with past
practice; or (B) except for draw downs on the existing working capital line of
credit, incur any obligation for borrowed money or purchase money indebtedness,
whether or not evidenced by a note, bond, debenture or similar instrument,
except in the ordinary course of business consistent with past practice.
(j) take or agree to take any action that would or is reasonably likely
to result in any of the Company's representations and warranties set forth in
this Agreement being untrue or in any of the conditions to the Merger not being
satisfied.
(k) commit to do any of the foregoing;
provided, however, that, in the event the Company deems it necessary to
take certain actions that would otherwise be proscribed by this Section 5.2, the
Company shall consult with Parent and Parent shall consider in good faith the
Company's request to take such actions.
5.3. Negative Covenants of Parent. Except as expressly contemplated by
this Agreement or otherwise consented to in writing by the Company, from the
date of this Agreement until the Effective Time, Parent will not, and will not
permit Merger Sub to, do any of the following:
(a) amend any of the material terms or provisions of the Parent Common
Stock.
(b) knowingly take any action which would result in a failure to
maintain the trading of Parent Common Stock on the American Stock Exchange.
(c) declare or pay any dividends or other distribution (whether in
cash, stock or other property) on outstanding shares of capital stock.
(d) take or agree to take any action that would or is reasonably likely
to result in any of Parent's or Merger Sub's representations and warranties set
forth in this Agreement being untrue or in any of the conditions to the Merger
not being satisfied.
(e) commit to do any of the foregoing.
5.4. Access and Information. Subject to confidentiality agreements to
which the Company or Parent or any of their respective Subsidiaries is a party,
each of the Company and Parent shall, and shall cause its Subsidiaries to, (a)
afford to the other party and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Representatives") reasonable access at reasonable times upon reasonable prior
notice to its officers, employees, agents, properties, offices and other
facilities and its Subsidiaries and to the books and records thereof and (b)
furnish promptly to the other party and its Representatives such information
concerning its business, properties, contracts, records and personnel
(including, without limitation, financial, operating and other data and
information) as may be
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reasonably requested, from time to time, such other party. Notwithstanding the
foregoing, no party shall be required to provide any information which it
reasonably believes it may not provide to the other party by reason of
applicable law, rules or regulations, which constitutes information protected by
attorney/client privilege, or which it is required to keep confidential by
reason of contract or agreement with third parties. The parties hereto will make
reasonable and appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply. Each of
Parent and the Company agrees that (i) it will, and will cause its
Representatives to, treat any information obtained hereunder in strict
accordance with Section 5.8 and (ii) it will not, and will cause its respective
Representatives not to, use any information obtained pursuant to this Section
5.4 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement.
5.5. Registration Rights. Parent hereby covenants and agrees to grant
certain registration rights as described herein to each stockholder of the
Company who shall be subject to the resale restrictions of Rule 145 and Rule 144
of the Securities Act as a result of the transactions contemplated hereby
(individually, a "Rule 145 Stockholder," and collectively, the "Rule 145
Stockholders"). The grant of registration rights contemplated hereby shall be
evidenced by a written agreement between Parent and the Rule 145 stockholders,
in form and substance reasonably satisfactory to Parent and such stockholders,
to be entered into prior to the Effective Time. Such agreement shall, among
other things, provide the Rule 145 Stockholders collectively, the right to
demand a single registration under the Securities Act of not less than 1,000,000
shares of Parent Common Stock received by them in the Merger, commencing on the
90th day after the Effective Time and ending on the second anniversary date of
the Effective Time and upon receipt of any such demand Parent shall (a) as soon
as practicable use its best efforts to register shares of the Parent Common
Stock under the Securities Act which are the subject of the demand, (b) provide
an indemnity relating to such registration pursuant to which Parent agrees to
indemnify the Rule 145 stockholders for claims or causes of action arising from
information about Parent included in the registration statement and (c) defray
all costs and expenses of such registration including the fees and expenses of
one counsel to the selling stockholders and all fees and expenses incurred by
Parent but excluding underwriting discounts or commissions applicable to shares
sold by such stockholders. The demand registration right shall be exercisable,
at the option of the selling stockholders, with regard to either an underwritten
offering or a shelf registration. In the event such stockholders elect a shelf
registration, Parent agrees to maintain the effectiveness of such registration
for a minimum of 180 days or until all shares covered thereby have been sold,
whichever first occurs.
5.6 No Solicitation.
(a) Except as expressly contemplated by this Agreement or otherwise
consented to in writing by Parent, from the date of this Agreement until the
earlier of the Effective Time or the date of termination of this Agreement in
accordance with its terms, the Company will not directly or indirectly, and will
not permit any of its Subsidiaries to, directly or indirectly, initiate, solicit
or encourage (including by way of furnishing information or assistance), or take
any other action to facilitate, any Company Acquisition Proposal (as defined
below), or enter into discussions or negotiate with any person or entity in
furtherance of such Company Acquisition Proposal, or enter into an agreement
with respect to any Company Acquisition Transaction (as defined below) or agree
to or endorse any Company Acquisition Proposal, or authorize or permit any of
the officers, directors or employees of the Company or any of its Subsidiaries
or any investment banker, financial advisor, attorney, accountant or other
representative retained by the Company or any of its Subsidiaries to take any
such action, and the Company shall notify Parent of all relevant terms of any
Company Acquisition Proposal received by the Company or any of its Subsidiaries
or by any such officer, director, investment banker, financial advisor or
attorney within two business days after receipt thereof, and if such inquiry or
proposal is in writing, the Company shall deliver or cause to be delivered to
Parent a copy of such inquiry or proposal; provided, however, that nothing
contained in this Agreement shall prohibit the
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Board of Directors of the Company from (i) complying with Rule 14e-2 promulgated
under the Exchange Act with regard to a Company Acquisition Proposal; or (ii) at
any time prior to the satisfaction of the condition set forth in Section 7.1(b),
furnishing information to, or entering into discussions or negotiations with,
any person or entity in connection with an unsolicited, bona fide, written
Company Acquisition Proposal, recommending the same to the Company's
stockholders or otherwise communicating with the Company's stockholders
regarding such proposal in a manner permitted by law, if, and only to the extent
that (A) the Board of Directors of the Company, after consultation with legal
counsel (which may include its regularly engaged legal counsel), determines in
good faith that such action is required for the Board of Directors of the
Company to comply with its fiduciary duties to stockholders imposed by Delaware
Law; (B) prior to furnishing such information to, or entering into discussions
or negotiations with, such person or entity the Company (x) provides two
business days' written notice to Parent to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such person
or entity and (y) obtains from such person or entity a customary confidentiality
agreement; and (C) the Company determines in good faith (after consultation with
its financial advisor) that, in light of the information furnished to it
relating to such Company Acquisition Proposal, the Company Acquisition
Transaction contemplated thereby would, if consummated, result in a more
favorable transaction than the transaction contemplated by this Agreement,
taking into account the long-term prospects and interests of the Company and its
stockholders. The Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties heretofore
conducted which are prohibited pursuant to this Section 5.6(a). The Company
agrees that it will take the necessary steps to promptly inform the individuals
or entities referred to in the first sentence of this Section 5.6(a) of the
obligations undertaken in this Section 5.6(a).
(b) "Company Acquisition Proposal" means an inquiry or proposal which
relates to or contemplates a Company Acquisition Transaction.
(c) "Company Acquisition Transaction" means any of the following
transactions:
(i) any merger, consolidation, share exchange or other business
combination involving the Company or any Subsidiary of the Company (other than
any such arrangement between the Company and any of its Subsidiaries or among
any of its Subsidiaries);
(ii) any sale, exchange, transfer or other disposition (whether in the
form of an asset sale, merger or otherwise) to any person (other than Parent or
any of its Subsidiaries) of properties or assets of the Company or any of its
Subsidiaries which constitute (i) all or substantially all of the properties and
assets of the Company, (ii) all or substantially all of the properties and
assets of any Significant Subsidiary, or a material division or other business
unit of the Company or any Significant Subsidiary, or (iii) properties and
assets which are material to the business or operations of the Company at its
Subsidiaries, taken as a whole.
(iii) any tender offer or exchange offer by any person (other than the
Parent or any of its Subsidiaries) for 15% or more of the outstanding shares of
Company Common Stock; or
(iv) any acquisition of shares of Company Common Stock by any person or
group (other than Parent or any of its Subsidiaries) which would require an
amendment, waiver, termination or alteration of the Company Rights Plan so that
such acquisition would not result in such person becoming an "Acquiring Person"
under the terms of the Company Rights Plan.
5.7 Confidentiality. Between the date of this Agreement and the
Effective Time, the parties hereto will maintain in confidence, and will cause
its Representatives to maintain in confidence, and not use to the detriment of a
party to this Agreement any information obtained from a party to this Agreement
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or its Subsidiaries in connection with this Agreement or the transactions
contemplated hereby (regardless of whether such information was obtained prior
to, on or after the date of this Agreement), unless (a) such information is
already known to such receiving party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such receiving party, (b) use of such information is necessary or appropriate
in making any filing or obtaining any consent or approval required for the
consummation of the transactions contemplated hereby or (c) the furnishing or
use of such information is required by legal proceedings or applicable law or
requirement of the American Stock Exchange. Upon any termination of this
Agreement, each party will return or destroy all confidential information
provided to it by the other party.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. Special Meeting of Company Stockholders. The Company shall
promptly after the date of this Agreement take all action necessary in
accordance with applicable law and its Restated Certificate of Incorporation, as
amended, and Amended and Restated Bylaws to convene a meeting of its
stockholders to consider and vote upon the approval of this Agreement and the
Merger, and the Company shall consult with Parent in connection therewith;
provided that the Company shall use its reasonable best efforts to hold the
special meeting of stockholders within 40 days after effectiveness of the
Registration Statement. The Company, through its Board of Directors, shall
recommend approval of such matters, subject to the terms and conditions set
forth in Section 5.6.
6.2. Registration Statement; Proxy Statement.
(a) Parent promptly shall prepare and shall file with the SEC and the
American Stock Exchange a registration statement on Form S-4 under the
Securities Act (the registration statement, together with the amendments
thereto, being the "Registration Statement"), containing a proxy
statement/prospectus, in connection with the registration of the Parent Common
Stock to be issued in the Merger. The Company promptly shall prepare and file
with the SEC a proxy statement that will be the same proxy statement/prospectus
contained in the Registration Statement, and a form of proxy with respect to the
meeting of the stockholders of the Company in connection with the Merger and the
other transactions contemplated by this Agreement (such proxy
statement/prospectus, together with any amendments thereof or supplements
thereto, in each case in the form or forms mailed to such stockholders, being
the "Proxy Statement"). Each of Parent and the Company shall use its best
efforts to (i) cause the Registration Statement to become effective as promptly
as practicable after such filing and (ii) cause the Proxy Statement to be mailed
to stockholders of the Company at the earliest practicable date. Parent shall
take any action required to be taken under any applicable federal or state
securities laws in connection with the issuance of shares of Parent Common Stock
in the Merger. Each of Parent and the Company shall furnish all information
concerning it and the holders of its capital stock as the other may reasonably
request in connection with such actions. As promptly as practicable after the
Registration Statement shall have become effective, the Company shall mail the
Proxy Statement to its stockholders. The Proxy Statement shall include the
recommendation of the Board of Directors of the Company in favor of the Merger
subject to the terms and conditions set forth in Section 5.6.
(b) The information supplied by the Company for inclusion in the
Registration Statement shall not, at the time the Registration Statement is
declared effective, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. The information supplied by the
Company for inclusion in the Proxy Statement to be sent to the Company's
stockholders in connection with the special meeting of stockholders to consider
the Merger shall not, at the date the Proxy Statement (or any amendment thereof
or supplement thereto) is first mailed to stockholders, at the time of the
special stockholders' meeting or at the Effective Time,
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contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event or circumstance
relating to the Company or any of its affiliates, or its or their respective
officers or directors, occurs or exists which should be set forth in an
amendment to the Registration Statement or a supplement to the Proxy Statement,
the Company shall promptly inform Parent and the Company shall cooperate with
Parent in the prompt filing with the SEC of any necessary amendment or
supplement to the Proxy Statement and the Registration Statement and, as
required by law, in disseminating the information contained in such amendment or
supplement to the stockholders of the Company. All documents that the Company is
responsible for filing with the SEC in connection with the transactions
contemplated herein will comply as to form and substance in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations thereunder and the Exchange Act and the rules and regulations
thereunder.
(c) The information supplied by Parent for inclusion in the
Registration Statement shall not, at the time the Registration Statement is
declared effective, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. The information supplied by Parent
for inclusion in the Proxy Statement to be sent to the Company's stockholders in
connection with the special stockholders' meeting shall not, at the date the
Proxy Statement (or any amendment thereof or supplement thereto) is first mailed
to stockholders, at the time of the meeting or at the Effective Time, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein, in the light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective Time any
event or circumstances relating to Parent or any of its respective affiliates,
or to its or their respective officers or directors, occurs or exists which
should be set forth in an amendment to the Registration Statement or a
supplement to the Proxy Statement, Parent shall promptly inform the Company and
Parent shall cooperate with the Company in the prompt filing with the SEC of any
necessary amendment or supplement to the Proxy Statement and the Registration
Statement and, as required by law, in disseminating the information contained in
such amendment or supplement to the stockholders of the Company. All documents
that Parent is responsible for filing with the SEC in connection with the
transaction contemplated herein will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
(d) (i) The Company shall use its reasonable efforts to cause to be
delivered to Parent letters of PricewaterhouseCoopers LLP and, if applicable,
Xxxxx Xxxxxxxx LLP dated as of a date within five business days before the date
on which the Registration Statement shall become effective and addressed to
Parent in form and substance reasonably satisfactory to Parent and customary in
scope and substance for "comfort" letters delivered by independent public
accountants in connection with registration statements and proxy statements
similar to the Registration Statement and Proxy Statement; and (ii) Parent shall
use its reasonable efforts to cause to be delivered to the Company a letter of
PricewaterhouseCoopers LLP dated as of a date within five business days before
the date on which the Registration Statement shall become effective and
addressed to the Company in form and substance reasonably satisfactory to the
Company and customary in scope and substance for "comfort" letters delivered by
independent public accountants in connection with registration statements and
proxy statements similar to the Registration Statement and Proxy Statement.
6.3. Appropriate Action; Consents; Filings.
(a) The Company and Parent each shall use its reasonable best efforts
to (i) take, or cause to be taken, all appropriate action, and do, or cause to
be done, all things necessary, proper or advisable under applicable law or
otherwise to consummate and make effective the transactions contemplated
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by this Agreement; (ii) obtain the Parent Required Approvals and the Company
Required Approvals; and (iii) make all necessary filings, and thereafter make
any other required submissions, with respect to this Agreement and the Merger
required under (A) the Securities Act (in the case of Parent) and the Exchange
Act and the rules and regulations thereunder, and any other applicable federal
or state securities laws, (B) the HSR Act and (C) any other applicable law;
provided that Parent and the Company shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior to filing and,
if requested, accepting all reasonable additions, deletions or changes suggested
in connection therewith. The Company and Parent shall furnish all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable law (including all information required to be
included in the Proxy Statement and the Registration Statement) in connection
with the transactions contemplated by this Agreement.
(b) (i) Each of the Company and Parent shall give (or shall cause their
respective Subsidiaries to give) any notices to third parties, and shall
use, and cause their respective Subsidiaries to use, its reasonable best
efforts to obtain any third party consents (A) necessary, proper or
advisable to consummate the transactions contemplated in this Agreement,
(B) disclosed or required to be disclosed in the Company Disclosure
Schedule or the Parent Disclosure Schedule, (C) otherwise required under
any contracts, licenses, leases or other agreements in connection with the
consummation of the transactions contemplated herein or (D) required to
prevent a Company Material Adverse Effect from occurring prior to or after
the Effective Time or a Parent Material Adverse Effect from occurring after
the Effective Time.
(ii) In the event that either party shall fail to obtain any third
party consent described in Section 6.3(b)(i), such party shall use its
reasonable best efforts, and shall take any such actions reasonably
requested by the other party hereto, to minimize any adverse effect upon
the Company and Parent, their respective Subsidiaries, and their respective
businesses resulting, or which could reasonably be expected to result after
the Effective Time, from the failure to obtain such consent.
6.4. Tax Treatment; Affiliates.
(a) From and after the date hereof and until the Effective Time, none
of Parent, the Company or any of their respective Subsidiaries shall knowingly
(i) take any action, or fail to take any reasonable action, as a result of which
the Merger would fail to qualify as a reorganization within the meaning of
Section 368(a) of the Code or (ii) enter into any contract, agreement,
commitment or arrangement to take or fail to take any such action. Each of the
parties shall use its reasonable best efforts to obtain the opinion of counsel
referred to in Section 7.1(d).
(b) Following the Effective Time, neither Parent nor any of its
Subsidiaries shall knowingly take any action or knowingly cause any action to be
taken which would cause the Merger to fail to qualify as a reorganization within
the meaning of Section 368(a) of the Code (and any comparable provisions of
applicable state or local law).
(c) The Company shall use its best efforts to obtain from any person
who may be deemed to have become an affiliate of the Company after the date of
this Agreement and on or prior to the Effective Time a written agreement
substantially in the form of Exhibit 6.4 as soon as practicable after attaining
such status.
(d) The Company shall deliver to Parent a statement dated no more than
30 days prior to the Effective Time in form and substance as is described in
Treas. Reg. Section 1.1445-2(c)(3)(i).
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6.5. Public Announcements. Parent and the Company will agree upon the
timing and content of the initial press release to be issued describing the
transactions contemplated by this Agreement, and will not make any public
announcement thereof prior to reaching such agreement unless required to do so
by applicable law or regulation. Thereafter, unless otherwise required by
applicable law or stock exchange requirements (and in that event, only if time
does not permit), Parent and the Company shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to the Merger and shall not issue any such press release or make any such public
statement prior to such consultation.
6.6. AMEX Listing. Parent shall use its best efforts to cause the
shares of Parent Common Stock to be issued in the Merger to be approved for
listing on the American Stock Exchange prior to the Effective Time.
6.7. Indemnification of Directors and Officers.
(a) The Restated Certificate of Incorporation and Bylaws of the
Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Restated Certificate of Incorporation, as
amended, and Amended and Restated Bylaws of the Company on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years after the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at any time prior to
the Effective Time were directors or officers of the Company in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by Law.
(b) From and after the Effective Time, the Surviving Corporation and
Parent (each, an "Indemnifying Party") shall jointly and severally indemnify,
defend and hold harmless the present and former officers and directors of the
Company or any of its Subsidiaries (collectively, the "Indemnified Parties")
against all losses, expenses, claims, damages, liabilities or amounts that are
paid in settlement of (with the approval of Parent and the Surviving Corporation
(which approval shall not unreasonably be withheld or delayed)), or otherwise in
connection with, any threatened or actual claim, action, suit, proceeding or
investigation (a "Claim"), based in whole or in part on the fact that such
person is or was a director or officer of the Company or any of its Subsidiaries
and arising out of actions or omissions occurring at or prior to the Effective
Time (including, without limitation, the transactions contemplated by this
Agreement), in each case to the full extent permitted under Delaware Law (and
shall pay expenses (including fees and disbursements of counsel), as incurred,
in advance of the final disposition of any such action or proceeding to each
Indemnified Party to the fullest extent permitted under Delaware Law, upon
receipt from the Indemnified Party to whom expenses are advanced of the
undertaking to repay such advances contemplated by Delaware Law).
(c) Without limiting the foregoing, in the event any Claim is brought
against any Indemnified Party (whether arising before or after the Effective
Time) after the Effective Time (i) the Indemnified Parties may retain the
Company's regularly engaged independent legal counsel, or other independent
legal counsel satisfactory to them provided that such other counsel shall be
reasonably acceptable to the Surviving Corporation, (ii) the Indemnifying
Parties shall jointly and severally pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are received
and (iii) the Indemnifying Parties will use their reasonable best efforts to
assist in the vigorous defense of any such matter, provided that no Indemnifying
Party shall be liable for any settlement of any Claim effected without its
written consent, which consent shall not be unreasonably withheld or delayed.
Any Indemnified Parties wishing to claim indemnification under this Section 6.7,
upon learning of any such Claim, shall notify the Indemnifying Parties (although
the failure so to notify the Indemnifying Parties shall not relieve the
Indemnifying Parties from any liability which the Indemnifying Parties may have
under this Section 6.7 except to the extent such failure prejudices the
Indemnifying Parties), and shall, if requested, deliver to the
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Indemnifying Parties the undertaking contemplated by Delaware Law. The
Indemnified Parties as a group may retain one law firm (in addition to local
counsel) to represent them with respect to each such matter unless there is,
under applicable standards of professional conduct (as determined by counsel to
the Indemnified Parties), a conflict on any significant issue between the
positions of any two or more Indemnified Parties, in which event, such
additional counsel as may be required may be retained by the Indemnified
Parties.
(d) Commencing at the Effective Time, the directors and officers of
Surviving Corporation shall be insured under the policies of directors and
officers insurance currently or hereafter maintained by Parent. In addition, for
a period of four years after the Effective Time, Parent shall cause to be
maintained in effect the current policies of directors' and officers' liability
insurance maintained by the Company and its Subsidiaries (provided that Parent
may substitute therefor policies of at least the same coverage and amounts
containing terms that are no less advantageous in any material respect to the
persons covered thereby) with respect to claims arising from facts or events
which occurred before the Effective Time; provided that Parent shall not be
required to pay an annual premium for such insurance in excess of two times the
last annual premium paid by the Company prior to the date hereof, but in such
case shall purchase as much coverage as possible for such amount.
(e) This Section 6.7 is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on Parent, Merger Sub and the Surviving
Corporation and their representative successors and assigns. No termination or
modification of the obligations of the Indemnifying Parties under this Section
6.7 that adversely affects the rights of any Indemnified Party shall be
effective against such Indemnified Party without his or her prior written
consent.
(f) The rights granted to the Indemnified Parties hereunder shall be in
addition to, and not in limitation of, any other rights that the Indemnified
Parties may have by contract, Delaware Law, or otherwise.
(g) In the event Parent, the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity in
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in either such case, proper
provision shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 6.7.
6.8. Agreement to Defend. In the event any claim, action, suit,
investigation or other proceeding by any governmental body or other person or
other legal or administrative proceeding is commenced that questions the
validity or legality of the transactions contemplated hereby or seeks damages in
connection therewith, whether before or after the Effective Time, the parties
hereto agree to cooperate and use their reasonable efforts to defend against and
respond thereto.
6.9. Obligations of Merger Sub. Parent shall take all action necessary
to cause Merger Sub to approve and adopt the Agreement, to perform its
obligations hereunder and to consummate the Merger on the terms and conditions
set forth in this Agreement.
6.10. Accounting for Merger. The Merger shall be accounted for under
the purchase method.
6.11. Executive Employment Agreement. As of or prior to the Effective
Time, Parent shall cause Xxxxxx Drilling USA, Inc. to enter into new employment
agreements with Xxxxx X. Xxxxx, the
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Chairman and Chief Executive Officer of the Company, and Xxxxxx X. Xxxxx, III,
Executive Vice President - Operations & Marketing of the Company, in
substantially the form of Exhibit 6.11.
6.12. Takeover Statutes. If any "fair price", "moratorium", "control
share acquisition" or other form of antitakeover statute or regulation shall
become applicable to the transactions contemplated hereby, each of Parent and
the Company and the members of their respective Boards of Directors shall grant
such approvals and take such actions as are reasonably necessary so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated hereby.
6.13. Employee Matters. The Surviving Corporation shall be responsible
for all severance obligations payable to its employees terminated after the
Effective Time, in accordance with its severance policies, if any, as in effect
at the time of such termination. Notwithstanding the foregoing, in the event an
employee of the Company listed in Exhibit 6.13 and still employed by the Company
immediately prior to the Effective Time is terminated by the Surviving
Corporation (or an affiliate) within one year of the Effective Time, Parent
shall cause the Surviving Corporation (or such affiliate) to pay such terminated
employee the amounts specified opposite such employee's name on Exhibit 6.13, in
lieu of any severance otherwise payable by the Surviving Corporation (or such
affiliate) under any severance agreement, policy or program in effect at the
time of such termination.
6.14 Stockholder Agreements.
(a) From and after the date of this Agreement and ending on the date of
termination of this Agreement, the Company agrees not to register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of the shares beneficially owned by the stockholders signatory
to the Stockholder Agreements (excluding shares with respect to which such
stockholder does not possess sole power to dispose or direct the disposition)
unless such transfer is permitted under the terms of the applicable Stockholders
Agreement.
(b) The Company represents to Parent and Merger Sub that, except as
disclosed in Schedule 4.5, paragraph 2 of the Company Disclosure Schedule, none
of the execution and delivery of the Stockholder Agreements by the parties
thereto, the consummation of the transactions contemplated thereby or compliance
by the stockholders signatory thereto with any of the provisions thereof will
trigger a "change in control" or similar provision of any contract, agreement or
understanding to which the Company or any of Company's Subsidiaries is a party,
or by which any of their respective properties or assets are bound.
ARTICLE VII
CLOSING CONDITIONS
7.1. Conditions to Obligations of Each Party Under this Agreement. The
respective obligations of each party to effect the Merger and the other
transactions contemplated herein shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions, any or all of which may
be waived, in whole or in part, to the extent permitted by applicable law:
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the Securities
Act. No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceedings for that purpose shall have
been initiated by the SEC.
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(b) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the holders of a majority of the outstanding shares of
the Company Common Stock.
(c) No Order. No governmental entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
which has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(d) Tax Opinion. The Company shall have received an opinion of Xxxxx &
Xxxxx, L.L.P., and Parent shall have received an opinion of Xxxxx & XxXxxxxx,
each dated the Effective Time, subject to the assumptions and conditions set
forth therein, to the effect that (i) the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of Section 368(a) of
the Code; (ii) each of Parent, Merger Sub and the Company will be a party to
reorganization within the meaning of Section 368(b) of the Code; (iii) no gain
or loss will be recognized by the Company, Parent or Merger Sub as a result of
the Merger; and (iv) no gain or loss will be recognized by a stockholder of the
Company as a result of the Merger, except that gain (if any) realized by a
stockholder of the Company as a result of the Merger will be recognized to the
extent of the amount of cash received by such stockholder and income or gain may
be recognized by stockholders in special circumstances (such as a stockholder
who acquired Company Common Stock through exercise of employee stock options or
otherwise as compensation for employment). In rendering such opinions, Xxxxx &
Xxxxx, L.L.P. and Xxxxx & XxXxxxxx may receive and rely upon representations
contained in certificates of the Company, Parent, Merger Sub and others.
(e) HSR Act. The applicable waiting period under the HSR Act shall have
expired or been terminated.
(f) AMEX. The shares of Parent Common Stock to be issued in the Merger
shall have been approved for listing on the American Stock Exchange, subject to
notice of issuance.
7.2. Additional Conditions to Obligations of Parent. The obligations of
Parent to effect the Merger and the other transactions contemplated in this
Agreement, unless otherwise waived in writing, are also subject to the following
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement shall be true and correct
when made and on and as of the Effective Time as if made on and as of such date,
except where failure to be so true and correct would not have a Material Adverse
Effect on the Company, and except that those representations and warranties
which address matters only as of a particular date shall remain true and correct
as of such date, except where the failure to be so true and correct would not
have a Material Adverse Effect on the Company. Solely for purposes of this
Section 7.2(a) and in determining compliance with the condition(s) set forth
herein, any representation and warranty made by the Company in this Agreement
shall be read and interpreted as if the qualification stated therein with
respect to materiality or the Material Adverse Effect on the Company were not
contained therein. Parent shall have received a certificate of the President of
the Company to such effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time. Parent shall have received a certificate of the President or
Chief Financial Officer of the Company to such effect.
(c) Other Agreements. The affiliate agreements to be entered into prior
to the Effective Time, as contemplated by Section 6.4 shall be in full force and
effect.
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(d) Company Material Adverse Effect. Since the date of this Agreement,
the Company shall not have suffered a Material Adverse Effect.
7.3. Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger and the other transactions
contemplated in this Agreement, unless otherwise waived in writing, is also
subject to the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Parent and Merger Sub contained in this Agreement shall be true
and correct when made and on and as of the Effective Time as if made on and as
of such date, except where the failure to be so true and correct would not have
a Material Adverse Effect on Parent, and except that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date, except where the failure to be so true and correct
would not have a Material Adverse Effect on Parent. Solely for purposes of this
Section 7.3(a) and in determining compliance with the condition(s) set forth
herein, any representation and warranty made by the Parent in this Agreement
shall be read and interpreted as if the qualification stated therein with
respect to materiality or Material Adverse Effect on Parent were not contained
therein. The Company shall have received a certificate of the President of
Parent to such effect.
(b) Agreements and Covenants. Parent shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time. The Company shall have received a certificate of the President of Parent
to that effect.
(c) Parent Material Adverse Effect. Since the date of this Agreement,
Parent shall not have suffered a Material Adverse Effect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1. Termination.
(a) This Agreement may be terminated at any time prior to the Effective
Time, whether before or after approval of this Agreement and the Merger by the
stockholders of the Company, only in the following ways:
(i) by mutual written consent of Parent and the Company;
(ii) by Parent, upon an intentional breach of any covenant or agreement
on the part of the Company set forth in this Agreement, or if any material
representation or warranty of the Company shall be or shall have become
untrue, in either case such that the conditions set forth in Section 7.2(a)
or Section 7.2(b) would not be satisfied (a "Terminating Company Breach"),
provided that if such Terminating Company Breach is curable by the Company
through the exercise of its reasonable best efforts and for so long as the
Company continues to exercise such reasonable best efforts, Parent may not
terminate this Agreement under this Section 8.1(a)(ii);
(iii) by the Company, upon an intentional breach of any covenant or
agreement on the part of Parent or Merger Sub set forth in this Agreement,
or if any material representation or warranty of Parent or Merger Sub shall
be or shall have become untrue, in either case such that the conditions set
forth in Section 7.3(a) or Section 7.3(b) would not be satisfied (a
"Terminating Parent Breach"),
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provided that if such Terminating Parent Breach is curable by Parent or
Merger Sub through the exercise of its reasonable best efforts and for so
long as Parent or Merger Sub continues to exercise such reasonable best
efforts, the Company may not terminate this Agreement under this Section
8.1(a)(iii);
(iv) by either Parent or the Company, if there shall be any order,
decree or ruling of any United States federal or state court of competent
jurisdiction, or any United States federal or state governmental,
regulatory or administrative authority, which is final and nonappealable,
restraining, enjoining or otherwise preventing the consummation of the
Merger;
(v) by either Parent or the Company, if the Merger shall not have been
consummated before May 1, 1999 (unless the failure to consummate the Merger
by such date shall be due to the action or failure to act of the party
seeking to terminate this Agreement);
(vi) by either Parent or the Company, if the stockholders' meeting
provided for in Section 6.1 shall have been held and the Agreement shall
fail to receive the stockholder approval required by Section 7.1(b) at such
meeting (including any adjournments and postponements thereof);
(vii) by Parent, if, (A) the Board of Directors of the Company
withdraws, or materially modifies or materially changes, its recommendation
of this Agreement or the Merger in a manner adverse to Parent or Merger Sub
or shall have resolved to do any of the foregoing; (B) the Board of
Directors of the Company (i) shall have recommended to the stockholders of
the Company a Company Acquisition Proposal or (ii) after the expiration of
ten business days following the public announcement (or, in the case of a
tender offer, following the commencement of such tender offer) of any
Company Acquisition Proposal, shall have (1) failed to recommend against
accepting such Company Acquisition Proposal or (2) taken no position with
respect thereto or (iii) resolved to do any of the foregoing; or (C) the
Company shall have effected an amendment, waiver, termination or other
alteration of the provisions of the Company Rights Plan in such a manner
that any person (other than Parent or Merger Sub) shall have been permitted
to acquire "beneficial ownership" or the right to acquire beneficial
ownership of, or any "group" (as such terms are defined under Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder),
shall have been formed which beneficially owns, or has the right to acquire
beneficial ownership of, more than 15% of the then outstanding shares of
capital stock of the Company, in each case without triggering the Company
Rights Plan; or
(viii) by the Company, if the Board of Directors of the Company
determines that proceeding with the Merger would be inconsistent with its
fiduciary obligations by reason of a Company Acquisition Proposal as to
which the Company has made the determinations and taken the actions
described in clauses (A), (B) and (C) of the proviso contained in Section
5.6(a), and elects to terminate this Agreement effective prior to the
satisfaction of the condition set forth in Section 7.1(b); provided that
the Company may not effect such termination pursuant to this Section
8.1(a)(viii) unless and until (A) Parent receives at least five business
days' prior written notice from the Company of its intention to effect such
termination pursuant to this Section 8.1(a)(viii); (B) during such period,
the Company shall, and shall cause its respective financial and legal
advisors to, consider any adjustment in the terms and conditions of this
Agreement that Parent may propose; and provided, further, that any
termination of this Agreement pursuant to this Section 8.1(a)(viii) shall
not be effective until the Company has made the termination payment
required by Section 8.5(b).
(b) Notwithstanding any of the foregoing, the right of any party hereto
to terminate this Agreement pursuant to Section 8.1(a) shall remain operative
and in full force and effect regardless of any
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investigation made by or on behalf of any party hereto, any person controlling
any such party or any of their respective officers or directors, whether prior
to or after the execution of this Agreement.
8.2. Effect of Termination. Except as provided in Section 8.5 or
Section 9.1, in the event of the termination of this Agreement pursuant to
Section 8.1(a), this Agreement shall forthwith become void, there shall be no
liability on the part of Parent, Merger Sub or the Company or any of their
respective officers or directors to the other and all rights and obligations of
any party hereto shall cease, except that nothing herein shall relieve any party
for any breach of this Agreement.
8.3. Amendment. This Agreement may be amended by the parties hereto by
action taken by or on behalf of their respective Boards of Directors at any time
prior to the Effective Time; provided, however, that, after approval of the
Merger by the stockholders of the Company, no amendment shall be made which by
Delaware Law requires the further approval of stockholders. This Agreement may
not be amended except by an instrument in writing signed by the parties hereto.
8.4. Waiver. At any time prior to the Effective Time, any party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other parties
with any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
8.5. Fees; Expenses and Other Payments.
(a) Except as provided in Section 8.5(b) and Section 8.5(c), each party
shall bear its own costs and expenses in connection with this Agreement and the
transactions contemplated hereby provided, however, that the allocable share of
each of Parent and the Company for all costs and expenses related to printing,
filing and mailing the Registration Statement and the Proxy Statement and all
SEC and other regulatory filing fees incurred in connection with the
Registration Statement and the Proxy Statement shall be one-half.
Notwithstanding anything to the contrary, all of the costs and expenses in
connection with this Agreement and the transactions contemplated hereby incurred
by the Company and the Parent shall, upon the consummation of the Merger, be
borne by the Surviving Corporation.
(b) If this Agreement is terminated for any reason pursuant to Section
8.1(a)(vi), (vii) or (viii), then the Company shall pay Parent a fee of $5
million, plus all reasonable third party costs incurred by Parent (including,
but not limited to costs for attorneys, accountants and other advisors) prior to
the time of such termination in cash by wire transfer to an account designated
by Parent; provided that such third party costs shall not exceed $500,000.
(c) If this Agreement is terminated by either the Parent or the Company
pursuant to Section 8.1(a)(ii) or (iii) (as the case may be), then the other
party shall pay the party that terminated the Agreement a fee of $7.5 million.
(d) The parties agree that the amounts provided in Section 8.5(b) and
(c) payable upon the occurrence of the events specified therein have been
determined by negotiation and reflect their best estimate and judgment of the
monetary value of the losses and damages to be incurred in connection with, and
time, effort, expense and cost of opportunity associated with, the transactions
contemplated in this Agreement, and the parties agree to accept payment of such
amount as liquidated damages in full and complete satisfaction of all claims and
expenses arising from the occurrence of such events (including, but not limited
to, claims for specific performance). Any payment required to be made pursuant
to Section 8.5(b)
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or (c) shall be made not later than two business days after delivery to the
party required to make such payment of notice of demand for payment and shall be
made by wire transfer of immediately available funds to an account designated in
such notice. Nothing in this Section 8.5(d) shall affect the rights of either
party under the Company Stock Option Agreement.
ARTICLE IX
GENERAL PROVISIONS
9.1. Effectiveness of Representations, Warranties and Agreements.
(a) Except as set forth in Section 9.1(b), the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement.
(b) The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Article VIII, except that the agreements set forth in Article I and
II, and Sections 5.5, 6.7, 6.10 and 6.13 shall survive the Effective Time and
those set forth in Sections 5.7, 8.2, 8.5 and Article IX shall survive the
termination of this Agreement.
9.2. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, sent by expedited courier or messenger
service, mailed by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like changes of address) or sent by
electronic transmission to the telecopier number specified below:
(a) If to Parent or Merger Sub:
Xxxxxx Industries, Inc.
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Nabors Corporate Services, Inc.
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Legal Department
Telecopier No.: (000) 000-0000
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41
(b) If to the Company:
Bayard Drilling Technologies, Inc.
0000 XX Xxxxxxxxxx
Xxxxx 000X
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxx, L.L.P.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxx
Telecopier No.: 214/953-6503
Notice to a "copy to" address shall be provided as a courtesy, but shall not be
deemed to be actual notice received by a party for any purpose. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
9.3. Certain Definitions. For purposes of this Agreement, the term:
(a) "affiliate" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person.
(b) "business day" means any day other than a day on which banks in the
State of New York are authorized or obligated to be closed.
(c) "control" (including the terms "controlled," "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of stock, by contract or credit
arrangement or otherwise.
(d) "knowledge" or "known" shall mean, with respect to any matter in
question, if an executive officer of the Company or Parent, as the case may be,
has actual knowledge of such matter.
(e) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d) of the Exchange Act).
(f) "Significant Subsidiary" or "Significant Subsidiaries" means any
Subsidiary of the Company or Parent, as the case may be, that would constitute a
Significant Subsidiary of such party within the meaning of Rule 1-02 of
Regulation S-X of the SEC.
(g) "Subsidiary" or "Subsidiaries" of the Company, Parent, the
Surviving Corporation or any other person, means any corporation, partnership,
limited liability company, joint venture or other legal entity of which the
Company, Parent, the Surviving Corporation or such other person, as the case may
be (either alone or through or together with any other Subsidiary), owns,
directly or indirectly, 50% or more of the capital stock or other equity
interests the holders of which are generally entitled to vote for the election
of the
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board of directors or other governing body of such corporation or other legal
entity.
9.4. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.5. Severability. If any term or other provision of this Agreement is
determined to be invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
9.6. Entire Agreement This Agreement (together with the Exhibits) and
the Company Stock Option Agreement and the constitute the entire agreement of
the parties and supersede all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof.
9.7. Assignment. This Agreement shall not be assigned by operation of
law or otherwise except Merger Sub may, without the Company's approval, assign
its interests to any wholly owned Subsidiary of Parent.
9.8. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied (other than the provisions of Article II and Sections 6.7 and
6.11), is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
9.9. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. Except as set forth in Section 8.5(d), all rights
and remedies existing under this Agreement are in addition to, and not exclusive
of, any rights or remedies otherwise available.
9.10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law.
9.11. Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the District of
Delaware or any court of the State of Delaware located in the City of Wilmington
in any action, suit or proceeding arising in connection with this Agreement, and
agrees that any such action, suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 9.11 and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the State of Delaware other than for such purpose. PARENT AND THE
COMPANY HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH
ACTION, SUIT OR PROCEEDING.
9.12. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Operating Officer
NABORS ACQUISITION CORP. VII
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President
BAYARD DRILLING TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx
President
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EXHIBIT 1.4A
TO THE AGREEMENT
AND PLAN OF MERGER
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BAYARD DRILLING TECHNOLOGIES, INC.
Bayard Drilling Technologies, Inc., a Corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify as follows:
1. The name of the Corporation is Bayard Drilling Technologies, Inc.
and the original Certificate of Incorporation of the Corporation (the "Original
Certificate") was filed with the office of the Secretary of State of the State
of Delaware on December 3, 1996.
2. This Restated Certificate of Incorporation of the Corporation
(this "Restated Certificate") was duly adopted in accordance with the provisions
of Sections 242 and 245 of the General Corporation Law of the State of Delaware.
3. This Restated Certificate restates and integrates and amends the
Original Certificate to read in its entirety as follows:
FIRST: The name of the Corporation is Bayard Drilling
Technologies, Inc.
SECOND: The address of its registered office in the State of
Delaware is c/o The Corporation Trust Company, 0000 Xxxxxx Xxxxxx., in
the City of Wilmington, County of Xxx Xxxxxx, Xxxxxxxx 00000. The name
of its registered agent at such address is The Corporation Trust
Company.
THIRD: The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 1,000 shares of common stock, par
value $.10 per share.
FIFTH: In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly authorized to
make, alter or repeal the by-laws of the Corporation.
SIXTH: Elections of directors need not be by written ballot
unless the by-laws of the Corporation shall so provide.
SEVENTH: Whenever a compromise or arrangement is proposed between
the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the
application in a summary way of the Corporation or of any creditor or
45
stockholder thereof or on the application of any receiver or receivers
appointed for the Corporation under the provisions of Section 291 of
Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation,
as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of
the creditors or class of creditors, and/or of the stockholders or
class of stockholders of the Corporation, as the case may be, agree to
any compromise or arrangement and to any reorganization of the
Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case
may be, and also on the Corporation.
EIGHTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of
Incorporation, in the manner now or hereafter prescribed by statute,
and all rights conferred upon stockholders herein are granted subject
to this reservation.
NINTH: No director of the Corporation shall be personally liable
to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law or (iv) for
any transaction from which the director derived an improper personal
benefit. No repeal or amendment of this Section 9 shall adversely
affect any rights of any person pursuant to this Section 9 which
existed at the time of such repeal or amendment with respect to acts or
omissions occurring prior to such repeal or amendment.
TENTH: The Corporation shall indemnify any person who was, is, or
is threatened to be made a party to a proceeding (as hereinafter
defined) by reason of the fact that he or she (i) is or was a director
or officer of the Corporation or (ii) while a director or officer of
the Corporation, is or was serving at the request of the Corporation as
a director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic
corporation, limited liability company, association, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other
enterprise, entity or organization, to the fullest extent permitted
under the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended. Such right shall be a contract
right and as such shall run to the benefit of any director or officer
who is elected and accepts the position of director or officer of the
Corporation or elects to continue to serve as a director or officer of
the Corporation while this Section 10 is in effect. Any repeal or
amendment of this Section 10 shall be prospective only and shall not
limit the rights of any such director or officer or the obligations of
the Corporation with respect to any claim arising from or related to
the services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Section 10.
Such right shall include the right to be paid by the Corporation
expenses (including attorneys' fees) incurred in defending any such
proceeding in advance of its final disposition to the maximum extent
permitted under the General Corporation Law of the State of Delaware,
as the same exists or may hereafter be amended. If a claim for
indemnification or advancement of expenses hereunder is not paid in
full by the Corporation within 60 days after a written claim has been
received by the Corporation, the claimant may
46
at any time thereafter bring suit against the Corporation to recover
the unpaid amount of the claim, and, if successful in whole or in part,
the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that
such indemnification is not permitted under the General Corporation Law
of the State of Delaware, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation
(including its board of directors or any committee thereof, independent
legal counsel or stockholders) to have made its determination prior to
the commencement of such action that indemnification of the claimant is
permissible in the circumstances nor an actual determination by the
Corporation (including its board of directors or any committee thereof,
independent legal counsel or stockholders) that such indemnification is
not permissible shall be a defense to the action or create a
presumption that such indemnification is not permissible. In the event
of the death of any person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or
her heirs, executors, administrators and personal representatives. The
rights conferred above shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, bylaw,
resolution of stockholders or directors, agreement or otherwise.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, any appeal in such an action, suit or proceeding,
and any inquiry or investigation that could lead to such an action, suit or
proceeding.
In witness whereof, Bayard Drilling Technologies, Inc. has caused this
certificate to be executed by the undersigned this ___ day of ___________,
199__.
BAYARD DRILLING TECHNOLOGIES, INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
47
EXHIBIT 1.4B
TO THE AGREEMENT
AND PLAN OF MERGER
BY-LAWS
OF
BAYARD DRILLING TECHNOLOGIES, INC.
(the "Corporation")
----------------------------------------------
ARTICLE I
OFFICES
SECTION 1. Principal Office.
The principal office of the Corporation shall be at such place as the Board of
Directors may from time to time determine, but until a change is effected, such
principal office shall be at 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000.
SECTION 2. Other Offices.
The Corporation may also have other offices at such places, within or without
the State of Delaware, as the Board of Directors may from time to time determine
or as the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Time and Place of Meetings.
A meeting of stockholders for any purpose may be held at such time and place,
within or without the State of Delaware, as shall be stated on the notice
thereof or in a duly executed waiver of notice thereof.
SECTION 2. Annual Meeting.
The annual meeting of the stockholders of the Corporation shall be held on the
first Tuesday of June in each year if not a legal holiday, and if a legal
holiday, then on the next succeeding day which is not a legal holiday at such
place, either within or without the State of Delaware, and at such time and as
set forth in the notice of the meeting or in a duly executed waiver of notice
thereof, for the election of the Board of Directors and for the transaction of
such other business as may properly be brought before the meeting. In the event
the annual meeting is not held on the date above provided, the Board of
Directors shall cause the meeting to be held as soon thereafter as may be
convenient. Such subsequent meeting shall be called in the same manner as
hereinafter provided for special meetings of stockholders.
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SECTION 3. Special Meetings.
Special meetings of the stockholders, unless otherwise prescribed by statute,
may be called at any time for any purpose or purposes by the Board and shall be
held at such place, either within or without the State of Delaware, and at such
hour as may be designated by the Board in the notice of the meeting; provided,
however, that the time so fixed shall permit the giving of notice as provided in
Section 4 of this Article II, unless such notice is waived as provided by law or
by these Restated By-Laws. At a special meeting only such matters as may be
specified in the notice thereof shall be considered. Special meetings shall also
be called and held in such cases and in such manner as may be specifically
required by law or by the Certificate of Incorporation.
SECTION 4. Notice of Meetings.
Written notice of each meeting of the stockholders, which shall state the place,
date and hour of the meeting and, in the case of a special meeting or where
otherwise required by law, the purpose or purposes for which it is called, shall
be given, unless a different period is required by law, not less than 10 nor
more than 60 days before the date of such meeting, by or at the direction of the
person calling the meeting, to each stockholder entitled to vote at such
meeting. If mailed, the notice of a meeting of stockholders shall be deemed to
be given when deposited in the United States mail, postage prepaid, directed to
the stockholder at his address as it appears on the records of the Corporation.
No business other than that stated in the notice shall be transacted at any
meeting without the unanimous consent of all the stockholders entitled to vote
thereat. Any such notice for any meeting other than the annual meeting shall, if
issued at the direction of the Board, so indicate. When a meeting is adjourned
to another time or place, notice need not be given if the time and place thereof
are announced at the meeting at which the adjournment is taken. If the
adjournment is for more than 30 days after the date of the original meeting, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
SECTION 5. Quorum.
Except as otherwise required by law, the Certificate of Incorporation or these
By-Laws, at all meetings of the stockholders, the holders of a majority of the
shares issued and outstanding and entitled to vote shall be present in person or
represented by proxy in order to constitute a quorum for the transaction of any
business. The holders of a plurality of the shares present in person or
represented by proxy and entitled to vote thereat, whether or not a quorum shall
be present, may adjourn the meeting from time to time, to a specified date or
place. At any such adjourned meeting at which a quorum may be present, the
Corporation may transact any business which might have been transacted at the
original meeting.
As to any matter with respect to which a separate class vote is required by the
Certificate of Incorporation, the holders of one-third of the shares of such
class which are then outstanding and entitled to vote shall be present in person
or represented by proxy in order to constitute a quorum for the purpose of any
separate vote required by such class.
The absence from any meeting of the number of shares required by law, the
Certificate of Incorporation or these By-Laws for action upon one matter shall
not prevent action at such meeting upon any other matter or matters which may
properly come before the meeting, if the number of shares required in respect of
such other matters shall be present.
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SECTION 6. Organization.
At each meeting of the stockholders, the President or, in his absence or
inability to act, the most senior Vice President or, in his absence or inability
to act, any person as may be designated by the Board of Directors or, in the
absence of such designation, a chairman to be chosen at the meeting by the
majority of those stockholders present in person or represented by proxy shall
act as chairman of the meeting. The Secretary or, in his absence or inability to
act, an Assistant Secretary, or in his absence or inability to act, any person
as may be designated from time to time by the Board of Directors shall act as
secretary of each meeting of stockholders and keep the minutes thereof; if no
such person is present or has been chosen, the holders of record of a majority
of shares of stock present in person or represented by proxy and entitled to
vote at the meeting shall choose any person present to act as secretary of the
meeting.
SECTION 7. Order of Business.
The order of business at all meetings of the stockholders shall be as determined
by the chairman of the meeting.
SECTION 8. Voting and Required Vote.
At each meeting of stockholders, each stockholder shall be entitled to one vote
for each share of capital stock held by such stockholder except as otherwise
provided in the Certificate of Incorporation. Except as otherwise provided in
the Certificate of Incorporation, and subject to statute, at each meeting of
stockholders if there shall be a quorum, the affirmative vote of the holders of
a majority of shares present in person or represented by proxy and entitled to
vote thereat, shall decide all matters brought before such meeting.
SECTION 9. Proxies.
Each stockholder entitled to vote at any meeting of stockholders or to express
consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by proxy. Any such proxy
shall be delivered to the secretary of such meeting at or prior to the time
designated in the order of business for so delivering such proxies. Each such
proxy shall be in writing and executed by the stockholder or his duly authorized
attorney-in-fact, but no such proxy shall be voted after three years from its
date unless such proxy provides for a longer period. A duly executed proxy shall
be irrevocable if it states that it is irrevocable and if, and only as long as,
it is coupled with an interest sufficient in law to support an irrevocable
power. A proxy may be made irrevocable regardless of whether the interest with
which it is coupled is an interest in the stock itself or an interest in the
Corporation generally.
SECTION 10. List of Stockholders.
A complete list of the stockholders entitled to vote at any meeting, arranged in
alphabetical order, with the address of each, and the number of shares held by
each, shall be prepared, or shall be caused to be prepared, by the Secretary and
shall be open to examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city in which the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present. The stock ledger shall be
the only evidence as to the stockholders entitled to examine the stock ledger,
the list required by these By-Laws or the books of the Corporation, or to vote
in person or by proxy at any meeting of the stockholders.
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SECTION 11. Voting by Fiduciaries, Pledgors and Joint Owners.
Persons holding stock in a fiduciary capacity shall be entitled to vote the
shares so held. Persons whose stock is pledged shall be entitled to vote, unless
in the transfer by the pledgor on the books of the Corporation he has expressly
empowered the pledgee to vote thereon, in which case only the pledgee, or his
proxy, may represent such stock and vote thereon.
If shares or other securities having voting power stand of record in the names
of two or more persons, whether fiduciaries, members of a partnership, joint
tenants, tenants-in-common, tenants by the entirety or otherwise, or if two or
more persons have the same fiduciary relationship respecting the same shares,
unless the Secretary is given written notice to the contrary and is furnished
with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting shall
have the following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting
binds all;
(c) if more than one votes, but the vote is evenly split on any
particular matter, each faction may vote the securities in
question proportionally, or any person voting the shares, or a
beneficiary, if any, may apply to the Court of Chancery or
such other court as may have jurisdiction to appoint an
additional person to act with the persons so voting the
shares, which shall then be voted as determined by a majority
of such persons and the person appointed by the Court. If the
instrument so filed shows that any such tenancy is held in
unequal interest, a majority or even-split for the purpose of
this paragraph shall be a majority or even-split in interest.
SECTION 12. Consent of Stockholders in Lieu of Meeting.
Unless otherwise provided by the Certificate of Incorporation, any action
required or permitted to be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by all of the holders of outstanding stock.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers.
The business and affairs of the Corporation shall be managed by or under the
direction of a Board of Directors, which may exercise all such authority and
powers of the Corporation and do all such lawful acts and things as are not by
statute, by the Certificate of Incorporation or by these By-Laws directed or
required to be exercised or done by the stockholders or such other persons as
provided therein.
SECTION 2. Number of Directors.
The number of Directors shall be determined from time to time by resolution of
the Board of Directors in accordance with the terms of the Certificate of
Incorporation.
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SECTION 3. Resignations.
Any Director may resign at any time upon written notice to the Board of
Directors, the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its receipt thereof
by the Board of Directors or by any such officer.
SECTION 4. Annual Meetings.
The annual meeting of the Board of Directors for the purpose of organizing the
Board, appointing officers and members of committees and transacting other
business, shall be held immediately following the annual meeting of the
stockholders at the same place where such meeting of stockholders shall be held.
No notice shall be required for any such meeting if held immediately after the
adjournment, and at the site, of the meeting of the stockholders. If not so
held, notice shall be given in the same manner as required for special meetings
of the Board of Directors.
SECTION 5. Regular Meetings.
Additional regular meetings of the Board may be held without notice at such time
and place (within or without the State of Delaware) as shall from time to time
be determined by the Board of Directors.
SECTION 6. Special Meetings.
Special meetings of the Board may be called at any time by the Chairman of the
Board, the Vice Chairman, the President or any Vice President or by two or more
Directors and shall be held at such time and place (within or without the State
of Delaware) as may be fixed by the person or persons calling the meeting;
provided, however, that the time so fixed shall permit the giving of notice as
provided in Section 7 of this Article III.
SECTION 7. Notice of Special Meetings.
Notice of the time and place of each special meeting of the Board of Directors
shall be mailed, postage prepaid to each director, addressed to him at his
address as it appears on the records of the Corporation, by first-class mail, at
least three days before the day on which such meeting is to be held, or shall be
sent addressed to him at such place by telegraph, telex, cable or wireless, or
be delivered to him personally or by telephone, no later than the day before the
day on which the meeting is to be held, and the method used for notice of such
special meeting need not be the same for each Director being notified. Except as
otherwise required by law, the Certificate of Incorporation or these By-Laws,
such notice need not state the purpose or purposes of such meeting thereof.
SECTION 8. Organization.
The Board of Directors shall select a chairman of the meeting from among the
Directors present to preside over the meeting. The Secretary or, in his absence
or inability to act, an Assistant Secretary, or in his absence or inability to
act, another Director selected by the Board shall act as secretary of the
meeting and keep the minutes thereof; if no such person is present or has been
chosen, the holders of record of a majority of shares of stock present in person
or represented by proxy and entitled to vote at the meeting shall choose any
person present to act as secretary of the meeting.
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SECTION 9. Quorum.
At all meetings of the Board of Directors the presence in person of one-third of
the total number of Directors constituting the entire Board of Directors,
whether then in office or not, shall be necessary and sufficient to constitute a
quorum for the transaction of any business by the Board of Directors at such
meeting, except as otherwise provided by law, the Certificate of Incorporation
or these By-Laws. At any meeting of the Board of Directors, no action shall be
taken (except adjournment, in the manner provided below) until after a quorum
has been established, except as otherwise provided by law, the Certificate of
Incorporation or these By-Laws.
Except as otherwise provided by law, the Certificate of Incorporation or these
By-Laws, the act of a majority of Directors who are present at a meeting at
which a quorum previously has been established (or at any adjournment of such
meeting, provided that a quorum shall have previously been established at such
adjourned meeting) shall be the act of the Board of Directors, regardless of
whether or not a quorum is present at the time such action is taken. In
determining the number of directors who are present at the time any such action
is taken, any Director who is in attendance at such meeting but who, for just
cause, is disqualified to vote on such matter, shall not be considered as being
present at the time of such action for the purpose of establishing the number of
votes required to take action on any matter submitted to the Board of Directors,
but shall be considered as being present for purposes of determining the
existence of a quorum.
In the event a quorum cannot be established at the beginning of a meeting, a
majority of the Directors present at the meeting, or the Secretary of the
Corporation, if there be no Director present, may adjourn the meeting from time
to time until a quorum be present. Only such notice of such adjournment need be
given as the Board of Directors may from time to time prescribe.
SECTION 10. Regulations.
The Board of Directors may adopt such rules and regulations for the conduct of
its meetings and for the management of the business and affairs of the
Corporation as it may deem proper and not inconsistent with law, the Certificate
of Incorporation and these By-Laws.
SECTION 11. Written Consent in Lieu of Meeting.
Any action required or permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting if all members of the Board then in
office consent thereto in writing, provided that the number of such members is
sufficient to constitute a quorum for such action, and the writing or writings
are filed with the minutes of proceedings of the Board of Directors.
SECTION 12. Telephonic Participation.
Any and all members of the Board of Directors may participate in a meeting of
the Board by means of a conference telephone or similar communications equipment
by means of which all persons participating in such meeting shall hear each
other; participation in a meeting pursuant to this Section shall constitute
presence in person at such meeting.
SECTION 13. Compensation.
Directors shall be entitled to such compensation for their services as Directors
and to such reimbursement for any reasonable expense incurred in attending
meetings of the Board of Directors as may from time to time be fixed by the
Board of Directors. The compensation of Directors may be on such basis as is
determined by the Board of Directors. Any Director may waive compensation for
any meeting. Any Director receiving compensation under these provisions shall
not be barred from
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serving the Corporation in any other capacity and receiving compensation and
reimbursement for reasonable expenses for such other services.
ARTICLE IV
COMMITTEES
SECTION 1. Committees.
The Board of Directors may appoint such committees as it shall deem advisable
and with such rights, powers, and authority as it shall prescribe. Each such
committee shall consist of one or more Directors. Unless otherwise provided by
the Board of Directors, a majority of the members of each such other committee
shall constitute a quorum, and the acts of a majority of the members present at
a meeting at which a quorum is present shall be the act of such committee.
SECTION 2. Vacancies; Committee Changes.
In the absence or disqualification of a member of any committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
The Board of Directors shall have the power at any time to fill vacancies in, to
change the membership of, and to discharge, any committee or any member of any
committee.
SECTION 3. Compensation.
Members of any committee shall be entitled to such compensation for their
services as members of the committee and to such reimbursement for any
reasonable expenses incurred in attending committee meetings as may from time to
time be fixed by the Board of Directors. Any committee member may waive
compensation for any meeting. Any committee member receiving compensation under
these provisions shall not be barred from serving the Corporation in any other
capacity and from receiving compensation and reimbursement of reasonable
expenses for such other services.
SECTION 4. Telephonic Participation.
Any and all members of any committee designated by the Board of Directors may
participate in a meeting of such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
such meeting can hear each other, and participation in such a meeting pursuant
to this Section shall constitute presence in person at such meeting.
SECTION 5. Action by Consent.
Any action required or permitted to be taken at any meeting of any committee of
the Board of Directors may be taken without a meeting if a written consent
thereto shall be signed by all members of the committee then in office, provided
that the number of such members is sufficient to constitute a quorum for such
action, if any, and such written consent is filed with the minutes of its
proceedings.
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ARTICLE V
NOTICES
SECTION 1. Waiver of Notice.
Whenever any notice is required to be given by law, the Certificate of
Incorporation or these By-Laws, a written waiver thereof; signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to such notice. Neither the business to be
transacted at, nor the purpose of any regular or special meeting of
stockholders, any meeting of other security holders, the Board of Directors, or
any committee of the Board of Directors need be specified in any written waiver
of notice unless so required by law, the Certificate of Incorporation or these
By-Laws.
SECTION 2. Attendance at Meeting.
Attendance of a person at any meeting, whether of stockholders or other security
holders (in person or by proxy), or the Board of Directors or any committee of
the Board of Directors, shall constitute a waiver of notice of such meeting,
except when such person attends such meeting for the express purpose of
objecting, and objects, at the beginning of the meeting, to the transaction of
any business on the ground that the meeting is not legally called or convened.
ARTICLE VI
OFFICERS
SECTION 1. Number and Qualifications.
The officers of the Corporation shall include the President and a Secretary, and
may include one or more Vice Presidents, a Treasurer, and such other officers as
may be elected or appointed in accordance with the provisions of Section 2 of
this Article VI. Any number of offices, except the offices of President and
Secretary, may be held by the same person.
SECTION 2. Selection, Term of Office and Qualification.
The officers shall be elected from time to time by the Board of Directors at its
first regular meeting after each annual meeting of stockholders. Each officer
shall hold his office until his successor is elected and qualified or until he
shall resign in the manner provided in Section 3 of this Article VI, or until he
shall have been removed in the manner provided in Section 4 of this Article VI,
or until his death. Other officers, including without limitation one or more
Assistant Treasurers and one or more Assistant Secretaries shall be chosen in
such manner, hold office for such period, have such authority, perform such
duties and be subject to removal as may be prescribed by the Board of Directors.
SECTION 3. Resignations.
Any officer may resign at any time upon written notice to the Board of
Directors, the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its receipt thereof
by the Board of Directors or any such officer.
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SECTION 4. Removal.
Any officer may be removed at any time, either with or without cause, by the
Board of Directors; and any officer not elected by the Board of Directors may be
removed in such manner as may be determined by the Board of Directors. Removal
from office however, shall not prejudice the contract rights, if any, of the
person removed except as provided in such contract.
SECTION 5. Vacancies.
Any vacancy occurring in any office of the Corporation which is required by
Section 2 of this Article VI to be elected by the Board of Directors, whether by
death, resignation, removal or otherwise, shall be filled for the unexpired
portion of the term by the Board of Directors. A vacancy in any other office
shall be filled in such manner as may be determined by the Board of Directors.
SECTION 6. The President.
The President shall be chief executive officer of the Corporation and shall
have, subject to the control of the Board of Directors, general and active
management of the business of the Corporation and the general and active
supervision and direction over the business operations and affairs of the
Corporation and over its several officers, agents and employees. He shall,
unless also a Director, be an ex officio member of all committees of the Board.
In general, he shall have such other powers and shall perform such other duties
as usually pertain to the office of President or as from time to time may be
assigned to him by the Board or these By-Laws.
SECTION 7. Vice President.
The Vice President or, in the event there be more than one, the Vice Presidents
in the order designated, or in the absence of any designation, in the order of
their seniority, shall have such powers and perform such duties as from time to
time may be assigned to him by the Board.
SECTION 8. The Treasurer and Assistant Treasurers.
The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the
funds and securities of the Corporation;
(b) keep full and accurate accounts of receipts and disbursements
in books belonging to the Corporation;
(c) cause all moneys and other valuables to be deposited to the
credit of the Corporation in such depositories as may be
designated by the Board of Directors;
(d) receive, and give receipts for moneys due and payable to the
Corporation from any source whatsoever;
(e) disburse the funds of the Corporation and supervise the
investment of its funds as ordered or authorized by the Board
of Directors, taking proper vouchers therefor;
(f) render to the President and the Board of Directors at the
regular meetings of the Board, or whenever they may request
it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation; and
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(g) in general, have all the powers and perform all the duties
incident to the office of Treasurer and such other duties as
from time to time may be assigned to him by the Board of
Directors or the President.
The Assistant Treasurer or Assistant Treasurers, if any, shall in the absence or
disability of the Treasurer or at his request, perform his duties and exercise
his powers and authority as may be assigned to him by the Board of Directors or
the President.
SECTION 9. The Secretary and Assistant Secretaries.
The Secretary shall:
(a) attend all meetings of the Board of Directors, any committee
of the Board of Directors, stockholders and other security
holders and record all votes and the proceedings of such
meetings in minute books to be kept by him for that purpose;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the Corporation
and affix and attest the seal to all stock certificates of the
Corporation (unless the seal of the Corporation on such
certificates shall be a facsimile, as hereinafter provided)
and affix and attest the seal to all other documents to be
executed on behalf of the Corporation under its seal;
(d) see that the books, reports, statements, certificates and
other documents and records required by law to be kept and
filed are properly kept and filed; and
(e) in general, have all the powers and perform all the duties
incident to the office of Secretary and such other duties as
from time to time may be assigned to him by the Board of
Directors or the President.
The Assistant Secretary or Assistant Secretaries, if any, shall, in the absence
or disability of the Secretary or at his request, perform his duties and
exercise his powers and authority as may be assigned to him by the Board of
Directors or the President.
SECTION 10. Compensation.
The compensation of all officers of the Corporation shall be fixed from time to
time by the Board of Directors; no officer of the Corporation shall be prevented
from receiving compensation because he is also a Director of the Corporation.
ARTICLE VII
CAPITAL STOCK AND DIVIDENDS
SECTION 1. Stock Certificates for Shares.
Certificates for shares of the capital stock of the Corporation shall be in such
form, not inconsistent with the Certificate of Incorporation, as shall be
approved by the Board of Directors and shall be signed by or in the name of the
corporation by the Chairman or by the President or a Vice President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary,
provided that the signatures of any such officers thereon may be facsimiles. The
seal of the Corporation, if
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there is one, shall be impressed, by original or by facsimile, printed or
engraved, on all such certificates. A certificate may also be signed by the
transfer agent and a registrar as the Board of Directors may determine, and in
such case the signature of the transfer agent or the registrar may also be
facsimile, engraved or printed. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may nevertheless be issued by the
Corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue.
SECTION 2. Stock Records.
The Corporation shall keep at such place or places, within or without the State
of Delaware, as the Board of Directors may from time to time determine, the
stock record books in which shall be recorded the number of shares issued, the
names of the owners of the shares, the number owned by them respectively, and
the transfer of such shares with the date of transfer. Blank stock certificate
books shall be kept by the Secretary or by any officer or agent designated by
the Board.
SECTION 3. Registration of Transfers.
Registration of transfer of certificates representing shares of stock of the
Corporation shall be effected only on the books of the Corporation only upon
authorization by the registered holder thereof, or by his attorney authorized by
power of attorney duly executed and filed with the Secretary or with a
designated transfer agent or transfer clerk, and upon surrender to the
Corporation or any transfer agent of the Corporation of the certificate or
certificates being transferred, which certificate shall be properly endorsed or
accompanied by a duly executed stock transfer power and the payment of all taxes
thereon. Whenever a certificate is endorsed by or accompanied by a stock power
executed by someone other than the person or persons named in the certificate,
evidence of authority to transfer shall also be submitted with the certificate.
Whenever any transfers of shares shall be made for collateral security and not
absolutely, and both the transferor and transferee request the Corporation to do
so, such fact shall be stated in the entry of the transfer.
SECTION 4. Determination of Stockholders.
Except as otherwise provided by law, the Corporation shall be entitled to
recognize the exclusive right of a person in whose name any share or shares
stand on the record of stockholders as the owner of such share or shares for all
purposes, including, without limitation, the rights to receive dividends or
other distributions, and to vote as such owner, the Corporation may hold any
such stockholder of record liable for calls and assessments and the Corporation
shall not be bound to recognize any equitable or legal claim to or interest in
any such share or shares on the part of any other person whether or not it shall
have express or other notice thereof.
SECTION 5. Regulations Governing Issuance and Transfers of Shares.
The Board of Directors shall have the power and authority to make all such rules
and regulations, not inconsistent with these By-Laws, as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
stock of the Corporation. It may appoint, or authorize any officer or officers
to appoint, one or more transfer agents or one or more transfer clerks and one
or more registrars and may require all certificates for shares of stock to bear
the signature or signatures of any of them.
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SECTION 6. Fixing of Record Date.
In order that the Corporation may determine the stockholders of record entitled
to notice of, or to vote at, any meeting of stockholders or any adjournment
thereof, or entitled to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action. Except as otherwise provided
by law, the Certificate of Incorporation, these By-Laws or by resolution of the
Board of Directors:
(1) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at
the close of business on the day next preceding the day on
which notice is given, or, if notice is waived, at the close
of business on the day next preceding the day on which the
meeting is held;
(2) The record date for determining stockholders entitled to
express consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is
necessary, shall be the day on which the first written consent
is expressed; and
(3) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which
the Board adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board may fix a new record date for the adjourned meeting.
SECTION 7. Lost, Stolen or Destroyed Stock Certificates.
The holder of any certificates representing shares of stock of the Corporation
shall immediately notify the Corporation of any loss, theft, destruction or
mutilation of such certificate, and the Board of Directors may authorize the
issuance of a new certificate of stock in lieu thereof upon satisfactory proof
of such loss, theft or destruction upon the giving of an open penalty bond with
surety satisfactory to the Treasurer and the Corporation's counsel, to protect
the Corporation or any person injured on account of the alleged loss, theft or
destruction of any such certificate or the issuance of a new certificate from
any liability or expense which it or they may incur by reason of the original
certificates remaining outstanding and upon payment of the Corporation's
reasonable costs incident thereto.
SECTION 8. Dividends and Reserves.
Subject to the provisions of law or of the Certificate of Incorporation, the
Board of Directors may, out of funds available therefor at any regular or
special meeting, declare dividends upon the capital stock of the Corporation as
and when they deem expedient. Before declaring any dividend there may be set
apart out of any funds of the Corporation available for dividends, such sum or
sums as the Board may from time to time in their discretion deem proper as a
reserve fund for working capital, to meet contingencies, or for equalizing
dividends, or for the purpose of repairing, maintaining or increasing the
property or business of the Corporation, or for such other purposes as the Board
shall deem to be in the best interests of the Corporation. The Board may, in its
discretion, modify or abolish any such reserve at any time.
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ARTICLE VIII
GENERAL PROVISIONS
SECTION 1. Execution of Contracts, Papers and Documents.
Except as otherwise required by law, the Certificate of Incorporation or these
By-Laws, any contract or other instrument may be executed and delivered in the
name and on behalf of the Corporation by such officers or employees of the
Corporation as the Board may from time to time determine, or in the absence of
such determination, by the President. Such authority may be general or confined
to specific instances as the Board may determine. Unless authorized by the Board
or expressly permitted by these By-Laws, no officer or agent or employee shall
have any power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or to incur a pecuniary liability for any
purpose.
SECTION 2. Voting Shares in Other Corporations.
The Corporation may vote any and all shares of stock and other securities having
voting rights which may at any time and from time to time be held by it in any
other corporation or corporations and such vote may be cast either in person or
by proxy by such officer of the Corporation as the Board of Directors may
appoint or, in the absence of such appointment, by the President or the
Secretary.
SECTION 3. Checks, Drafts, etc.
All checks, drafts, bills of exchange or other orders for the payment of money
out of the funds of the Corporation, and all notes or other evidences of
indebtedness of the Corporation, shall be signed in the name and on behalf of
the Corporation by such persons and in such manner as shall from time to time be
authorized by the Board.
SECTION 4. Books, Accounts and Other Records.
Except as otherwise provided by law, the books, accounts and other records of
the Corporation shall be kept at such place or places, within or without the
State of Delaware, as the Board of Directors may from time to time designate.
SECTION 5. Corporate Seal.
The Board of Directors may provide a suitable seal which shall bear the name of
the Corporation, the year of incorporation and shall include the words
"Corporate Seal, Delaware." Said seal shall be in the custody of the Secretary
of the Corporation, and may provide for one or more duplicates thereof to be
kept in the custody of such other officer or officers of the Corporation as the
Board may prescribe.
SECTION 6. Fiscal Year.
Following the fiscal year ended September 30, 1997, the fiscal year of the
Corporation shall be a period of twelve (12) calendar months beginning January 1
and ending on December 31 of each year.
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ARTICLE IX
TRANSACTIONS WITH DIRECTORS AND OFFICERS; INDEMNIFICATION
SECTION 1. Affiliated Transactions.
No contract or transaction between the Corporation and one or more of its
directors or officers. or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
Directors or officers are directors or officers or have a financial interest,
shall be void or voidable solely for this reason, or solely because the Director
or officer is present at or participates in the meeting of the Board of
Directors or committee thereof that authorizes the contract or transaction or
solely because his or their votes are counted for such purpose, if:
(a) The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to
the Board of Directors or the committee, and the Board of
Directors or committee in good faith authorizes the contract
or transaction by the affirmative vote of a majority of the
disinterested Directors, even though the disinterested
Directors be less than a quorum; or
(b) The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to
the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by the vote
of the stockholders; or
(c) The contract or transaction is fair to the Corporation as of
the time it is authorized, approved, or ratified by the Board
of Directors, a committee thereof, or the stockholders.
SECTION 2. Determining Quorum.
Common or interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee thereof which
authorized the contract or transaction.
SECTION 3. Indemnification.
(a) Each person who at any time shall serve or shall have served
as a director, officer, employee or agent of the Corporation
(including any predecessor of the Corporation), or any person
who is or was serving at the written request of the
Corporation (in accordance with written procedures adopted
from time to time by the Board of Directors) as a director,
officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise, shall be
entitled to (a) indemnification and (b) the advancement of
expenses incurred by such person from the Corporation as, and
to the fullest extent, permitted by Section 145 of the
Delaware General Corporation Law or any successor statutory
provision, as from time to time amended. The foregoing right
of indemnification and to the advancement of expenses shall
not be deemed exclusive of any other rights to which those to
be indemnified may be entitled as a matter of law or under any
agreement, vote of stockholders or disinterested directors of
the Corporation, or other arrangement.
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(b) The Corporation may purchase and maintain insurance or another
arrangement on behalf of any person who is or was a director,
officer, employee or agent of the Corporation or who is or was
serving at the written request of the Corporation as a
director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or
domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other
enterprise against any liability asserted against and incurred
by such person in such capacity or arising out of such
person's status in such capacity, whether or not the
Corporation would have the power to indemnify such person
against that liability under this Section 3 or the Delaware
General Corporation Law.
ARTICLE X
AMENDMENT
The power to adopt, amend or repeal these By-Laws shall be in the stockholders
entitled to vote and may be exercised by the affirmative vote of a majority of
the stock issued and outstanding and entitled to vote thereat at any annual
meeting of the stockholders or at any special meeting thereof if notice of the
proposed amendment or repeal be contained in the notice of such special meeting.
Such power shall also be conferred upon the directors and may be exercised by
the affirmative vote of a majority of the Board at any regular meeting of the
Board or at any special meeting of the Board if notice of the proposed amendment
or repeal be contained in the notice of such special meeting, but the fact that
such power has been so conferred upon the directors shall not divest the
stockholders of the power, nor limit their power to adopt, amend or repeal these
By-Laws.
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EXHIBIT 6.4
TO THE AGREEMENT
AND PLAN OF MERGER
FORM OF AFFILIATE LETTER
Xxxxxx Industries, Inc.
000 X. Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Bayard Drilling Technologies, Inc.
0000 XX Xxxxxxxxxx
Xxxxx 000X
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed
to be an "affiliate" of Bayard Drilling Technologies, Inc., a Delaware
corporation (the "Company"), as the term "affiliate" is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the terms
of the Agreement and Plan of Merger, dated as of October __, 1998 (the "Merger
Agreement"), among Nabors Acquisition Corp. VII, a Delaware corporation ("Merger
Sub"), the Company and Xxxxxx Industries, Inc., a Delaware corporation
("Parent"), pursuant to which (i) Merger Sub will be merged with and into the
Company, with the Company continuing as the surviving corporation (the
"Merger"), and (ii) the Company will become a subsidiary of Parent and
stockholders of the Company will become stockholders of Parent.
Capitalized terms used in this letter without definition shall have the
meanings assigned to them in the Merger Agreement. As a result of the Merger, I
may receive shares of common stock, par value $.10 per share, of Parent (the
"Parent Common Stock"). I would receive such Parent Common Stock in exchange for
shares (or upon exercise of options or warrants for shares) owned by me of
common stock, par value $.01 per share of the Company (the "Company Common
Stock").
1. I hereby represent, warrant and covenant to the Company and
Parent that in the event I receive any shares of Parent Common Stock as a result
of the Merger:
A. I shall not make any offer, sale, pledge, transfer or other
disposition of the shares of Parent Common Stock in violation of the
Securities Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement
and discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of
the shares of Parent Common Stock, to the extent I felt necessary, with
my counsel or counsel for the Company.
C. I have been advised that the issuance of the shares of
Parent Common Stock to me pursuant to the Merger has been registered
with the SEC under the Securities Act on a Registration Statement on
Form S-4. However, I have also been advised that, because at the time
the Merger is submitted for a vote of the stockholders of the Company,
(a) I may be deemed to be an affiliate of
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the Company and (b) the distribution by me of the shares of Parent
Common Stock has not been registered under the Securities Act, I may
not sell, transfer or otherwise dispose of the shares of Parent Common
Stock issued to me in the Merger unless (i) such sale, transfer or
other disposition is made in conformity with the volume and other
limitations of Rule 145 promulgated by the SEC under the Securities
Act, (ii) such sale, transfer or other disposition has been registered
under the Securities Act or (iii) in the opinion of counsel reasonably
acceptable to Parent, or pursuant to a "no action" letter obtained by
the undersigned from the staff of the SEC, such sale, transfer or other
disposition is otherwise exempt from registration under the Securities
Act.
D. I understand that except as provided for in the Merger
Agreement, Parent is under no obligation to register the sale, transfer
or other disposition of the Parent Stock by me or on my behalf under
the Act or, except as provided in paragraph 2(A), to take any other
action necessary in order to make compliance with an exemption from
such registration available.
E. I also understand that stop transfer instructions will be
given to Parent's transfer agent with respect to the shares of Parent
Common Stock issued to me in the Merger, to the extent that the resale
restrictions contained in Rule 145 may apply to such shares, and there
will be placed on the certificates for such shares of Parent Common
Stock, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT DATED [ ], 1998 BETWEEN THE REGISTERED
HOLDER HEREOF, BAYARD DRILLING TECHNOLOGIES, INC. AND XXXXXX
INDUSTRIES, INC., A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF XXXXXX INDUSTRIES, INC."
F. I also understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a
registration statement, to the extent that the resale restrictions
contained in Rule 145 may apply to such shares, Parent reserves the
right to put the following legend on the certificates issued to my
transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH
A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933."
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64
G. Execution of this letter should not be considered an
admission on my part that I am an "affiliate" of the Company as
described in the first paragraph of this letter, nor as a waiver of any
rights I may have to object to any claim that I am such an affiliate on
or after the date of this letter.
2. By Parent's acceptance of this letter, Parent hereby agrees
with me as follows:
A. For so long as and to the extent necessary to permit me to
sell the shares of Parent Common Stock pursuant to Rule 145 and, to the
extent applicable, Rule 144 under the Securities Act, Parent shall (a)
use its reasonable best efforts to (i) file, on a timely basis, all
reports and data required to be filed with the SEC by it pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended and (ii)
furnish to me upon request a written statement as to whether Parent has
complied with such reporting requirements during the 12 months
preceding any proposed sale of the shares of Parent Common Stock by me
under Rule 145, and (b) otherwise use its reasonable best efforts to
permit such sales pursuant to Rule 145 and Rule 144.
B. It is understood and agreed that certificates with the
legends set forth in paragraphs 1.E. and 1.F. will be substituted by
delivery of certificates without such legend if (i) such certificates
are presented for transfer and a registration statement with respect to
such transfer has become effective under the Securities Act, (ii) one
year shall have elapsed from the date the undersigned acquired the
Parent Common Stock received in the Merger and the provisions of Rule
145(d)(2) are then available to the undersigned, (iii) two years shall
have elapsed from the date the undersigned acquired the shares of
Parent Common Stock received in the Merger and the provisions of Rule
145(d)(3) are then applicable to the undersigned, or (iv) Parent has
received either an opinion of counsel, which opinion and counsel shall
be reasonably satisfactory to Parent, or a "no-action" letter obtained
by the undersigned from the staff of the SEC, to the effect that the
restrictions imposed by Rule 145 under the Securities Act no longer
apply to the undersigned.
Very truly yours,
Agreed and accepted this __ day of ___________, 1998, by
BAYARD DRILLING TECHNOLOGIES, INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
XXXXXX INDUSTRIES, INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
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EXHIBIT 6.11A
TO THE AGREEMENT
AND PLAN OF MERGER
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated ________, 1998, is
entered into between XXXXXX DRILLING USA, INC. (the "Company"), a Delaware
corporation with a business office at 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000 and Xxxxx X. Xxxxx (the "Employee"), whose address is 0000 Xxxxx
Xxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000.
The Company and the Employee desire to enter into a contract of
employment on the terms as hereinafter set forth; and
The Company is associated as a subsidiary or an Affiliate (as defined
in Section 5.2) with Xxxxxx Industries, Inc. ("Nabors") and its subsidiaries,
the number of which varies from time to time, but all of which during all
pertinent times have common business interests either through ownership or
agreement;
NOW, THEREFORE, in consideration of the above recitals, the mutual
promises contained in this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged, the
parties hereto agree as follows:
ARTICLE I
EMPLOYMENT
1.1. The Company hereby employs the Employee and the Employee hereby
accepts such employment and agrees to perform the services specified herein upon
the terms and conditions hereinafter set forth.
1.2. Subject only to the provisions for termination as hereinafter set
forth, the term of this Agreement shall be for a two-year period (the "Term of
Employment") commencing on the date hereof (the "Commencement Date").
Thereafter, this Agreement is subject to renewal upon the mutual agreement of
Employee and the Company. All previous understandings, whether written or oral,
concerning the Employee's employment arrangements with the Company or any
Affiliates of the Company or their respective successors (including but not
limited to the Employee's prior employment agreement with Bayard Drilling
Technologies, Inc.) shall be superseded by this Agreement and shall no longer be
applicable, and the Employee's position referred to herein initially shall be
Vice President - Central Division of the Company.
1.3. The Employee has been elected Vice President - Central Division of
the Company by the Board of Directors of the Company and agrees to perform:
(a) the duties required to effectively discharge the
functions assigned to the Vice President - Central
Division of the Company; and
(b) such other duties and responsibilities directly
relating to the business of the Company or otherwise
as may be reasonably prescribed from time to time by
the Board.
1.4. The Employee shall devote his full time, attention and energy to
the business of the Company or such other successor division or entity that is
owned by the Company or one of its Affiliates. The Employee shall not accept
part-time or full-time employment or have any consulting or other similar
arrangement (including, but not limited to, as a director) with any other entity
without the express written consent of the Company's Board of Directors.
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66
1.5. The Employee shall not appropriate or otherwise divert any
corporate opportunity for his personal benefit which should be directed to, or
otherwise appropriately belongs to, the Company or any Affiliate thereof.
1.6. In the event of a question or dispute with respect to (a) the
adequacy of the time commitment of the Employee, as stipulated above in Section
1.4, or (b) whether an opportunity referred to in Section 1.5 hereof should be
directed to the Company or an Affiliate thereof, the parties agree that the
Board of Directors' determination as to any such question shall be final and
conclusive.
ARTICLE II
COMPENSATION
2.1. For services rendered by the Employee under this Agreement, the
Company shall pay to the Employee cash compensation as follows:
(a) The Employee shall receive during the term of this
Agreement a base annual cash compensation ("Base
Compensation") of $175,000 per annum, payable no less
frequently than monthly, which Base Compensation may
be increased to an amount as may be determined by the
Board of Directors of the Company from time to time.
(b) The Employee shall receive an annual bonus as may be
determined by the Board of Directors of the Company
acting in its reasonable discretion.
2.2. The Company shall reimburse the Employee for all reasonable,
ordinary and necessary entertainment expenses incurred by the Employee on behalf
of the Company. The Employee agrees to account to the Company therefor in the
manner normally prescribed by the Company for the reimbursement of employee
expenses.
2.3. The Company, at its option, shall provide the Employee with a
Company-owned vehicle or an $800 per month automobile allowance, which shall be
utilized to defray the cost and expenses of an automobile to be utilized by the
Employee primarily for Company business.
2.4. The Employee shall be eligible to fully participate in all benefit
programs provided by the Company in accordance with their terms, including but
not limited to a major medical insurance program.
2.5. The Employee shall be entitled to paid vacation of at least four
weeks per calendar year, pro rated for service during such year, in accordance
with the Company's vacation policy, as the same may be amended from time to
time.
2.6. In consideration of the Employee waiving his rights under his
prior employment agreement with Bayard Drilling Technologies, Inc. and entering
into this agreement, the Employee shall receive a one-time, lump sum signing
bonus of $300,000, payable within five business days of the execution and
delivery of this Agreement by the parties hereto, to an account to be specified
by the Employee in writing.
ARTICLE III
STOCK OPTIONS/STOCK GRANTS
The Employee shall receive options to acquire 200,000 shares of common
stock, par value $.10 per share (the "Common Stock"), of Nabors at the closing
price for shares on the date hereof, which date shall be the date of grant. Such
options will vest in four equal installments commencing on the first anniversary
of the date of grant, will have a ten-year term from the date of grant and will
be subject to the terms of Nabors' standard form stock option agreement and the
applicable stock option plan. The Employee shall be eligible to receive further
grants of options to purchase shares of Common Stock in accordance with the
terms of
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Nabors' 1998 Employee Stock Plan (or any successor plan from time to time
adopted by Nabors on terms and conditions described in a stock option agreement
to be entered into between the Employee and Nabors) if, as and when any such
options are granted generally to officers of the Company or an Affiliate. The
exercise price of the options shall be the closing price of the Common Stock on
the date of grant or as otherwise specified in such grant. Subject to the terms
of said stock option agreement, the options will vest in four equal installments
commencing on the first anniversary of the grant and will have a ten-year term
from the date of grant.
ARTICLE IV
DEATH AND DISABILITY BENEFITS
4.1. The Company in its discretion may apply for and procure as owner
and for its own benefit, insurance on the life of the Employee, in such amount
and in such forms as the Company may choose. The Employee shall have no interest
whatsoever in any such policy or policies, but, at the request of the Company,
shall submit to medical examinations and supply such information and execute
such documents as may reasonably be required by the insurance company or
companies to which the Company has applied for insurance.
4.2. The Employee shall be covered by the Company's disability plans as
such plans may from time to time exist. The Company may eliminate or change the
terms and conditions of said plans at its discretion with no liability to the
Employee other than the liability, if any, under such plans which may have
accrued up to the elimination or change of such plans. In the event that because
of physical or mental illness or personal injury while the Employee is employed
by Company, the Employee shall become permanently and totally or partially
disabled such that he is unable to perform, and in all reasonable medical
likelihood will continue indefinitely to be unable to perform, his normal duties
in his regular manner, as determined by independent, competent medical
authority, and such disability continues for a period of 180 consecutive days,
the Employee shall continue to participate in the Company's group insurance
benefits to the extent provided for and permitted in such plans as they may
exist from time to time. All other benefits of full-time or part-time employment
shall terminate.
ARTICLE V
NONDISCLOSURE
5.1 The Employee will treat as confidential any knowledge of the
Company's or its Affiliates' (as defined below) formulae, specifications or
secret processes or other confidential information (including both business and
technical information) the Employee may acquire in the course of his employment
and the Employee will not divulge any information with respect to any formulae,
specifications, methods or processes or other confidential information of the
Company or its Affiliates or with respect to any other matter of a secret nature
which may have come into his possession or knowledge while in the employ of the
Company, or publish or cause to be published, or otherwise utilize, any such
information, except as he may be authorized so to do by the Company in
furtherance of the business of the Company and its Affiliates, unless (i) such
information is already known to the Employee, (ii) such information becomes
publicly available through no fault of the Employee or (iii) such information is
required to be disclosed by legal proceedings or applicable law. In the event of
a breach or threatened breach by the Employee of the provisions of this Article
V, the Company shall be entitled to an injunction, without the necessity of
posting bond, restraining the Employee from disclosing, in whole or in part,
such confidential information. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies available to the Company for such
breach or threatened breach, including the recovery of damages from the
Employee.
5.2 As used in this Agreement, the term "Affiliate" and derivatives
thereof mean any person or entity directly or indirectly controlling, controlled
by or under common control with the Company, and the term "control" and
derivatives thereof mean (a) the ownership or power to vote more than 50% of the
shares or
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other equity interests in an entity or (b) the ability to direct such entity's
business and affairs. For purposes of this Agreement, the term "Affiliate" also
shall include Bayard Drilling Technologies, Inc.
ARTICLE VI
TERMINATION
6.1. Employment of the Employee may be terminated by the Company prior
to the expiration of the Term of Employment under any of the following
conditions:
(a) The death of the Employee.
(b) The disability (whether total or partial) of the
Employee which renders him permanently unable to
perform his duties hereunder.
(c) The disability (whether total or partial) of the
Employee which renders him temporarily unable to
perform his duties for a period of at least 180
consecutive days.
(d) "For cause" (as defined in Section 6.1(f)).
(e) At its sole discretion for any reason, without cause,
upon 30 days' written notice.
(f) Termination of the Employee "for cause" shall mean
any one or more of the following:
(i) the commission in the course of the
Employee's employment by the Company of any
fraudulent act, embezzlement, theft or
dishonesty;
(ii) any conviction of, or plea of guilty or nolo
contendere by, the Employee to a felony
under a criminal code of the United States
of America or any state thereof (from which,
through lapse of time or otherwise, no
successful appeal shall have been made),
whether or not committed in the course of
his employment by the Company;
(iii) the willful refusal or repeated failure by
the Employee to carry out reasonable, lawful
instructions of the Board of Directors or
any senior officer of the Company relating
to the duties of the Employee set forth in
Section 1.3;
(iv) the willful disclosure of any trade secrets
or confidential corporate information of the
Company to persons not authorized to know
same, unless such disclosure is required by
any law or court order or similar process;
or
(v) the willful refusal or repeated failure of
the Employee to perform or to observe any
material provision of this Agreement, or to
perform the duties of his employment in any
material respect.
The Employee may voluntarily terminate his employment under this Agreement at
any time by providing 30 days' prior written notice thereof to the Company.
6.2 (a) In the event of termination by the Company
pursuant to subsection (a), (b) or (c) of Section
6.1, the Company agrees to pay to the Employee six
months' base salary or the time remaining in the Term
of Employment, whichever is less, at the applicable
Base Compensation at the time of termination, payable
over such period in accordance with Section 2.1(a).
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(b) In the event of a termination by the Company for
cause (other than pursuant to Section 6.1(f)(ii)),
the Company shall deliver a written notice to the
Employee at least 30 days prior to the date of
termination, which notice shall set forth in detail
the cause. If the event which gives rise to the
termination for cause is capable of being cured, and
if the Employee effects such a cure within such
30-day period, such termination for cause shall not
occur. In the event of a termination by the Company
for cause pursuant to Section 6.1(f)(ii), the
Employee's employment shall terminate automatically,
without any further action on the part of the
Company. If the Employee is terminated for cause, the
Company shall have no further obligation to the
Employee, other than payment of salary accrued at the
applicable Base Compensation through the date of
termination.
(c) In the event of a termination by the Company pursuant
to Section 6.1(e), the Company agrees to pay to the
Employee his base salary for the time remaining in
the Term of Employment payable over such period in
accordance with Section 2.1(a).
(d) In the event of a voluntary termination by the
Employee, the Employee shall be entitled to receive
his salary at the applicable Base Compensation
through the date of termination.
ARTICLE VII
RESTRICTIVE COVENANT
7.1. The Employee agrees that during the period specified in subsection
7.2, he will not, within the Restricted Territory (as defined below), as
principal, agent, trustee or through the agency of any corporation, partnership,
association or agent or agency, engage in any business that is now conducted or
during the Term of Employment is conducted by the Company or any of its
Affiliates, and shall not be (in each case, other than with respect to the
Company or an Affiliate):
(a) the owner of more than one percent of the outstanding
capital stock of any corporation having 500 or more
stockholders;
(b) the owner of any of the outstanding capital stock of
any corporation having fewer than 500 stockholders;
(c) an officer, director or employee of any corporation;
(d) a member or employee of any partnership; or
(e) an owner or employee of any other business or entity;
which conducts any business now being conducted or any business being conducted
during the term of this Agreement by the Company or any of its Affiliates.
"Restricted Territory" means any geographic area in which the Company or any
Affiliate has significant business activities during such period, including on
the date hereof, but not limited to, the Lower 48 United States and Mexico. The
Employee further agrees that during the period specified in Section 7.2, he will
not (i) directly or indirectly induce any customers or potential customers of
the Company or any Affiliate to patronize any business engaged in the type of
business now being conducted by the Company (or its Affiliates) or conducted by
the Company (or its Affiliates) at the date of termination of his employment
with the Company, other than that of the Company or its Affiliates; (ii)
canvass, solicit or accept any said business from any customers or potential
customers of the Company or any Affiliate; (iii) directly or indirectly request
or advise any customers of the Company or any Affiliate to
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withdraw, curtail or cancel such customer's business with the Company or
Affiliate; or (iv) directly or indirectly disclose to any other person, firm or
corporation the names or addresses of any of the customers or potential
customers of the Company or any Affiliate, other than to or for the benefit of
the Company or any Affiliate. During such term, the Employee further agrees that
he will not, either directly or indirectly through any person, firm, association
or corporation with which he is now or may hereafter become associated, cause or
induce any present or future employee of the Company or any Affiliate to leave
the employ of the Company or any Affiliate to accept employment with the
Employee or with such person, firm, association or corporation.
7.2. The provisions of this Article VII shall be applicable only so
long as the Company is making payments as required by this Agreement.
7.3. In the event that the provisions of this Article VII should ever
be deemed to exceed the limitations permitted by applicable laws, then such
provisions shall be reformed to the maximum limitations permitted by applicable
laws.
ARTICLE VIII
INVENTION AND DISCLOSURE
8.1. Any discoveries, ideas and suggestions, improvements and/or
inventions of any character pertaining to the present scope of the business of
the Company and its Affiliates or any reasonable or contemplated expansion
thereof, made and/or developed by the Employee while in the employ of the
Company, whether or not conceived or made during his regular working hours, or
whether or not the Employee is specifically instructed to make or develop the
same, shall be for the benefit of the Company and shall be considered to have
been made under and by virtue of this agreement and shall immediately become the
sole and exclusive property of the Company.
8.2. The Employee will disclose to the Company any and all discoveries,
ideas, suggestions, improvements and/or inventions which the Employee may make
solely, jointly or in common with others, while employed by the Company or any
Affiliate and which relate to any method, product, process, machine or apparatus
for use in the drilling industry or which relate to the present scope of the
business of the Company and its Affiliates or any reasonable or contemplated
expansion thereof.
8.3. The Employee hereby assigns, sells and transfers to the Company
his entire right, title and interest in and to any and all discoveries, ideas,
suggestions, improvements and/or inventions referred to herein and in and to all
letters patent (and applications for letters patent) which may be or may have
been filed, on such discoveries, ideas, suggestions, improvements and/or
inventions made or conceived by him while employed by the Company, solely or
jointly, and the Employee agrees both during and after any employment by the
Company or its Affiliates, to execute and deliver to the Company any and all
instruments and papers necessary or desirable to accomplish such assignment,
sale and transfer and all instruments or papers which may be necessary or
desirable to obtain and promote the right to the exclusive enjoyment of the
discoveries, ideas, suggestions, improvements and/or inventions by the Company,
when requested by the Company, to testify in any legal proceeding on behalf of
the Company and to sign, at the request of the Company, all lawful papers and to
execute and sign any original, additional, provisional, reissue or other related
applications for letters patent with respect to said discoveries, ideas,
suggestions, improvements and/or inventions which may be necessary or desirable
to accomplish the foregoing, and in general to do all lawful acts to aid the
Company to obtain and enforce protection of its aforesaid discoveries, ideas,
suggestions, improvements and/or inventions in any and all countries. Such
assistance will be without additional compensation to the Employee; provided,
however, that in giving such assistance and in testifying and signing documents
as aforesaid, the Employee shall not be required to expend any money, but all
expenses in connection therewith shall be assumed and paid by the Company,
provided such expenses shall have been incurred at the request of the Company.
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8.4. The Employee hereby represents and warrants to the Company that,
except for inventions, improvements and discoveries made during employment with
the Company, there are at present no discoveries, ideas, suggestions,
improvements and/or inventions not covered by patents or patent applications,
which were conceived, made, invented or discovered by the Employee before
entering the employ of the Company and which the Employee desires to remove from
the operation of this Agreement.
8.5. The Employee hereby sells, transfers and assigns to the Company
all of the entire right, title and interest of the Employee in and to all
copyrightable material made or conceived by the Employee, solely or jointly,
while employed by the Company, which relate or pertain to the business,
functions or operations of Company or its Affiliates or any reasonable or
contemplated expansion thereof. The Employee agrees to communicate promptly and
to disclose to the Company in any form as he may be required to do so all
information, details and data pertaining to the above copyrightable material and
to execute and deliver to the Company formal transfers and assignments and other
papers and documents as may be required of the Employee to permit the Company to
register copyrights thereon and to perfect the Company's ownership thereof. With
respect to such copyrightable materials created by the Employee in connection
with the employment under this agreement, the Employee acknowledges that the
Employee is an "employee" under the copyright laws of the United States and that
the Company shall therefore own all copyrights in any such created works and
that the Employee shall have no rights in such works. If necessary to give
effect to this provision, the Employee hereby assigns to the Company and agrees
to assign to the Company all rights and any copyrights in any such works.
8.6. The Employee agrees to return to the Company, upon leaving the
employ of the Company, all plans, drawings, models, papers, notes, books and
other documents belonging to the Company or its Affiliates or relating to their
businesses.
ARTICLE IX
MISCELLANEOUS
9.1. THIS AGREEMENT SHALL BE SUBJECT TO AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF TEXAS, WITHOUT APPLICATION OF THE CONFLICTS OF LAW
PROVISIONS THEREOF.
9.2. All notices to be given hereunder shall be in writing. All written
notices required in this Agreement shall be sent postage prepaid by certified or
registered mail, return receipt requested.
9.3. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing, and if sent by registered mail to the
Employee at his latest home address on file with the Company, to the Company in
care of Nabors Corporate Services, Inc., 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000, Attention: President, or to such other address as any
party shall designate by written notice to the other.
9.4. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company.
9.5. If any provision of this Agreement should be held invalid, the
remainder of this Agreement shall be enforced to the greatest extent permitted
by applicable law, it being the intent of the parties that invalid or
unenforceable provisions are severable.
9.6. No modification or waiver of this Agreement or any part hereof
shall be valid or effective unless in writing and signed by the parties hereto.
Further, no waiver or breach of this Agreement shall be deemed to be a waiver of
any other subsequent breach or condition, whether of a like or different nature.
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9.7. The headings of paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to effect the constitution hereof.
9.8. This Agreement may be executed in one or more counterparts, each
of which shall for all purposes be deemed to be an original, but all of which
shall constitute one and the same Agreement.
9.9. This Agreement contains the entire agreement between the parties
with respect to the employment of Employee by the Corporation and supersedes any
and all prior understandings, agreements or correspondence between the parties.
9.10. In the event of any dispute or disagreement between the parties
hereto arising out of or relating to this Agreement or the breach, termination
or invalidity thereof, or with respect to Employee's employment with the
Company, the Company shall appoint a senior level representative to meet with
the Employee for the purpose of resolving such dispute or disagreement through
meetings and discussions. If at least one such meeting has taken place, or if
either party refuses or fails to attend such a meeting, or if either party
believes after one such meeting that resolution of the dispute or disagreement
is unlikely, then either party may demand arbitration under the provisions of
this Section 9.10. Such arbitration shall be conducted under the then existing
commercial arbitration rules of the American Arbitration Association (the "AAA")
to the extent that such rules are not inconsistent with the provisions of this
Section 9.10. The arbitration shall be heard by three arbitrators chosen in
accordance with the rules of the AAA. The place of arbitration shall be at
Houston, Texas. The arbitrators shall render a written decision which shall be
final and binding upon the parties and shall be enforceable in any court having
jurisdiction over the parties. The Employee acknowledges that a remedy at law
for any breach by the Employee of the provisions of Articles VII and VIII of
this Agreement will be inadequate, and, notwithstanding anything else herein
contained, the Employee hereby agrees that the Company shall be entitled to
pre-award/pre-judgment or post-award/post-judgment injunctive relief from a
court of competent jurisdiction or arbitration panel in case of any such breach,
without limiting any other relief to which the Company may be entitled at law or
equity or under this Agreement and the Employee expressly waives, to the fullest
extent permitted by law, the posting of any bond or security that might
otherwise be required, in connection therewith, by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first above written in one or more
counterparts.
XXXXXX DRILLING USA, INC.
By:
-----------------------------------------
Xxxxxxx X. Xxxxxxxx
President
"Employee"
--------------------------------------------
Xxxxx X. Xxxxx
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EXHIBIT 6.11 B
TO THE AGREEMENT
AND PLAN OF MERGER
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated ________, 1998, is
entered into between XXXXXX DRILLING USA, INC. (the "Company"), a Delaware
corporation with a business office at 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000 and Xxxxxx X. Xxxxx, III (the "Employee"), whose address is 00000
Xxx Xxxx Xxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000.
The Company and the Employee desire to enter into a contract of
employment on the terms as hereinafter set forth; and
The Company is associated as a subsidiary or an Affiliate (as defined
in Section 5.2) with Xxxxxx Industries, Inc. ("Nabors") and its subsidiaries,
the number of which varies from time to time, but all of which during all
pertinent times have common business interests either through ownership or
agreement;
NOW, THEREFORE, in consideration of the above recitals, the mutual
promises contained in this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged, the
parties hereto agree as follows:
ARTICLE I
EMPLOYMENT
1.1. The Company hereby employs the Employee and the Employee
hereby accepts such employment and agrees to perform the services specified
herein upon the terms and conditions hereinafter set forth.
1.2. Subject only to the provisions for termination as hereinafter
set forth, the term of this Agreement shall be for a one-year period (the "Term
of Employment") commencing on the date hereof (the "Commencement Date").
Thereafter, this Agreement is subject to renewal upon the mutual agreement of
Employee and the Company. All previous understandings, whether written or oral,
concerning the Employee's employment arrangements with the Company or any
Affiliates of the Company or their respective successors (including but not
limited to the Employee's prior employment agreement with Bayard Drilling
Technologies, Inc.) shall be superseded by this Agreement and shall no longer be
applicable, and the Employee's position referred to herein initially shall be
Marketing Manager - Central Division of the Company.
1.3. The Employee has been appointed Marketing Manager - Central
Division of the Company by the President of the Company and agrees to perform:
(a) the duties required to effectively discharge the
functions assigned to the Marketing Manager - Central
Division; and
(b) such other duties and responsibilities directly
relating to the business of the Company or otherwise
as may be reasonably prescribed from time to time by
the Board.
1.4. The Employee shall devote his full time, attention and energy
to the business of the Company or such other successor division or entity that
is owned by the Company or one of its Affiliates. The Employee shall not accept
part-time or full-time employment or have any consulting or other similar
arrangement (including, but not limited to, as a director) with any other entity
without the express written consent of the Company's Board of Directors.
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1.5. The Employee shall not appropriate or otherwise divert any
corporate opportunity for his personal benefit which should be directed to, or
otherwise appropriately belongs to, the Company or any Affiliate thereof.
1.6. In the event of a question or dispute with respect to (a) the
adequacy of the time commitment of the Employee, as stipulated above in Section
1.4, or (b) whether an opportunity referred to in Section 1.5 hereof should be
directed to the Company or an Affiliate thereof, the parties agree that the
Board of Directors' determination as to any such question shall be final and
conclusive.
ARTICLE II
COMPENSATION
2.1. For services rendered by the Employee under this Agreement,
the Company shall pay to the Employee cash compensation as follows:
(a) The Employee shall receive during the term of this
Agreement a base annual cash compensation ("Base
Compensation") of $130,000 per annum, payable no less
frequently than monthly, which Base Compensation may
be increased to an amount as may be determined by the
Board of Directors of the Company from time to time.
(b) The Employee shall receive an annual bonus as may be
determined by the Board of Directors of the Company
acting in its reasonable discretion.
2.2. The Company shall reimburse the Employee for all reasonable,
ordinary and necessary entertainment expenses incurred by the Employee on behalf
of the Company. The Employee agrees to account to the Company therefor in the
manner normally prescribed by the Company for the reimbursement of employee
expenses.
2.3. The Company, at its option, shall provide the Employee with a
Company-owned vehicle or a $800 per month automobile allowance, which shall be
utilized to defray the cost and expenses of an automobile to be utilized by the
Employee primarily for Company business.
2.4. The Employee shall be eligible to fully participate in all
benefit programs provided by the Company in accordance with their terms,
including but not limited to a major medical insurance program.
2.5. The Employee shall be entitled to paid vacation of at least
four weeks per calendar year pro rated for service during such year, in
accordance with the Company's vacation policy, as the same may be amended from
time to time.
2.6 In consideration of the Employee waving his rights under his
prior employment agreement with Bayard Drilling Technologies, Inc. and entering
into this Agreement, the Employee shall receive (a) a one-time, lump sum signing
bonus of $40,000 and (b) if still employed by the Company or an Affiliate at the
end of the Term of Employment, an additional one-time, lump sum bonus of
$40,000. Each such bonus payment shall be payable within five business days of
the occurrence of the event giving rise to such bonus payment, to an account to
be specified by the Employee in writing.
ARTICLE III
STOCK OPTIONS/STOCK GRANTS
The Employee shall receive options to acquire 40,000 shares of common
stock, par value $.10 per share (the "Common Stock"), of Nabors at the closing
price for shares on the date hereof, which date shall be the date of grant. Such
options will vest in four equal installments commencing on the first anniversary
of
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the date of grant, will have a ten-year term from the date of grant and will be
subject to the terms of Nabors' standard form stock option agreement and the
applicable stock option plan. The Employee shall be eligible to receive further
grants of options to purchase shares of Common Stock in accordance with the
terms of Nabors' 1998 Employee Stock Plan (or any successor plan from time to
time adopted by Nabors on terms and conditions described in a stock option
agreement to be entered into between the Employee and Nabors) if, as and when
any such options are granted generally to officers and directors of the Company
or an Affiliate. The exercise price of the options shall be the closing price of
the Common Stock on the date of grant or as otherwise specified in such grant.
Subject to the terms of said stock option agreement, the options will vest in
four equal installments commencing on the first anniversary of the grant and
will have a ten-year term from the date of grant.
ARTICLE IV
DEATH AND DISABILITY BENEFITS
4.1. The Company in its discretion may apply for and procure as
owner and for its own benefit, insurance on the life of the Employee, in such
amount and in such forms as the Company may choose. The Employee shall have no
interest whatsoever in any such policy or policies, but, at the request of the
Company, shall submit to medical examinations and supply such information and
execute such documents as may reasonably be required by the insurance company or
companies to which the Company has applied for insurance.
4.2. The Employee shall be covered by the Company's disability
plans as such plans may from time to time exist. The Company may eliminate or
change the terms and conditions of said plans at its discretion with no
liability to the Employee other than the liability, if any, under such plans
which may have accrued up to the elimination or change of such plans. In the
event that because of physical or mental illness or personal injury while the
Employee is employed by Company, the Employee shall become permanently and
totally or partially disabled such that he is unable to perform, and in all
reasonable medical likelihood will continue indefinitely to be unable to
perform, his normal duties in his regular manner, as determined by independent,
competent medical authority, and such disability continues for a period of 180
consecutive days, the Employee shall continue to participate in the Company's
group insurance benefits to the extent provided for and permitted in such plans
as they may exist from time to time. All other benefits of full-time or
part-time employment shall terminate.
ARTICLE V
NONDISCLOSURE
5.1 The Employee will treat as confidential any knowledge of the
Company's or its Affiliates' (as defined below) formulae, specifications or
secret processes or other confidential information (including both business and
technical information) the Employee may acquire in the course of his employment
and the Employee will not divulge any information with respect to any formulae,
specifications, methods or processes or other confidential information of the
Company or its Affiliates or with respect to any other matter of a secret nature
which may have come into his possession or knowledge while in the employ of the
Company, or publish or cause to be published, or otherwise utilize, any such
information, except as he may be authorized so to do by the Company in
furtherance of the business of the Company and its Affiliates, unless (i) such
information is already known to the Employee, (ii) such information becomes
publicly available through no fault of the Employee or (iii) such information is
required to be disclosed by legal proceedings or applicable law. In the event of
a breach or threatened breach by the Employee of the provisions of this Article
V, the Company shall be entitled to an injunction, without the necessity of
posting bond, restraining the Employee from disclosing, in whole or in part,
such confidential information. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies available to the Company for such
breach or threatened breach, including the recovery of damages from the
Employee.
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5.2 As used in this Agreement, the term "Affiliate" and
derivatives thereof mean any person or entity directly or indirectly
controlling, controlled by or under common control with the Company, and the
term "control" and derivatives thereof mean (a) the ownership or power to vote
more than 50% of the shares or other equity interests in an entity or (b) the
ability to direct such entity's business and affairs. For purposes of this
Agreement, the term "Affiliate" also shall include Bayard Drilling Technologies,
Inc.
ARTICLE VI
TERMINATION
6.1. Employment of the Employee may be terminated by the Company
prior to the expiration of the Term of Employment under any of the following
conditions:
(a) The death of the Employee.
(b) The disability (whether total or partial) of the
Employee which renders him permanently unable to
perform his duties hereunder.
(c) The disability (whether total or partial) of the
Employee which renders him temporarily unable to
perform his duties for a period of at least 180
consecutive days.
(d) Termination by the Company "for cause" (as defined in
Section 6.1(f)).
(e) The termination by the Company at its sole discretion
for any reason, without cause, upon 30 days' written
notice.
(f) Termination of the Employee "for cause" shall mean any
one or more of the following:
(i) the commission in the course of the
Employee's employment by the Company of any
fraudulent act, embezzlement, theft or
dishonesty;
(ii) any conviction of, or plea of guilty or nolo
contendere by, the Employee to a felony under
a criminal code of the United States of
America or any state thereof (from which,
through lapse of time or otherwise, no
successful appeal shall have been made),
whether or not committed in the course of his
employment by the Company;
(iii) the willful refusal or repeated failure by
the Employee to carry out reasonable, lawful
instructions of the Board of Directors or any
senior officer of the Company relating to the
duties of the Employee set forth in Section
1.3;
(iv) the willful disclosure of any trade secrets
or confidential corporate information of the
Company to persons not authorized to know
same, unless such disclosure is required by
any law or court order or similar process; or
(v) the willful refusal or repeated failure of
the Employee to perform or to observe any
material provision of this Agreement, or to
perform the duties of his employment in any
material respect.
The Employee may voluntarily terminate his employment under this Agreement at
any time by providing 30 days' prior written notice thereof to the Company.
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6.2 (a) In the event of termination by the Company pursuant to
subsection (a), (b) or (c) of Section 6.1, the Company
agrees to pay to the Employee six months' base salary
or the time remaining in the Term of Employment,
whichever is less, at the applicable Base Compensation
at the time of termination, payable over such period
in accordance with Section 2.1(a).
(b) In the event of a termination by the Company for cause
(other than pursuant to Section 6.1(f)(ii)), the
Company shall deliver a written notice to the Employee
at least 30 days prior to the date of termination,
which notice shall set forth in detail the cause. If
the event which gives rise to the termination for
cause is capable of being cured, and if the Employee
effects such a cure within such 30-day period, such
termination for cause shall not occur. In the event of
a termination by the Company for cause pursuant to
Section 6.1(f)(ii), the Employee's employment shall
terminate automatically, without any further action on
the part of the Company. If the Employee is terminated
for cause, the Company shall have no further
obligation to the Employee, other than payment of
salary accrued at the applicable Base Compensation
through the date of termination.
(c) In the event of a termination by the Company pursuant
to Section 6.1(e), the Company agrees to pay to the
Employee his base salary at the applicable Base
Compensation for the time remaining in the Term of
Employment, payable over such period in accordance
with Section 2.1(a).
(d) The Employee may voluntarily terminate his employment
under this Agreement at any time by providing at least
30 days' prior written notice thereof to the Company.
In the event the Employee voluntarily terminates his
employment in accordance with the last sentence of
Section 6.1, the Employee shall be entitled to receive
his salary at the applicable Base Compensation through
the date of termination.
ARTICLE VII
RESTRICTIVE COVENANT
7.1. The Employee agrees that during the period specified in
subsection 7.2, he will not, within the Restricted Territory (as defined below),
as principal, agent, trustee or through the agency of any corporation,
partnership, association or agent or agency, engage in any business that is now
conducted or during the Term of Employment is conducted by the Company or any of
its Affiliates, and shall not be (in each case, other than with respect to the
Company or an Affiliate):
(a) the owner of more than one percent of the outstanding
capital stock of any corporation having 500 or more
stockholders;
(b) the owner of any of the outstanding capital stock of
any corporation having fewer than 500 stockholders;
(c) an officer, director or employee of any corporation;
(d) a member or employee of any partnership; or
(e) an owner or employee of any other business or entity;
which conducts any business now being conducted or any business being conducted
during the term of this Agreement by the Company or any of its Affiliates.
"Restricted Territory" means any geographic area in which
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the Company or any Affiliate has significant business activities during such
period, including on the date hereof, but not limited to, the Lower 48 United
States and Mexico. The Employee further agrees that during the period specified
in Section 7.2, he will not (i) directly or indirectly induce any customers or
potential customers of the Company or any Affiliate to patronize any business
engaged in the type of business now being conducted by the Company (or its
Affiliates) or conducted by the Company (or its Affiliates) at the date of
termination of his employment with the Company, other than that of the Company
or its Affiliates; (ii) canvass, solicit or accept any said business from any
customers or potential customers of the Company or any Affiliate; (iii) directly
or indirectly request or advise any customers of the Company or any Affiliate to
withdraw, curtail or cancel such customer's business with the Company or
Affiliate; or (iv) directly or indirectly disclose to any other person, firm or
corporation the names or addresses of any of the customers or potential
customers of the Company or any Affiliate, other than to or for the benefit of
the Company or any Affiliate. During such term, the Employee further agrees that
he will not, either directly or indirectly through any person, firm, association
or corporation with which he is now or may hereafter become associated, cause or
induce any present or future employee of the Company or any Affiliate to leave
the employ of the Company or any Affiliate to accept employment with the
Employee or with such person, firm, association or corporation.
7.2. The provisions of this Article VII shall be applicable until
only so long as the Company is making payments as required by this Agreement.
7.3. In the event that the provisions of this Article VII should
ever be deemed to exceed the limitations permitted by applicable laws, then such
provisions shall be reformed to the maximum limitations permitted by applicable
laws.
ARTICLE VIII
INVENTION AND DISCLOSURE
8.1. Any discoveries, ideas and suggestions, improvements and/or
inventions of any character pertaining to the present scope of the business of
the Company and its Affiliates or any reasonable or contemplated expansion
thereof, made and/or developed by the Employee while in the employ of the
Company, whether or not conceived or made during his regular working hours, or
whether or not the Employee is specifically instructed to make or develop the
same, shall be for the benefit of the Company and shall be considered to have
been made under and by virtue of this agreement and shall immediately become the
sole and exclusive property of the Company.
8.2. The Employee will disclose to the Company any and all
discoveries, ideas, suggestions, improvements and/or inventions which the
Employee may make solely, jointly or in common with others, while employed by
the Company or any Affiliate and which relate to any method, product, process,
machine or apparatus for use in the drilling industry or which relate to the
present scope of the business of the Company and its Affiliates or any
reasonable or contemplated expansion thereof.
8.3. The Employee hereby assigns, sells and transfers to the
Company his entire right, title and interest in and to any and all discoveries,
ideas, suggestions, improvements and/or inventions referred to herein and in and
to all letters patent (and applications for letters patent) which may be or may
have been filed, on such discoveries, ideas, suggestions, improvements and/or
inventions made or conceived by him while employed by the Company, solely or
jointly, and the Employee agrees both during and after any employment by the
Company or its Affiliates, to execute and deliver to the Company any and all
instruments and papers necessary or desirable to accomplish such assignment,
sale and transfer and all instruments or papers which may be necessary or
desirable to obtain and promote the right to the exclusive enjoyment of the
discoveries, ideas, suggestions, improvements and/or inventions by the Company,
when requested by the Company, to testify in any legal proceeding on behalf of
the Company and to sign, at the request of the Company, all lawful papers and to
execute and sign any original, additional, provisional, reissue or other related
applications for letters patent with respect to said discoveries, ideas,
suggestions, improvements and/or inventions which may be necessary or desirable
to accomplish the foregoing, and in general to do all lawful acts to aid the
Company
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to obtain and enforce protection of its aforesaid discoveries, ideas,
suggestions, improvements and/or inventions in any and all countries. Such
assistance will be without additional compensation to the Employee; provided,
however, that in giving such assistance and in testifying and signing documents
as aforesaid, the Employee shall not be required to expend any money, but all
expenses in connection therewith shall be assumed and paid by the Company,
provided such expenses shall have been incurred at the request of the Company.
8.4. The Employee hereby represents and warrants to the Company
that, except for inventions, improvements and discoveries made during employment
with the Company, there are at present no discoveries, ideas, suggestions,
improvements and/or inventions not covered by patents or patent applications,
which were conceived, made, invented or discovered by the Employee before
entering the employ of the Company and which the Employee desires to remove from
the operation of this Agreement.
8.5. The Employee hereby sells, transfers and assigns to the
Company all of the entire right, title and interest of the Employee in and to
all copyrightable material made or conceived by the Employee, solely or jointly,
while employed by the Company, which relate or pertain to the business,
functions or operations of Company or its Affiliates or any reasonable or
contemplated expansion thereof. The Employee agrees to communicate promptly and
to disclose to the Company in any form as he may be required to do so all
information, details and data pertaining to the above copyrightable material and
to execute and deliver to the Company formal transfers and assignments and other
papers and documents as may be required of the Employee to permit the Company to
register copyrights thereon and to perfect the Company's ownership thereof. With
respect to such copyrightable materials created by the Employee in connection
with the employment under this agreement, the Employee acknowledges that the
Employee is an "employee" under the copyright laws of the United States and that
the Company shall therefore own all copyrights in any such created works and
that the Employee shall have no rights in such works. If necessary to give
effect to this provision, the Employee hereby assigns to the Company and agrees
to assign to the Company all rights and any copyrights in any such works.
8.6. The Employee agrees to return to the Company, upon leaving the
employ of the Company, all plans, drawings, models, papers, notes, books and
other documents belonging to the Company or its Affiliates or relating to their
businesses.
ARTICLE IX
MISCELLANEOUS
9.1. THIS AGREEMENT SHALL BE SUBJECT TO AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT APPLICATION OF THE CONFLICTS OF LAW
PROVISIONS THEREOF.
9.2. All notices to be given hereunder shall be in writing. All
written notices required in this Agreement shall be sent postage prepaid by
certified or registered mail, return receipt requested.
9.3. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered mail to
the Employee at his latest home address on file with the Company, to the Company
in care of Xxxxxx Corporate Services, Inc., 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000, Attention: President, or to such other address as any
party shall designate by written notice to the other.
9.4. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company.
9.5. If any provision of this Agreement should be held invalid, the
remainder of this Agreement shall be enforced to the greatest extent permitted
by applicable law, it being the intent of the parties that invalid or
unenforceable provisions are severable.
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9.6. No modification or waiver of this Agreement or any part hereof
shall be valid or effective unless in writing and signed by the parties hereto.
Further, no waiver or breach of this Agreement shall be deemed to be a waiver of
any other subsequent breach or condition, whether of a like or different nature.
9.7. The headings of paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to effect the constitution hereof.
9.8. This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original, but all of
which shall constitute one and the same Agreement.
9.9. This Agreement contains the entire agreement between the
parties with respect to the employment of Employee by the Corporation and
supersedes any and all prior understandings, agreements or correspondence
between the parties.
9.10. In the event of any dispute or disagreement between the
parties hereto arising out of or relating to this Agreement or the breach,
termination or invalidity thereof, or with respect to Employee's employment with
the Company, the Company shall appoint a senior level representative to meet
with the Employee for the purpose of resolving such dispute or disagreement
through meetings and discussions. If at least one such meeting has taken place,
or if either party refuses or fails to attend such a meeting, or if either party
believes after one such meeting that resolution of the dispute or disagreement
is unlikely, then either party may demand arbitration under the provisions of
this Section 9.10. Such arbitration shall be conducted under the then existing
commercial arbitration rules of the American Arbitration Association (the "AAA")
to the extent that such rules are not inconsistent with the provisions of this
Section 9.10. The arbitration shall be heard by three arbitrators chosen in
accordance with the rules of the AAA. The place of arbitration shall be at
Houston, Texas. The arbitrators shall render a written decision which shall be
final and binding upon the parties and shall be enforceable in any court having
jurisdiction over the parties. The Employee acknowledges that a remedy at law
for any breach by the Employee of the provisions of Articles VII and VIII of
this Agreement will be inadequate, and, notwithstanding anything else herein
contained, the Employee hereby agrees that the Company shall be entitled to
pre-award/pre-judgment or post-award/post-judgment injunctive relief from a
court of competent jurisdiction or arbitration panel in case of any such breach,
without limiting any other relief to which the Company may be entitled at law or
equity or under this Agreement and the Employee expressly waives, to the fullest
extent permitted by law, the posting of any bond or security that might
otherwise be required, in connection therewith, by the Company.
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81
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first above written in one or more
counterparts.
XXXXXX DRILLING USA, INC.
By:
-----------------------------
Xxxxxxx X. Xxxxxxxx
President
"Employee"
--------------------------------
Xxxxxx X. Xxxxx, III
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