AGREEMENT REGARDING DISTRIBUTION
AND PLAN OF REORGANIZATION
THIS AGREEMENT REGARDING DISTRIBUTION AND PLAN OF REORGANIZATION (referred
to herein as the "Agreement"), dated as of February 12, 2001, by and between
RPC, INC., a Delaware corporation ("RPC"), and MARINE PRODUCTS CORPORATION, a
Delaware corporation ("Marine").
RECITALS
A. RPC has formed Marine as a wholly-owned subsidiary for the purpose of
taking title to the stock of Chaparral Boats, Inc. ("Chaparral"), a wholly owned
subsidiary of RPC, the assets and liabilities of which constitute RPC's boat
manufacturing operations (the "Boat Manufacturing Business").
B. The Board of Directors of RPC has determined that it is in the best
interests of RPC and its shareholders to transfer and assign to Marine,
effective prior to the Effective Time (as defined herein), the capital stock of
Chaparral, as a capital contribution, and to receive in exchange therefor
additional shares of Marine Common Stock (as defined herein).
C. The Board of Directors of RPC has further determined that it is in the
best interests of RPC and its shareholders to make a distribution (the
"Distribution") to the holders of RPC Common Stock (as defined herein) of all of
the outstanding shares of Marine Common Stock at the rate of 0.6 shares of
Marine Common Stock for every one share of RPC Common Stock outstanding as of
the Record Date (as defined herein).
E. The parties have received a favorable ruling letter from the Internal
Revenue Service (the "IRS") concerning the non-taxability of the Distribution to
RPC or its shareholders pursuant to Section 355 of the Code (as defined herein),
if consummated pursuant to the terms and conditions contained in the request
therefor.
F. The parties have determined that it is necessary and desirable to set
forth the principal corporate transactions required to effect the Distribution
and to set forth other agreements that will govern certain other matters
following the Distribution.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements and covenants contained in this Agreement and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used herein, the following terms have the
following meaning:
"Action" means any claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, governmental or other regulatory or
administrative agency or commission or any other tribunal.
"Ancillary Agreements" means all of the written agreements, instruments,
understandings, assignments and other arrangements entered into in connection
with the transactions contemplated hereby, including, without limitation, the
Employee Benefits Agreement, the Transition Support Services Agreement, and the
Tax Sharing Agreement.
"Assets" means all properties, rights, contracts, leases and claims, of
every kind and description, wherever located, whether tangible or intangible,
and whether real, personal or mixed.
"Chaparral" has the meaning set forth in the Recitals to this Agreement.
"Chaparral Stock" means the capital stock of Chaparral to be transferred at
or prior to the Effective Time by RPC to Marine.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Distribution" has the meaning set forth in the Recitals to this Agreement.
"Distribution Agent" means SunTrust Bank, Atlanta, in its capacity as agent
for RPC in connection with the Distribution.
"Distribution Date" means the date upon which the Distribution shall be
effective, as determined by the Board of Directors of RPC.
"Effective Time" means 5:00 p.m. Atlanta time on the Distribution Date.
"Employee Benefits Agreement" means the Employee Benefits Agreement entered
into at or prior to the Effective Time between RPC, Marine and Chaparral, as
amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form 10" means the Registration Statement on Form 10 filed by Marine with
the Commission pursuant to the Exchange Act.
"Group" means the RPC Group or the Marine Group, as the context so
requires.
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"Indemnifiable Loss" means any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation and
reasonable attorneys' fees and expenses) in connection with any and all Actions
or threatened Actions indemnifiable pursuant to Article IV.
"Information Statement" means that certain Information Statement filed by
Marine with the Securities and Exchange Commission and provided to RPC
shareholders, pursuant to the Exchange Act.
"Boat Manufacturing Business Assets" means all Assets used or useful in the
conduct of the Boat Manufacturing Business.
"Liabilities" means any and all claims, debts, liabilities and obligations,
absolute or contingent, matured or not matured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, including all costs
and expenses relating thereto, and including, without limitation, those debts,
liabilities and obligations arising under this Agreement or any Ancillary
Agreement, any law, rule, regulation, action, order or consent decree of any
governmental entity or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.
"Marine Business" means the Boat Manufacturing Business which will be
conducted by the Marine Group at and after the Effective Time.
"Marine Bylaws" means the bylaws of Marine in the form filed as an exhibit
to the Form 10 at the time they become effective.
"Marine Common Stock" means the outstanding shares of common stock, $.10
par value, of Marine.
"Marine Group" means Marine and any of its subsidiaries and any other
subsidiary or division of any member of the RPC Group that, immediately prior to
the Effective Time, is included in the operations of the Marine Business.
"Marine Liabilities" means (a) Liabilities of any member of the Marine
Group under this Agreement or any Ancillary Agreement, and (b) except as
otherwise expressly provided in this Agreement or any Ancillary Agreement,
Liabilities incurred in connection with the conduct or operation of the Marine
Business or the ownership of the Chaparral Stock, whether arising before, at or
after the Effective Time.
"Prime Rate" means the prime rate of interest as determined from time to
time by SunTrust Bank, Atlanta.
"Record Date" means the date designated by RPC's Board of Directors as the
record date for determining the shareholders of RPC entitled to receive the
Distribution.
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"RPC Business" means the business conducted by RPC and its subsidiaries,
joint ventures and partnerships, other than the Marine Business.
"RPC Common Stock" means the outstanding shares of common stock, $.10 par
value, of RPC.
"RPC Group" means RPC and its subsidiaries, joint ventures and
partnerships, excluding any member of the Marine Group.
"RPC Liabilities" means (i) Liabilities of any member of the RPC Group
under this Agreement or any Ancillary Agreement, and (ii) Liabilities, other
than Marine Liabilities, incurred in connection with the operation of the RPC
Business, whether arising before, at or after the Effective Time.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" shall have the meaning given to such term in the Tax Sharing
Agreement.
"Tax Sharing Agreement" means the Tax Sharing Agreement entered into at or
before the Effective Time between RPC and Marine, as amended from time to time.
"Transition Support Services Agreement" means the Transition Support
Services Agreement entered into at or prior to the Effective Time between RPC
and Marine, as amended from time to time.
ARTICLE II
REORGANIZATION; TRANSFER OF CHAPARRAL STOCK;
ASSETS AND LIABILITIES; AND TRANSITION ARRANGEMENTS
Section 2.01 Reorganization. At or before the Effective Time the following
transactions shall occur:
(a) Anchor Crane and Hoist Company, Inc., a wholly owned subsidiary of
RPC, shall transfer all of its assets and liabilities to RPC, in complete
liquidation under Section 332 of the Code;
(b) Chaparral will distribute all of the issued and outstanding
capital stock of RPC Investment Company to RPC;
(c) the RPC Intercompany Balance (as defined in Section 8.03 below)
shall be adjusted as provided in Section 8.03 below.
(d) RPC shall contribute to Marine all of the Chaparral Stock, in
exchange for a number of shares of Marine Common Stock that when combined with
the shares of Marine Common Stock then owned by RPC shall equal approximately
16,981,811 shares.
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Section 2.02 Assets and Liabilities. Except as otherwise expressly provided
in this Agreement or in any of the Ancillary Agreements, RPC and Marine covenant
and agree that:
(a) Marine shall at and after the Effective Time be responsible for
timely payment and discharge of all of the Marine Liabilities.
(b) RPC shall at and after the Effective Time be responsible for
timely payment and discharge of all of the RPC Liabilities.
(c) It is the understanding of the parties hereto that as of the date
hereof and immediately prior to the Effective Time, there are and will be no
Boat Manufacturing Business Assets that are not Assets of Chaparral, there are
and will be no Marine Liabilities that are not Liabilities of Chaparral, and
there are and will be no Assets or Liabilities of Chaparral or Marine other than
the Boat Manufacturing Business Assets and Marine Liabilities; however, in the
event that any conveyance of an Asset or assumption of a Liability is required
to reflect this understanding and is not effected at or before the Effective
Time, the obligation to transfer such Asset and assume such Liability shall
continue past the Effective Time and shall be accomplished as soon thereafter as
practicable.
(d) If any Asset may not be transferred by reason of the requirement
to obtain the consent of any third party and such consent has not been obtained
by the Effective Time, then such Asset shall not be transferred until such
consent has been obtained, and RPC and Marine, as the case may be, shall cause
the owner of such Asset to use all reasonable efforts to provide to the
appropriate member of the other Group all the rights and benefits associated
with such Asset. Both parties shall otherwise cooperate and use all reasonable
efforts to provide the economic and operational equivalent of an assignment or
transfer of the Asset.
(e) From and after the Effective Time, each party shall promptly
transfer or cause the members of its Group promptly to transfer to the other
party or the appropriate member of the other party's Group, from time to time,
any property received that is an Asset of the other party or a member of its
Group. Without limiting the foregoing, funds received by a member of one Group
upon the payment of accounts receivable that belong to a member of the other
Group shall be transferred to the other Group by check or wire transfer not more
than five business days after receipt of such payment.
(f) Except as expressly set forth in this Agreement or any Ancillary
Agreement, or in any instrument or document contemplated by this Agreement or
any Ancillary Agreement, no member of the RPC Group nor any member of the Marine
Group has made or may be deemed to have made any representation or warranty as
to (i) the Assets, business or Liabilities retained, transferred or assumed as
contemplated hereby or thereby, (ii) any consents or approvals required in
connection with the transfer or assumption by such party of any Asset or
Liability contemplated hereby or thereby, (iii) the value or freedom from any
lien, claim, equity or other encumbrance of, or any other matter concerning, any
Assets of such party or (iv) the absence of any defenses or right of setoff or
freedom from counterclaim with respect to any claim or other Asset of such
party. EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY ANCILLARY
AGREEMENT, ALL ASSETS WERE, OR ARE BEING, TRANSFERRED, OR ARE BEING RETAINED ON
AN "AS IS", "WHERE IS" BASIS AND THE RESPECTIVE TRANSFEREES WILL BEAR THE
ECONOMIC AND LEGAL RISKS THAT ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO
VEST IN THE TRANSFEREE A TITLE THAT IS FREE AND CLEAR OF ANY LIEN, CLAIM, EQUITY
OR OTHER ENCUMBRANCE.
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Section 2.03 Ancillary Agreements. At or before the Effective Time, RPC and
Marine will execute and deliver:
(a) A duly executed Employee Benefits Agreement;
(b) A duly executed Tax Sharing Agreement;
(c) A duly executed Transition Support Services Agreement; and
(d) Such other agreements, leases, documents or instruments as the
parties may agree are necessary or desirable in order to achieve the purposes
hereof.
Section 2.04 Issuance of Marine Common Stock. At the Effective Time and in
exchange for the transfer by RPC to Marine of the Chaparral Stock as provided in
this Agreement, Marine will issue and deliver to RPC a certificate representing
16,981,811 shares, which, together with the 100 shares of Marine Common Stock
initially issued to RPC will constitute all the shares to be distributed as
provided in Section 3.03 below.
Section 2.05 Resignations. Prior to the Effective Time, Marine will deliver
or cause to be delivered to RPC the resignation, effective as of the Effective
Time, of Xxxxx X. Xxxx, Xx. as a director and Executive Vice President of RPC.
Section 2.06 Insurance.
(a) If the Distribution occurs, Marine will use its best efforts to
procure and maintain directors' and officers' liability insurance coverage in
commercially reasonable amounts consistent with industry practice with respect
to directors and officers of RPC who will become directors and officers within
the Marine Group as of the Distribution Date for acts of such directors and
officers as members within the Marine Group for periods from and after the
Distribution Date.
(b) If the Distribution occurs, RPC will use its best efforts to
maintain directors' and officers' liability insurance coverage in commercially
reasonable amounts consistent with industry practice for a period of five years
from the Distribution Date with respect to the directors and officers of RPC who
will become directors and officers of members of the Marine Group as of the
Distribution Date for acts of such directors and officers as members of the RPC
Group during periods prior to the Distribution Date.
ARTICLE III
THE DISTRIBUTION
Section 3.01 Cooperation Prior to the Distribution.
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(a) RPC and Marine shall prepare, and Marine shall mail to the holders
of RPC Common Stock, the Information Statement, which shall set forth
appropriate disclosures concerning Marine, the Distribution and any other
appropriate matters.
(b) RPC shall, as the sole shareholder of Marine, approve, and Marine
shall adopt, the Marine employee benefit plans contemplated by the Employee
Benefits Agreement and RPC and Marine shall cooperate in preparing, filing with
the Commission under the Securities Act or the Exchange Act and causing to
become effective any registration statements or amendments thereto that are
appropriate to reflect the establishment of or amendments to any employee
benefit plan of Marine contemplated by the Employee Benefits Agreement.
(c) RPC and Marine shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of states or other political
subdivisions of the United States in connection with the transactions
contemplated by this Agreement or any Ancillary Agreement.
(d) Marine shall prepare, file and use its best efforts to cause to be
approved prior to the Record Date, the application to permit listing, subject to
official notice of issuance, of the Marine Common Stock on the American Stock
Exchange or such other quotation system as the Marine Board of Directors shall
deem appropriate.
(e) RPC shall use its best efforts to cause the RPC Common Stock to
remain listed on the New York Stock Exchange.
Section 3.02 RPC Board Action; Conditions Precedent to the Distribution.
RPC's Board of Directors, or a duly appointed committee thereof, shall, in its
sole discretion, establish the Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution. In no event shall
the Distribution occur unless the following conditions shall have been
satisfied:
(a) all necessary regulatory approvals shall have been received;
(b) the Form 10 shall have become effective under the Exchange Act;
(c) the Marine Board of Directors, as named in the Form 10, shall have
been elected by RPC as sole shareholder of Marine, and the Marine Bylaws shall
have been adopted and be in effect;
(d) the Marine Common Stock shall have been approved for listing on
the American Stock Exchange, subject to official notice of issuance, or such
other quotation system as the Marine Board of Directors shall deem appropriate;
(e) the RPC Common Stock shall remain listed on the New York Stock
Exchange, or shall be listed on such other quotation system as the RPC Board of
Directors shall deem appropriate.
(f) the Information Statement forming part of the Form 10 referenced
above shall have been mailed to all stockholders of RPC of record as of the
Record Date; and
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(g) no order, injunction or decree issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing consummation of
the Distribution shall be in effect.
Section 3.03 The Distribution. On or before the Distribution Date, subject
to satisfaction or waiver of the conditions set forth in this Agreement, RPC
shall deliver to the Distribution Agent a certificate or certificates
representing all of the then outstanding shares of Marine Common Stock held by
RPC, endorsed in blank, and shall instruct the Distribution Agent, except as
otherwise provided in Section 3.04, to distribute to each holder of record of
RPC Common Stock on the Record Date 0.6 shares of Marine Common Stock for each
one share of RPC Common Stock so held either by crediting the holder's brokerage
account or by delivering a certificate or certificates representing such shares.
Marine agrees to provide all certificates for shares of Marine Common Stock that
the Distribution Agent shall require in order to effect the Distribution.
Section 3.04 Fractional Shares. The Distribution Agent shall not distribute
any fractional share of Marine Common Stock. The Distribution Agent shall
aggregate all such fractional shares and sell them in an orderly manner after
the Distribution Date in the open market and, after completion of such sales,
distribute a pro rata portion of the proceeds from such sales, based upon the
average gross selling price of all such Marine Common Stock, less a pro rata
portion of the aggregate brokerage commissions payable in connection with such
sales, to each holder of RPC Common Stock who would otherwise have received a
fractional share of Marine Common Stock in the Distribution.
ARTICLE IV
INDEMNIFICATION
Section 4.01 Marine Indemnification of the RPC Group. If the Distribution
occurs, on and after the Effective Time, Marine shall indemnify, defend and hold
harmless each member of the RPC Group, and each of their respective directors,
officers, employees and agents (the "RPC Indemnitees") from and against any and
all Indemnifiable Losses incurred or suffered by any of the RPC Indemnitees and
arising out of, or due to, (a) the failure of Marine or any member of the Marine
Group to pay, perform or otherwise discharge, any of the Marine Liabilities and
(b) any untrue statement or alleged untrue statement of any material fact
contained in the preliminary or final Form 10, the preliminary or final
Information Statement or any amendment or supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading (other than the
information provided by RPC for use therein).
Section 4.02 RPC Indemnification of Marine Group. If the Distribution
occurs, on and after the Effective Time, RPC shall indemnify, defend and hold
harmless each member of the Marine Group and each of their respective directors,
officers, employees and agents (the "Marine Indemnitees") from and against any
and all Indemnifiable Losses incurred or suffered by any of the Marine
Indemnitees and arising out of, or due to, (a) the failure of RPC or any member
of the RPC Group to pay, perform or otherwise discharge, any of the RPC
Liabilities and (b) any untrue statement or alleged untrue statement of any
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material fact contained in the preliminary or final Form 10, the preliminary or
final Information Statement or any amendment or supplement thereto or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading based
on information provided by RPC for use therein.
Section 4.03 General Mutual Indemnity. RPC and Marine shall indemnify and
hold each other harmless from and against any Indemnifiable Losses, which may be
imposed or incurred as a result of litigation in which RPC or Marine is a party
by virtue of their prior corporate affiliation and not as a result of or
attributable to the indemnified party's fault or participation. RPC and Marine
shall promptly notify each other, as the case may be, of the existence of any
claim against the other as a result of the aforesaid circumstances and shall
give the indemnifying party reasonable opportunity to defend such litigation at
such party's expense and with counsel of its own selection; in which case the
indemnifying party shall have the right reasonably to control the defense or
settlement of such claim, provided that the indemnified party shall at all times
have the right to fully participate in such defense at its own expense. If the
indemnifying party shall, within a reasonable time after such notice, fail to
defend, the indemnified party shall have the right (but not the obligation) at
the expense (including reasonable legal fees and expenses) of the indemnifying
party, to undertake the defense of and to compromise or settle, exercising
reasonable business judgment, such litigation on behalf, for the account, and at
the risk of the indemnifying party. In the event of such litigation, each party
shall make available all information and assistance as the other party may
reasonably request.
Section 4.04 Insurance and Third Party Obligations. No insurer or any other
third party shall be, by virtue of the foregoing indemnification provisions (a)
entitled to a benefit it would not be entitled to receive in the absence of such
provisions, (b) relieved of the responsibility to pay any claims to which it is
obligated, or (c) entitled to any subrogation rights with respect to any
obligation hereunder.
ARTICLE V
INDEMNIFICATION PROCEDURES
Section 5.01 Notice and Payment of Claims. If any RPC Indemnitee or Marine
Indemnitee (the "Indemnified Party") determines that it is or may be entitled to
indemnification by a party (the "Indemnifying Party") under Article IV (other
than in connection with any Action or claim subject to Section 5.02), the
Indemnified Party shall deliver to the Indemnifying Party a written notice
specifying, to the extent reasonably practicable, the basis for its claim for
indemnification and the amount for which the Indemnified Party reasonably
believes it is entitled to be indemnified. After the Indemnifying Party shall
have been so notified, the Indemnifying Party shall, within 30 days after
receipt of such notice, pay the Indemnified Party such amount in cash or other
immediately available funds (or reach agreement with the Indemnified Party as to
a mutually agreeable alternative payment schedule) unless the Indemnifying Party
objects to the claim for indemnification or the amount thereof. If the
Indemnifying Party does not give the Indemnified Party written notice objecting
to such claim and setting forth the grounds therefor within the same 30 day
period, the Indemnifying Party shall be deemed to have acknowledged its
liability for such claim and the Indemnified Party may exercise any and all of
its rights under applicable law to collect such amount. Any amount owed under
this Section 5.01 that is not paid within such 30 day period, or is otherwise
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past due, shall bear interest at a simple rate of interest per annum equal to
the Prime Rate plus 2%.
Section 5.02 Notice and Defense of Third Party Claims. Promptly following
the earlier of (a) receipt of notice of the commencement by a third party of any
Action against or otherwise involving any Indemnified Party or (b) receipt of
information from a third party alleging the existence of a claim against an
Indemnified Party, in either case with respect to which indemnification may be
sought pursuant to this Agreement (a "Third Party Claim"), the Indemnified Party
shall give the Indemnifying Party written notice thereof. The failure of the
Indemnified Party to give notice as provided in this Section 5.02 shall not
relieve the Indemnifying Party of its obligations under this Agreement, except
to the extent that the Indemnifying Party is prejudiced by such failure to give
notice. Within 30 days after receipt of such notice, the Indemnifying Party
shall by giving written notice thereof to the Indemnified Party (a) acknowledge,
as between the parties hereto, liability for, and at its option assumption of
the defense of such Third Party Claim at its sole cost and expense or (b) object
to the claim of indemnification set forth in the notice delivered by the
Indemnified Party pursuant to the first sentence of this Section 5.02 setting
forth the grounds therefor; provided that if the Indemnifying Party does not
within the same 30 day period give the Indemnified Party written notice
acknowledging liability and electing to assume the defense or objecting to such
claim and setting forth the grounds therefor, the Indemnifying Party shall be
deemed to have acknowledged, as between the parties hereto, its liability to the
Indemnified Party for such Third Party Claim. Any contest of a Third Party Claim
as to which the Indemnifying Party has elected to assume the defense shall be
conducted by attorneys employed by the Indemnifying Party and reasonably
satisfactory to the Indemnified Party; provided that the Indemnified Party shall
have the right to participate in such proceedings and to be represented by
attorneys of its own choosing at the Indemnified Party's sole cost and expense.
If the Indemnifying Party assumes the defense of a Third Party Claim, the
Indemnifying Party may settle or compromise the claim without the prior written
consent of the Indemnified Party; provided that the Indemnifying Party may not
agree to any such settlement pursuant to which any remedy or relief, other than
monetary damages for which the Indemnifying Party shall be responsible
hereunder, shall be applied to or against the Indemnified Party, without the
prior written consent of the Indemnified Party, which consent shall not be
unreasonably withheld. If the Indemnifying Party does not assume the defense of
a Third Party Claim for which it has acknowledged liability for indemnification
under Article IV, the Indemnified Party may require the Indemnifying Party to
reimburse it on a current basis for its reasonable expenses of investigation,
reasonable attorney's fees and reasonable out-of-pocket expenses incurred in
defending against such Third Party Claim and the Indemnifying Party shall be
bound by the result obtained with respect thereto by the Indemnified Party;
provided that the Indemnifying Party shall not be liable for any settlement
effected without its consent, which consent shall not be unreasonably withheld.
The Indemnifying Party shall pay to the Indemnified Party in cash the amount for
which the Indemnified Party is entitled to be indemnified (if any) within 15
days after the final resolution of such Third Party Claim (whether by the final
nonappealable judgment of a court of competent jurisdiction or otherwise), or,
in the case of any Third Party Claim as to which the Indemnifying Party has not
acknowledged liability, within 15 days after such Indemnifying Party's objection
has been resolved by settlement, compromise or the final nonappealable judgment
of a court of competent jurisdiction.
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ARTICLE VI
EMPLOYEE MATTERS
Section 6.01 Employee Benefits Agreement. All matters relating to or
arising out of any employee benefit, compensation or welfare arrangement in
respect of any employee of Marine or Chaparral shall be governed by the Employee
Benefits Agreement. In the event of any inconsistency between the Employee
Benefits Agreement, this Agreement or any other Ancillary Agreement, the
Employee Benefits Agreement shall govern.
Section 6.02 Dual Employees. Several current executive officers of RPC will
be executive officers of both RPC and Marine immediately after the Distribution
Date. Two-thirds of each such executive officer's RPC options and performance
restricted stock awards that have not been earned and issued into escrow will
remain subject to the RPC 1994 Employee Stock Incentive Plan and will be
adjusted as provided in the Employee Benefits Agreement, and one-third of such
options and awards will be replaced with options and awards under the Marine
2001 Employee Stock Incentive Plan as provided in the Employee Benefits
Agreement.
ARTICLE VII
TAX MATTERS
Section 7.01 Tax Sharing Agreement. All matters relating to Taxes shall be
governed exclusively by the Tax Sharing Agreement. In the event of any
inconsistency between the Tax Sharing Agreement, this Agreement or any other
Ancillary Agreement, the Tax Sharing Agreement shall govern.
ARTICLE VIII
ACCOUNTING MATTERS
Section 8.01 Allocation of Prepaid Items and Reserves. All prepaid items
and reserves that have been maintained by RPC on a consolidated basis but that
relate in part to Assets or Liabilities of Chaparral or the Boat Manufacturing
Business shall be allocated between RPC and Marine as determined by RPC in its
reasonable discretion.
Section 8.02 Accounting Treatment. The transfer by RPC of Chaparral Stock
and any other Boat Manufacturing Business Assets to Marine pursuant to this
Agreement shall constitute a capital contribution by RPC to Marine.
Section 8.03 Fifteen Million Dollar Cash Balance and Cancellation of
Intercompany Accounts. As used herein, "RPC Intercompany Balance" means the net
intercompany account balance payable by members of the RPC Group to members of
the Marine Group as of the Effective Time. On or before the Distribution Date,
RPC shall prepare and deliver to Marine a preliminary Boat Manufacturing
Business balance sheet which shall set forth a good faith estimate of the RPC
Intercompany Balance as of the Effective Time. On or before the Distribution
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Date, RPC shall pay to Marine that portion of the RPC Intercompany Balance equal
to (i) $15 million less (ii) the amount of cash or cash equivalents shown on the
preliminary Boat Manufacturing Business balance sheet as an asset of the Marine
Group (the "Preliminary Payment Amount"). Within thirty (30) business days after
the Effective Time, RPC shall prepare and deliver to Marine a final Boat
Manufacturing Business balance sheet which shall set forth the final calculation
of the RPC Intercompany Balance and a calculation of an amount equal to (i) $15
million less (ii) the amount of cash or cash equivalents shown on the final Boat
Manufacturing Business balance sheet as an asset of the Marine Group (the
"Definitive Payment Amount") as of the Effective Time. Within ten (10) business
days after the delivery of the final Boat Manufacturing Business balance sheet,
RPC shall pay to Marine any amount by which the Definitive Payment Amount
exceeds the Preliminary Payment Amount (or Marine shall pay to RPC any amount by
which the Preliminary Payment Amount exceeds the Definitive Payment Amount, as
the case may be). All amounts paid by RPC to Marine hereunder shall be credited
against the RPC Intercompany Balance on Marine's balance sheet (and debited
against RPC's balance sheet). Any remaining RPC Intercompany Balance on the
books of Marine and RPC in excess of all such amounts so paid by RPC to Marine
hereunder shall be cancelled by Marine and RPC. Any disputes arising from the
adjustments required by the final Boat Manufacturing Business balance sheet
shall be resolved in accordance with Section 12.10 hereof.
ARTICLE IX
TRANSITION SUPPORT
Section 9.01 Transition Support Services Agreement. All matters relating to
the provision of support services by the RPC Group to the Marine Group after the
Effective Time shall be governed exclusively by the Transition Support Services
Agreement. In the event of any inconsistency between the Transition Support
Agreement, this Agreement or any other Ancillary Agreement, the Transition
Support Services Agreement shall govern.
ARTICLE X
INFORMATION
Section 10.01 Provision of Corporate Records. As soon as practicable
following the Effective Time, RPC and Marine shall each arrange for the
provision to the other of existing corporate documents (e.g. minute books, stock
registers, stock certificates, documents of title, contracts, etc.) in its
possession relating to the other or its business and affairs or to any other
entity that is part of such other's respective Group or to the business and
affairs of such other entity.
Section 10.02 Access to Information. From and after the Effective Time, RPC
and Marine shall each afford the other and its accountants, counsel and other
designated representatives reasonable access (including using reasonable efforts
to give access to persons or firms possessing information) and duplicating
rights during normal business hours to all records, books, contracts,
instruments, computer data and other data and information in its possession
relating to the business and affairs of the other or a member of its Group
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(other than data and information subject to an attorney/client or other
privilege), insofar as such access is reasonably required by the other
including, without limitation, for audit, accounting and litigation purposes.
Section 10.03 Litigation Cooperation. RPC and Marine shall each use
reasonable efforts to make available to the other, upon written request, its
officers, directors, employees and agents, and the officers, directors,
employees and agents of its subsidiaries, as witnesses to the extent that such
persons may reasonably be required in connection with any legal, administrative
or other proceedings arising out of the business of the other, or of any entity
that is part of the others' respective Group, prior to the Effective Time in
which the requesting party or one of its subsidiaries may from time to time be
involved.
Section 10.04 Retention of Records. Except as otherwise required by law or
agreed to in writing, each party shall, and shall cause the members of its Group
to, retain all information relating to the other's business in accordance with
the past practice of such party. Notwithstanding the foregoing, either party may
destroy or otherwise dispose of any information at any time in accordance with
the corporate record retention policy maintained by such party with respect to
its own records.
Section 10.05 Confidentiality. Each party shall, and shall cause each
member of its Group to, hold and cause its directors, officers, employees,
agents, consultants and advisors to hold, in strict confidence, unless compelled
to disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all information concerning the other
party (except to the extent that such information can be shown to have been (a)
in the public domain through no fault of such disclosing party or (b) lawfully
acquired after the Effective Time on a non-confidential basis from other sources
by the disclosing party), and neither party shall release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors who shall be advised of the
provisions of this Section 10.05 and be bound by them. Each party shall be
deemed to have satisfied its obligation to hold confidential information
concerning or supplied by the other party if it exercises the same care as it
takes to preserve confidentiality for its own similar information.
ARTICLE XI
INTEREST ON PAYMENTS
Section 11.01 Interest. Except as otherwise expressly provided in this
Agreement or an Ancillary Agreement, all payments by one party to the other
under this Agreement or any Ancillary Agreement shall be paid, by check or wire
transfer of immediately available funds to an account in the United States
designated by the recipient, within 30 days after receipt of an invoice or other
written request for payment setting forth the specific amount due and a
description of the basis therefor in reasonable detail. Any amount remaining
unpaid beyond its due date, including disputed amounts that are ultimately
determined to be payable, shall bear interest at a rate of simple interest per
annum equal to the Prime Rate plus 2%.
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ARTICLE XII
MISCELLANEOUS
Section 12.01 Expenses. Except as specifically provided in this Agreement
or any Ancillary Agreement and except as to salaries of any persons who as of
the Effective Time are employees of both RPC and Marine, all costs and expenses
incurred prior to the Effective Time in connection with the preparation,
execution, delivery and implementation of this Agreement and the Ancillary
Agreements and with the consummation of the transactions contemplated by this
Agreement (including transfer taxes and the fees and expenses of the
Distribution Agent and of all counsel, accountants and financial and other
advisors) shall be paid by RPC and all such costs incurred at or after the
Effective Time shall be paid by the party incurring such costs.
Section 12.02 Notices. All notices and communications under this Agreement
shall be deemed to have been given (a) when received, if such notice or
communication is delivered by facsimile, hand delivery or overnight courier,
and, (b) three (3) business days after mailing if such notice or communication
is sent by United States registered or certified mail, return receipt requested,
first class postage prepaid. All notices and communications, to be effective,
must be properly addressed to the party to whom the same is directed at its
address as follows:
If to RPC, to: RPC, Inc.
0000 Xxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
with a copy to: Xxxxxx X. Xxxxx, Esq.
Arnall Golden & Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile: 000-000-0000
If to Marine, to: Marine Products Corporation
0000 Xxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx X. Xxxxxx
Facsimile: 000-000-0000
with a copy to: Xxxxxx X. Xxxxx, Esq.
Arnall Golden & Xxxxxxx LLP
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
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Either party may, by written notice delivered to the other party in accordance
with this Section 12.02, change the address to which delivery of any notice
shall thereafter be made.
Section 12.03 Amendment and Waiver. This Agreement may not be altered or
amended, nor may any rights hereunder be waived, except by an instrument in
writing executed by the party or parties to be charged with such amendment or
waiver. No waiver of any terms, provision or condition of or failure to exercise
or delay in exercising any rights or remedies under this Agreement, in any one
or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, provision, condition, right or remedy or as
a waiver of any other term, provision or condition of this Agreement.
Section 12.04 Entire Agreement. This Agreement, together with the Ancillary
Agreements, constitutes the entire understanding of the parties hereto with
respect to the subject matter hereof, superseding all negotiations, prior
discussions and prior agreements and understandings relating to such subject
matter. To the extent that the provisions of this Agreement are inconsistent
with the provisions of any Ancillary Agreement, the provisions of such Ancillary
Agreement shall prevail with respect to the subject matter hereof.
Section 12.05 Parties in Interest. Neither of the parties hereto may assign
its rights or delegate any of its duties under this Agreement without the prior
written consent of the other party. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns. Nothing contained in this Agreement, express
or implied, is intended to confer any benefits, rights or remedies upon any
person or entity other than members of the RPC Group and the Marine Group and
the RPC Indemnitees and Marine Indemnitees under Articles IV and V hereof.
Section 12.06 Further Assurances and Consents. In addition to the actions
specifically provided for elsewhere in this Agreement, each of the parties
hereto will use its reasonable efforts to (a) execute and deliver such further
instruments and documents and take such other actions as any other party may
reasonably request in order to effectuate the purposes of this Agreement and to
carry out the terms hereof and (b) take, or cause to be taken, all actions, and
do, or cause to be done, all things, reasonably necessary, proper or advisable
under applicable laws, regulations and agreements or otherwise to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, using its reasonable efforts to obtain any consents and
approvals, make any filings and applications and remove any liens, claims,
equity or other encumbrance on an Asset of the other party necessary or
desirable in order to consummate the transactions contemplated by this
Agreement; provided that no party hereto shall be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to any
third party from whom such consents, approvals and amendments are requested or
to take any action or omit to take any action if the taking of or the omission
to take such action would be unreasonably burdensome to the party or its Group
or the business thereof.
Section 12.07 Severability. The provisions of this Agreement are severable
and should any provision hereof be void, voidable or unenforceable under any
applicable law, such provision shall not affect or invalidate any other
provision of this Agreement, which shall continue to govern the relative rights
and duties of the parties as though such void, voidable or unenforceable
provision were not a part hereof.
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Section 12.08 Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of Georgia, without
regard to the conflicts of law rules of such state.
Section 12.09 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same Agreement.
Section 12.10 Disputes.
(a) All disputes arising from or in connection with this Agreement
including, without limitation, any arising from Articles IV or V hereof, whether
based on contract, tort, statute or otherwise, including, but not limited to,
disputes in connection with claims by third parties (collectively, "Disputes"),
shall be resolved only in accordance with the provisions of this Section 12.10;
provided, however, that nothing contained herein shall preclude either party
from seeking or obtaining (i) injunctive relief to prevent an actual or
threatened breach of any of the provisions of this Agreement, or (ii) equitable
or other judicial relief to enforce the provisions of this Section 12.10 hereof
or to preserve the status quo pending resolution of Disputes hereunder.
(b) Either party may give the other party written notice of any
Dispute not resolved in the normal course of business. Within 10 days after
delivery of the notice of a Dispute, the receiving party shall submit to the
other a written response. The notice and the response shall include a statement
of such party's position and a summary of arguments supporting that position and
the name and title of the executive who will represent that party and of any
other person who will accompany such executive in resolving the Dispute. Within
twenty (20) days after delivery of the first notice, the executives of both
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, and shall negotiate in good faith to
attempt to resolve the Dispute. All reasonable requests for information made by
one party to the other will be honored.
(c) If the Dispute has not been resolved by negotiation within sixty
(60) days of the first party's notice, the Dispute shall be submitted, upon
application of either party, for resolution by binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(the "Rules"). Arbitration shall be by a single arbitrator experienced in the
matters that are at issue in the Dispute, which arbitrator shall be selected by
the parties in accordance with the Rules. The arbitration shall be conducted in
Atlanta, Georgia. The decision of the arbitrator shall be final and binding as
to all matters at issue in the Dispute; provided, however, if necessary such
decision may be enforced by either party in any court of law having jurisdiction
over the parties or the subject matter of the Dispute. Unless the arbitrator
shall assess the costs and expenses of the arbitration proceeding and of the
parties differently, each party shall pay its costs and expenses incurred in
connection with the arbitration proceeding, and the costs and expenses of the
arbitrator shall be shared equally by the parties.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
RPC, INC.,
a Delaware corporation
By: _______________________________
Name:______________________________
Its:_______________________________
MARINE PRODUCTS CORPORATION,
a Delaware corporation
By:_______________________________
Name: ____________________________
Its:______________________________
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