1
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
XXXXXX DRILLING COMPANY,
SAINTS ACQUISITION COMPANY
AND
SUPERIOR ENERGY SERVICES, INC.
OCTOBER 28, 1998
2
TABLE OF CONTENTS
ARTICLE I
THE MERGER
1.1 The Merger........................................................... 1
1.2 Closing Date......................................................... 2
1.3 Consummation of the Merger........................................... 2
1.4 Effects of the Merger................................................ 2
1.5 Certificate of Incorporation; Bylaws................................. 2
1.6 Directors and Officers............................................... 2
1.7 Conversion of Superior Common Stock.................................. 2
1.8 Exchange of Certificates............................................. 3
1.9 Stock Transfer Books................................................. 6
1.10 Taking of Necessary Action; Further Action........................... 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Xxxxxx and Sub..................... 6
(a) Organization and Compliance with Law........................ 6
(b) Capitalization.............................................. 7
(c) Authorization and Validity of Agreement..................... 8
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Xxxxxx or any of the Xxxxxx
Subsidiaries is a Party..................................... 8
(e) Commission Filings; Financial Statements.................... 9
(f) Absence of Undisclosed Liabilities.......................... 9
(g) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events.................................. 10
(h) Tax Representation.......................................... 10
(i) Opinion of Financial Advisor................................ 11
(j) Interim Operations of Sub................................... 11
(l) Certain Business Practices.................................. 11
2.2 Representations and Warranties of Superior........................... 11
(a) Organization and Compliance with Law........................ 11
(b) Capitalization.............................................. 12
(c) Authorization and Validity of Agreement..................... 13
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Superior or any of the Superior
Subsidiaries is a Party..................................... 13
(e) Commission Filings; Financial Statements.................... 14
(f) Absence of Undisclosed Liabilities.......................... 14
-i-
3
(g) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events.................................. 15
(h) Litigation.................................................. 15
(i) Employee Benefit Plans...................................... 16
(j) Taxes....................................................... 17
(k) Environmental Matters....................................... 19
(l) Severance Payments.......................................... 20
(m) Voting Requirements......................................... 21
(n) Section 162(m) of the Code.................................. 21
(o) Brokers..................................................... 21
(p) Labor Relations............................................. 21
(q) Insurance................................................... 21
(r) Title to Properties......................................... 21
(s) Permits; Compliance......................................... 22
(t) Contingent Payment Obligations.............................. 22
(u) Certain Business Practices.................................. 22
(v) Opinion of Financial Advisor................................ 22
ARTICLE III
COVENANTS OF SUPERIOR PRIOR TO THE EFFECTIVE TIME
3.1 Conduct of Business by Superior Pending the Merger................... 23
3.2 No Solicitation...................................................... 25
3.3 Affiliate Letters.................................................... 26
3.4 Obtain Tax Opinion................................................... 26
ARTICLE IV
COVENANTS OF XXXXXX PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Xxxxxx Pending the Merger..................... 26
4.2 Stock Exchange Listing............................................... 26
4.3 Obtain Tax Opinion................................................... 26
4.4 Available Information................................................ 27
4.5 Future Acquisitions.................................................. 27
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Meetings of Stockholders............................................. 27
5.2 Registration Statement; Proxy Statements............................. 28
5.3 Appropriate Action; Consents; Filings................................ 29
5.4 Accountants Letters.................................................. 31
-ii-
4
5.5 Pooling of Interests................................................. 31
5.6 Superior Employee Benefits........................................... 31
5.7 Superior Stock Options............................................... 32
5.8 [Intentionally omitted].............................................. 33
5.9 Tax-Free Reorganization.............................................. 33
5.10 Indemnification...................................................... 34
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligation of Each Party to Effect the Merger.......... 35
6.2 Additional Conditions to Obligations of Xxxxxx....................... 36
6.3 Additional Conditions to Obligations of Superior..................... 37
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination.......................................................... 38
7.2 Effect of Termination................................................ 39
7.3 Waiver and Amendment................................................. 39
7.4 Fees, Expenses and Other Payments.................................... 39
ARTICLE VIII
GENERAL PROVISIONS
8.1 Effectiveness of Representations, Warranties and Agreements.......... 40
8.2 Public Statements.................................................... 40
8.3 Assignment........................................................... 41
8.4 Notices.............................................................. 41
8.5 Governing Law........................................................ 41
8.6 Severability......................................................... 42
8.7 Counterparts......................................................... 42
8.8 Headings............................................................. 42
8.9 Entire Agreement; Third Party Beneficiaries.......................... 42
8.10 Specific Performance................................................. 42
8.11 Disclosure Letters................................................... 42
-iii-
5
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of the 28th day of October,
1998 (the "Agreement"), is among Xxxxxx Drilling Company, a Delaware corporation
("Xxxxxx"), Saints Acquisition Company, a newly formed Delaware corporation and
a wholly owned subsidiary of Xxxxxx ("Sub"), and Superior Energy Services, Inc.,
a Delaware corporation ("Superior").
WITNESSETH:
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of Xxxxxx, Sub and Superior,
and Xxxxxx as sole stockholder of Sub, have approved the merger of Sub with and
into Superior (the "Merger"), whereby each issued and outstanding share of
common stock, par value $0.001 per share, of Superior ("Superior Common Stock")
not owned directly or indirectly by Superior will be converted into the right to
receive 0.90 of a share of common stock, par value $0.16 2/3 per share, of
Xxxxxx ("Xxxxxx Common Stock");
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Sections
368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended
(the "Code"), and this Agreement constitutes a plan of reorganization;
WHEREAS, the Merger is intended to be treated as a "pooling of
interests" for accounting purposes; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), at the Effective Time (as defined in
Section 1.3) Sub shall be merged with and into Superior. As a result of the
Merger, the separate corporate existence of Sub shall cease and Superior shall
continue as the surviving corporation (sometimes referred to herein as the
"Surviving Corporation"), and all the properties, rights, privileges, powers and
franchises of Superior and Sub shall vest in the Surviving Corporation, without
any transfer or assignment having occurred, and all debts, liabilities and
duties of Superior and Sub shall attach to the Surviving Corporation, all in
accordance with the DGCL.
6
1.2 CLOSING DATE. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxx & Xxxxxx
L.L.P., 2300 First City Tower, 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, as soon
as practicable after the satisfaction or waiver of the conditions set forth in
Section 6.1 or at such other time and place and on such other date as Xxxxxx and
Superior shall agree, or if no date has been agreed to, any date specified by
one party to the other upon three days' notice following satisfaction of the
conditions set forth in Section 6.1, provided that the other closing conditions
set forth in Article VI shall have been satisfied or waived at or prior to such
time. The date on which the Closing occurs is herein referred to as the "Closing
Date."
1.3 CONSUMMATION OF THE MERGER. As soon as practicable on the Closing
Date, the parties hereto will cause the Merger to be consummated by filing with
the Secretary of State of Delaware a certificate of merger in such form as
required by, and executed in accordance with, the relevant provisions of the
DGCL. The "Effective Time" of the Merger (as that term is used in this
Agreement) shall mean such time as the certificate of merger is duly filed with
the Secretary of State of Delaware or at such later time (not to exceed 90 days
from the date the certificate is filed) as is specified in the certificate of
merger pursuant to the mutual agreement of Xxxxxx and Superior.
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth
in the applicable provisions of the DGCL.
1.5 CERTIFICATE OF INCORPORATION; BYLAWS. At the Effective Time, the
Certificate of Incorporation and Bylaws of Sub, as in effect immediately prior
to the Effective Time, shall be the Certificate of Incorporation and Bylaws,
respectively, of the Surviving Corporation, provided that they shall be amended
as of the Effective Time to reflect that the name of the Surviving Corporation
shall be "Superior Energy Services, Inc."
1.6 DIRECTORS AND OFFICERS. The officers and directors of the Surviving
Corporation, each to hold office until their respective successors are duly
elected or appointed and qualified, shall be as set forth on Annex I attached
hereto.
1.7 CONVERSION OF SUPERIOR COMMON STOCK.
(a) As of the Effective Time, by virtue of the Merger and without
any action on the part of the holder of any shares of Superior Common Stock or
any shares of capital stock of Sub, and subject to Section 1.8(f), each share of
Superior Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares to be canceled in accordance with Section 1.7(b)) shall
be converted into the right to receive 0.90 of a share of Xxxxxx Common Stock
(the "Merger Consideration"); provided, however, that if, between the date
hereof and the Effective Time, the outstanding shares of Xxxxxx Common Stock or
Superior 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,
the Merger Consideration shall be correspondingly adjusted to the extent
appropriate to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares. As of the Effective
Time, all such shares of Superior Common Stock shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each holder of a
-2-
7
certificate representing any such shares of Superior Common Stock shall cease to
have any rights with respect thereto, except the right to receive the Merger
Consideration.
(b) Each share of Superior Common Stock held in the treasury of
Superior and each share of Superior Common Stock owned by Sub, Xxxxxx or any
direct or indirect wholly owned subsidiary of Xxxxxx or of Superior immediately
prior to the Effective Time shall be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
(c) Each share of common stock of Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one share of the
common stock, $.001 par value per share, of the Surviving Corporation.
1.8 EXCHANGE OF CERTIFICATES.
(a) From and after the Effective Time, (i) Xxxxxx shall make
available to a bank or trust company designated by Xxxxxx (the "Exchange
Agent"), for the benefit of the holders of shares of Superior Common Stock, for
exchange in accordance with this Section 1.8, through the Exchange Agent,
certificates evidencing such number of shares of Xxxxxx Common Stock issuable to
holders of Superior Common Stock in the Merger pursuant to Section 1.7. The
Exchange Agent shall, pursuant to irrevocable written instructions from Xxxxxx,
deliver the Xxxxxx Common Stock, together with any cash to be paid in lieu of
fractional interests in shares of Xxxxxx Common Stock pursuant to Section 1.8(f)
and any dividends or distributions related thereto (collectively, the "Exchange
Fund"), in exchange for certificates theretofore evidencing Superior Common
Stock surrendered to the Exchange Agent pursuant to Section 1.8(c). Except as
contemplated by Sections 1.8(f) and (g) hereof, the Exchange Fund shall not be
used for any other purpose.
(b) As promptly as practicable after the Effective Time, Xxxxxx
shall cause the Exchange Agent to mail to each holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Superior Common Stock (the "Certificates") (i) a letter of
transmittal (which shall be in customary form and 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 (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration.
(c) Upon surrender to the Exchange Agent of a Certificate for
cancellation, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other documents
as may be reasonably required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor (i) a certificate
representing that number of whole shares of Xxxxxx Common Stock, if any, to
which such holder is entitled pursuant to Section 1.7 and (ii) cash in lieu of
any fractional shares of Xxxxxx Common Stock to which such holder is entitled
pursuant to Section 1.8(f) and any dividends or other distributions to which
such holder is entitled pursuant to Section 1.8(d) (together, the "Additional
Payments"), and the Certificate so surrendered shall forthwith be canceled. In
the event of a transfer of ownership of shares of Superior Common Stock which is
not registered in the transfer records of Superior, the applicable Merger
Consideration and Additional Payments, if any, may be issued to
-3-
8
a transferee if the Certificate representing such shares of Superior 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
1.8, each Certificate shall be deemed at all times after the Effective Time to
represent only the right to receive upon such surrender the Merger Consideration
with respect to the shares of Superior Common Stock formerly represented thereby
and Additional Payments, if any.
(d) No dividends or other distributions declared or made after the
Effective Time with respect to Xxxxxx 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 Xxxxxx Common Stock the holder thereof is entitled to
receive upon surrender thereof, and no cash payment in lieu of any fractional
shares shall be paid to any such holder pursuant to Section 1.8(f), until the
holder of such Certificate shall surrender such Certificate. Subject to the
effect of escheat, tax or other applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates representing
whole shares of Xxxxxx Common Stock issued in exchange therefor, without
interest, (i) promptly, the amount of any cash payable with respect to a
fractional share of Xxxxxx Common Stock to which such holder is entitled
pursuant to Section 1.8(f) and the amount of dividends or other distributions
with a record date after the Effective Time and theretofore paid with respect to
such whole shares of Xxxxxx Common Stock, and (ii) at the appropriate payment
date, the amount of dividends or other distributions, 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 Xxxxxx Common Stock.
After the Effective Time, each outstanding Certificate which theretofore
represented shares of Superior Common Stock shall, until surrendered for
exchange in accordance with this Section 1.8, be deemed for all purposes to
evidence ownership of the number of shares of Xxxxxx Common Stock into which the
shares of Superior Common Stock (which, prior to the Effective Time, were
represented thereby) shall have been so converted.
(e) All shares of Xxxxxx Common Stock issued or cash paid upon
conversion of the shares of Superior Common Stock in accordance with the terms
hereof (including any cash paid pursuant to Section 1.8(d) or (f)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of Superior Common Stock.
(f) Notwithstanding anything herein to the contrary, no
certificates or scrip evidencing fractional shares of Xxxxxx Common Stock shall
be issued in connection with the Merger, and any such fractional share interests
to which a holder of record of Superior Common Stock at the Effective Time would
otherwise be entitled will not entitle such holder to vote or to any rights of a
stockholder of Xxxxxx. In lieu of any such fractional shares, each holder of
record of Superior Common Stock at the Effective Time who but for the provisions
of this Section 1.8(f) would be entitled to receive a fractional interest of a
share of Xxxxxx Common Stock pursuant to the Merger shall be paid cash, without
any interest thereon, equal to the fraction of a share of Xxxxxx Common Stock to
which such holder would be entitled but for this provision multiplied by the
closing price of the Xxxxxx Common Stock on the New York Stock Exchange on the
Effective Date.
-4-
9
(g) Any portion of the Exchange Fund (including any shares of
Xxxxxx Common Stock) which remains undistributed to the holders of Superior
Common Stock for six months after the Effective Time shall be delivered to
Xxxxxx, upon demand, and any holders of Superior Common Stock who have not
theretofore complied with Sections 1.7 and 1.8 shall thereafter look only to
Xxxxxx for the applicable Merger Consideration and any Additional Payments to
which they are entitled. Any portion of the Exchange Fund remaining unclaimed by
holders of shares of Superior Common Stock as of a date which is immediately
prior to such time as such amounts would otherwise escheat to or become property
of any governmental entity shall, to the extent permitted by applicable law,
become the property of Xxxxxx, free and clear of any claims or interest of any
person previously entitled thereto.
(h) None of the Exchange Agent, Xxxxxx or the Surviving Corporation
shall be liable to any holder of Certificates for any shares of Xxxxxx Common
Stock (or dividends or distributions with respect thereto), or cash delivered to
a public official pursuant to any abandoned property, escheat or similar law.
(i) Each of the Surviving Corporation and Xxxxxx shall be entitled
to deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Certificates such amounts as it is required to deduct
and withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by the Surviving Corporation or Xxxxxx, as the case may be, such
amounts withheld shall be treated for all purposes of this Agreement as having
been paid to the holder of the Certificates in respect of which such deduction
and withholding was made by the Surviving Corporation or Xxxxxx, as the case may
be.
(j) If 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 Merger
Consideration and Additional Payments, if any.
(k) If, at any time after the Effective Time, the Surviving
Corporation shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of Sub or Superior acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger or
otherwise to carry out this Agreement, the officers of the Surviving Corporation
shall be authorized to execute and deliver, in the name and on behalf of each of
Sub and Superior or otherwise, all such deeds, bills of sale, assignments and
assurances and to take and do, in such names and on such behalves or otherwise,
all such other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to and under such
rights, properties or assets in the Surviving Corporation or otherwise to carry
out the purposes of this Agreement.
-5-
10
1.9 STOCK TRANSFER BOOKS. At the Effective Time, the stock transfer
books of Superior shall be closed and there shall be no further registration of
transfers of shares of Superior Common Stock thereafter on the records of
Superior. On or after the Effective Time, any Certificates presented to the
Exchange Agent or Xxxxxx for any reason shall be converted into the Merger
Consideration and Additional Payments, if any.
1.10 TAKING OF NECESSARY ACTION; FURTHER ACTION. The parties hereto
shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger as promptly as possible. If, at
any time after the Effective Time, any such further action is necessary or
desirable to carry out the purposes of this Agreement and to vest in the
Surviving Corporation all right, title and possession to all assets, property,
rights, privileges, powers and franchises of Superior or Sub, such corporations
shall direct their respective officers and directors to take all such lawful and
necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF XXXXXX AND SUB. Xxxxxx and Sub
hereby jointly and severally represent and warrant to Superior that:
(a) Organization and Compliance with Law. Each of Xxxxxx and its
consolidated significant subsidiaries as defined in Rule 1.02 of
Regulation S-X (the "Xxxxxx Subsidiaries") is a corporation, a limited
liability company or a limited liability partnership duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized and has all
requisite corporate power and authority and all necessary governmental
authorizations to own, lease and operate all of its properties and
assets and to carry on its business as now being conducted, except
where the failure to be so organized, existing or in good standing or
to have such governmental authority would not have a material adverse
effect on the financial condition, results of operations or business of
Xxxxxx and the Xxxxxx Subsidiaries, taken as a whole (a "Xxxxxx XXX").
A Xxxxxx XXX shall not be deemed to include material adverse changes
affecting the contract drilling industry or the United States economy
generally. Except as set forth in Section 2.1(a) of the disclosure
letter delivered by Xxxxxx to Superior on the date hereof (the "Xxxxxx
Disclosure Letter"), each of Xxxxxx and the Xxxxxx Subsidiaries is duly
qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure
to be duly qualified does not and would not, either individually or in
the aggregate, have a Xxxxxx XXX. Each of Xxxxxx and the Xxxxxx
Subsidiaries is in compliance with all applicable laws, judgments,
orders, rules and regulations, domestic and foreign, except where
failure to be in such compliance would not have a Xxxxxx XXX.
-6-
11
(b) Capitalization.
(i) The authorized capital stock of Xxxxxx consists of
120,000,000 shares of Xxxxxx Common Stock, and 1,942,000 shares of
preferred stock, par value $1.00 per share ("Xxxxxx Preferred
Stock"). As of September 30, 1998, there were issued and
outstanding 76,783,045 shares of Xxxxxx Common Stock, 482,044
shares of Xxxxxx Common Stock were held as treasury shares, and no
shares of Xxxxxx Preferred Stock were issued and outstanding but
120,000 shares have been designated as Junior Participating
Preferred Stock, par value $.01 per share. All issued shares of
Xxxxxx Common Stock were validly issued and are fully paid and
nonassessable and no holder thereof is entitled to preemptive
rights. Except as set forth in Section 2.1(b) of the Xxxxxx
Disclosure Letter, and except for shares reserved for issuance
pursuant to Xxxxxx stock plans described in Section 2.1(b) of
Xxxxxx Disclosure Letter and pursuant to the 5 1/2% Convertible
Subordinated Debentures due 2004 (the "Convertible Debentures"),
no shares of Xxxxxx Common Stock are reserved for issuance, and
except for Xxxxxx'x obligations under that certain Rights
Agreement dated as of July 14, 1998 between Xxxxxx and Norwest
Bank Minnesota, N.A., as Rights Agent, there are no contracts,
agreements, commitments or arrangements obligating Xxxxxx (i) to
offer, sell, issue or grant any capital stock of Xxxxxx or (ii) to
redeem, purchase or acquire, or offer to purchase or acquire, any
outstanding capital stock of Xxxxxx or to grant any lien on any
shares of capital stock of Xxxxxx. All shares of Xxxxxx Common
Stock to be issued pursuant to the Merger, when issued in
accordance with this Agreement, will be validly issued, fully paid
and nonassessable and will not violate the preemptive rights of
any person. Except as set forth in Section 2.1(b) of the Xxxxxx
Disclosure Letter, Xxxxxx is not a party to, and is not aware of,
any voting agreement, voting trust or similar agreement or
arrangement relating to any class or series of its capital stock,
or any agreement or arrangement providing for registration rights
with respect to any capital stock or other securities of Xxxxxx.
(ii) As of September 30, 1998, there were outstanding options
to purchase 5,597,500 shares of Xxxxxx Common Stock pursuant to
the plans and agreements referenced in Section 2.1(b)(i) above
("Xxxxxx Options"), and 11,371,020 shares were reserved for
issuance upon conversion of the Convertible Debentures.
(iii) As of the date hereof, the authorized capital stock of
Sub consists of 1,000 shares of common stock, par value $0.01 per
share, all of which were validly issued and are fully paid and
nonassessable and are owned by Xxxxxx.
(iv) Except as set forth in Section 2.1(b) of the Xxxxxx
Disclosure Letter, all outstanding shares of the Xxxxxx
Subsidiaries (A) are owned by Xxxxxx or a wholly owned subsidiary
of Xxxxxx, free and clear of all liens, charges, encumbrances,
adverse claims and options of any nature, (B) were duly authorized
and validly issued and are fully paid and nonassessable, and (C)
have not been issued in violation of any preemptive rights. Except
as set forth in Section 2.1(b) of the Xxxxxx Disclosure
-7-
12
Letter, there are not now, and at the Effective Time there will
not be, any outstanding options, warrants, scrip, rights to
subscribe for, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or
exchangeable for, shares of any class of capital stock of the
Xxxxxx Subsidiaries, or contracts, understandings or arrangements
to which Xxxxxx or a Xxxxxx Subsidiary is a party, or by which any
of them is or may be bound, to issue additional shares of capital
stock or options, warrants, scrip or rights to subscribe for, or
securities or rights convertible into or exchangeable for, any
additional shares of capital stock of any Xxxxxx Subsidiary.
(c) Authorization and Validity of Agreement. Xxxxxx and Sub have
all requisite corporate power and authority to enter into this
Agreement and to perform their obligations hereunder. The execution and
delivery by Xxxxxx and Sub of this Agreement and the consummation by
each of them of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Xxxxxx and
Sub (other than, with respect to the approval of the issuance of shares
of Xxxxxx Common Stock pursuant to the Merger (the "Share Issuance")
and the approval of an amendment to Xxxxxx'x Restated Certificate of
Incorporation to increase the authorized share capital (the "Charter
Amendment"), by the holders of a majority of the outstanding shares of
Xxxxxx Common Stock in accordance with Section 5.1(b)). On or prior to
the date hereof, the Board of Directors of Xxxxxx has determined to
recommend approval of the Share Issuance and the Charter Amendment to
the stockholders of Xxxxxx, and such determination is in effect as of
the date hereof. This Agreement has been duly executed and delivered by
Xxxxxx and Sub and is the valid and binding obligation of Xxxxxx and
Sub, enforceable against Xxxxxx and Sub in accordance with its terms,
except as the same may be limited by legal principles of general
applicability governing the application and availability of equitable
remedies.
(d) No Approvals or Notices Required; No Conflict with Instruments
to which Xxxxxx or any of the Xxxxxx Subsidiaries is a Party. Neither
the execution and delivery of this Agreement nor the performance by
Xxxxxx or Sub of their respective obligations hereunder, nor the
consummation of the transactions contemplated hereby by Xxxxxx and Sub,
will (i) except for the requirement of a Charter Amendment to increase
the authorized share capital, conflict with the certificate of
incorporation or bylaws or other equivalent organizational documents of
Xxxxxx or the charter or bylaws of any of the Xxxxxx Subsidiaries; (ii)
assuming satisfaction of the requirements set forth in clause (iii)
below, violate any provision of law applicable to Xxxxxx or any of the
Xxxxxx Subsidiaries; (iii) except for (A) requirements of federal or
state securities laws, (B) requirements arising out of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx"),
(X) requirements of notice filings in such foreign jurisdictions as may
be applicable, and (D) the filing of a certificate of merger by Sub in
accordance with the DGCL, require any consent or approval of, or filing
with or notice to, any public body or authority, domestic or foreign,
under any provision of law applicable to Xxxxxx or any of the Xxxxxx
Subsidiaries; or (iv) require any consent, approval or notice under, or
violate, breach, be in conflict with or constitute a default (or an
event that, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or
result in the creation or
-8-
13
imposition of any lien upon any properties, assets or business of
Xxxxxx or any of the Xxxxxx Subsidiaries under, any note, bond,
indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment or any order, judgment or decree to which Xxxxxx or any of
the Xxxxxx Subsidiaries is a party or by which Xxxxxx or any of the
Xxxxxx Subsidiaries or any of their respective assets or properties is
bound or encumbered, except (A) the approval by the stockholders of
Xxxxxx in accordance with Section 5.1(b), (B) those that have already
been given, obtained or filed, (C) those that are required pursuant to
bank loan agreements, as set forth in Section 2.1(d) of the Xxxxxx
Disclosure Letter, which will be obtained prior to the Effective Time,
or (D) those that, in the aggregate, would not have a Xxxxxx XXX.
(e) Commission Filings; Financial Statements. Xxxxxx and each of
the Xxxxxx Subsidiaries have timely filed all reports, registration
statements and other filings, together with any amendments required to
be made with respect thereto, that they have been required to file with
the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
reports, registration statements and other filings (including all
notes, exhibits and schedules thereto and documents incorporated by
reference therein) filed by Xxxxxx with the Commission since August 31,
1996 through the date of this Agreement, together with any amendments
thereto, are sometimes collectively referred to as the "Xxxxxx
Commission Filings." As of the respective dates of their filing with
the Commission, the Xxxxxx Commission Filings complied in all material
respects with the Securities Act, the Exchange Act and the rules and
regulations of the Commission thereunder, and 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 made
therein, in light of the circumstances under which they were made, not
misleading.
Each of the consolidated financial statements (including any
related notes or schedules) included in the Xxxxxx Commission Filings
was prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto) and complied with all
applicable rules and regulations of the Commission. Such consolidated
financial statements fairly present the consolidated financial position
of Xxxxxx and the Xxxxxx Subsidiaries as of the dates thereof and the
results of operations, cash flows and changes in stockholders' equity
for the periods then ended (subject, in the case of the unaudited
interim financial statements, to normal year-end audit adjustments on a
basis consistent with past periods).
(f) Absence of Undisclosed Liabilities. Except as disclosed in
Section 2.1(f) of the Xxxxxx Disclosure Letter or in the Xxxxxx
Commission Filings, as of the date of this Agreement, neither Xxxxxx
nor any of the Xxxxxx Subsidiaries has any liabilities that are
reasonably likely to have, individually or in the aggregate, a Xxxxxx
XXX, except liabilities which are accrued or reserved against in the
consolidated balance sheet of Xxxxxx as of August 31, 1997 or May 31,
1998, included in the Xxxxxx Commission Filings or reflected in the
notes thereto. Neither Xxxxxx nor any Xxxxxx Subsidiary has incurred or
paid any liability since May 31, 1998, except for liabilities incurred
or paid (i) in the ordinary course
-9-
14
of business consistent with past practice, (ii) in connection with
transactions contemplated by this Agreement, or (iii) pursuant to
transactions not prohibited by this Agreement.
(g) Conduct of Business in the Ordinary Course; Absence of Certain
Changes and Events. Since August 31, 1997, except as contemplated by
this Agreement or as disclosed in the Xxxxxx Commission Filings filed
with the Commission prior to the date hereof or as set forth in Section
2.1(g) of the Xxxxxx Disclosure Letter, Xxxxxx and the Xxxxxx
Subsidiaries have conducted their business only in the ordinary and
usual course, and there has not been (i) any Xxxxxx XXX or any
condition, event or development that reasonably may be expected to
result in a Xxxxxx XXX; (ii) any material change by Xxxxxx in its
accounting methods, principles or practices; (iii) any revaluation by
Xxxxxx or any of the Xxxxxx Subsidiaries of any of their respective
assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the
ordinary course of business; (iv) any declaration, setting aside or
payment of any dividends or distributions in respect of Xxxxxx Common
Stock, or any redemption, purchase or other acquisition of any of its
securities or any securities of any of the Xxxxxx Subsidiaries; (v) any
damage, destruction or loss (whether or not covered by insurance)
materially adversely affecting the properties or business of Xxxxxx and
the Xxxxxx Subsidiaries, taken as a whole; (vi) any increase in
indebtedness for borrowed money other than borrowings under existing
credit facilities or indebtedness incurred in the ordinary course of
business; or (vii) any granting of a security interest in or lien on
any material property or assets of Xxxxxx and the Xxxxxx Subsidiaries,
taken as a whole, other than (A) liens for taxes not due and payable or
which are being contested in good faith; (B) maritime liens and
mechanics', warehousemen's and other statutory liens incurred in the
ordinary course of business; (C) defects and irregularities in title
and encumbrances which are not substantial in character or amount and
do not materially impair the use of the property or asset in question;
and (D) liens securing indebtedness incurred in the ordinary course of
business (collectively, "Permitted Liens").
(h) Tax Representation. Xxxxxx has no plan or intention to (i)
liquidate the Surviving Corporation; (ii) merge the Surviving
Corporation with or into another corporation; (iii) sell or otherwise
dispose of the stock of the Surviving Corporation except for transfers
or successive transfers to one or more corporations controlled (within
the meaning of section 368(c) of the Code) in each case by the
transferor corporation; (iv) cause the Surviving Corporation to issue
additional shares of its capital stock that would result in Xxxxxx'x
losing control (within the meaning of section 368(c) of the Code), of
the Surviving Corporation; (v) cause or permit the Surviving
Corporation to sell or otherwise dispose of any of its assets or of any
of the assets acquired from Sub except for dispositions made in the
ordinary course of business or transfers or successive transfers to one
or more corporations controlled (within the meaning of section 368(c)
of the Code) in each case by the transferor corporation; or (vi)
reacquire or cause any person related (as defined in Treas. Reg.
Section 1.368-1(e)(3)) to Xxxxxx to acquire any of the Xxxxxx Common
Stock issued to the Superior stockholders pursuant to the Merger.
Neither Xxxxxx nor any of the Xxxxxx Subsidiaries own any Superior
Common Stock. Following the Merger, the Surviving Corporation will
continue its historic business (within the meaning of Treas. Reg.
Section 1.368-1(d)) or use a
-10-
15
significant portion of its historic business assets (within the meaning
of Regulation 1.368-1(d)) in a trade or business.
(i) Opinion of Financial Advisor. Xxxxxx has received the opinion
of Xxxxxxxxx & Company, Inc. on the date of this Agreement to the
effect that the Merger Consideration is fair, from a financial point of
view, to Xxxxxx.
(j) Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its
operations only as contemplated hereby.
(k) No agent, broker, person or firm acting on behalf of Xxxxxx is
or will be entitled to any commission or broker's or finder's fee from
any of the parties hereto in connection with any of the transactions
contemplated herein, except fees to Xxxxxxxxx & Company, Inc. and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, both to be paid by
Xxxxxx.
(l) Certain Business Practices. As of the date of this Agreement,
neither Xxxxxx or any of the Xxxxxx Subsidiaries nor any director,
officer, employee or agent of Xxxxxx or any of the Xxxxxx Subsidiaries
has (i) used any funds for unlawful contributions, gifts, entertainment
or other unlawful payments relating to political activity, (ii) made
any unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political party or campaign or
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended (the "FCPA"), (iii) consummated any transaction, made any
payment, entered into any agreement or arrangement or taken any other
action in violation of Section 1128B(b) of the Social Security Act, as
amended (the "SSA"), or (iv) made any other unlawful payment.
2.2 REPRESENTATIONS AND WARRANTIES OF SUPERIOR. Superior hereby
represents and warrants to Xxxxxx that:
(a) Organization and Compliance with Law. Each of Superior and its
consolidated subsidiaries (the "Superior Subsidiaries") is a
corporation or a limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction in
which it is chartered or organized and has all requisite corporate
power and authority and all necessary governmental authorizations to
own, lease and operate all of its properties and assets and to carry on
its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such governmental
authority would not have a material adverse effect on the financial
condition, results of operations or business of Superior and the
Superior Subsidiaries, taken as a whole (a "Superior MAE"). A Superior
MAE shall not be deemed to include material adverse changes affecting
the oilfield services industry or the United States economy generally.
Except as set forth in Section 2.2(a) of the disclosure letter
delivered by Superior to Xxxxxx on the date hereof (the "Superior
Disclosure Letter"), each of Superior and the Superior Subsidiaries is
duly qualified as a foreign corporation to do business, and is in good
standing,
-11-
16
in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure
to be duly qualified does not and would not, either individually or in
the aggregate, have a Superior MAE. Each of Superior and the Superior
Subsidiaries is in compliance with all applicable laws, judgments,
orders, rules and regulations, domestic and foreign, except where
failure to be in such compliance would not have a Superior MAE.
(b) Capitalization.
(i) The authorized capital stock of Superior consists of
40,000,000 shares of Superior Common Stock and 5,000,000 shares of
preferred stock, par value $.01 per share ("Superior Preferred Stock").
As of October 26, 1998, there were issued and outstanding 28,792,523
shares of Superior Common Stock, 474,500 shares of Superior Common
Stock were held as treasury shares and no shares of Superior Preferred
Stock were issued and outstanding. All issued shares of Superior Common
Stock were validly issued and are fully paid and nonassessable and no
holder thereof is entitled to preemptive rights. Except as set forth in
Section 2.2(b) of the Superior Disclosure Letter, Superior is not a
party to, and is not aware of, any voting agreement, voting trust or
similar agreement or arrangement relating to any class or series of its
capital stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of Superior.
(ii) As of the date hereof, there were outstanding options
(the "Superior Options") to purchase an aggregate of 1,726,500 shares
of Superior Common Stock under the Amended and Restated Superior, Inc.
1995 Stock Incentive Plan (the "Superior Stock Option Plan"). Other
than as set forth in this Section 2.2(b) and in Section 2.2(b) (ii) of
the Superior Disclosure Letter, there are not now, and at the Effective
Time there will not be, any (A) shares of capital stock or other equity
securities of Superior outstanding other than Superior Common Stock
issuable pursuant to the exercise of Superior Options or (B)
outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of any class of
capital stock of Superior, or contracts, understandings or arrangements
to which Superior is a party, or by which it is or may be bound, to
issue additional shares of its capital stock or options, warrants,
scrip or rights to subscribe for, or securities or rights convertible
into or exchangeable for, any additional shares of its capital stock.
(iii) Except as set forth in Section 2.2(b) of the Superior
Disclosure Letter, all outstanding shares of capital stock of the
Superior Subsidiaries (A) are owned by Superior or a wholly owned
subsidiary of Superior, free and clear of all liens, charges,
encumbrances, adverse claims and options of any nature, (B) were duly
authorized and validly issued and are fully paid and nonassessable, and
(C) have not been issued in violation of any preemptive rights. There
are not now, and at the Effective Time there will not be, any
outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of any class of
capital stock of the Superior Subsidiaries, or contracts,
understandings or arrangements to which Superior or a Superior
Subsidiary is a party, or by which any of them
-12-
17
is or may be bound, to issue additional shares of its capital stock or
options, warrants, scrip or rights to subscribe for, or securities or
rights convertible into or exchangeable for, any additional shares of
capital stock of any Superior Subsidiary. There are not now, and at the
Effective Time there will not be, any outstanding contractual
obligations of Superior or any of the Superior Subsidiaries to
repurchase, redeem or otherwise acquire any outstanding shares of
capital stock or other ownership interests of any such Superior
Subsidiary or to provide funds to or make any investment (in the form
of a loan, capital contribution or otherwise) in any such Superior
Subsidiary or any other entity.
(iv) Except for the Superior Subsidiaries or as set forth in
Section 2.2(b) of the Superior Disclosure Letter, Superior does not,
directly or indirectly, own of record or beneficially, or have the
right or obligation to acquire, any outstanding securities or other
interest in any corporation, partnership, joint venture or other
entity.
(c) Authorization and Validity of Agreement. Superior has all
requisite corporate power and authority to enter into this Agreement
and to perform its obligations hereunder. The execution and delivery by
Superior of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action (subject only, with respect to the Merger,
to approval of this Agreement by its stockholders as provided for in
Section 5.1(a)). On or prior to the date hereof, the Board of Directors
of Superior has determined to recommend approval of the Merger to the
stockholders of Superior, and such determination is in effect as of the
date hereof. This Agreement has been duly executed and delivered by
Superior and is the valid and binding obligation of Superior,
enforceable against Superior in accordance with its terms, except as
the same may be limited by legal principles of general applicability
governing the application and availability of equitable remedies.
(d) No Approvals or Notices Required; No Conflict with Instruments
to which Superior or any of the Superior Subsidiaries is a Party.
Neither the execution and delivery of this Agreement nor the
performance by Superior of its obligations hereunder, nor the
consummation of the transactions contemplated hereby by Superior, will
(i) conflict with the certificate of incorporation or bylaws of
Superior or the charter or bylaws or other equivalent organizational
documents of any of the Superior Subsidiaries; (ii) assuming
satisfaction of the requirements set forth in clause (iii) below,
violate any provision of law applicable to Superior or any of the
Superior Subsidiaries; (iii) except for (A) requirements of federal or
state securities laws, (B) requirements arising out of the HSR Act, (C)
requirements of notice filings in such foreign jurisdictions as may be
applicable, and (D) the filing of a certificate of merger in accordance
with the DGCL, require any consent or approval of, or filing with or
notice to, any public body or authority, domestic or foreign, under any
provision of law applicable to Superior or any of the Superior
Subsidiaries; or (iv) require any consent, approval or notice under, or
violate, breach, be in conflict with or constitute a default (or an
event that, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or
result in the creation or imposition of any lien upon any properties,
assets or business of Superior or any of the Superior Subsidiaries
under, any note, bond, indenture, mortgage, deed of trust, lease,
franchise, permit, authorization, license,
-13-
18
contract, instrument or other agreement or commitment or any order,
judgment or decree to which Superior or any of the Superior
Subsidiaries is a party or by which Superior or any of the Superior
Subsidiaries or any of their respective assets or properties is bound
or encumbered, except (A) the approval by the stockholders of Superior
of this Agreement in accordance with Section 5.1(a), (B) those that
have already been given, obtained or filed, (C) those that are required
pursuant to bank loan agreements, as set forth in Section 2.2(d) of the
Superior Disclosure Letter, which Superior will use its reasonable
efforts to obtain prior to the Effective Time, and (D) those that, in
the aggregate, would not have a Superior MAE.
(e) Commission Filings; Financial Statements. Superior and each of
the Superior Subsidiaries have timely filed all reports, registration
statements and other filings, together with any amendments required to
be made with respect thereto, that they have been required to file with
the Commission under the Securities Act and the Exchange Act. All
reports, registration statements and other filings (including all
notes, exhibits and schedules thereto and documents incorporated by
reference therein) filed by Superior with the Commission since January
1, 1996 through the date of this Agreement, together with any
amendments thereto, are sometimes collectively referred to as the
"Superior Commission Filings." As of the respective dates of their
filing with the Commission, the Superior Commission Filings complied in
all material respects with the Securities Act, the Exchange Act and the
rules and regulations of the Commission thereunder, and 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
made therein, in light of the circumstances under which they were made,
not misleading.
Each of the consolidated financial statements (including any
related notes or schedules) included in the Superior Commission Filings
was prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto) and complied with the
rules and regulations of the Commission. Such consolidated financial
statements fairly present the consolidated financial position of
Superior and the Superior Subsidiaries as of the dates thereof and the
results of operations, cash flows and changes in stockholders' equity
for the periods then ended (subject, in the case of the unaudited
interim financial statements, to normal year-end audit adjustments on a
basis consistent with past periods).
(f) Absence of Undisclosed Liabilities. Except as disclosed in
Section 2.2(f) of the Superior Disclosure Letter or in the Superior
Commission Filings, as of the date of this Agreement, neither Superior
nor any of the Superior Subsidiaries has any liabilities that are
reasonably likely to have, individually or in the aggregate, a Superior
MAE, except liabilities which are accrued or reserved against in the
consolidated balance sheet of Superior as of December 31, 1997 or June
30, 1998, included in the Superior Commission Filings or reflected in
the notes thereto. Neither Superior nor any Superior Subsidiary has
incurred or paid any liability since June 30, 1998, except for
liabilities incurred or paid (i) in the ordinary course of business
consistent with past practice, (ii) in connection with transactions
-14-
19
contemplated by this Agreement, or (iii) pursuant to transactions not
prohibited by this Agreement.
(g) Conduct of Business in the Ordinary Course; Absence of Certain
Changes and Events. Since January 1, 1998, except as contemplated by
this Agreement or as disclosed in the Superior Commission Filings filed
with the Commission prior to the date hereof or as set forth in Section
2.2(g) of the Superior Disclosure Letter, Superior and the Superior
Subsidiaries have conducted their business only in the ordinary and
usual course, and there has not been (i) any Superior MAE, or any
condition, event or development that reasonably may be expected to
result in a Superior MAE; (ii) any material change by Superior in its
accounting methods, principles or practices; (iii) any revaluation by
Superior or any of the Superior Subsidiaries of any of their respective
assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the
ordinary course of business; (iv) any entry by Superior or any of the
Superior Subsidiaries into any commitment or transaction material to
Superior and the Superior Subsidiaries, taken as a whole; (v) any
declaration, setting aside or payment of any dividends or distributions
in respect of Superior Common Stock or any redemption, purchase or
other acquisition of any of its securities or any securities of any of
the Superior Subsidiaries; (vi) any damage, destruction or loss
(whether or not covered by insurance) materially adversely affecting
the properties or business of Superior and the Superior Subsidiaries,
taken as a whole; (vii) any increase in indebtedness for borrowed money
other than an increase as a result of borrowings under existing credit
facilities or indebtedness incurred in the ordinary course of business;
(viii) any granting of a security interest in or lien on any material
property or assets of Superior and the Superior Subsidiaries, taken as
a whole, other than Permitted Liens; or (ix) any increase in or
establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards),
stock purchase or other employee benefit plan or any other increase in
the compensation payable or to become payable to any officers or key
employees of Superior or any of the Superior Subsidiaries other than
those that are required under existing contractual arrangements.
(h) Litigation. Except as disclosed in the Superior Commission
Filings or as set forth in Section 2.2(h) of the Superior Disclosure
Letter, there are no claims, actions, suits, investigations, inquiries
or proceedings (including any proceedings in arbitration) pending or,
to the knowledge of Superior, threatened against or affecting Superior
or any of the Superior Subsidiaries or any of their respective
properties at law or in equity, or before or by any federal, state,
municipal or other governmental agency or authority, or before any
arbitration board or panel, wherever located, that individually or,
with respect to multiple actions, suits or proceedings that allege
similar theories of recovery based on similar facts, in the aggregate
if adversely determined could have a Superior MAE, or that involve the
risk of criminal liability. There are no claims pending or, to the
knowledge of Superior, threatened by any present or former officer,
director, employee or affiliate against Superior or any of the Superior
Subsidiaries for indemnification pursuant to any statute,
organizational
-15-
20
document, contract or otherwise with respect to any action, suit,
investigation or proceeding pending in any court or before or by any
governmental authority.
(i) Employee Benefit Plans.
(i) Section 2.2(i) of the Superior Disclosure Letter
provides a list of each of the following which is sponsored, maintained
or contributed to by Superior, a Superior Subsidiary or any
corporation, trade, business or entity under common control with
Superior or a Superior Subsidiary within the meaning of section 414(b),
(c), (m) or (o) of the Code or Section 4001 of ERISA (as defined below)
(a "Superior ERISA Affiliate") for the benefit of its current or former
employees, officers or directors as of the Closing Date:
(A) each "employee benefit plan" ("Plan"), as such term
is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); and
(B) each personnel policy, stock option plan, collective
bargaining agreement, bonus plan or arrangement, incentive
award plan or arrangement, vacation policy, severance pay
plan, policy or agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental income
arrangement, consulting agreement, employment agreement and
each other employee benefit plan, agreement, arrangement,
program, practice or understanding that is not described in
Section 2.2(i)(i)(A) ("Benefit Program or Agreement").
True and complete copies of each of the Plans, Benefit Programs or
Agreements, related trusts, if applicable, and all amendments thereto,
have been or on request will be furnished to Xxxxxx.
(ii) None of Superior, any Superior Subsidiary or any
Superior ERISA Affiliate contributes to or has an obligation to
contribute to, or has at any time contributed to or had an obligation
to contribute to, a plan subject to Title IV of ERISA, including,
without limitation, a multiemployer plan within the meaning of Section
3(37) of ERISA.
(iii) Except as otherwise set forth in Section 2.2(i) of the
Superior Disclosure Letter:
(A) each Plan and each Benefit Program or Agreement has
been administered, maintained and operated in all material
respects in accordance with the terms thereof and in
compliance with its governing documents and applicable law
(including, where applicable, ERISA and the Code);
(B) there is no matter pending with respect to any of
the Plans before any governmental agency, and there are no
actions, suits or claims pending (other than routine claims
for benefits) or, to the knowledge of Superior, threatened
against, or with respect to, any of the Plans or Benefit
Programs or Agreements or their assets;
-16-
21
(C) no act, omission or transaction has occurred which
would result in the imposition on Superior, any Superior
Subsidiary or any Superior ERISA Affiliate of breach of
fiduciary duty liability damages under Section 409 of ERISA, a
civil penalty assessed pursuant to Subsections (c), (i) or (1)
of Section 502 of ERISA or a tax imposed pursuant to Chapter
43 of Subtitle D of the Code;
(D) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not
require Superior, any Superior Subsidiary or any Superior
ERISA Affiliate to make a larger contribution to, or pay
greater benefits under, any Plan, Benefit Program or Agreement
than it otherwise would, whether or not some other subsequent
action or event would be required to cause such payment or
provision to be triggered, or create or give rise to any
additional vested rights or service credits under any Plan or
Benefit Program or Agreement; and
(E) each of the Plans intended to be qualified under
section 401 of the Code (1) satisfies in form the requirements
of such section except to the extent amendments are not
required by law to be made until a date after the Closing
Date, (2) has received a favorable determination letter from
the Internal Revenue Service regarding such qualified status,
(3) has not, since receipt of the most recent favorable
determination letter, been amended, and (4) has not been
operated in a way that would adversely affect its qualified
status.
(iv) In connection with the consummation of the transactions
contemplated by this Agreement, no payments of money or other property,
acceleration of benefits, or provisions of other rights have or will be
made hereunder, under any agreement contemplated hereby, or under the
Plans or Benefit Programs or Agreements that would be reasonably likely
to result in the imposition of the sanctions imposed under sections
280G and 4999 of the Code, whether or not some other subsequent action
or event would be required to cause such payment, acceleration or
provision to be triggered.
(v) Each Plan may be unilaterally amended or terminated in
its entirety without liability except as to benefits accrued thereunder
prior to such amendment or termination.
(j) Taxes. Except as set forth in Section 2.2(j) of the Superior
Disclosure Letter, all federal and all material state, local, foreign
returns, declarations, reports, including claims for refunds,
estimates, information returns and statements (including any amendments
thereof) ("Tax Returns") of or relating to any Taxes (as hereinafter
defined) that are required to be filed on or before the Closing Date by
or with respect to Superior or any of the Superior Subsidiaries, or any
other corporation that is or was a member of an affiliated group
(within the meaning of section 1504(a) of the Code) of corporations of
which Superior was a member for any period ending on or prior to the
Closing Date, have been or will be duly and timely filed with
appropriate governmental authorities, and all Taxes, including interest
and penalties, due and payable with respect to the periods covered by
such Tax Returns or
-17-
22
otherwise required to be duly paid or deposited by or with respect to
Superior or any of the Superior Subsidiaries have been paid or
adequately provided for in reserves established by Superior. Except as
set forth in Section 2.2(j) of the Superior Disclosure Letter, all U.S.
Federal Income Tax Returns of or with respect to Superior or any of the
Superior Subsidiaries have been audited by the applicable governmental
authority, or the applicable statute of limitations has expired, for
all periods up to and including the tax year ended December 31, 1994.
There is no material claim against Superior or any of the Superior
Subsidiaries with respect to any Taxes, and no material assessment,
deficiency or adjustment has been asserted or proposed with respect to
any Tax Return of or with respect to Superior or any of the Superior
Subsidiaries that has not been adequately provided for in reserves
established by Superior in the consolidated financial statements
included in the Superior Commission Filings. The total amounts set up
as liabilities for current and deferred Taxes in the consolidated
financial statements included in the Superior Commission Filings have
been prepared in accordance with generally accepted accounting
principles and are sufficient to cover the payment of all material
Taxes, including any penalties or interest thereon and whether or not
assessed or disputed, that are, or are hereafter found to be, or to
have been, due with respect to the operations of Superior and the
Superior Subsidiaries through the periods covered thereby. Superior and
each of the Superior Subsidiaries have (and as of the Closing Date will
have) made all deposits (including estimated tax payments for taxable
years for which the consolidated federal income tax return is not yet
due) required with respect to Taxes. Except as set forth in Section
2.2(j) of the Superior Disclosure Letter, no waiver or extension of any
statute of limitations as to any federal, local or foreign Tax matter
has been given by or requested from Superior or any of the Superior
Subsidiaries, and none of such Tax Returns are now under audit or
examination by any federal, state, local or foreign or other
governmental entity. Except for statutory liens for current Taxes not
yet due, no liens for Taxes exist upon the assets of either Superior or
the Superior Subsidiaries. Except as set forth in Section 2.2(j) of the
Superior Disclosure Letter, neither Superior nor any of the Superior
Subsidiaries (i) has filed consolidated income Tax Returns with any
corporation, other than consolidated federal and state income Tax
Returns with Superior, for any taxable period which is not now closed
by the applicable statute of limitations, (ii) is a party to any tax
sharing or tax indemnity agreement, or (iii) has any liability for
Taxes of any other person (other than current members of Superior's
affiliated group of corporations) under Treas. Reg. Section 1.1502-6
(or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise. Neither Superior nor
the Superior Subsidiaries has any income or gain resulting from any
intercompany transaction as described in Treas. Reg. Section 1.1502-13.
Superior and the Superior Subsidiaries have made available to
Xxxxxx true and correct copies of all federal, state and local income
and franchise Tax Returns, examination reports and statements of
deficiencies asserted or assessed against or agreed to by Superior or
any Superior Subsidiary for all open Tax periods. None of the assets of
Superior or the Superior Subsidiaries (i) is property that is required
to be treated as being owned by any other person pursuant to the "safe
harbor lease" provisions of former section 168(f)(8) of the Code, (ii)
is "tax-exempt use property" within the meaning of section 168(h) of
the Code, or (iii) secures any debt the interest on which is tax-exempt
under section 103(a) of the Code.
-18-
23
For purposes of this Agreement, "Tax" or "Taxes" means any and all
taxes, fees, levies, duties, tariffs, imposts and other charges of any
kind (together with any and all interest, penalties, additions to tax
and additional amounts imposed with respect thereto) imposed by any
government or taxing authority, including, without limitation, taxes or
other charges on or with respect to income, franchises, severance,
gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment
compensation, disability or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value added
or gains taxes; license, registration and documentation fees; and
custom duties, tariffs and similar charges whether or not disputed.
(k) Environmental Matters. Except for matters disclosed in the
Superior Commission Filings or as set forth in Section 2.2(k) of the
Superior Disclosure Letter and except for matters that in the aggregate
would not have a Superior MAE, (i) the properties, operations and
activities of Superior and the Superior Subsidiaries comply with all
applicable Environmental Laws (as defined below); (ii) Superior and the
Superior Subsidiaries and the properties and operations of Superior and
the Superior Subsidiaries are not subject to any existing, pending or,
to the knowledge of Superior, threatened action, suit, investigation,
inquiry or proceeding by or before any governmental authority under any
Environmental Law; (iii) all notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed by Superior or
the Superior Subsidiaries under any Environmental Law in connection
with any aspect of the business of Superior or the Superior
Subsidiaries, including without limitation those relating to the
treatment, storage, disposal or release of a hazardous substance or
solid waste, have been duly obtained or filed and will remain valid and
in effect after the Merger, and Superior and the Superior Subsidiaries
are in compliance with the terms and conditions of all such notices,
permits, licenses and similar authorizations; (iv) Superior and the
Superior Subsidiaries have satisfied and are currently in compliance
with all financial responsibility requirements applicable to their
operations and imposed by the U.S. Coast Guard and Minerals Management
Service pursuant to OPA (as hereinafter defined) or by any other
governmental authority under any other Environmental Law, and Superior
and the Superior Subsidiaries have not received any notice of
noncompliance with any such financial responsibility requirements; (v)
to the knowledge of Superior, there are no physical or environmental
conditions existing on any property of Superior and the Superior
Subsidiaries or resulting from Superior's and the Superior
Subsidiaries' operations or activities, past or present, at any
location, that would give rise to any on-site or off-site remedial
obligations under any Environmental Laws; (vi) to the knowledge of
Superior, since the effective date of the relevant requirements of
applicable Environmental Laws, all hazardous substances or solid wastes
generated by Superior or any of the Superior Subsidiaries or used in
connection with any of their properties or operations have been
transported only by carriers authorized under Environmental Laws to
transport such substances and wastes, and disposed of only at
treatment, storage and disposal facilities authorized under
Environmental Laws to treat, store or dispose of such substances and
wastes, and, to the knowledge of Superior, such carriers and facilities
have been and are operating in compliance with such authorizations and
are not the subject of any existing, pending or overtly threatened
action, investigation or inquiry by any governmental authority
-19-
24
in connection with any Environmental Laws; (vii) there has been no
exposure of any person or property to hazardous substances, solid
waste, or any pollutant or contaminant, nor has there been any release
of hazardous substances, solid waste, or any pollutant or contaminant
into the environment by Superior or the Superior Subsidiaries or in
connection with any of their properties or operations that could
reasonably be expected to give rise to any claim for damages or
compensation; and (viii) Superior and the Superior Subsidiaries have
made available to Xxxxxx true and correct copies of all internal and
external environmental audits and studies and all correspondence on
substantial environmental matters in the possession of Superior and the
Superior Subsidiaries relating to any of the current or former
properties or operations of Superior and the Superior Subsidiaries.
For purposes of this Agreement, the term "Environmental Laws"
shall mean any and all laws, statutes, ordinances, rules, regulations,
orders or determinations of any Governmental Authority pertaining to
health or the environment currently in effect in any and all
jurisdictions in which the party in question and its subsidiaries own
property or conduct business, including, without limitation, the Clean
Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation
and Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water
Act, as amended, the Toxic Substances Control Act, as amended, the
Hazardous & Solid Waste Amendments Act of 1984, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, the Oil Pollution
Act of 1990 ("OPA"), any state laws pertaining to the handling of oil
and gas exploration and production wastes or the use, maintenance and
closure of pits and impoundments, and all other environmental
conservation or protection laws. For purposes of this Agreement, the
terms "hazardous substance" and "release" have the meanings specified
in CERCLA, and the terms "solid waste" and "disposal" have the meanings
specified in RCRA; provided, however, that to the extent the laws of
the state in which the property is located establish a meaning for
"hazardous substance," "release," "solid waste" or "disposal" that is
broader than that specified in either CERCLA or RCRA, such broader
meaning shall apply. For purposes of this Agreement, the term
"Governmental Authority" includes the United States, the state, county,
city and political subdivisions in which the party in question owns
property or conducts business, and any agency, department, commission,
board, bureau or instrumentality of any of them that exercises
jurisdiction over the party in question.
(l) Severance Payments. Except as set forth in Section 2.2(l) of
the Superior Disclosure Letter, none of Superior or the Superior
Subsidiaries will owe a severance payment or similar obligation to any
of their respective employees, officers or directors as a result of the
Merger or the transactions contemplated by this Agreement, nor will any
of such persons be entitled to severance payments or other benefits as
a result of the Merger or the transactions contemplated by this
Agreement in the event of the subsequent termination of their
employment.
-20-
25
(m) Voting Requirements. The affirmative vote of the holders of a
majority of the outstanding shares of Superior Common Stock is the only
vote of the holders of any class or series of the capital stock of
Superior necessary to approve this Agreement and the Merger.
(n) Section 162(m) of the Code. Except as disclosed in Section
2.2(n) of the Superior Disclosure Letter, the disallowance of a
deduction under section 162(m) of the Code for employee remuneration
will not apply to any amount paid or payable by Superior or the
Surviving Corporation or any of their subsidiaries under any contract,
benefit plan, program, arrangement or understanding of Superior
currently in effect.
(o) Brokers. No agent, broker, person or firm acting on behalf of
Superior is or will be entitled to any commission or broker's or
finder's fee from any of the parties hereto in connection with any of
the transactions contemplated herein, except fees to Xxxxxxx Xxxx &
Company L.L.C. to be paid by Superior.
(p) Labor Relations. Except as set forth in Section 2.2(p) of the
Superior Disclosure Letter, neither Superior nor any of the Superior
Subsidiaries is a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with respect to
a labor union or labor organization, and, to the knowledge of Superior,
there are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of Superior or any of the Superior Subsidiaries. There are no
unfair labor practice complaints against Superior or any of the
Superior Subsidiaries pending before the National Labor Relations Board
and there is no labor strike, dispute, slow down or stoppage, or any
union organizing campaign, actually pending or, to the knowledge of
Superior, threatened against Superior or any of the Superior
Subsidiaries, except for any such proceedings which would not
reasonably be expected to have a Superior MAE.
(q) Insurance. Section 2.2(q) of the Superior Disclosure Letter
sets forth a list and brief description of the insurance policies of
Superior and the Superior Subsidiaries relating to their properties and
the conduct of their business. All premiums due and arising thereon
have been paid and such policies are in full force and effect. True and
correct copies of all such insurance policies have been or on request
will be made available to Xxxxxx.
(r) Title to Properties. Superior or the Superior Subsidiaries,
individually or together, have good and marketable title to all of the
properties reflected in Superior's consolidated balance sheet as of
June 30, 1998 (the "Consolidated Balance Sheet"), other than any
properties reflected in Superior's Consolidated Balance Sheet that (i)
have been sold or otherwise disposed of since the date of Superior's
Consolidated Balance Sheet in the ordinary course of business
consistent with past practice or (ii) are not, individually or in the
aggregate, material to Superior, free and clear of security interests
or liens, other than (y) liens the existence of which is reflected in
Superior's Consolidated Financial Statements, and (z) Permitted Liens.
Superior or the Superior Subsidiaries, individually or together, hold
under valid lease agreements all real and personal properties reflected
in Superior's Consolidated Balance Sheet as being held under
capitalized leases, and all real and personal
-21-
26
property that is subject to operating leases, and enjoy peaceful and
undisturbed possession of such properties under such leases, other than
(i) any properties as to which such leases have expired in accordance
with their terms without any liability of any party thereto since the
date of Superior's Consolidated Balance Sheet and (ii) any properties
that, individually or in the aggregate, are not material to Superior.
Neither Superior nor any Superior Subsidiary has received any written
notice of any adverse claim to the title to any properties owned by
them or with respect to any lease under which any properties are held
by them, other than any claims that, individually or in the aggregate,
could not reasonably be expected to have a Superior MAE.
(s) Permits; Compliance. Superior and the Superior Subsidiaries
have obtained all permits, licenses, authorizations, orders,
certificates, registrations or other approvals (collectively,
"Permits") that are necessary to carry on their businesses as currently
conducted, except for any such Permits as to which, individually or in
the aggregate, the failure to possess could not reasonably be expected
to have a Superior MAE. Such Permits are in full force and effect, have
not been violated in any respect that could reasonably be expected to
have a Superior MAE and no suspension, revocation or cancellation
thereof has been threatened, and there is no action, proceeding or
investigation pending or threatened regarding suspension, revocation or
cancellation of any of such Permits, except where the suspension,
revocation or cancellation of such Permits could not reasonably be
expected to have a Superior MAE.
(t) Contingent Payment Obligations. Set forth in Section 2.2(t) of
the Superior Disclosure Letter is a listing of all contingent amounts
required by Superior or any Superior Subsidiary to be paid after the
Effective Time relating to acquisitions by Superior or any Superior
Subsidiary completed prior to the Effective Time.
(u) Certain Business Practices. As of the date of this Agreement,
neither Superior or any of the Superior Subsidiaries nor any director,
officer, employee or agent of Superior or any of the Superior
Subsidiaries has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political
activity, (ii) made any unlawful payment to any foreign or domestic
government official or employee or to any foreign or domestic political
party or campaign or violated any provision of the FCPA, (iii)
consummated any transaction, made any payment, entered into any
agreement or arrangement or taken any other action in violation of
Section 1128B(b) of the SSA, or (iv) made any other unlawful payment.
(v) Opinion of Financial Advisor. Superior has received the
opinion of Xxxxxxx Xxxx & Company on the date of this Agreement to the
effect that the Merger Consideration is fair, from a financial point of
view, to the holders of Superior Common Stock.
-22-
27
ARTICLE III
COVENANTS OF SUPERIOR PRIOR TO THE EFFECTIVE TIME
Superior covenants and agrees as follows:
3.1 CONDUCT OF BUSINESS BY SUPERIOR PENDING THE MERGER. From the date
of this Agreement until the Effective Time, unless Xxxxxx shall otherwise agree
in writing or as otherwise expressly contemplated by this Agreement or set forth
in Section 3.1 of the Superior Disclosure Letter:
(a) the business of Superior and the Superior Subsidiaries shall
be conducted only in, and Superior and the Superior Subsidiaries shall
not take any action except in, the ordinary course of business and
consistent with past practice;
(b) Superior shall not, directly or indirectly, (i) issue, sell,
pledge, dispose of or encumber, or permit any Superior Subsidiary to
issue, sell, pledge, dispose of or encumber, any capital stock of
Superior or any Superior Subsidiary except upon the exercise of the
options set forth in Section 2.2(b)(ii) of the Superior Disclosure
Letter, upon the exercise of Superior Options or upon conversion of any
convertible securities of Superior outstanding as of the date of this
Agreement; (ii) amend or propose to amend the respective charters or
bylaws of Superior or any Superior Subsidiary; (iii) split, combine or
reclassify any outstanding capital stock, or declare, set aside or pay
any dividend payable in cash, stock, property or otherwise with respect
to its capital stock whether now or hereafter outstanding; (iv) redeem,
purchase or acquire or offer to acquire, or permit any of the Superior
Subsidiaries to redeem, purchase or acquire or offer to acquire, any of
its or their capital stock; (v) enter into any contract, agreement,
commitment or arrangement with respect to any of the matters set forth
in this Section 3.1(b); (vi) enter into, adopt or (except as may be
required by law and except for an amendment to the Superior Stock
Option Plan (or any option agreements existing thereunder) to provide
the Board of Directors of Superior (or a duly appointed committee
thereof) with the power to take the actions required pursuant to
Section 5.7) amend or terminate any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation
right, restricted stock, performance unit, stock equivalent, stock
purchase, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or
other arrangement for the benefit or welfare of any director, officer
or employee; (vii) increase in any manner the compensation or fringe
benefits of any director, officer or key employee, other than those
that are required under existing contractual arrangements; (viii)
except as provided in Section 5.7, pay to any director, officer or
employee any benefit not required by any employee benefit agreement,
trust, plan, fund or other arrangement as in effect on the date hereof;
(ix) commence any legal proceedings other than in accordance with past
practice or settle any legal proceedings or claims against Superior or
any Superior Subsidiary not covered by insurance for an amount or
amounts in excess of $50,000 in the aggregate; or (x) lend or advance
any funds or otherwise extend credit to any person other than Superior
or a Superior
-23-
28
Subsidiary except for advances to employees for business related
expenses consistent with past practice and trade credit extended in the
ordinary course of business;
(c) Superior shall use its reasonable efforts (i) to preserve
intact the business organization of Superior and each of the Superior
Subsidiaries; (ii) to maintain in effect any authorizations or similar
rights of Superior and each of the Superior Subsidiaries; (iii) to keep
available the services of the current officers and key employees of
Superior and the Superior Subsidiaries; (iv) to preserve the goodwill
of those having business relationships with it and the Superior
Subsidiaries; (v) to maintain and keep its properties and the
properties of the Superior Subsidiaries in as good a repair and
condition as presently exists, except for deterioration due to ordinary
wear and tear and damage due to casualty; and (vi) to maintain in full
force and effect insurance comparable in amount and scope of coverage
to that currently maintained by it and the Superior Subsidiaries;
(d) Without the prior written consent of Xxxxxx, which consent
will not be unreasonably withheld, Superior shall not make or agree to
make, or permit any of the Superior Subsidiaries to make or agree to
make, new capital expenditures; provided, however, that Superior may
incur up to $5.3 million of capital expenditures in the fourth quarter
of 1998 pursuant to their 1998 capital expenditure budget previously
disclosed to Xxxxxx and may incur up to an aggregate of $200,000 in
1999;
(e) Without the prior written consent of Xxxxxx, which consent
will not be unreasonably withheld, Superior shall not, and shall not
permit any of the Superior Subsidiaries to (i) sell, pledge, dispose of
or encumber any material portion of its assets; (ii) incur, assume or
guarantee indebtedness for money borrowed, other than borrowings under
their revolving line of credit in the ordinary course of business; or
(iii) prepay any indebtedness or other material liability, except
prepayments of indebtedness pursuant to or required by revolving lines
of credit and prepayments made to obtain prepayment discounts
consistent with prior practices;
(f) Superior shall not, and shall not permit any of the Superior
Subsidiaries to, authorize, propose or announce an intention to
authorize or propose, or enter into an agreement with respect to, any
merger, consolidation or business combination (other than the Merger)
or any acquisition of a material amount of assets or securities, or
otherwise acquire direct or indirect control over any other person,
except for (i) purchases of U.S. Treasury securities or U.S. government
agency securities, which in either case have maturities of three years
or less, (ii) other investments in connection with cash management
activities consistent with past practice, or (iii) purchases of
inventory, spares and replacements consistent with past practices;
(g) Superior shall, and shall cause the Superior Subsidiaries to,
perform their respective obligations under any contracts and agreements
to which any of them is a party or to which any of their assets is
subject;
-24-
29
(h) Superior shall not, and shall not permit any of the Superior
Subsidiaries to, take any action that would, or that reasonably could
be expected to, result in any of the representations and warranties set
forth in this Agreement becoming untrue or any of the conditions to the
Merger set forth in Article VI not being satisfied. Superior promptly
shall advise Xxxxxx orally and in writing of any change or event
having, or which, insofar as reasonably can be foreseen, would have, a
Superior MAE; and
(i) Superior shall, and shall cause the Superior Subsidiaries to,
make available to Xxxxxx and its representatives such information with
respect to the business and affairs of Superior and the Superior
Subsidiaries as Xxxxxx shall reasonably request, and shall confer at
such times as Xxxxxx may reasonably request with one or more
representatives of Xxxxxx to report material operational matters and
the general status of ongoing operations.
3.2 NO SOLICITATION. From and after the date of this Agreement,
neither Superior nor any Superior Subsidiary shall, directly or indirectly,
through any officer, director, employee, representative or agent of Superior or
any of the Superior Subsidiaries, (i) solicit or knowingly encourage, including
by way of furnishing information, or take any other action to knowingly
facilitate the initiation of any inquiries or proposals regarding (A) any
merger, combination, tender offer, share exchange, sale of shares of capital
stock or similar business combination transactions involving Superior or the
Superior Subsidiaries, or the acquisition, directly or indirectly, of a material
interest in any voting securities of Superior or any of the Superior
Subsidiaries or (B) any sale or other disposition, directly or indirectly, of 5%
or more of the assets of Superior and the Superior Subsidiaries, taken as a
whole (any of the transactions being referred to herein as a "Superior
Acquisition Transaction"), (ii) negotiate or otherwise engage in discussions
with any person (other than Xxxxxx, Sub or their directors, officers, employees,
agents and representatives) with respect to any Superior Acquisition
Transaction, (iii) enter into any agreement, arrangement or understanding
requiring it to terminate or fail to consummate the Merger or any other
transactions contemplated by this Agreement; or (iv) agree to endorse or endorse
any Superior Acquisition Transaction; provided, however, that nothing in this
Section 3.2 or elsewhere in this Agreement shall prevent the members of the
Board of Directors of Superior from (i) furnishing information to (but only
pursuant to a confidentiality agreement substantially similar to the
Confidentiality Agreement between Superior and Xxxxxx dated October 22, 1998
(the "Confidentiality Agreement")) or entering into discussions or negotiations
with any person or group that makes an unsolicited bona fide written proposal
for a Superior Acquisition Transaction (an "Alternative Proposal"), if, and only
to the extent that, (A) the Board of Directors of Superior, based on the written
opinion of outside counsel (a copy of which shall be provided promptly to
Xxxxxx), determines in good faith that such action is required for the Board of
Directors of Superior to comply with its fiduciary duties to stockholders
imposed by law, (B) such Alternative Proposal is not conditioned on the receipt
of financing, the Board of Directors of Superior has reasonably concluded in
good faith that the person or group making such Alternative Proposal will have
adequate sources of financing to consummate such Alternative Proposal and that
such Alternative Proposal is more favorable to the stockholders of Superior than
the Merger, and the Board of Directors of Superior has received a written
opinion from a nationally-recognized investment banking firm (a copy of which
shall be provided promptly to Xxxxxx) to the effect that the consideration to be
received by stockholders of Superior in connection with such Alternative
Proposal is superior, from a financial point of view, to the consideration to be
-25-
30
received by them in the Merger, (C) prior to furnishing such information to, or
entering into discussions or negotiations with, such person or entity, Superior
provides written notice to Xxxxxx to the effect that it is furnishing
information to, or entering into negotiations with, such person or group, and
(D) Superior keeps Xxxxxx informed of the status and all material information
with respect to any such discussions or negotiations, and (ii) to the extent
applicable, complying with Rule 14e-2 promulgated under the Exchange Act with
regard to an Alternative Proposal.
3.3 AFFILIATE LETTERS. At least 30 days prior to the Closing Date,
Superior shall deliver to Xxxxxx a list, which shall be reasonably acceptable to
Xxxxxx, identifying all persons whom it believes are, at the time this Agreement
is submitted for approval to the stockholders of Superior, "affiliates" of
Superior for purposes of Rule 145 under the Securities Act. Superior shall
deliver or cause to be delivered to Xxxxxx on or prior to the Closing Date a
duly executed affiliate letter in the form of Exhibit A (an "Affiliate's
Agreement") for each such "affiliate" of Superior. Xxxxxx shall be entitled to
place legends as specified in such Affiliate's Agreements on the certificates
evidencing any Xxxxxx Common Stock to be received by such affiliates pursuant to
the terms of this Agreement and to issue appropriate stop transfer instructions
to the transfer agent for Xxxxxx Common Stock consistent with the terms of such
Affiliate's Agreements.
3.4 OBTAIN TAX OPINION. Superior shall use its best efforts to obtain
the tax opinion referred to in Section 6.3(d) hereof.
ARTICLE IV
COVENANTS OF XXXXXX PRIOR TO THE EFFECTIVE TIME
Xxxxxx covenants and agrees as follows:
4.1 CONDUCT OF BUSINESS BY XXXXXX PENDING THE MERGER. From the date of
this Agreement until the Effective Time, unless Superior shall otherwise agree
in writing or as otherwise expressly contemplated by this Agreement, Xxxxxx
shall not, and shall not permit any of the Xxxxxx Subsidiaries to, take any
action that would, or that reasonably could be expected to, result in any of the
representations and warranties set forth in this Agreement becoming untrue or
any of the conditions to the Merger set forth in Article VI not being satisfied.
Xxxxxx promptly shall advise Superior orally and in writing of any change or
event having, or which, insofar as reasonably can be foreseen, would have, a
Xxxxxx XXX.
4.2 STOCK EXCHANGE LISTING. Xxxxxx shall use all reasonable efforts to
cause the shares of Xxxxxx Common Stock to be issued in the Merger and the
shares of Xxxxxx Common Stock to be reserved for issuance upon the exercise of
Superior Options to be assumed by Xxxxxx in the Merger, if any, to be approved
for listing on the New York Stock Exchange (the "NYSE"), subject to official
notice of issuance, prior to the Closing Date.
4.3 OBTAIN TAX OPINION. Xxxxxx shall use its best efforts to obtain
the tax opinion referred to in Section 6.2(f) hereof.
-26-
31
4.4 AVAILABLE INFORMATION. Xxxxxx shall, and shall cause the Xxxxxx
Subsidiaries to, make available to Superior and its representatives such
information with respect to the business and affairs of Xxxxxx and the Xxxxxx
Subsidiaries as Superior shall reasonably request, and shall confer at such
times as Superior may reasonably request with one or more representatives of
Superior to report material operation matters and the general status of ongoing
operations.
4.5 FUTURE ACQUISITIONS. Xxxxxx shall not, and shall not permit any of
the Xxxxxx Subsidiaries to, enter into an agreement with respect to, any merger,
consolidation or business combination (other than the Merger) or any acquisition
of a material amount of assets or securities, or otherwise acquire direct or
indirect control over any other person, to the extent such transaction would
prohibit the consummation of this transaction.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 MEETINGS OF STOCKHOLDERS.
(a) Superior shall, promptly after the date of this Agreement,
take all actions necessary in accordance with the DGCL and its certificate of
incorporation and bylaws to convene a special meeting of the Superior
stockholders to consider approval and adoption of this Agreement and the Merger
(the "Superior Stockholders' Meeting"), and Superior shall consult with Xxxxxx
in connection therewith. Subject to Section 3.2 hereof and to the fiduciary
duties of its Board of Directors, the Board of Directors of Superior shall
recommend to the stockholders of Superior the approval of this Agreement and
Superior shall use all reasonable efforts to solicit from stockholders of
Superior proxies in favor of the approval and adoption of this Agreement and the
Merger and to secure the vote or consent of stockholders required by the DGCL
and its certificate of incorporation and bylaws to approve and adopt this
Agreement and the Merger (the "Required Superior Vote").
(b) Xxxxxx shall, promptly after the date of this Agreement, take
all actions necessary in accordance with the DGCL and its certificate of
incorporation and bylaws to convene a special meeting of Xxxxxx'x stockholders
(the "Xxxxxx Stockholders' Meeting") to consider approval of the Charter
Amendment and the Share Issuance, and Xxxxxx shall consult with Superior in
connection therewith. Subject to the fiduciary duties of its Board of Directors,
the Board of Directors of Xxxxxx shall recommend to the stockholders of Xxxxxx
the approval of the Charter Amendment and the Share Issuance and Xxxxxx shall
use all reasonable efforts to solicit from stockholders of Xxxxxx proxies in
favor of the approval of the Charter Amendment and the Share Issuance and to
secure the vote or consent of the stockholders of Xxxxxx required by the DGCL
and the rules of the NYSE to approve the Charter Amendment and the Share
Issuance (the "Required Xxxxxx Vote").
-27-
32
5.2 REGISTRATION STATEMENT; PROXY STATEMENTS.
(a) Joint Proxy Statement/Prospectus. As promptly as practicable
after the execution of this Agreement, Xxxxxx and Superior shall jointly prepare
and file with the Commission a joint proxy statement and forms of proxies in
connection with (i) the solicitation of proxies to be voted at the Xxxxxx
Stockholders' Meeting with respect to the Charter Amendment and the Share
Issuance and (ii) in connection with the solicitation of proxies to be voted at
the Superior Stockholders' Meeting with respect to this Agreement and the Merger
(such joint proxy statement, together with any amendments thereof or supplements
thereto effected prior to the effective date of the Registration Statement,
being the "Joint Proxy Statement"). As soon as practicable after the date
hereof, Xxxxxx shall prepare and file with the Commission a registration
statement on Form S-4 (such registration statement, together with any amendments
thereof or supplements thereto, being the "Registration Statement"), containing
a Joint Proxy Statement for stockholders of Xxxxxx and a proxy
statement/prospectus for stockholders of Superior in connection with the
registration under the Securities Act of the offering, sale and delivery of the
Xxxxxx Common Stock to be issued pursuant to this Agreement upon consummation of
the Merger to stockholders of Superior (the "Joint Proxy Statement/Prospectus").
Each of Xxxxxx and Superior shall furnish all information concerning it and the
holders of its capital stock as the other may reasonably request in connection
with such actions. Each of Xxxxxx and Superior will use all reasonable efforts
to have or cause the Registration Statement to become effective as promptly as
practicable, and shall take any action required to be taken under any applicable
federal or state securities laws in connection with the issuance of shares of
Xxxxxx Common Stock in the Merger. As promptly as practicable after the
Registration Statement shall have become effective, (x) Xxxxxx shall mail the
Joint Proxy Statement/Prospectus to its stockholders entitled to notice of and
to vote at the Xxxxxx Stockholders' Meeting and (y) Superior shall mail the
Joint Proxy Statement/Prospectus to its stockholders entitled to notice of and
to vote at the Superior Stockholders' Meeting.
(b) Superior Information. The information supplied by Superior 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
Superior for inclusion in the Joint Proxy Statement/Prospectus shall not, at the
date the Joint Proxy Statement/Prospectus (or any supplement thereto) is first
mailed to stockholders of Xxxxxx, at the date (if different) the Joint Proxy
Statement/Prospectus (or any supplement thereto) is first mailed to stockholders
of Superior, at the time of the Xxxxxx Stockholders' Meeting, at the time (if
different) of the Superior Stockholders' 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 or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time prior to the Effective Time any event or circumstance
relating to Superior or any of the Superior Subsidiaries, or their respective
officers or directors, should be discovered by Superior that should be set forth
in an amendment to the Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus, Superior shall promptly inform Xxxxxx. All documents that
Superior is responsible for filing with the Commission in connection with the
transactions contemplated herein shall comply as to form in all material
respects with the
-28-
33
applicable requirements of the Securities Act and the regulations thereunder and
the Exchange Act and the regulations thereunder.
(c) Xxxxxx Information. The information supplied by Xxxxxx 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
Xxxxxx for inclusion in the Joint Proxy Statement/Prospectus shall not, at the
date the Joint Proxy Statement/Prospectus (or any supplement thereto) is first
mailed to stockholders of Xxxxxx, at the date (if different) the Joint Proxy
Statement/Prospectus (or any supplement thereto) is first mailed to stockholders
of Superior, at the time of the Xxxxxx Stockholders' Meeting, at the time (if
different) of the Superior Stockholders' 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 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 Xxxxxx or any of its affiliates, or to their respective officers or
directors, should be discovered by Xxxxxx that should be set forth in an
amendment to the Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus, Xxxxxx shall promptly inform Superior. All documents that
Xxxxxx is responsible for filing with the Commission in connection with the
transactions contemplated hereby shall comply as to form in all material
respects with the applicable requirements of the Securities Act and the
regulations thereunder and the Exchange Act and the regulations thereunder.
(d) Amendments. No amendment or supplement to the Registration
Statement, the Joint Proxy Statement or the Joint Proxy Statement/Prospectus
shall be made by Xxxxxx or Superior without the approval of the other party,
which shall not be unreasonably withheld or delayed. Xxxxxx and Superior each
will advise the other, promptly after it receives notice thereof, of the time
when the Registration Statement has become effective or any supplement or
amendment has been filed, the issuance of any stop order suspending the
effectiveness of the Registration Statement or the solicitation of proxies
pursuant to the Joint Proxy Statement/Prospectus, the suspension of the
qualification of Xxxxxx Common Stock issuable in connection with the Merger for
offering or sale in any jurisdiction, any request by the staff of the Commission
for amendment of the Registration Statement, the Joint Proxy Statement or the
Joint Proxy Statement/Prospectus, the receipt from the staff of the Commission
of comments thereon or any request by the staff of the Commission for additional
information with respect thereto.
5.3 APPROPRIATE ACTION; CONSENTS; FILINGS.
(a) Superior and Xxxxxx shall each use all reasonable efforts (i)
to take, or to cause to be taken, all actions, and to do, or to cause to be
done, all things that, in either case, are necessary, proper or advisable under
applicable law or otherwise to consummate and make effective the transactions
contemplated by this Agreement, (ii) to obtain from any governmental authorities
any authorizations or orders required to be obtained by Xxxxxx or Superior or
any of their respective subsidiaries in connection with the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, including the Merger, (iii) to make all
necessary filings, and thereafter make any other required submissions, with
respect
-29-
34
to this Agreement and the Merger required under (A) the Securities Act (in the
case of Xxxxxx) and the Exchange Act and the regulations thereunder, and any
other applicable federal or state securities laws, (B) the HSR Act and (C) any
other applicable law. Xxxxxx and Superior shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the nonfiling party and its advisors prior to filings and,
if requested, shall accept all reasonable additions, deletions or changes
suggested in connection therewith. Superior and Xxxxxx shall furnish all
information required for any application or other filing to be made pursuant to
any applicable law or any applicable regulations of any governmental authority
(including all information required to be included in the Joint Proxy Statement,
the Joint Proxy Statement/Prospectus or the Registration Statement) in
connection with the transactions contemplated by this Agreement.
(b) Each of Superior and Xxxxxx shall give prompt notice to the
other of (i) the occurrence, or failure to occur, of any event which occurrence
or failure would be likely to cause any of its representations or warranties
contained in this Agreement to be untrue or inaccurate at any time from the date
hereof to the Effective Time, (ii) any material failure by it or any of its
officers, directors, employees or agents to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder, (iii)
any notice or other communication from any Person alleging that the consent of
such Person is or may be required in connection with the Merger, (iv) any notice
or other communication from any governmental authority in connection with the
Merger, (v) any actions, suits, claims, investigations or proceedings commenced
or threatened in writing against, relating to or involving or otherwise
affecting Superior, Xxxxxx or their respective subsidiaries that relate to the
consummation of the Merger, and (vi) any change that is reasonably likely to
have a Superior MAE or a Xxxxxx XXX, respectively, or is likely to delay or
impede the ability of either Superior or Xxxxxx, respectively, to consummate the
transactions contemplated by this Agreement or to fulfill their respective
obligations set forth herein.
(c) Xxxxxx and Superior agree to cooperate and use all reasonable
efforts vigorously to contest and resist any action, including legislative,
administrative or judicial action, and to have vacated, lifted, reversed or
overturned any order (whether temporary, preliminary or permanent) of any court
or governmental authority that is in effect and that restricts, prevents or
prohibits the consummation of the Merger or any other transactions contemplated
by this Agreement, including the vigorous pursuit of all available avenues of
administrative and judicial appeal and all available legislative action.
(d) (i) Each of Superior and Xxxxxx shall give (or shall cause
their respective subsidiaries to give) any notices to third persons,
and use, and cause their respective subsidiaries to use, all reasonable
efforts to obtain any consents from third persons (A) necessary, proper
or advisable to consummate the transactions contemplated by this
Agreement or to satisfy any of the conditions set forth in Article VI,
(B) otherwise required under any contracts, licenses, leases or other
agreements in connection with the consummation of the transactions
contemplated hereby or (C) required to prevent a Superior MAE or a
Xxxxxx XXX from occurring prior to or after the Effective Time.
(ii) If any party shall fail to obtain any consent from a
third person described in subsection (d)(i) above, such party shall use
all reasonable efforts, and shall take
-30-
35
any such actions reasonably requested by the other parties, to limit
the adverse effect upon Superior and Xxxxxx, their respective
subsidiaries, and their respective businesses resulting, or that could
reasonably be expected to result after the Effective Time, from the
failure to obtain such consent.
5.4 ACCOUNTANTS LETTERS.
(a) Superior shall use its reasonable efforts to cause KPMG Peat
Marwick LLP to deliver a letter dated as of the date of the Proxy Statement, and
addressed to Superior and Xxxxxx, in form and substance reasonably satisfactory
to Xxxxxx and customary in scope and substance for agreed upon procedures
letters delivered by independent public accountants in connection with
registration statements and proxy statements similar to the Registration
Statement and Joint Proxy Statement.
(b) Xxxxxx shall use its reasonable efforts to cause
PricewaterhouseCoopers to deliver a letter dated as of the date of the
Registration Statement, and addressed to Xxxxxx and Superior, in form and
substance reasonably satisfactory to Superior and customary in scope and
substance for agreed upon procedures letters delivered by independent public
accountants in connection with registration statements and proxy statements
similar to the Registration Statement and Joint Proxy Statement.
5.5 POOLING OF INTERESTS. Each party hereto shall use all reasonable
efforts to cause the Merger to be treated for financial accounting purposes as a
"pooling of interests" and shall not take, and shall use all reasonable efforts
to prevent any Affiliate (as such term is defined in the Securities Act) of such
party from taking, any actions that could prevent the Merger from being treated
for financial accounting purposes as a pooling of interests.
5.6 SUPERIOR EMPLOYEE BENEFITS. As soon as practicable after the
Effective Time, those employees of Superior and the Superior Subsidiaries who
become employees of the Surviving Corporation or a subsidiary of the Surviving
Corporation or Xxxxxx or a Xxxxxx Subsidiary shall be entitled to participate in
all employee benefit plans of Xxxxxx, including, without limitation, the Xxxxxx
401(k) savings plan, in respect of their service after the Effective Time to the
same extent that employees of Xxxxxx who are employed in comparable positions
are entitled to participate. Xxxxxx and Superior further agree that any such
employees shall be credited for their service with Superior for purposes of
eligibility, benefit entitlement and vesting in the plans provided by Xxxxxx.
Such employees' benefits under Xxxxxx'x medical benefit plan shall not be
subject to any exclusions for any pre-existing conditions (to the extent such
exclusions did not apply under Superior's medical benefit plan), and credit
shall be received for any deductibles or out-of-pocket amounts previously paid.
The employees of Superior and the Superior Subsidiaries shall continue to
participate in the benefit plans of Superior to the extent that the requirements
set forth in the first sentence of this Section 5.6 are not satisfied.
-31-
36
5.7 SUPERIOR STOCK OPTIONS.
(a) Superior shall, in accordance with the terms of the Superior
Stock Option Plan, cause each Superior Option that is outstanding under such
plan at the Effective Time that has an exercise price in excess of the market
price of the Superior Common Stock on the Closing Date (each an
"Out-of-the-Money Superior Option") to be canceled as of the Effective Time. At
the Effective Time, (i) Xxxxxx shall assume the Superior Stock Option Plan and
(ii) each Superior Option that is outstanding under the Superior Stock Option
Plan as of the Effective Time (other than the Out-of-the-Money Superior Options)
shall fully vest in accordance with the terms of the Superior Stock Option Plan
and shall be deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under the Superior Stock Option Plan and such
Superior Option, 0.90 of a share of Xxxxxx Common Stock for each share of
Superior Common Stock covered by such Superior Option (rounded downward to the
nearest whole number), at a price per share (rounded upward to the nearest whole
cent) equal to (y) the aggregate exercise price per share of Superior Common
Stock purchasable pursuant to such Superior Option immediately prior to the
Effective Time divided by (z) 0.90.
(b) As soon as practicable after the Effective Time, Xxxxxx shall
deliver to the participants in the Superior Stock Option Plan appropriate notice
setting forth such participants' rights pursuant thereto and, except as
otherwise provided in subsection (a) above, the grants pursuant to the Superior
Stock Option Plan shall continue in effect on the same terms and conditions
(subject to the adjustments required by this Section 5.7 after giving effect to
the Merger).
(c) At the Effective Time, Xxxxxx shall grant to each holder of an
Out-of-the-Money Superior Option who is employed by Superior at such time an
option (each a "Replacement Option") to purchase a number of shares of Xxxxxx
Common Stock equal to the number of shares of Superior Common Stock covered by
such Out-of-the-Money Superior Option at the time it was canceled multiplied by
0.90. Each Replacement Option shall be granted pursuant to a stock option plan
maintained by Xxxxxx or the Superior Stock Option Plan, as determined by Xxxxxx
in its sole discretion. The purchase price for each share of Xxxxxx Common Stock
subject to each Replacement Option shall be equal to the closing sales price of
the Xxxxxx Common Stock on the Closing Date (or, if there are no sales on that
date, the last preceding date on which there was a sale) on the New York Stock
Exchange (the "Market Value per Share"). Subject to the terms of the stock
option plan pursuant to which a Replacement Option is granted and the agreement
to be executed by Xxxxxx and each such individual evidencing the grant of such
option (which agreement shall be in the form customarily used for granting
options under such plan), each such option shall (i) have a term of ten years
(which term shall begin on the Closing Date), (ii) vest and become exercisable
in accordance with the vesting schedules set forth in the corresponding
Out-of-the-Money Superior Options, and (iii) constitute an option that is not
intended to be treated as an incentive stock option (within the meaning of
section 422 of the Code).
(d) At the Effective Time, Xxxxxx shall xxxxx to each of the
persons listed on Annex II (provided such individual is employed by Superior at
such time) an option to purchase 75,000 shares of Xxxxxx Common Stock pursuant
to a stock option plan maintained by Xxxxxx or the Superior Stock Option Plan,
as determined by Xxxxxx in its sole discretion. The purchase price for
-32-
37
each share of Xxxxxx Common Stock subject to each such option shall be equal to
the Market Value per Share. Subject to the terms of the stock option plan
pursuant to which such options are granted and the agreement to be executed by
Xxxxxx and each such individual evidencing the grant of such option (which
agreement shall be in the form customarily used for granting options under such
plan), each such option shall (i) have a term of ten years (which term shall
begin on the Closing Date), (ii) vest and become exercisable with respect to (A)
20% of the shares covered thereby on the Closing Date and (B) an additional 20%
of the shares covered thereby on each of the first, second, third and fourth
anniversaries of the Closing Date, and (iii) constitute an option that is not
intended to be treated as an incentive stock option (within the meaning of
section 422 of the Code).
(e) As soon as practicable after the Effective Time, Xxxxxx shall
file a registration statement on Form S-8 (or any successor or other appropriate
forms), or another appropriate form with respect to the shares of Xxxxxx Common
Stock subject to the options described in the preceding paragraphs of this
Section 5.7 and shall use its reasonable efforts to maintain the effectiveness
of such registration statement or registration statements (and maintain the
current status of the prospectus or prospectuses contained therein), for so long
as such options remain outstanding.
(f) The Board of Directors of Superior (or a duly appointed
committee thereof responsible for the administration of the Superior Stock
Option Plan in accordance with the terms of such plan) shall, prior to or as of
the Effective Time, take all necessary actions, pursuant to and in accordance
with the terms of the Superior Stock Option Plan and the instruments evidencing
the Superior Options, to provide (i) for the cancellation of the
Out-of-the-Money Superior Options as provided in paragraph (a) of this Section
5.7, (ii) for the conversion of the Superior Options (other than the
Out-of-the-Money Superior Options) into options to acquire Xxxxxx Common Stock
in accordance with paragraph (a) of this Section 5.7, and (iii) that no consent
of the holders of the Superior Options is required in connection with such
cancellation and conversion.
5.8 [Intentionally omitted]
5.9 TAX-FREE REORGANIZATION.
(a) Xxxxxx and Superior shall each use its best efforts to cause
the Merger to be treated as a reorganization within the meaning of section
368(a) of the Code.
(b) To the extent permitted under applicable tax laws, the Merger
shall be reported as a reorganization within the meaning of sections
368(a)(1)(A) and 368(a)(2)(E) of the Code in all federal, state, and local Tax
Returns after the Effective Time.
(c) Following the Merger, the Surviving Corporation will hold at
least 90 percent of the fair market value of Superior's net assets, at least 70
percent of the fair market value of Superior's gross assets, at least 90 percent
of the fair market value of the net assets of Sub and at least 70 percent of the
fair market value of the gross assets of Sub, held immediately prior to the
Merger, taking into account amounts used to pay reorganization expenses and any
distributions other than regular dividends.
-33-
38
5.10 INDEMNIFICATION.
(a) From and after the Effective Time, Xxxxxx and the Surviving
Corporation shall, to the extent provided in the certificate of incorporation or
by-laws of Superior immediately prior to the Effective Time, indemnify, defend
and hold harmless each person who is now, or has been at any time prior to the
date hereof or who becomes prior to the Effective Time, an officer, director or
employee of Superior or any of the Superior Subsidiaries (the "Indemnified
Parties") against losses, claims, damages, costs, expenses, liabilities or
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be unreasonably withheld) of or in
connection with a claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of the fact that such
person is or was a director, officer or employee of Superior or any of the
Superior Subsidiaries, whether pertaining to any matter existing or occurring at
or prior to the Effective Time and whether reasserted or claimed prior to, or at
or after, the Effective Time. The defense of any such claim, action, suit,
proceeding or investigation shall be conducted by Xxxxxx and the Surviving
Corporation. If Xxxxxx or the Surviving Corporation has failed to conduct such
defense, the Indemnified Parties may retain counsel satisfactory to them and
Xxxxxx and the Surviving Corporation shall pay all reasonable fees and expenses
of such counsel for the Indemnified Parties promptly as statements therefor are
received. The party not conducting the defense will use reasonable efforts to
assist in the vigorous defense of any such matter, provided that such party
shall not be liable for any settlement of any claim effected without its written
consent, which consent, however, shall not be unreasonably withheld. Any
Indemnified Party wishing to claim indemnification under this Section 5.10, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify Xxxxxx and the Surviving Corporation (but the failure so to notify shall
not relieve them from any liability which they may have under this Section 5.10
except to the extent such failure prejudices them). If Xxxxxx and the Surviving
Corporation are responsible for the attorneys' fees of the Indemnified Parties,
then the Indemnified Parties as a group may retain only one law firm to
represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties.
(b) The Surviving Corporation shall purchase and maintain for a
period of four years after the Effective Time continuation coverage for
Superior's directors' and officers' liability insurance policy as in effect on
the date hereof or obtain a directors' and officers' insurance policy with
comparable coverage; provided, however, that the Surviving Corporation shall not
be required to expend in any year an amount in excess of 150% of the annual
aggregate premiums currently paid by Superior for such insurance; and provided,
further, that if the annual premiums of such insurance coverage exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with the
best coverage available, in the reasonable judgment of the Board of Directors of
Xxxxxx, for a cost not exceeding such amount.
(c) The rights granted hereunder to the Indemnified Parties who
are Superior directors shall be contractual rights inuring to the benefit of
such Indemnified Parties and shall survive this Agreement and any merger,
consolidation or reorganization of the Surviving Corporation or Xxxxxx.
-34-
39
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions, any
or all of which may be waived by the parties hereto, in whole or in part, to the
extent permitted by applicable law:
(a) This Agreement shall have been approved and adopted by the
requisite vote of the stockholders of Superior, as may be required by
law and by any applicable provisions of Superior's certificate of
incorporation or bylaws;
(b) The Charter Amendment and the Share Issuance shall have been
approved and adopted by the requisite vote of the stockholders of
Xxxxxx as required by the DGCL and the rules of the NYSE;
(c) The waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or
been terminated;
(d) No order shall have been entered and remain in effect in any
action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal
the consummation of the Merger;
(e) The Registration Statement shall be effective (and remain
effective on the Closing Date), and all post-effective amendments filed
shall have been declared effective or shall have been withdrawn; and no
stop order suspending the effectiveness thereof shall have been issued
and no proceedings for that purpose shall have been initiated or, to
the knowledge of the parties, threatened by the Commission;
(f) There shall have been obtained any and all material permits,
approvals and consents of securities or blue sky commissions of any
jurisdiction, and of any other governmental body or agency, that
reasonably may be deemed necessary so that the consummation of the
Merger and the transactions contemplated thereby will be in compliance
with applicable laws, the failure to comply with which would have a
material adverse effect on the business, financial condition or results
of operations of the Surviving Corporation and its subsidiaries, taken
as a whole after consummation of the Merger;
(g) The shares of Xxxxxx Common Stock issuable upon consummation
of the Merger and the shares of Xxxxxx Common Stock issuable upon
exercise of any Superior Options that are to become options to purchase
Xxxxxx Common Stock pursuant to Section 5.7 shall have been approved
for listing on the New York Stock Exchange, subject to official notice
of issuance; and
-35-
40
(h) All approvals of private persons or corporations, (i) the
granting of which is necessary for the consummation of the Merger or
the transactions contemplated in connection therewith and (ii) the
non-receipt of which would have a material adverse effect on the
business, financial condition or results of operations of the Surviving
Corporation and its subsidiaries, taken as a whole after the
consummation of the Merger, shall have been obtained; save and except
the consent of the lenders under the Superior revolving credit facility
shall not be a condition of Closing.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF XXXXXX. The obligation of
Xxxxxx to effect the Merger is, at the option of Xxxxxx, also subject to the
fulfillment at or prior to the Closing Date of the following conditions, any or
all of which may be waived by the parties hereto, in whole or in part, to the
extent permitted by applicable law:
(a) Each of the representations and warranties of Superior
contained in Section 2.2 that is qualified as to materiality shall be
true and correct, and each of such representations and warranties that
is not so qualified as to materiality shall be true and correct in all
material respects, as of the date of this Agreement and (except to the
extent such representations and warranties speak specifically as of an
earlier date) as of the Closing Date as though such representations and
warranties had been made at and as of that time; all of the terms,
covenants and conditions of this Agreement to be complied with and
performed by Superior on or before the Closing Date shall have been
duly complied with and performed in all material respects; and a
certificate to the foregoing effect dated the Closing Date and signed
by the chief executive officer of Superior shall have been delivered to
Xxxxxx;
(b) Since the date of this Agreement, no Superior MAE shall have
occurred, and Xxxxxx shall have received a certificate signed by the
chief executive officer of Superior dated the Closing Date to such
effect;
(c) Superior shall have received, and furnished written copies to
Xxxxxx of, each of the Superior affiliates' agreements required
pursuant to Section 3.3;
(d) Xxxxxx shall have received from Jones, Walker, Waechter,
Poitevent, Carrere & Xxxxxxx, L.L.P., counsel to Superior, an opinion
dated the Closing Date in the form attached as Exhibit B; and
(e) Xxxxxx shall have received from Xxxxxx & Xxxxxx L.L.P., a
written opinion dated as of the Closing Date to the effect that for
U.S. federal income tax purposes (i) the Merger will be treated as a
reorganization within the meaning of section 368(a) of the Code, (ii)
Xxxxxx, Sub and Superior will each be a party to the reorganization
within the meaning of section 368(b) of the Code, and (iii) no gain or
loss will be recognized by Xxxxxx, Sub or Superior as a result of the
Merger. In rendering such opinion, counsel may require and rely upon
(and may incorporate by reference) representations and covenants to the
extent commercially reasonable, including those contained in
certificates of officers and/or directors or Xxxxxx, Superior, and Sub.
Xxxxxx shall have received executed copies of the certificates
-36-
41
of officers and directors of Xxxxxx, Superior, and Sub that may
reasonably be required by counsel in connection with the tax opinions
referred to in this Section 6.2(f).
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SUPERIOR. The obligation
of Superior to effect the Merger is, at the option of Superior, also subject to
the fulfillment at or prior to the Closing Date of the following conditions, any
or all of which may be waived by the parties hereto, in whole or in part, to the
extent permitted by applicable law:
(a) Each of the representations and warranties of Xxxxxx and Sub
contained in Section 2.1 that is qualified as to materiality shall be
true and correct, and each of such representations and warranties that
is not so qualified as to materiality shall be true and correct in all
material respects, as of the date of this Agreement and (except to the
extent such representations and warranties speak specifically as of an
earlier date) as of the Closing Date as though such representations and
warranties had been made at and as of that time; all the terms,
covenants and conditions of this Agreement to be complied with and
performed by Xxxxxx on or before the Closing Date shall have been duly
complied with and performed in all material respects; and a certificate
to the foregoing effect dated the Closing Date and signed by the chief
executive officer of Xxxxxx shall have been delivered to Superior;
(b) Since the date of this Agreement, no Xxxxxx XXX shall have
occurred, and Superior shall have received a certificate signed by the
chief executive officer of Xxxxxx dated the Closing Date to such
effect;
(c) Superior shall have received from Xxxxxx & Xxxxxx L.L.P.,
counsel to Xxxxxx, an opinion dated the Closing Date in the form
attached as Exhibit C; and
(d) Superior shall have received from Jones, Walker, Waechter,
Poitevent, Carrere & Xxxxxxx, L.L.P., a written opinion dated as of the
Closing Date to the effect that for U.S. federal income tax purposes
(i) the Merger will be treated as a reorganization within the meaning
of section 368(a) of the Code, (ii) Xxxxxx, Sub and Superior will each
be a party to that reorganization within the meaning of section 368(b)
of the Code, and (iii) Superior and the stockholders of Superior who
exchange Superior Common Stock for Xxxxxx Common Stock will not
recognize any gain or loss as a result of the exchange of Xxxxxx Common
Stock pursuant to the Merger, other than to the extent such
stockholders receive cash in lieu of fractional shares. In rendering
such opinion, counsel may require and rely upon (any may incorporate by
reference) representations and covenants to the extent commercially
reasonable, including those contained in certificates of officers
and/or directors of Xxxxxx, Superior and Sub and others. Superior shall
have received executed copies of the certificates of officers and
directors of Superior, Xxxxxx and Sub that may reasonably be required
by counsel in connection with the tax opinions referred to in this
Section 6.3(d).
-37-
42
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated and the Merger and
the other transactions contemplated herein may be abandoned at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
Xxxxxx and/or Superior:
(a) by mutual consent of Xxxxxx and Superior;
(b) by either Xxxxxx or Superior if the Merger has not been
effected on or before May 31, 1999; provided, however, that the right
to terminate this Agreement under this Section 7.1(b) shall not be
available to a party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the
Merger to occur on or before such date; provided, further, that this
Agreement may be extended by written notice of either Xxxxxx or
Superior to a date not later than August 31, 1999, if the Merger shall
not have been consummated as a result of Xxxxxx or Superior having
failed by May 31, 1999 to receive all required permits and orders with
respect to the Merger or as a result of entering of an order by a court
or governmental authority;
(c) by either Xxxxxx or Superior if a final, nonappealable order
of a judicial or administrative authority of competent jurisdiction to
restrain, enjoin or otherwise prevent a consummation of this Agreement
or the transactions contemplated in connection herewith shall have been
entered;
(d) by either Xxxxxx or Superior if this Agreement shall fail to
get the Required Superior Vote by the stockholders of Superior at the
Superior Stockholders' Meeting;
(e) by either Xxxxxx or Superior if the Charter Amendment or the
Share Issuance fails to get the Required Xxxxxx Vote by the
stockholders of Xxxxxx at the Xxxxxx Stockholders' Meeting;
(f) by Xxxxxx if there has been a breach of any representation or
warranty or covenant set forth in this Agreement by Superior, such that
the conditions set forth in Section 6.2(a) would not be satisfied,
which breach has not been cured within 30 days following receipt by
Superior of notice of such breach;
(g) by Superior if there has been a breach of any representation
or warranty or covenant set forth in this Agreement by Xxxxxx, such
that the conditions set forth in Section 6.3(a) would not be satisfied,
which breach has not been cured within 30 days following receipt by
Xxxxxx of notice of such breach;
(h) by Xxxxxx, if (i) the Board of Directors of Superior
withdraws, modifies or changes its recommendation of this Agreement or
the Merger or shall have resolved to do any of the foregoing or the
Board of Directors of Superior shall have recommended to the
-38-
43
stockholders of Superior any Alternative Proposal or resolved to do so;
(ii) a tender offer or exchange offer for 30 percent or more of the
outstanding shares of Superior Common Stock is commenced and the Board
of Directors of Superior, within 10 Business Days after such tender
offer or exchange offer is so commenced, either fails to recommend
against acceptance of such tender or exchange offer by its stockholders
or takes no position with respect to the acceptance of such tender or
exchange offer by its stockholders; or (iii) any person shall have
acquired beneficial ownership or the right to acquire beneficial
ownership of, or any "group" (as such term is defined under Section
13(d) of the Exchange Act and the regulations promulgated thereunder),
shall have been formed which beneficially owns, or has the right to
acquire beneficial ownership of, 30 percent or more of the then
outstanding shares of Superior Common Stock; or
(i) by Superior, if Superior accepts an Alternative Proposal and
makes the payment required pursuant to Section 7.4 of this Agreement.
7.2 EFFECT OF TERMINATION. Except as provided in Section 7.4 or 8.1 of
this Agreement, in the event of the termination of this Agreement pursuant to
Section 7.1, this Agreement shall forthwith become void, there shall be no
liability on the part of Xxxxxx, Sub or Superior 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 from
liability for any misrepresentation or breach of any covenant or agreement under
this Agreement.
7.3 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is, or whose stockholders are, entitled to
the benefits thereof. This Agreement may not be amended or supplemented at any
time, except by an instrument in writing signed on behalf of each party hereto,
provided that after this Agreement has been approved and adopted by the
stockholders of Superior or the Share Issuance and Charter Amendment have been
approved by stockholders of Xxxxxx, this Agreement may be amended only as may be
permitted by applicable provisions of the DGCL. The waiver by any party hereto
of any condition or of a breach of another provision of this Agreement shall not
operate or be construed as a waiver of any other condition or subsequent breach.
The waiver by any party hereto of any of the conditions precedent to its
obligations under this Agreement shall not preclude it from seeking redress for
breach of this Agreement other than with respect to the condition so waived.
7.4 FEES, EXPENSES AND OTHER PAYMENTS.
(a) Except as provided in this Section 7.4, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the parties incurring such expense, except that expenses
incurred in connection with printing and mailing the Registration Statement and
the Joint Proxy Statement/Prospectus shall be shared equally by Xxxxxx and
Superior.
(b) If this Agreement is terminated by Xxxxxx pursuant to Section
7.1(h) or by Superior pursuant to Section 7.1(i), then Superior shall pay to
Xxxxxx a termination fee equal to $7 million.
-39-
44
(c) If this Agreement is terminated by Xxxxxx or Superior pursuant
to Sections 7.1(d) or 7.1(f) and within 12 months of any such termination,
Superior or any of the Superior Subsidiaries accepts a written offer or enters
into a written agreement to consummate a Superior Acquisition Proposal with such
person or any of its Affiliates and Superior or such Superior Subsidiary is
acquired, through merger, consolidation, share exchange, sale of assets or
otherwise, by such person or any of its Affiliates, then Superior shall at the
closing (and as a condition of such closing) pay to Xxxxxx immediately a
termination fee of $7 million.
(d) If Superior shall fail to pay Xxxxxx any fee or other amount
due hereunder, Superior shall pay the costs and expenses (including legal fees
and expenses) of Xxxxxx in connection with any action, including the filing of
any lawsuit or other legal action, taken to collect payment, together with
interest on the amount of any unpaid fee at the publicly announced prime
interest rate of Citibank N.A. in effect from time to time, from the date such
fee or other payment was required to be paid until payment in full.
(e) Subject to the following sentences, the payments required by
this Section 7.4 shall constitute liquidated damages in full and complete
satisfaction of, and shall be the sole and exclusive remedy of Xxxxxx for, any
loss, liability, damage or claim arising out of or in conjunction with the
transactions contemplated by this Agreement, including any termination of this
Agreement pursuant to Section 7.1 and shall not constitute a penalty.
Notwithstanding the foregoing sentence, if (i) this Agreement is terminated by
Xxxxxx as a result of an intentional breach of any representation, warranty,
covenant or agreement by Superior and no termination fee is required to be paid
pursuant to Section 7.4(c), Xxxxxx may pursue any remedies available to it at
law or in equity and shall be entitled to recover such additional amounts as
Xxxxxx may be entitled to receive at law or in equity or (ii) this Agreement is
terminated by Superior as a result of an intentional breach of any
representation, warranty, covenant or agreement by Xxxxxx, Superior may pursue
any remedies available to it at law or in equity and shall be entitled to
recover such additional amounts as Xxxxxx may be entitled to receive at law or
in equity.
ARTICLE VIII
GENERAL PROVISIONS
8.1 EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations and warranties in this Agreement shall terminate at the
Effective Time and the representations, warranties, covenants and agreements of
each of the parties hereto shall terminate upon the termination of this
Agreement pursuant to Section 7.1, except that the covenants and agreements set
forth in Article I and Sections 2.1(h), 5.3(d), 5.5, 5.6, 5.7, 5.9 and 5.10
shall survive the Effective Time and Section 7.4 and Article VIII hereof shall
survive the termination of this Agreement.
8.2 PUBLIC STATEMENTS. Superior and Xxxxxx agree to consult with each
other prior to issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby, and shall not
issue any such press release or make any such public statement
-40-
45
without the consent of the other, except as may be required by law or applicable
stock exchange rules.
8.3 ASSIGNMENT. This Agreement shall inure to the benefit of and will
be binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. Except as set forth in this Agreement, this
Agreement shall not be assignable by the parties hereto.
8.4 NOTICES. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered
in person or by courier, (ii) sent by telecopy or facsimile transmission, answer
back requested, or (iii) mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
if to Superior: Superior Energy Services, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxx
with a copy to: Jones, Walker, Waechter, Poitevent,
Carrere & Xxxxxxx, L.L.P.
First NBC Building
000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
if to Xxxxxx: Xxxxxx Drilling Company
Xxxxxx Building
0 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
with a copy to: Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: T. Xxxx Xxxxx
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 8.4. Such notices shall be
effective, (i) if delivered in person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when the
answer back is received, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
8.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the substantive law of the State of Delaware without giving
effect to the principles of conflicts
-41-
46
of law thereof; provided, however, that any matter involving the internal
corporate affairs of any party hereto shall be governed by the provisions of the
DGCL.
8.6 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.
8.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same agreement.
8.8 HEADINGS. The Section headings herein are for convenience only and
shall not affect the construction hereof.
8.9 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement and
the Confidentiality Agreement constitute the entire agreement and supersede all
other prior agreements and understandings, both oral and written, among the
parties or any of them, with respect to the subject matter hereof and neither
this nor any document delivered in connection with this Agreement confers upon
any person not a party hereto any rights or remedies hereunder except as
specifically provided herein.
8.10 SPECIFIC PERFORMANCE. The parties hereby acknowledge and agree
that the failure of any party to this Agreement to perform its agreements and
covenants hereunder, including its failure to take all actions as are necessary
on its part to the consummation of the Merger, will cause irreparable injury to
the other parties to this Agreement for which damages, even if available, will
not be an adequate remedy. Accordingly, each of the parties hereto hereby
consents to the granting of equitable relief (including specific performance and
injunctive relief) by any court of competent jurisdiction to enforce any party's
obligations hereunder. The parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
equitable relief and that this Section is without prejudice to any other rights
that the parties hereto may have for any failure to perform this Agreement.
8.11 DISCLOSURE LETTERS.
(a) The Superior Disclosure Letter, executed by Superior as of the
date hereof, and delivered to Xxxxxx on the date hereof, contains all disclosure
required to be made by Superior under the various terms and provisions of this
Agreement. Each item of disclosure set forth in the Superior Disclosure Letter
specifically refers to the Article and Section of the Agreement to which such
disclosure responds, and shall not be deemed to be disclosed with respect to any
other Article or Section of the Agreement.
(b) The Xxxxxx Disclosure Letter, executed by Xxxxxx as of the
date hereof, and delivered to Superior on the date hereof, contains all
disclosure required to be made by Xxxxxx under the various terms and provisions
of this Agreement. Each item of disclosure set forth in the Xxxxxx Disclosure
Letter specifically refers to the Article and Section of the Agreement to which
such
-42-
47
disclosure responds, and shall not be deemed to be disclosed with respect to any
other Article or Section of the Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
THE NEXT PAGE IS THE SIGNATURE PAGE.]
-43-
48
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
SUPERIOR ENERGY SERVICES, INC.
By /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
XXXXXX DRILLING COMPANY
By /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
SAINTS ACQUISITION COMPANY
By /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
49
ANNEX I
OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
NAME TITLE
---- -----
Directors:
Xxxxxx X. Xxxxxx Xx....................... Chairman of the Board
Xxxxx X. Xxxx............................. Director
Xxxxx X. Xxxxx............................ Director
Xxxxxxx X. Xxxx........................... Director
Officers:
Xxxxxxx X. Xxxx........................... President and Chief Executive Officer
Xxxxxx X. Xxxxxx.......................... Vice President-Finance
Xxxxx X. Xxxx............................. Vice President
Xxxxx X. Xxxxx............................ Vice President
Xxxxx Xxxxxxxxx........................... Vice President
Xxxxxx Xxxxxx............................. Vice President
I.E. Xxxxxxx.............................. Treasurer
Xxxxxxx Xxxxxxxxx......................... Secretary
Xxxx Xxxxx................................ Assistant Secretary
50
ANNEX II
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxx
Xxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxxx
51
EXHIBIT A
AFFILIATE'S AGREEMENT
[Date]
[Xxxxxx Address]
Ladies and Gentlemen:
The undersigned has been advised that, as of the date hereof, the
undersigned may be deemed to be an "affiliate" of Superior Energy Services,
Inc., a Delaware corporation ("Superior"), as that term is defined for purposes
of paragraphs (c) and (d) of Rule 145 of the Regulations of the Commission under
the Securities Act (an "Affiliate").
Pursuant to the terms and subject to the conditions of that certain
Agreement and Plan of Merger by and among Xxxxxx Drilling Company, a Delaware
corporation ("Xxxxxx"), Saints Acquisition Company., a newly formed Delaware
corporation and a wholly-owned Subsidiary of Xxxxxx ("Sub"), and Superior dated
as of October 28, 1998 (the "Merger Agreement"), providing for, among other
things, the merger of Sub with and into Superior (the "Merger"), the undersigned
will be entitled to receive shares of Xxxxxx Common Stock in exchange for shares
of Superior Common Stock owned by the undersigned at the Effective Time of the
Merger as determined pursuant to the Merger Agreement. Capitalized terms used
but not defined herein are defined in the Merger Agreement and are used herein
with the same meanings as ascribed to them therein.
The undersigned understands that the Merger will be treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principles and that the staff of the Commission
has issued certain guidelines that should be followed to ensure the application
of pooling of interests accounting to the transaction.
In consideration of the agreements contained herein, Xxxxxx'x reliance
on this letter in connection with the consummation of the Merger and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned hereby represents, warrants and agrees that the
undersigned will not make any sale, transfer or other disposition of (i)
Superior Common Stock during the period from the date hereof until the earlier
of the Effective Time and the termination of the Merger Agreement (which period,
if the Merger is consummated, will be greater than thirty (30) days), (ii)
Xxxxxx Common Stock received by the undersigned pursuant to the Merger or
otherwise owned by the undersigned until such time as financial statements that
include at least thirty (30) days of combined operations of Superior and Xxxxxx
after the Merger shall have been publicly reported, unless the undersigned shall
have delivered to Xxxxxx, prior to any such sale, transfer or other disposition,
a written opinion from PricewaterhouseCoopers LLP, independent public
accountants for Xxxxxx, or a written no-action letter from the accounting staff
of the Commission, in either case in form and substance reasonably satisfactory
to Xxxxxx, to the effect that such sale, transfer or other disposition will not
cause the Merger not to be treated as
52
a "pooling of interests" for financial accounting purposes in accordance with
generally accepted accounting principles and the Regulations of the Commission
or (iii) Xxxxxx Common Stock received by the undersigned pursuant to the Merger
in violation of the Securities Act or the Regulations thereunder. The
undersigned has been advised that the offering, sale and delivery of the shares
of Xxxxxx Common Stock pursuant to the Merger will have been registered with the
Commission under the Securities Act on a Registration Statement on Form S-4. The
undersigned has also been advised, however, that, since the undersigned may be
deemed to be an Affiliate at the time the Merger is submitted for a vote of the
stockholders of Superior, Xxxxxx Common Stock received by the undersigned
pursuant to the Merger can be sold by the undersigned only (i) pursuant to an
effective registration statement under the Securities Act, (ii) in conformity
with the volume and other limitations of Rule 145 promulgated by the Commission
under the Securities Act or (iii) in reliance upon an exemption from
registration that is available under the Securities Act.
The undersigned also understands that instructions will be given to the
Exchange Agent for Xxxxxx Common Stock with respect to Xxxxxx Common Stock to be
received by the undersigned pursuant to the Merger and that there will be placed
on the certificates representing such shares of Xxxxxx Common Stock, or any
substitutions therefor, a legend stating in substance as follows:
"These shares were issued in a transaction to which Rule 145
promulgated under the Securities Act of 1933, as amended, applies.
These shares may only be transferred in accordance with the terms of
such Rule and an Affiliate's Agreement between the original holder of
such shares and Xxxxxx Corporation, a copy of which agreement is on
file at the principal offices of Xxxxxx Corporation."
It is understood and agreed that the legend set forth above shall be removed
upon surrender of certificates bearing such legend by delivery of substitute
certificates without such legend if the undersigned shall have delivered to
Xxxxxx an opinion of counsel, in form and substance reasonably satisfactory to
Xxxxxx, to the effect that (i) the sale or disposition of the shares represented
by the surrendered certificates may be effected without registration of the
offering, sale and delivery of such shares under the Securities Act and (ii) the
shares to be so transferred may be publicly offered, sold and delivered by the
transferee thereof without compliance with the registration provisions of the
Securities Act.
By its execution hereof, Xxxxxx agrees that it will, as long as the
undersigned owns any Xxxxxx Common Stock to be received by the undersigned
pursuant to the Merger, take all reasonable efforts to make timely filings with
the Commission of all reports required to be filed by it pursuant to the
Exchange Act and will promptly furnish upon written request of the undersigned a
written statement confirming that such reports have been so timely filed.
A-2
53
If you are in agreement with the foregoing, please so indicate by
signing below and returning a copy of this letter to the undersigned, at which
time this letter shall become a binding agreement between us.
Very truly yours,
By
--------------------------------------
Name:
Title:
Date:
Address:
ACCEPTED this ___ day
of ______________, 1998:
XXXXXX DRILLING COMPANY
By
---------------------------
Name:
Title:
A-3
54
EXHIBIT B
FORM OF XXXXX, XXXXXX OPINION
October __, 1998
Superior Energy Services, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Superior Energy Services, Inc., a Delaware
corporation ("Superior"), in connection with the Merger (the "Merger") and
related transactions contemplated by that certain Agreement and Plan of Merger
dated October 28, 1998, by and among Xxxxxx Drilling Company, a Delaware
corporation ("Xxxxxx"), Saints Acquisition Company, a Delaware corporation and a
wholly owned subsidiary of Xxxxxx ("Merger Sub"), and Superior (the
"Agreement"), pursuant to which Merger Sub will be merged with and into
Superior. Capitalized terms used herein but not defined herein shall have the
meaning ascribed to them in the Agreement. This opinion is being rendered
pursuant to Section 6.2(d) of the Agreement.
In connection therewith, we have examined copies of the Agreement and
originals, or photostatic or certified copies, of such corporate records of
Superior, and such communications, certificates of public officials,
certificates of officers of Superior and other documents, as we have deemed
necessary or appropriate for the purposes of this opinion. As to matters of fact
relevant to the opinions expressed herein and as to factual matters arising in
connection with our examination of the corporate documents, records and
instruments of Superior, and other documents or writings, we have relied, to the
extent we deem necessary or appropriate, upon the representations and warranties
made by Superior in the Agreement and related instruments, and upon certificates
and other communications of corporate officers of Superior, without further
investigation as to the facts set forth therein. We have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies.
Based upon the foregoing, and in reliance thereon, and subject to the
assumptions, qualifications and limitations hereinafter set forth, we are of the
opinion that:
1. Superior is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now being conducted as
described in the Registration Statement on Form S-4 (Registration No.
__________) filed with the Securities and Exchange Commission by Xxxxxx pursuant
to the Securities Act of 1933, as amended, which became effective on
_____________;
55
2. The appropriate filings have been made with respect to the Merger
with the Secretary of State of the State of Delaware to cause the Merger to
become effective;
3. Superior has the requisite corporate power to merge with Merger Sub
as contemplated by the Agreement;
4. The execution and delivery of the Agreement did not, and the
consummation of the Merger will not, violate any provisions of Superior'
Articles of Incorporation or Bylaws, each as amended to date; and
5. The Agreement has been duly and validly authorized, executed and
delivered by Superior, and the Agreement is a valid and binding agreement of
Superior enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws or court decisions affecting creditors' rights generally and by
other general equitable principles and except as the enforceability of the
indemnification provision may be limited by applicable federal or state
securities laws.
This opinion is limited to the laws of the State of Delaware and the
federal laws of the United States of America and the General Corporation Law of
the State of Delaware.
This opinion is solely for your benefit and except for Xxxxxx, which
shall be entitled to rely on this opinion, may not be relied upon by any other
person without our written permission.
Very truly yours,
JONES, WALKER, WAECHTER, POITEVENT,
CARRERE & XXXXXXX, L.L.P.
B-2
56
EXHIBIT C
FORM OF XXXXXX & XXXXXX OPINION
October __, 1998
Xxxxxx Drilling Company
Xxxxxx Building
0 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx Drilling Company, a Delaware
corporation ("Xxxxxx"), in connection with the Merger (the "Merger") and related
transactions contemplated by the Agreement and Plan of Merger dated October 28,
1998 (the "Agreement"), by and among Saints Acquisition Company, a Delaware
corporation and wholly owned subsidiary of Xxxxxx ("Merger Sub"), and Superior
Energy Services, Inc., a Delaware corporation ("Superior"). All capitalized
terms not otherwise defined herein shall have the same meaning as in the
Agreement. This opinion is being rendered pursuant to Section 6.3(c) of the
Agreement.
In connection with rendering the opinions hereinafter set forth, we
have examined originals or photostatic or certified copies of all such corporate
records of Xxxxxx and its subsidiaries, such agreements, communications and
other instruments, certificates of officers of Xxxxxx, certificates and
telegrams of public officials, and such other documents as we have deemed
relevant and necessary as the basis for the opinions hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals, the correctness of
all statements of fact contained therein, the conformity to original documents
of all documents submitted to us as certified or photostatic copies and the due
execution and delivery of all documents (except for the due execution and
delivery of the Agreement by Xxxxxx) where due execution and delivery are a
prerequisite to the effectiveness thereof. We have relied on the accuracy of the
representations and warranties as to factual matters by all of the parties
contained in the Agreement as well as the truth and accuracy of all of the
representations and warranties as to factual matters made by Xxxxxx and Superior
in connection with the Merger and the opinions hereinafter set forth. As to
certain questions of fact material to the opinions hereinafter set forth, we
have, to the extent we deemed appropriate, relied on certificates of officers of
Xxxxxx and on certificates and telegrams of governmental officials.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. Xxxxxx is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its
57
business as now being conducted as described in the Registration Statement on
Form S-4 (Registration No. __________) (the "Registration Statement") filed by
the Company under the Securities Act of 1933, as amended, which Registration
Statement became effective on _________.
2. Merger Sub is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now being conducted as
described in the Registration Statement.
3. The appropriate filings have been made with respect to the Merger
with the Secretary of State of the State of Delaware to cause the Merger to
become effective.
4. Merger Sub has the requisite corporate power to merge with and into
Superior as contemplated by the Agreement.
5. The execution and delivery of the Agreement did not, and the
consummation of the Merger will not, violate any provision of Xxxxxx'x Restated
Certificate of Incorporation or Bylaws or Merger Sub's Certificate of
Incorporation or Bylaws.
6. The Agreement has been duly and validly authorized, executed and
delivered by Xxxxxx and Merger Sub, and the Agreement is a valid and binding
agreement of Xxxxxx and Merger Sub enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or court decisions affecting
creditors' rights generally and by other general equitable principles and except
as the enforceability of the indemnification provision may be limited by
applicable federal or state securities laws.
7. The Registration Statement has become effective under the Securities
Act.
8. The shares of Xxxxxx Common Stock to be delivered in connection with
the Merger are duly authorized and reserved for issuance and, when issued in
accordance with the terms and conditions of the Agreement, will be validly
issued, fully paid and nonassessable.
The opinions set forth herein are specifically limited to matters of
the laws of the State of Delaware and of the United States, and the General
Corporation Law of the State of Delaware.
This letter is furnished to you solely for your benefit pursuant to the
Agreement. This letter and the opinions expressed herein may not be used or
relied upon by you for any other purpose and may not be relied upon for any
purpose by any other person or entity without our prior written consent. Except
for the use permitted herein, this letter is not to be quoted or reproduced in
whole or in part or otherwise referred to in any manner nor is it to be filed
with any governmental agency or delivered to any other person.
Very truly yours,
XXXXXX & XXXXXX L.L.P.
C-2
