UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)*
PETROLITE CORPORATION
---------------------
(Name of Issuer)
CAPITAL STOCK
-----------------------------
(Title of Class of Securities)
716723 10 1
--------------
(CUSIP Number)
Wm. S. Barnickel & Company
c/o Jules Chasnoff
Lowenhaupt & Chasnoff, L.L.C.
10 South Broadway, Suite 600
St. Louis, MO 63102-1733
(314) 241-5950
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 25, 1997
------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Check the following box if a fee is being paid with the statement. [ ] (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
equity securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
(Continued on Following Pages)
(Page 1 of 103 pages)
- ---------------------
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject to all other
provisions of the Act (however, see the Notes).
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 2 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wm. S. Barnickel & Company 43-6029518
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ] [N/A]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Missouri Corporation
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER 5,337,360 shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER -0- shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER 5,337,360 shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER -0- shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 3 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NationsBank Corporation 56-0906609
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [X]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
North Carolina Corporation
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER -0- shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 5,558,332 shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER -0- shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 5,547,702 shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 4 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Boatmen's Trust Company 43-0497480
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [X]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Missouri Corporation
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER 124,101 shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 5,434,231 shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER 16,167 shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 5,531,535 shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
BK
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 5 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The John S. Lehmann Trust f/b/o John S. Lehmann, Jr. 43-6401897
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ] [N/A]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Missouri Trust
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER -0- shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER -0- shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER -0- shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER -0- shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 6 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The John S. Lehmann Trust f/b/o Frederick W. Lehmann III 43-6401898
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ] [N/A]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Missouri Trust
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER -0- shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER -0- shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER -0- shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER -0- shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 7 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Genevieve J. Brown ###-##-####
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ] [N/A]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER 5,846 shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 5,375,850 shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER 5,846 shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 5,375,850 shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 8 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael V. Janes ###-##-####
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ] [N/A]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER 200 shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 5,375,063 shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER 200 shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 5,425,463 shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 9 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William B. Janes ###-##-####
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ] [N/A]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER 23,400 shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 5,337,360 shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER 23,400 shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 5,337,360 shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 10 of 103 Pages
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fairfax F. Pollnow ###-##-####
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X] (b) [ ] (See Items 3, 4 and 5 below)
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS 00 (See Item 3 below)
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ] [N/A]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
NUMBER OF SHARES 7. SOLE VOTING POWER 3,000 shares
----------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 5,337,360 shares
(See Item 5 below)
OWNED BY EACH ----------------------------------------------------------
9. SOLE DISPOSITIVE POWER 3,000 shares
REPORTING ----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 5,337,360 shares
PERSON WITH (See Item 5 below)
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,590,778 shares (See Item 5 below)
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ] [N/A]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.19%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 11 of 103 Pages
- --------------------------------------------------------------------------------
INTRODUCTORY NOTE.
This statement is filed on behalf of Wm. S. Barnickel & Company, a Missouri
corporation ("Barnickel Company"); NationsBank Corporation, a North Carolina
corporation ("NationsBank"); its subsidiary, Boatmen's Trust Company, a Missouri
corporation ("BTC");The John S. Lehmann Trust f/b/o John S. Lehmann, Jr.
("Lehmann Trust I") and The John S. Lehmann Trust f/b/o Frederick W. Lehmann III
("Lehmann Trust II") (Lehmann Trust I and Lehmann II are hereinafter referred to
collectively as the "Lehmann Trusts") established under the Indenture of Trust
of John S. Lehmann dated July 8, 1959, as amended; Genevieve J. Brown, Michael
V. Janes, and William B. Janes (Genevieve J. Brown, Michael V. Janes and William
B. Janes are referred to herein collectively as the "Janeses") and Fairfax F.
Pollnow. NationsBank, BTC, Barnickel Company, Lehmann Trust I, Lehmann Trust II,
Genevieve J. Brown, Michael V. Janes, William B. Janes and Fairfax F. Pollnow
are hereinafter referred to as the "Reporting Persons."
This Amendment No. 9 is being filed on behalf of the Reporting Persons and
supplements and amends the information set forth in Schedule 13D filed on
February 24, 1994, as amended by Amendments No. 1, No. 2, No. 3, No. 4, No. 5,
No. 6, No. 7 and No. 8 filed on, respectively, April 8, 1994, July 11, 1994,
December 9, 1994, February 10, 1995, June 8, 1995, November 12, 1996,
November 27, 1996 and January 30, 1997 previously filed by the Reporting Persons
and The William S. Barnickel Testamentary Trust, a former Missouri trust (the
"Barnickel Trust").
The filing of this Schedule 13D should not be construed as an admission
that the Reporting Persons constitute a group or are the beneficial owners of
the shares of capital stock (the "Capital Stock") of Petrolite Corporation (the
"Company") indicated below.
Each signatory hereto acknowledges responsibility with respect to the
information provided as to such signatory but assumes no responsibility as to
information as to any other signatory.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is hereby amended and supplemented as follows:
The Company and Barnickel Company, have entered into an Agreement and
Plan of Merger with Baker Hughes Incorporated, Baker Hughes Missouri, Inc., and
Baker Hughes Delaware, Inc., dated February 25, 1997 (the "Merger Agreement"), a
copy of which is filed herewith as Exhibit 1 to this Amendment No. 9. The terms
of the Merger Agreement call for a tax-free exchange of common stock in which
the Capital Stock of the Company and the outstanding capital stock of Barnickel
Company will be converted into shares of common stock of Baker Hughes. For such
purpose the Capital Stock of the Company will be valued at $61 per share and the
value of the common stock of Baker Hughes will be based on the average market
price of such stock during a 10-day period shortly before closing.
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 12 of 103 Pages
- --------------------------------------------------------------------------------
The Merger Agreement is subject to approval by a vote of the shareholders
of the Company, including the favorable vote of shareholders other than the
Barnickel Company, a vote of the shareholders of the Barnickel Company, and
satisfaction of other customary conditions.
See the Merger Agreement (filed herewith as Exhibit 1) for more specific
details regarding the transaction.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5(b) is hereby supplemented and amended as follows:
(b) Independently of any potential group status, NationsBank as the
beneficial owner of 99.96% of the outstanding capital stock of BTC may be deemed
to have shared voting power over 220,972 shares of the Company and shared
dispositive power over 210,342 shares of Capital Stock of the Company. Of the
220,972 shares of Capital Stock of the Company it may be deemed to beneficially
own, BTC has sole voting power over 124,101 shares of Capital Stock of the
Company; shared voting power over 96,871 shares of Capital Stock of the Company;
sole dispositive power over 16,167 shares of Capital Stock of the Company; and
shared dispositive power over 194,175 shares of Capital Stock of the Company.
Taking into consideration potential group status with Barnickel
Company, NationsBank has shared voting power over 5,558,332 shares of Capital
Stock of the Company and shared dispositive power over 5,547,702 shares of
Capital Stock of the Company. BTC has sole voting power over 124,101 shares of
Capital Stock of the Company; shared voting power over 5,434,231 shares of
Capital Stock of the Company; sole dispositive power over 16,167 shares of
Capital Stock of the Company; and shared dispositive power over 5,531,535 shares
of Capital Stock of the Company.
ITEM 6. CONTRACTS, ARRANGMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
Item 4 is hereby amended and supplemented by adding the following:
See Item 4.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following additional exhibits are filed with this Amendment No. 9:
Exhibit 1. Agreement and Plan of Merger, by and among Baker Hughes
Incorporated, Baker Hughes Missouri, Inc., Baker Hughes
Delaware, Inc., Petrolite Corporation, and Wm. S. Barnickel &
Company
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 13 of 103 Pages
- --------------------------------------------------------------------------------
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
accurate, dated in each case as of February 26, 1997.
NATIONSBANK CORPORATION
BRUCE L. TALEN
----------------------------------------
Signature
Bruce L. Talen, Attorney-in-Fact
----------------------------------------
(Name/Title)
BOATMEN'S TRUST COMPANY
BRUCE L. TALEN
----------------------------------------
Signature
Bruce L. Talen, Vice President
----------------------------------------
(Name/Title)
WM. S. BARNICKEL & COMPANY
BRUCE L. TALEN
----------------------------------------
Signature
Bruce L. Talen, Attorney-in-Fact
----------------------------------------
(Name/Title)
JOHN S. LEHMANN TRUST F/B/O
FREDERICK W. LEHMANN III
By: Boatmen's Trust Company, Trustee
By: BRUCE L. TALEN
----------------------------------------
Bruce L. Talen, Vice President
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 14 of 103 Pages
- --------------------------------------------------------------------------------
JOHN S. LEHMANN TRUST F/B/O
JOHN S. LEHMANN, JR.
By: Boatmen's Trust Company, Trustee
By: BRUCE L. TALEN
----------------------------------------
Bruce L. Talen, Vice President
GENEVIEVE J. BROWN*
----------------------------------------
Genevieve J. Brown
MICHAEL V. JANES*
----------------------------------------
Michael V. Janes
WILLIAM B. JANES*
----------------------------------------
William B. Janes
FAIRFAX F. POLLNOW*
----------------------------------------
Fairfax F. Pollnow
* By: BRUCE L. TALEN
-----------------------------------
Bruce L. Talen, as attorney-in-fact
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 15 of 103 Pages
- --------------------------------------------------------------------------------
INDEX OF SCHEDULES
Schedule II Directors and Executive Officers of BTC
Schedule VIII Transactions During the Past Sixty Days
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 16 of 103 Pages
- --------------------------------------------------------------------------------
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF BTC
The following information completely replaces Schedule II to the
Schedule 13D, as amended, and lists the names, residence or business addresses,
principal occupation or employment (together with the name, principal business
and address of the employer, if other than NationsBank or BTC), and citizenship
of each of the directors and executive officers of BTC:
HOWARD F. BAER, Director of BTC; Private Investor, 232 N. Kingshighway,
Suite 504, St. Louis, MO 63108; U.S.A.
CLARENCE C. BARKSDALE, Director of BTC; Vice Chairman, Washington
University, 1130 Hampton Avenue, St. Louis, MO 63139; U.S.A.
GERALD D. BLATHERWICK, Director of BTC; Retired Vice Chairman - Human
Resources and Corporate Communications - Southwestern Bell Corporation, 26
Fordyce Lane, St. Louis, MO 63124; U.S.A.
MARY JANE BLOCK, Executive Vice President of BTC; U.S.A
STEPHEN F. BRAUER, Director of BTC; President, Hunter Engineering Company,
an engineering company; 11250 Hunter Drive, Bridgeton, MO 63044; U.S.A.
LYLE W. BRIZENDINE, Executive Vice President of BTC; U.S.A.
MARY LEYHE BURKE, PH.D., Director of BTC; Head of School, Whitfield School;
a private secondary school; 175 South Mason Road, St. Louis, MO 63141; U.S.A.
J.J. LANDERS CARNAL, Executive Vice President of BTC; Switzerland and
U.S.A.
ANDREW B. CRAIG, III, Director of BTC; Chairman of the Board NationsBank;
One Boatmen's Plaza, 800 Market Street, St. Louis, MO 63101; U.S.A.
DONALD DANFORTH, JR., Director of BTC; President, Danforth Agri-Resources,
Inc., a diversified investments and management company; 700 Corporate Park
Drive, Suite 330, St. Louis MO 63105; U.S.A.
JOHN C. DANFORTH, Partner, Bryan Cave LLP, One Metropolitan Square, 211 N.
Broadway, Suite 3600, St. Louis, MO 63102; U.S.A.
THOMAS S. DARNALL, JR. Executive Vice President of BTC; U.S.A.
MARTIN E. GALT, III, Director of BTC; Chairman, Chief Executive Officer and
President, BTC; U.S.A.
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 17 of 103 Pages
- --------------------------------------------------------------------------------
A. WILLIAM HAGER, Director of BTC; Chairman of the Board, Hager Hinge
Company; a hinge manufacturing company; 139 Victor Street, St. Louis, MO 63104;
U.S.A.
SAMUEL B. HAYES, III, Director of BTC; Chairman of the Board, The Boatmen's
National Bank of St. Louis, One Boatmen's Plaza, 800 Market Street, St. Louis,
MO 63101; U.S.A.
ROBERT B. HOFFMAN, Senior Vice President and Chief Financial Officer,
Monsanto Company, 800 North Lindbergh Blvd., St. Louis, MO 63167; U.S.A.
ROBERT E. KRESKO, Director of BTC; Retired Partner, Trammell Crowe Company,
a real estate development company; Pierre Laclede Center, 7701 Forsyth Blvd.,
Suite 680, St. Louis, MO 63105; U.S.A.
JOHN PETERS MACCARTHY, Director and Retired Chairman and Chief Executive
Officer of BTC; U.S.A.
JAMES S. MCDONNELL III, Director of BTC; Retired Vice President, McDonnell
Douglas Corporation; 40 Glen Eagles Drive, St. Louis, MO 63124; U.S.A.
JOHN B. MCKINNEY, Director of BTC; President & Chief Executive Officer,
Laclede Steel Company; a steel manufacturer; One Metropolitan Square, 15th
Floor, St. Louis, MO 63102; U.S.A.
REUBEN M. MORRISS, III, Retired Vice Chairman of BTC; 10048 Litzsinger Rd.,
St. Louis, MO 63124; U.S.A.
WILLIAM C. NELSON, Director of BTC; Chairman, President and Chief Executive
Officer, Boatmen's First National Bank of Kansas City; 10th & Baltimore, P.O.
Box 419038; Kansas City, MO 64183; U.S.A.
KIMBERLY A. OLSON, Executive Vice President, Group One Capital, Inc., 1611
Des Peres Road, St. Louis, MO 63131; U.S.A.
WILLIAM A. PECK, M.D., Director of BTC; Executive Vice Chancellor and Dean,
Washington University School of Medicine, 660 South Euclid Avenue, Box 8106, St.
Louis, MO 63110; U.S.A.
JERRY E. RITTER, Director of BTC; Chairman of the Board, Kiel Center
Partners, L.P., 1401 Clark Street, St. Louis, MO 63103; U.S.A.
HUGH SCOTT, III, Director of BTC; Chairman and Chief Executive Officer,
Western Diesel Services, Inc., an industrial company; 101 S. Hanley, Suite 1910,
St. Louis, MO 63105; U.S.A.
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 18 of 103 Pages
- --------------------------------------------------------------------------------
RICHARD W. SHOMAKER, Director of BTC; Consultant, Brown Group, Inc., a
footwear and specialty retailing company; 8400 Maryland Avenue, St. Louis, MO
63105; U.S.A.
BRICE R. SMITH, JR., Director of BTC; Chairman of the Board, Sverdrup
Corporation, an engineering and design company; 13723 Riverport Drive, Maryland
Heights, MO 63043; U.S.A.
WILLIAM D. STAMPER, Director of BTC; President, W.D. Stamper Company, a
small capitalization investment company; 7777 Bonhomme, Suite 1006, St. Louis,
MO 63105; U.S.A.
V. RAYMOND STRANGHOENER, Executive Vice President, General Counsel and
Secretary of BTC.
JANET MCAFEE WEAKLEY, Director of BTC; Chairman and Chief Executive
Officer, Janet McAfee, Inc., a real estate brokerage company, 149 N. Meramac
Ave., St. Louis, MO 63105; U.S.A.
GORDON E. WELLS, Director of BTC; Retired Chairman of the Board, Boatmen's
First National Bank of Kansas City; 3121 West 67th Terrace, Shawnee Mission,
Kansas 66208; U.S.A.
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 19 of 103 Pages
- --------------------------------------------------------------------------------
SCHEDULE VIII
TRANSACTIONS DURING THE PAST SIXTY DAYS*
None
*Computed from February 25, 1997
<PAGE>
CUSIP No. 716723 10 1 SCHEDULE 13D Page 20 of 103 Pages
- --------------------------------------------------------------------------------
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
among
BAKER HUGHES INCORPORATED,
BAKER HUGHES MISSOURI, INC.,
BAKER HUGHES DELAWARE, INC.,
PETROLITE CORPORATION,
and
WM. S. BARNICKEL & COMPANY
Dated as of February 25, 1997
<PAGE>
TABLE OF CONTENTS
Page
1. The Mergers........................................................ 2
1.1. The Mergers............................................... 2
1.2. The Closing............................................... 2
1.3. Effective Times........................................... 2
2. Charter and Bylaws of the Surviving Corporations................... 3
2.1. Charter................................................... 3
2.2. Bylaws.................................................... 3
3. Directors and Officers of the Surviving Corporations............... 3
3.1. Directors................................................. 3
3.2. Officers.................................................. 3
4. Conversion of the Common Stock..................................... 4
4.1. Certain Definitions....................................... 4
4.2. Conversion of the Barnickel Stock......................... 5
4.3. Conversion of the Company Stock........................... 6
4.4. Exchange of Certificates Representing Barnickel
Common Stock and Company Common Stock................... 8
4.5. Adjustment of Company Share Value.........................10
4.6. Dissenting Stockholders...................................10
5. Representations and Warranties of the Company......................11
5.1. Existence; Good Standing; Corporate Authority.............11
5.2. Authorization, Validity and Effect of Agreements..........12
5.3. Capitalization............................................12
5.4. Subsidiaries..............................................12
5.5. No Violation of Law.......................................13
5.6. No Conflict...............................................13
5.7. SEC Documents.............................................14
5.8. Litigation................................................14
5.9. Absence of Certain Changes................................15
5.10. Taxes.....................................................15
5.11. Employee Benefit Plans....................................16
5.12. Labor Matters.............................................17
5.13. Environmental Matters.....................................17
5.14. Trademarks, Patents and Copyrights........................17
5.15. Insurance.................................................18
(i)
<PAGE>
5.16. No Brokers................................................18
5.17. Opinion of Financial Advisor..............................18
5.18. Parent Stock Ownership....................................18
5.19. Reorganization............................................19
5.20. Vote Required.............................................19
5.21. Amendment to the Company Rights Agreement.................19
6. Representations and Warranties of Barnickel........................19
6.1. Existence; Good Standing; Corporate Authority.............19
6.2. Authorization, Validity and Effect of Agreements..........20
6.3. Capitalization............................................20
6.4. Subsidiaries..............................................20
6.5. No Violation of Law.......................................20
6.6. No Conflict...............................................20
6.7. Financial Statements......................................21
6.8. Litigation................................................21
6.9. Absence of Certain Changes................................21
6.10. Taxes.....................................................22
6.11. Employee Benefit Plans....................................22
6.12. Labor Matters.............................................23
6.13. Environmental Matters.....................................24
6.14. Trademarks, Patents and Copyrights........................24
6.15. Insurance.................................................24
6.16. No Brokers................................................24
6.17. Opinion of Financial Advisor..............................25
6.18. Parent Stock Ownership....................................25
6.19. Reorganization............................................25
6.20. Vote Required.............................................25
7. Representations and Warranties of Parent, Merger Sub and
Merger Grandsub....................................................25
7.1. Existence; Good Standing; Corporate Authority.............25
7.2. Authorization, Validity and Effect of Agreements..........26
7.3. Capitalization............................................26
7.4. Subsidiaries..............................................26
7.5. No Violation of Law.......................................27
7.6. No Conflict...............................................27
7.7. SEC Documents.............................................27
7.8. Litigation................................................28
7.9. Absence of Certain Changes................................28
7.10. Taxes.....................................................28
7.11. Employee Benefit Plans....................................29
(ii)
<PAGE>
7.12. Environmental Matters.....................................30
7.13. Trademarks, Patents and Copyrights........................31
7.14. Insurance.................................................31
7.15. No Brokers................................................31
7.16. Opinion of Financial Advisor..............................31
7.17. Barnickel and Company Stock Ownership.....................31
7.18. Reorganization............................................31
7.19. Vote Required.............................................31
8. Covenants..........................................................32
8.1. Acquisition Proposals.....................................32
8.2. Conduct of the Company and Barnickel's Businesses.........33
8.2A Conduct of Parent's Business..............................35
8.3. Meetings of Stockholders..................................36
8.4. Filings; Other Action.....................................37
8.5. Inspection of Records.....................................38
8.6. Publicity.................................................38
8.7. Registration Statement....................................38
8.8. Listing Application.......................................39
8.9. Letters of Accountants....................................39
8.10. Agreements of Rule 145 Affiliates.........................40
8.11. Expenses..................................................40
8.12. Indemnification and Insurance.............................41
8.13. Certain Benefits..........................................42
8.14. Reorganization; Pooling...................................45
8.15. Certain Tax Agreements....................................45
8.16. Obligations of Merger Sub and Merger Grandsub.............45
8.17. Rights Agreement..........................................46
8.18. Mutuality of Mergers......................................46
9. Conditions.........................................................46
9.1. Conditions to Each Party's Obligation to Effect the
Mergers.................................................46
9.2. Conditions to Obligation of the Company to Effect
the Company Merger......................................47
9.3. Conditions to Obligation of Barnickel to Effect the
Barnickel Merger........................................48
9.4. Conditions to Obligation of Parent, Merger Sub and
Merger Grandsub to Effect the Mergers...................48
10. Termination........................................................49
10.1. Termination by Mutual Consent...........................49
10.2. Termination by Parent, Barnickel or the Company.........49
(iii)
<PAGE>
10.3. Termination by the Company..............................50
10.4. Termination by Barnickel................................51
10.5. Termination by Parent...................................51
10.6. Effect of Termination...................................52
10.7. Extension; Waiver.......................................54
11. General Provisions.................................................55
11.1. Nonsurvival of Representations, Warranties and
Agreements..............................................55
11.2. Notices.................................................55
11.3. Assignment; Binding Effect; Benefit.....................56
11.4. Entire Agreement........................................57
11.5. Amendments..............................................57
11.6. Governing Law...........................................57
11.7. Counterparts............................................57
11.8. Headings................................................58
11.9. Interpretation..........................................58
11.10. Waivers.................................................58
11.11. Incorporation of Exhibits...............................58
11.12. Severability............................................58
11.13. Enforcement of Agreement................................58
11.14. Obligation of Parent....................................58
11.15. Subsidiaries............................................59
Exhibits
A. Form of Custodial Agreement (ss. 1.2)
B. Form of Certificate of the Company
C. Form of Certificate of Barnickel
D. Form of Certificate of Parent
(iv)
<PAGE>
Index of Defined Terms
(Not Part of This Agreement)
1987 Plan ................................................ Section 4.3(e)(i)
1993 Plan ................................................ Section 4.3(e)(i)
Acquisition Proposals .................................... Section 8.1
Action ................................................... Section 8.12(a)
Additional Brown Assets .................................. Section 4.1(b)
Affiliates ............................................... Section 8.10(a)
Agreement ................................................ Preamble
Antitrust Laws ........................................... Section 10.6(d)
Articles of Merger ....................................... Section 1.3(a)
Benefit Continuation Period .............................. Section 8.13(a)
Brown .................................................... Preamble
Brown Acquisition Proposal ............................... Section 8.1
Brown Benefit Plans ...................................... Section 6.11
Brown Certificate ........................................ Section 4.2(c)
Brown Common Stock ....................................... Section 4.2(b)
Brown Disclosure Letter .................................. Section 6
Brown Effective Time ..................................... Section 1.3(a)
Brown Estimate ........................................... Section 4.1(b)(v)
Brown Exchange Ratio ..................................... Section 4.1(e)
Brown Financial Statements ............................... Section 6.7
Brown Material Adverse Effect ............................ Section 6.1
Brown Merger ............................................. Recitals
Brown Share Value ........................................ Section 4.1(a)
Brown Surviving Corporation .............................. Section 1.1(a)
Brown Value .............................................. Section 4.1(b)
Cause .................................................... Section 8.13(b)(ii)
Certificate of Merger .................................... Section 1.3(b)
Certificates ............................................. Section 4.4(b)(i)
Closing .................................................. Section 1.2
Closing Date ............................................. Section 1.2
Code ..................................................... Recitals
Company .................................................. Preamble
Company Acquisition Proposal ............................. Section 8.1
Company Benefit Plans .................................... Section 5.11
Company CEO .............................................. Section 8.13(b)(ii)
Company Certificate ...................................... Section 4.3(c)
Company Common Stock ..................................... Section 4.3(b)
Company Disclosure Letter ................................ Section 5
Company Effective Time ................................... Section 1.3(b)
Company Employees ........................................ Section 8.13(d)
Company Exchange Ratio ................................... Section 4.1(f)
(v)
<PAGE>
Company Material Adverse Effect .......................... Section 5.1
Company Merger ........................................... Recitals
Company Option ........................................... Section 4.3(e)(i)
Company Options .......................................... Section 4.3(e)(i)
Company Permits .......................................... Section 5.5
Company Reports .......................................... Section 5.7
Company Rights ........................................... Section 5.3
Company Rights Agreement ................................. Section 5.3
Company Share Value ...................................... Section 4.1(c)
Company Stock Options Plan ............................... Section 4.3(e)(i)
Company's Expenses ....................................... Section 8.13(b)(i)
Confidentiality Agreements ............................... Section 11.4
Continuity Custodian ..................................... Section 1.2
Continuity Fraction ...................................... Section 4.4(b)
Custodial Agreement ...................................... Section 1.2
Delaware Courts .......................................... Section 11.6
DGCL ..................................................... Section 1.1(b)
Dissenting Stockholders .................................. Section 4.6(a)
Environmental Law ........................................ Section 5.13(a)
ERISA .................................................... Section 5.11
Exchange Act ............................................. Section 5.6(b)
Exchange Agent ........................................... Section 4.4(a)
Exchange Fund ............................................ Section 4.4(a)
Executive and Employment Agreements ...................... Section 8.13(a)
Form S-4 ................................................. Section 8.7(a)
HSR Act .................................................. Section 5.6(b)
Incentive Plans .......................................... Section 8.13(b)
Indemnified Parties ...................................... Section 8.12(a)
Indemnified Party ........................................ Section 8.12(a)
Injunction ............................................... Section 9.4(c)
Interim Bonus Percentage ................................. Section 8.13(b)(ii)
IRS ...................................................... Section 5.11
Letter of Transmittal .................................... Section 4.4(b)(i)
Liens .................................................... Section 5.4
Merger Grandsub .......................................... Preamble
Merger Sub. .............................................. Preamble
Mergers .................................................. Recitals
MGBCL .................................................... Section 1.1(a)
NYSE ..................................................... Section 4.1(d)
Parent ................................................... Preamble
Parent Benefit Plans ..................................... Section 7.11
Parent Common Stock ...................................... Section 4.2(b)
Parent Material Adverse Effect ........................... Section 7.1
Parent Preferred Stock ................................... Section 7.3
Parent Pricing Period .................................... Section 4.1(d)
(vi)
<PAGE>
Parent Reports .......................................... Section 7.7
Parent Share Value ...................................... Section 4.1(d)
Price Waterhouse ........................................ Section 8.9(a)
Proxy Statement/Prospectus .............................. Section 8.7(a)
Regulatory Filings ...................................... Section 5.6(b)
retained earnings ....................................... Section 5.7
Rule 145 Affiliates ..................................... Section 8.10
SEC ..................................................... Section 4.3(e)(ii)
Securities Act .......................................... Section 4.4(d)
Subsidiary .............................................. Section 11.15
Surviving Corporation ................................... Section 1.1(b)
tax ..................................................... Section 5.10
taxes ................................................... Section 5.10
Third Party Provisions .................................. Section 11.3
Transaction Expenses .................................... Section 10.6(c)(iii)
(vii)
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
February 25, 1997 among Baker Hughes Incorporated, a Delaware corporation
("Parent"), Baker Hughes Missouri, Inc., a Missouri corporation and a wholly
owned subsidiary of Parent ("Merger Sub"), Baker Hughes Delaware, Inc., a
Delaware corporation and a wholly owned subsidiary of Merger Sub ("Merger
Grandsub"), Petrolite Corporation, a Delaware corporation (the "Company") and
Wm. S. Barnickel & Company, a Missouri corporation ("Barnickel").
RECITALS
WHEREAS, Parent desires to acquire all of the outstanding capital
stock of the Company.
WHEREAS, Barnickel holds approximately 47.1% of the outstanding
Company Common Stock (as defined in Section 4.3(b)) and certain other assets
that Parent desires to acquire.
WHEREAS, the parties hereto desire to merge Merger Sub with and into
Barnickel (the "Barnickel Merger"), with Barnickel surviving as a wholly owned
subsidiary of Parent, pursuant to which each share of Barnickel Common Stock (as
defined in Section 4.2(b)) will be converted into the right to receive Parent
Common Stock (as defined in Section 4.2(b)), and then to merge Merger Grandsub
with and into Company (the "Company Merger", and together with the Barnickel
Merger, the "Mergers"), with the Company surviving as a wholly owned subsidiary
of Barnickel, pursuant to which each share of Company Common Stock will be
converted into the right to receive Parent Common Stock, in each case, as more
fully provided for herein.
WHEREAS, the respective Boards of Directors of Parent, Merger Sub,
Merger Grandsub, the Company and Barnickel have determined the Mergers, in the
manner contemplated herein, to be desirable and in the best interests of their
respective corporations and stockholders and, by resolutions duly adopted, have
approved and adopted this Agreement.
WHEREAS, it is intended that the Mergers provided for herein shall
qualify as reorganizations within the meaning of section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), for federal income tax purposes.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
<PAGE>
ARTICLE 1
1. The Mergers.
1.1. The Mergers. (a) Subject to the terms and conditions of this
Agreement, at the Barnickel Effective Time (as defined in Section 1.3(a)),
Merger Sub shall be merged with and into Barnickel in accordance with this
Agreement, and the separate corporate existence of Merger Sub shall thereupon
cease. Barnickel shall be the surviving corporation in the Barnickel Merger
(sometimes hereinafter referred to as the "Barnickel Surviving Corporation").
The Barnickel Merger shall have the effects specified in the General and
Business Corporation Law of the State of Missouri (the "MGBCL").
(b) Subject to the terms and conditions of this Agreement, at the
Company Effective Time (as defined in Section 1.3(b)), Merger Grandsub shall be
merged with and into the Company in accordance with this Agreement, and the
separate corporate existence of Merger Grandsub shall thereupon cease. The
Company shall be the surviving corporation in the Company Merger (sometimes
hereinafter referred to as the "Surviving Corporation"). The Company Merger
shall have the effects specified in the Delaware General Corporation Law (the
"DGCL").
1.2. The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Mergers (the "Closing") shall take place (a) at
the offices of Baker & Botts, L.L.P., One Shell Plaza, 910 Louisiana, Houston,
Texas, at 9:00 a.m., local time, on the first business day immediately following
the day on which the last to be fulfilled or waived of the conditions set forth
in Article 9 (excluding Section 9.2(d)) shall be fulfilled or waived in
accordance herewith or (b) at such other time, date or place as Parent,
Barnickel and the Company may agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date." At the Closing, Barnickel will
enter into an agreement (the "Custodial Agreement") substantially in the form
attached hereto as Exhibit A. The Custodial Agreement will name a custodian (the
"Continuity Custodian") who will hold shares of Parent Common Stock under the
terms of the Custodial Agreement. Custodial Agreement fees shall be paid by the
Barnickel Surviving Corporation out of its own funds and no funds will be
supplied, directly or indirectly (including through Merger Sub), by Parent for
payment of such fees.
1.3. Effective Times. (a) If all the conditions to the Barnickel
Merger set forth in Article 9 shall have been fulfilled or waived in accordance
herewith and this Agreement shall not have been terminated in accordance with
Article 10, Parent, Merger Sub and Barnickel shall cause articles of merger (the
"Articles of Merger") meeting the requirements of sections 351.430 and 351.435
of the MGBCL to be properly executed and filed in accordance with such sections
on the Closing Date. The Barnickel Merger shall become effective at the time of
filing of the Articles of Merger with the Secretary of State of the State of
Missouri in accordance with the MGBCL or at such later time which the parties
hereto shall have agreed upon and designated in such filing as the effective
time of the Barnickel Merger (the "Barnickel Effective Time").
(b) If all the conditions to the Company Merger set forth in Article 9
shall have been fulfilled or waived in accordance herewith and this Agreement
shall not have been terminated as provided in Article 10, Parent, Merger
Grandsub and the Company shall cause a certificate of merger (the "Certificate
2
<PAGE>
of Merger") meeting the requirements of section 251 of the DGCL to be properly
executed and filed in accordance with such section on the Closing Date. The
Company Merger shall become effective at the time of filing of the Certificate
of Merger with the Secretary of State of the State of Delaware in accordance
with the DGCL, which shall be immediately after the filing of the Articles of
Merger in accordance with Section 1.3(a) hereof, or at such later time which the
parties hereto shall have agreed upon and designated in such filing as the
effective time of the Company Merger (the "Company Effective Time"), but in any
case shall be after the Barnickel Effective Time.
ARTICLE 2
2. Charter and Bylaws of the Surviving Corporations.
2.1. Charter. (a) The articles of incorporation of Barnickel in effect
immediately prior to the Barnickel Effective Time shall be the articles of
incorporation of the Barnickel Surviving Corporation, until duly amended in
accordance with applicable law.
(b) The certificate of incorporation of the Company in effect
immediately prior to the Company Effective Time shall be the certificate of
incorporation of the Surviving Corporation, until duly amended in accordance
with applicable law.
2.2. Bylaws. (a) The bylaws of Merger Sub in effect immediately prior
to the Barnickel Effective Time shall be the bylaws of the Barnickel Surviving
Corporation, until duly amended in accordance with applicable law.
(b) The bylaws of Merger Grandsub in effect immediately prior to the
Company Effective Time shall be the bylaws of the Surviving Corporation, until
duly amended in accordance with applicable law.
ARTICLE 3
3. Directors and Officers of the Surviving Corporations.
3.1. Directors. (a) The directors of Merger Sub immediately prior to
the Barnickel Effective Time shall be the directors of the Barnickel Surviving
Corporation as of the Barnickel Effective Time.
(b) The directors of Merger Grandsub immediately prior to the Company
Effective Time shall be the directors of the Surviving Corporation as of the
Company Effective Time.
3.2. Officers. (a) The officers of the Merger Sub immediately prior
to the Barnickel Effective Time shall be the officers of the Barnickel Surviving
Corporation as of the Barnickel Effective Time.
3
<PAGE>
(b) The officers of the Company immediately prior to the Company
Effective Time shall be the officers of the Surviving Corporation as of the
Company Effective Time.
ARTICLE 4
4. Conversion of the Common Stock.
4.1. Certain Definitions. For purposes of this Article 4, the
following terms shall have the following meanings:
(a) "Barnickel Share Value" shall mean the Barnickel Value (as defined
in Section 4.1(b)) divided by the number of shares of Barnickel Common Stock
issued and outstanding at the Barnickel Effective Time.
(b) "Barnickel Value" shall mean the sum of (x) the product of the
Company Share Value (as defined in Section 4.1(c)) on the Closing Date
multiplied by the number of shares of Company Common Stock owned by Barnickel on
the Closing Date (5,337,360 shares as of the date hereof) plus (y) the net
after-tax value of the remainder of Barnickel's assets (the "Additional
Barnickel Assets") as of the Closing Date. For purposes of calculating the net
after-tax value referred to in clause (y) of the first sentence of this Section
4.1(b):
(i) All cash and cash equivalents will be valued at face value
and all investment securities will be valued at their average closing price for
the 10 consecutive trading days ending immediately prior to the second trading
day prior to the Closing Date, as reported on the principal exchange on which
each such investment security trades, less 40% of the aggregate net taxable gain
(taking into account taxable losses only to the extent of taxable gains) which
would have been realized by Barnickel were it to have sold all such assets at
such value on the Closing Date.
(ii) All other assets will be valued at their book value as
recorded on Barnickel's books as of the Closing Date.
(iii) The book value of the liabilities (excluding deferred
income taxes relating to shares of Company Common Stock, cash equivalents and
investment securities) of Barnickel as recorded on Barnickel's books as of the
Closing Date (including all fees and expenses of financial, legal, tax,
accounting and other advisors and any compensation to be paid to directors and
officers of Barnickel in connection with this Agreement or otherwise in excess
of $950,000) will be deducted from the sum of items (i) and (ii) above. All
calculations made pursuant to this Section 4.1(b) shall be made in accordance
with generally accepted accounting principles, applied on a consistent basis
with prior periods, except as otherwise provided herein.
(iv) No later than five days prior to the scheduled Closing Date,
Barnickel shall deliver to Parent a good faith estimate of the net after-tax
value of the Additional Barnickel Assets calculated in accordance with this
Section 4.1(b) (the "Barnickel Estimate"). Barnickel shall permit Parent's
4
<PAGE>
independent public accountants and other representatives to observe and
participate in the preparation of the Barnickel Estimate and agrees to
incorporate to the extent appropriate their input into the determination of the
Barnickel Estimate. The net after-tax value of the Additional Barnickel Assets
referred to in clause (y) of the first sentence of this Section 4.1(b) shall be
based upon the Barnickel Estimate, adjusted as mutually agreed to by Parent and
Barnickel, after good faith consultation, to reflect any change in the value of
the Additional Barnickel Assets as of, and as computed immediately prior to, the
Closing Date and although the Barnickel Surviving Corporation has the right to
sell any or all of the Additional Barnickel Assets at any time after the Company
Effective Time, any such sales shall not affect the net after-tax value.
(c) "Company Share Value" shall mean $61.00; provided, however, if
subsequent to the date of this Agreement, but prior to the Company Effective
Time, Parent or any Subsidiary of Parent purchases any shares of Company Common
Stock at a per share price in excess of the Company Share Value, the Company
Share Value shall be increased to equal such higher per share price.
(d) "Parent Share Value" shall mean the average of the per share
closing prices of Parent Common Stock as reported on the consolidated
transaction reporting system for securities traded on the New York Stock
Exchange, Inc. ("NYSE") (as reported in the New York City edition of The Wall
Street Journal or, if not reported thereby, another authoritative source) for
the ten consecutive trading days ending immediately prior to the second trading
day prior to the Closing Date (the "Parent Pricing Period"), appropriately
adjusted for any stock splits, reverse stock splits, stock dividends,
recapitalizations or other similar transactions.
(e) "Barnickel Exchange Ratio" shall mean the quotient of the
Barnickel Share Value divided by the Parent Share Value (rounded to four decimal
places).
(f) "Company Exchange Ratio" shall mean the quotient of the Company
Share Value divided by the Parent Share Value (rounded to four decimal places).
4.2. Conversion of the Barnickel Stock. (a) At the Barnickel Effective
Time, each share of the common stock, $.01 par value per share, of Merger Sub
outstanding immediately prior to the Barnickel Effective Time shall be converted
into and become one fully paid and non-assessable share of common stock, $100.00
par value per share, of the Barnickel Surviving Corporation.
(b) At the Barnickel Effective Time, each share of the common stock,
$100.00 par value per share (the "Barnickel Common Stock"), of Barnickel issued
and outstanding immediately prior to the Barnickel Effective Time (other than
shares of Barnickel Common Stock (i) held in Barnickel's treasury, (ii) owned by
Parent, Merger Sub or any other wholly owned Subsidiary (as defined in Section
11.15) of Parent or Barnickel or (iii) held by Dissenting Stockholders (as
defined in Section 4.6(a)) shall, by virtue of the Barnickel Merger and without
any action on the part of the holder thereof, be converted into the right to
receive a number of shares of common stock, $1.00 par value per share (the
"Parent Common Stock"), of Parent equal to the Barnickel Exchange Ratio.
5
<PAGE>
(c) As a result of the Barnickel Merger and without any action on the
part of the holder thereof, each share of the Barnickel Common Stock shall cease
to be outstanding and shall be canceled and retired and shall cease to exist,
and each holder (other than Dissenting Stockholders) of a certificate
representing any shares of the Barnickel Common Stock (a "Barnickel
Certificate") shall thereafter cease to have any rights with respect to such
shares of the Barnickel Common Stock, except the right to receive, without
interest, Parent Common Stock and cash for fractional shares of Parent Common
Stock in accordance with Sections 4.2(b) and 4.4(e) upon the surrender of such
Barnickel Certificate.
(d) Each share of the Barnickel Common Stock issued and held in
Barnickel's treasury, and each share of the Barnickel Common Stock owned by
Parent, Merger Sub or any other wholly owned Subsidiary of Parent or Barnickel,
shall, at the Barnickel Effective Time and by virtue of the Barnickel Merger,
cease to be outstanding and shall be canceled and retired and no stock of Parent
or any other consideration shall be delivered in exchange therefor.
4.3. Conversion of the Company Stock. (a) At the Company Effective
Time, each share of the common stock, $.01 par value per share, of Merger
Grandsub outstanding immediately prior to the Company Effective Time shall be
converted into and become one fully paid and non-assessable share of capital
stock, without par value, of the Surviving Corporation.
(b) At the Company Effective Time, each share of the capital stock,
without par value (the "Company Common Stock"), of the Company issued and
outstanding immediately prior to the Company Effective Time (other than shares
of Company Common Stock (i) held in the Company's treasury or (ii) owned by
Parent, Merger Grandsub, Barnickel Surviving Corporation or any other wholly
owned Subsidiary of Parent or the Company) shall, by virtue of the Company
Merger and without any action on the part of the holder thereof, be converted
into the right to receive a number of shares of Parent Common Stock equal to the
Company Exchange Ratio.
(c) As a result of the Company Merger and without any action on the
part of the holder thereof, each share of the Company Common Stock shall cease
to be outstanding and shall be canceled and retired and shall cease to exist,
and each holder of a certificate (a "Company Certificate") representing any
shares of the Company Common Stock shall thereafter cease to have any rights
with respect to such shares of the Company Common Stock, except the right to
receive, without interest, Parent Common Stock and cash for fractional shares of
Parent Common Stock in accordance with Sections 4.3(b) and 4.4(e) upon the
surrender of such Company Certificate.
(d) Each share of the Company Common Stock issued and held in the
Company's treasury, and each share of the Company Common Stock owned by Parent,
Merger Grandsub, Barnickel Surviving Corporation or any other wholly owned
Subsidiary of Parent or the Company (other than shares issued pursuant to
Section 4.3(a)), shall, at the Company Effective Time and, by virtue of the
Company Merger, cease to be outstanding and shall, be canceled and retired
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without payment of any consideration therefor and no stock of Parent or other
consideration shall be delivered in exchange therefor.
(e) (i) At the Company Effective Time, all options (individually, a
"Company Option" and collectively, the "Company Options") then outstanding under
the Company's 1987 Incentive Stock Option Plan (the "1987 Plan"), 1993 Stock
Incentive Option Plan (the "1993 Plan") and the Stock Option Agreement, dated
August 11, 1995, between the Company and Paul H. Hatfield (collectively, the
"Company Stock Option Plans") shall remain outstanding following the Company
Effective Time. At the Company Effective Time, the Company Options shall, by
virtue of the Company Merger and without any further action on the part of the
Company or the holder of any Company Option, be assumed by Parent in such manner
that Parent (i) is a corporation "assuming a stock option in a transaction to
which [s]ection 424(a) applied" within the meaning of section 424 of the Code or
(ii) to the extent that section 424 of the Code does not apply to any Company
Option, would be such a corporation were section 424 of the Code applicable to
such option. Each Company Option assumed by Parent shall be exercisable upon the
same terms and conditions as under the applicable Company Stock Option Plan and
the applicable option agreement issued thereunder, except that (i) each Company
Option shall be exercisable for that whole number of shares of Parent Common
Stock (rounded to the nearest whole share) into which the number of shares of
the Company Common Stock subject to such Company Option immediately prior to the
Company Effective Time would be converted under Section 4.3(b), and (ii) the
option price per share of Parent Common Stock shall be an amount equal to the
option price per share of Company Common Stock subject to such Company Option in
effect immediately prior to the Company Effective Time divided by the Company
Exchange Ratio (the price per share, as so determined, being rounded upward to
the nearest full cent). Pursuant to Section 2.9 of each of the 1987 Plan and the
1993 Plan and Section 5.8 of the 1993 Plan, all Company Options (as adjusted
pursuant to this Section 4.3(e)) granted under such Company Stock Options Plans
will immediately become exercisable upon consummation of the Company Merger and
will remain exercisable in full for a period of 12 months following consummation
of the Company Merger; provided, however, no Company Option granted under the
1987 Plan may be exercised more than 11 years after the date of grant thereof
and no Company Option granted under the 1993 Plan may be exercised more than 10
years after the date of grant thereof. Upon the expiration of the aforementioned
12 month period, any unexpired Company Options issued under the 1987 Plan or the
1993 Plan held by holders who continue to be employed by Parent or its
Subsidiaries shall, pursuant to the terms of such Company Stock Option Plans, no
longer be governed by Section 2.9 thereof, but shall continue to be and become
exercisable pursuant to the other provisions of the applicable Company Stock
Option Plan and the applicable option agreements issued thereunder.
(ii) Parent shall take all corporate action necessary to reserve for
issuance a number of shares of Parent Common Stock equal to the number of shares
of Parent Common Stock issuable upon the exercise of the Company Options assumed
by Parent pursuant to this Section 4.3(e). From and after the date of this
Agreement, except as provided in Section 8.2(f), no additional options shall be
granted by the Company or its Subsidiaries under the Company Stock Option Plans
or otherwise. As soon as practicable following the Company Effective Time,
Parent shall file with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-8 covering all shares of Parent Common Stock to
be issued upon exercise of the Company Options and shall cause such registration
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statement to remain effective for as long as there are outstanding any Company
Options.
4.4. Exchange of Certificates Representing Barnickel Common Stock and
Company Common Stock. (a) As of the Barnickel Effective Time, Parent shall
deposit, or shall cause to be deposited, with an exchange agent selected by
Parent, which shall be Parent's transfer agent for the Parent Common Stock or
such other party reasonably satisfactory to Barnickel and the Company (the
"Exchange Agent"), for the benefit of the holders of shares of Barnickel Common
Stock and Company Common Stock, for exchange in accordance with this Article 4,
certificates representing the shares of Parent Common Stock and the cash in lieu
of fractional shares (such cash and certificates for shares of Parent Common
Stock, together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund") to be issued pursuant to
Sections 4.2 and 4.3 and paid pursuant to this Section 4.4 in exchange for
outstanding shares of Barnickel Common Stock or Company Common Stock.
(b) (i) Promptly after the Barnickel Effective Time and the Company
Effective Time, respectively, Parent shall cause the Exchange Agent to mail to
each holder of record of one or more Barnickel Certificates or Company
Certificates (collectively, the "Certificates") (other than to holders of
Barnickel Common Stock or Company Common Stock that, pursuant to Sections 4.2(d)
and 4.3(d), respectively, are canceled without payment of any consideration
therefor): (A) a letter of transmittal (the "Letter of Transmittal") which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as Parent, the
Company and Barnickel may reasonably specify and (B) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock and cash in lieu of fractional
shares. Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such Letter of Transmittal, duly executed and completed in
accordance with the instructions thereto, the holder of such Certificate shall
be entitled to receive in exchange therefor (x) a certificate representing that
number of whole shares of Parent Common Stock and (y) a check representing the
amount of cash in lieu of fractional shares, if any, and unpaid dividends and
distributions, if any, which such holder has the right to receive in respect of
the Certificate surrendered pursuant to the provisions of this Article 4, after
giving effect to any required withholding tax, and the Certificate so
surrendered shall forthwith be canceled; provided, however, that in the case of
surrenders of Barnickel Certificates, the Parent Common Stock issued in exchange
therefor shall be delivered as set forth in paragraph (ii) of this Section
4.4(b). No interest will be paid or accrued on the cash in lieu of fractional
shares and unpaid dividends and distributions, if any, payable to holders of
Certificates. In the event of a transfer of ownership of Barnickel Common Stock
or Company Common Stock which is not registered in the transfer records of
Barnickel or the Company, respectively, a certificate representing the proper
number of shares of Parent Common Stock, together with a check for the cash to
be paid in lieu of fractional shares, may be issued to such a transferee if the
Certificate representing such Barnickel Common Stock or Company Common Stock is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
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(ii) Certificates representing shares of Parent Common Stock issued in
exchange for Barnickel Certificates shall be delivered to or for the benefit of
each of the holders of such Barnickel Certificates as follows:
(A) a certificate representing a fraction of such shares (rounded
up to the next largest share) equal to the Continuity Fraction (as hereinafter
defined) shall be delivered to the Continuity Custodian, to be held for the
account of such holder pursuant to the terms of the Custodial Agreement; and
(B) a certificate representing the remainder of such shares shall
be delivered to such holder, as specified in the Letter of Transmittal.
"Continuity Fraction" shall mean the fraction derived by dividing (x)
one-half of the total number of shares of Barnickel Common Stock outstanding as
of the date of this Agreement by (y) the total number of shares of Barnickel
Common Stock so outstanding less the number of shares of Barnickel Common Stock
held by Dissenting Stockholders.
(c) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared or made after the Barnickel Effective
Time or the Company Effective Time, as applicable, with respect to Parent Common
Stock with a record date after the Barnickel Effective Time or the Company
Effective Time, as applicable, shall be paid with respect to the shares to be
issued upon conversion of any Certificate until such Certificate is surrendered
for exchange as provided herein. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the holder
of the certificates representing whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Barnickel Effective Time or the Company Effective Time, as applicable,
theretofore payable with respect to such whole shares of Parent Common Stock and
not paid, less the amount of any withholding taxes which may be required
thereon, and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Barnickel Effective Time or the
Company Effective Time, as applicable, but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole shares of Parent
Common Stock, less the amount of any withholding taxes which may be required
thereon.
(d) At or after the Barnickel Effective Time or the Company Effective
Time, respectively, there shall be no transfers on the stock transfer books of
Barnickel of the shares of Barnickel Common Stock which were outstanding
immediately prior to the Barnickel Effective Time and no transfers on the stock
transfer books of the Company of the shares of Company Common Stock which were
outstanding immediately prior to the Company Effective Time. If, after the
Barnickel Effective Time, Barnickel Certificates are presented to the Barnickel
Surviving Corporation, or, after the Company Effective Time, Company
Certificates are presented to the Surviving Corporation, the presented
Certificates shall be canceled and exchanged for certificates for shares of
Parent Common Stock and cash in lieu of fractional shares, if any, deliverable
in respect thereof pursuant to this Agreement in accordance with the procedures
set forth in this Article 4. Certificates surrendered for exchange by any person
constituting an "affiliate" of Barnickel or the Company for purposes of Rule
145(c) under the Securities Act of 1933, as amended (the "Securities Act"),
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shall not be exchanged until Parent has received a written agreement from such
person as provided in Section 8.10.
(e) No fractional shares of Parent Common Stock shall be issued
pursuant hereto. In lieu of the issuance of any fractional share of Parent
Common Stock pursuant to Section 4.2(b) or Section 4.3(b), cash adjustments will
be paid to holders in respect of any fractional share of Parent Common Stock
that would otherwise be issuable, and the amount of such cash adjustment shall
be equal to such fractional proportion of the Parent Share Value.
(f) Any portion of the Exchange Fund (including the proceeds of any
investments thereof and any shares of Parent Common Stock) that remains
unclaimed by the former stockholders of Barnickel or the Company one year after
the Company Effective Time shall be delivered to Parent. Any former stockholders
of Barnickel or the Company who have not theretofore complied with this Article
4 shall thereafter look only to Parent for payment of their shares of Parent
Common Stock, cash in lieu of fractional shares and unpaid dividends and
distributions on the Parent Common Stock deliverable in respect of each
Certificate such former stockholder holds as determined pursuant to this
Agreement.
(g) None of Parent, the Barnickel Surviving Corporation, the Surviving
Corporation, the Exchange Agent or any other person shall be liable to any
former holder of shares of Barnickel Common Stock or Company Common Stock for
any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(h) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Barnickel Surviving Corporation or the Surviving Corporation, as the case may
be, the posting by such person of a bond in such reasonable amount as the
Barnickel Surviving Corporation or the Surviving Corporation, as the case may
be, may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Certificate the shares of Parent Common Stock and cash
in lieu of fractional shares, and unpaid dividends and distributions on shares
of Parent Common Stock as provided in Section 4.3(c), deliverable in respect
thereof pursuant to this Agreement.
4.5. Adjustment of Company Share Value. In the event that, subsequent
to the date of this Agreement but prior to the Company Effective Time, the
Company changes the number of shares of Company Common Stock issued and
outstanding as a result of a stock split, reverse stock split, stock dividend,
recapitalization or other similar transaction, the Company Share Value and other
items dependent thereon shall be appropriately adjusted.
4.6. Dissenting Stockholders. (a) Notwithstanding any provision of
this Agreement to the contrary, shares of Barnickel Common Stock that are
outstanding immediately prior to the Barnickel Effective Time and that are held
by stockholders who (i) shall have filed with Barnickel, prior to or at the
meeting of stockholders of Barnickel at which this Agreement will be submitted
to a vote, a written objection to the Barnickel Merger, (ii) shall have not
voted in favor of the Barnickel Merger and (iii) shall have demanded properly in
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writing the fair value for such shares of Barnickel Common Stock in
accordance with section 351.455 of the MGBCL ("Dissenting Stockholders"), shall
not be converted into or represent the right to receive the Parent Common Stock
or cash for fractional shares of Parent Common Stock in accordance with Sections
4.2(b) and 4.4(e) but shall become the right to receive payment of the fair
value of such shares of Barnickel Common Stock in accordance with the provisions
of section 351.455 of the MGBCL, provided, however, that any Dissenting
Stockholder who shall have failed to comply with the requirements of Section
351.455 of the MGBCL shall be conclusively presumed to have consented to the
Barnickel Merger and shall be bound by the terms thereof and the shares of
Barnickel Common Stock held by such Dissenting Stockholder shall thereupon be
deemed to have been converted into and to have become exchangeable for, as of
the Barnickel Effective Time, the right to receive the Parent Common Stock and
cash for fractional shares of Parent Common Stock, if any, in accordance with
Sections 4.2(b) and 4.4(e), without any interest thereon, upon surrender in the
manner provided in Section 4.4(b) of the Barnickel Certificate or Certificates
that formerly evidenced such Barnickel Common Stock. The right of a Dissenting
Stockholder to be paid the fair value of his or her shares pursuant to Section
351.455 of the MGBCL shall cease if and at such time Barnickel shall abandon the
Barnickel Merger. Any payments to Dissenting Stockholders shall be paid by
Barnickel Surviving Corporation out of its own funds and no funds will be
supplied, directly or indirectly, by Parent for payment to Dissenting
Stockholders, nor will Parent directly or indirectly (including through Merger
Sub) reimburse Barnickel Surviving Corporation for any payments to Dissenting
Stockholders.
(b) Barnickel shall give Parent (i) prompt notice and copies of any
written objections to this Agreement received by Barnickel, any demands for fair
value of shares of Barnickel Common Stock or other instruments served pursuant
to the MGBCL and received by Barnickel and withdrawals of such demands and (ii)
the opportunity to participate in all negotiations and proceedings with respect
to demands for fair value under the MGBCL. Barnickel shall not, except with the
prior written consent of Parent, make any payment (except to the extent that any
such payment is made pursuant to a final, nonappealable court order) with
respect to any demands for the fair value of Barnickel Common Stock or offer to
settle or settle any such demands.
ARTICLE 5
5. Representations and Warranties of the Company. Except as set forth
in the disclosure letter delivered to Parent concurrently with the execution
hereof (the "Company Disclosure Letter") or as disclosed with reasonable
specificity in the Company Reports (as defined in Section 5.7), the Company
represents and warrants to Parent that:
5.1. Existence; Good Standing; Corporate Authority. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation. The Company is duly qualified to do
business as a foreign corporation and is in good standing under the laws of any
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified would not have,
individually or in the aggregate, a Company Material Adverse Effect (as defined
below). The Company has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now conducted.
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The copies of the Company's certificate of incorporation and bylaws previously
made available to Parent are true and correct and contain all amendments as of
the date hereof. As used in this Agreement, the phrase "Company Material Adverse
Effect" shall mean a material adverse effect on (a) the business, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries on a consolidated basis or (b) the ability of the Company to
consummate the transactions contemplated by this Agreement.
5.2. Authorization, Validity and Effect of Agreements. The Company has
the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The consummation
by the Company of the transactions contemplated hereby has been duly authorized
by all requisite corporate action, other than, with respect to the Company
Merger, the approval and adoption of this Agreement by the Company's
stockholders. This Agreement constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity. The Company has taken all
action necessary to render the restrictions set forth in Section 203 of the DGCL
inapplicable to this Agreement and the Company Merger.
5.3. Capitalization. The authorized capital stock of the Company
consists of 35,000,000 shares of Company Common Stock and, as of January 3,
1997, there were 11,364,948 shares of Company Common Stock issued and
outstanding and 663,100 shares of Company Common Stock reserved for issuance
upon exercise of outstanding Company Options. All such issued and outstanding
shares of Company Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. One capital stock purchase right
(each, a "Company Right") issued pursuant to the Rights Agreement, dated as of
March 28, 1994 (the "Company Rights Agreement"), as amended, between the Company
and Society National Bank is associated with and attached to each outstanding
share of Company Common Stock. As of the date of this Agreement, except as set
forth in this Section 5.3 and except for any shares of Company Common Stock
issued pursuant to Company Options outstanding as of January 3, 1997, there are
no outstanding shares of capital stock and there are no options, warrants,
calls, subscriptions, convertible securities, or other rights, agreements or
commitments which obligate the Company or any of its Subsidiaries to issue,
transfer or sell any shares of capital stock or other voting securities of the
Company or any of its Subsidiaries. The Company has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter.
5.4. Subsidiaries. Each of the Company's Subsidiaries is a corporation
or partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own, operate and lease its properties and to
carry on its business as it is now being conducted, and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership,
operation or lease of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so qualified
or to be in good standing would not have a Company Material Adverse Effect. All
of the outstanding shares of capital stock of, or other ownership interests in,
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each of the Company's Subsidiaries is duly authorized, validly issued, fully
paid and nonassessable, and is owned, directly or indirectly, by the Company
free and clear of all liens, pledges, security interests, claims or other
encumbrances ("Liens"). Schedule 5.4 to the Company Disclosure Letter sets forth
the following information for each Subsidiary of the Company, as applicable: (i)
its name and jurisdiction of incorporation or organization; (ii) its authorized
capital stock or share capital; and (iii) the number of issued and outstanding
shares of capital stock or share capital.
5.5. No Violation of Law. To the Company's knowledge (as defined in
Section 11.9), neither the Company nor any of its Subsidiaries is in violation
of any order of any court, governmental authority or arbitration board or
tribunal, or any law, ordinance, governmental rule or regulation to which the
Company or any of its Subsidiaries or any of their respective properties or
assets is subject, except as would not have, individually or in the aggregate, a
Company Material Adverse Effect. The Company and its Subsidiaries hold all
permits, licenses, variances, exemptions, orders, franchises and approvals of
all governmental authorities necessary for the lawful conduct of their
respective businesses (the "Company Permits"), except where the failure so to
hold would not have a Company Material Adverse Effect. The Company and its
Subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply would not have a Company Material Adverse Effect.
As of the date of this Agreement, to the knowledge of the Company, no
investigation by any governmental authority with respect to the Company or any
of its Subsidiaries is pending or threatened, other than those the outcome of
which would not have a Company Material Adverse Effect.
5.6. No Conflict. (a) Neither the execution and delivery by the
Company of this Agreement nor the consummation by the Company of the
transactions contemplated hereby in accordance with the terms hereof, will: (i)
conflict with or result in a breach of any provisions of the certificate of
incorporation or bylaws of the Company; (ii) violate, or conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination or in a right of termination or cancellation of, or
give rise to a right of purchase under, or accelerate the performance required
by, or result in the creation of any Lien upon any of the properties of the
Company or its Subsidiaries under, or result in being declared void, voidable,
or without further binding effect, or otherwise result in a detriment to the
Company or any of its Subsidiaries under, any of the terms, conditions or
provisions of, any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, lease, contract, agreement, joint venture or other instrument
or obligation to which the Company or any of its Subsidiaries is a party, or by
which the Company or any of its Subsidiaries or any of their properties is bound
or affected; or (iii) contravene or conflict with or constitute a violation of
any provision of any law, rule, regulation, judgment, order or decree binding
upon or applicable to the Company or any of its Subsidiaries, except, in the
case of matters described in clause (ii) or (iii), as would not have,
individually or in the aggregate, a Company Material Adverse Effect.
(b) Neither the execution and delivery by the Company of this
Agreement nor the consummation by the Company of the transactions contemplated
hereby in accordance with the terms hereof will require any consent, approval or
authorization of, or filing or registration with, any governmental or regulatory
authority, other than (i) the filings provided for in Article 1 and (ii) filings
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required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Securities Act or applicable state securities and "Blue
Sky" laws ((i) and (ii) collectively, the "Regulatory Filings"), except for any
consent, approval or authorization the failure of which to obtain and for any
filing or registration the failure of which to make would not have a Company
Material Adverse Effect.
5.7. SEC Documents. The Company has made available to Parent each
registration statement, report, proxy statement or information statement (other
than preliminary materials) filed by the Company with the SEC since October 31,
1995, each in the form (including exhibits and any amendments thereto) filed
with the SEC (collectively, the "Company Reports"). As of their respective
dates, the Company Reports (i) were prepared in all material respects in
accordance with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations thereunder and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading except for such
statements, if any, as have been modified by subsequent filings with the SEC
prior to the date hereof. Each of the consolidated balance sheets of the Company
included in or incorporated by reference into the Company Reports (including the
related notes and schedules) fairly presents the consolidated financial position
of the Company and its Subsidiaries as of its date and each of the consolidated
statements of income, cash flows and changes in stockholders' equity ("retained
earnings") of the Company included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presents the
results of operations, cash flows or retained earnings, as the case may be, of
the Company and its Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to (x) such exceptions as may be permitted by
Form 10-Q of the SEC and (y) normal year-end audit adjustments), in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein. Except as and to
the extent set forth on the consolidated balance sheet of the Company and its
Subsidiaries at October 31, 1996, including all notes thereto, neither the
Company nor any of its Subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on, or reserved against in, a balance sheet of the
Company or in the notes thereto prepared in accordance with generally accepted
accounting principles consistently applied, other than liabilities or
obligations which would not have, individually or in the aggregate, a Company
Material Adverse Effect and liabilities and obligations arising in the ordinary
course of business since such date.
5.8. Litigation. There are no actions, suits or proceedings pending
against the Company or any of its Subsidiaries or, to the Company's knowledge,
threatened against the Company or any of its Subsidiaries, at law or in equity,
or before or by any federal or state commission, board, bureau, agency or
instrumentality, that are likely to have, individually or in the aggregate, a
Company Material Adverse Effect. There are no outstanding judgments, decrees,
injunctions, awards or orders against the Company or any of its Subsidiaries
that are likely to have, individually or in the aggregate, a Company Material
Adverse Effect. Schedule 5.8 of the Company Disclosure Letter contains, as of
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the date of this Agreement, an accurate and complete list of all actions, suits
and proceedings pending or, to the knowledge of the Company, threatened against
the Company or its Subsidiaries.
5.9. Absence of Certain Changes. Since October 31, 1996, there has not
been (i) any change in the financial condition or business of the Company or its
Subsidiaries which has had or is likely to have an adverse effect which is
material to the financial condition or business of the Company and its
Subsidiaries on a consolidated basis, other than any adverse change resulting
from adverse changes in general economic conditions, stock market fluctuations
or conditions or adverse changes in or affecting the oil services or specialty
chemical industries generally, (ii) any material change by the Company in its
accounting methods, principles or practices or its tax methods, practices or
elections, (iii) any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of the Company or any redemption,
purchase or other acquisition of any of its securities, except dividends on the
Company Common Stock at a rate of not more than $.28 per share per quarter, or
(iv) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan, except in the ordinary course of
business.
5.10. Taxes. (a) The Company and its Subsidiaries have (i) duly filed
(or there has been filed on their behalf) on a timely basis with appropriate
governmental authorities all tax returns, statements, reports, declarations,
estimates and forms required to be filed by them, on or prior to the date
hereof, except to the extent that any failure to file would not have,
individually or in the aggregate, a Company Material Adverse Effect and (ii)
duly paid or deposited in full on a timely basis or made adequate provisions in
accordance with generally accepted accounting principles (or there has been paid
or deposited or adequate provision has been made on their behalf) for the
payment of all taxes required to be paid by the Company or its Subsidiaries for
all periods ending through the date hereof, except to the extent that any
failure to pay or deposit or make adequate provision for the payment of such
taxes would not have, individually or in the aggregate, a Company Material
Adverse Effect.
(b)(i) The federal income tax returns of the Company and each of its
Subsidiaries have been examined by the IRS (as defined in Section 5.11) (or the
applicable statutes of limitation for the assessment of federal income taxes for
such periods have expired) for all periods through and including October 31,
1994; (ii) except to the extent being contested in good faith, all material
deficiencies asserted as a result of such examinations and any other
examinations of the Company and its Subsidiaries by any taxing authority have
been paid, fully settled or adequately provided for in the financial statements
contained in the Company Reports; (iii) as of the date hereof, neither the
Company nor any of its Subsidiaries has granted any requests, agreements,
consents or waivers to extend the statutory period of limitations applicable to
the assessment of any taxes with respect to any tax returns of the Company or
any of its Subsidiaries; (iv) neither the Company nor any of its Subsidiaries is
a party to any tax sharing or tax indemnity agreement; and (v) neither the
Company nor any of its Subsidiaries is a party to an agreement that provides for
the payment of any amount that would constitute a "parachute payment" within the
meaning of Section 280G of the Code.
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For purposes of this Agreement, "tax" or "taxes" means all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, accumulated
earnings, personal holding company, excess profits, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, disability, capital stock, or windfall profits taxes, customs duties
or other taxes, fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority (domestic or foreign).
5.11. Employee Benefit Plans. Schedule 5.11 of the Company Disclosure
Letter contains a list of all material employee benefit plans and other benefit
arrangements, including all "employee benefit plans" as defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), covering employees
of the Company and its Subsidiaries (the "Company Benefit Plans"). True and
complete copies of the Company Benefit Plans and, if applicable, the most recent
Form 5500 and annual reports for each such plan have been made available to
Parent. All applicable reporting and disclosure requirements have been met with
respect to the Company Benefit Plans except for any noncompliance that would not
result in a material liability to the Company. There has been no "reportable
event," as that term is defined in Section 4043 of ERISA, with respect to the
Company Benefit Plans subject to Title IV of ERISA, which event is likely to
result in a material liability to the Company. To the extent applicable, the
Company Benefit Plans comply, in all material respects, with the requirements of
ERISA and the Code, and any Company Benefit Plan intended to be qualified under
section 401(a) of the Code has been determined by the Internal Revenue Service
(the "IRS") to be so qualified. The Company Benefit Plans have been maintained
and operated, in all material respects, in accordance with their terms and there
is no material liability for breaches of fiduciary duty in connection with the
Company Benefit Plans. To the Company's knowledge, there are no pending or
anticipated claims against or otherwise involving any Company Benefit Plan and
no suit, action or other litigation (excluding claims for benefits incurred in
the ordinary course of Company Benefit Plan activities) has been brought against
or with respect to any such Company Benefit Plan, except for any of the
foregoing which would not have a Company Material Adverse Effect. All material
contributions required to be made as of the date hereof to the Company Benefit
Plans have been made or provided for. The Company does not maintain or
contribute to any material plan or arrangement which provides or has any
liability to provide life insurance, medical or other employee welfare benefits
to any employee or former employee upon his retirement or termination of
employment and the Company has not represented, promised or contracted (whether
in oral or written form) to any employee or former employee that such benefits
would be provided. With respect to the Company Benefit Plans or any "employee
pension benefit plans," as defined in Section 3(2) of ERISA, that are subject to
Title IV of ERISA and have been maintained or contributed to within six years
prior to the Company Effective Time by the Company, its Subsidiaries or any
trade or business (whether or not incorporated) which is under common control,
or which is treated as a single employer, with the Company or any of its
Subsidiaries under Sections 414(b), (c), (m), or (o) of the Code, (i) neither
the Company nor any of its Subsidiaries has incurred any direct or indirect
liability under title IV of ERISA in connection with any termination thereof or
withdrawal therefrom; (ii) there does not exist any accumulated funding
deficiency within the meaning of section 412 of the Code or section 302 of
ERISA, whether or not waived; and (iii) the actuarial value of the assets equal
or exceed the actuarial present value of the benefit liabilities, within the
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meaning of Section 4041 of ERISA, based upon reasonable actuarial assumptions
and asset valuation principles, except, in each case, for any liability or any
excise tax which would not have a Company Material Adverse Effect. No prohibited
transaction has occurred with respect to any Company Benefit Plan that would
result in the imposition of any excise tax or other liability under the Code or
ERISA which would have a Company Material Adverse Effect. Neither the Company
nor any of its Subsidiaries nor any trade or business (whether or not
incorporated) which is under common control, or which is treated as a single
employer, with the Company or any of its Subsidiaries under Sections 414(b),
(c), (m), or (o) of the Code, contributes to, or has an obligation to contribute
to, and has not within six years prior to the Company Effective Time contributed
to, or had an obligation to contribute to, a multiemployer plan within the
meaning of Section 3(37) of ERISA. The execution of, and performance of the
transactions contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
benefit plan, policy, arrangement or agreement or any trust or loan that will or
may result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligations to fund benefits with respect to any employee.
5.12. Labor Matters. Neither the Company nor any of its Subsidiaries
is a party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization. To
the Company's knowledge, there are no organizational efforts with respect to the
formation of a collective bargaining unit presently being made or threatened
involving employees of the Company or any of its Subsidiaries.
5.13. Environmental Matters. To the knowledge of the Company, and
except as would not have, individually or in the aggregate, a Company Material
Adverse Effect:
(a) there are not any past or present conditions or circumstances that
interfere with the conduct of the business of the Company and each of its
Subsidiaries in the manner now conducted or which interfere with compliance with
any order of any court, governmental authority or arbitration board or tribunal,
or any law, ordinance, governmental rule or regulation related to human health
or the environment ("Environmental Law");
(b) there are not any past or present conditions or circumstances at,
or arising out of, any current or former businesses, assets or properties of the
Company or any Subsidiary of the Company, including but not limited to on-site
or off-site disposal or release of any chemical substance, product or waste,
which may give rise to: (i) liabilities or obligations for any cleanup,
remediation, disposal or corrective action under any Environmental Law or (ii)
claims arising for personal injury, property damage, or damage to natural
resources; and
(c) neither the Company nor any of its Subsidiaries has (i) received
any notice of noncompliance with, violation of, or liability or potential
liability under any Environmental Law or (ii) entered into any consent decree or
order or is subject to any order of any court or governmental authority or
tribunal under any Environmental Law or relating to the cleanup of any hazardous
materials contamination.
5.14. Trademarks, Patents and Copyrights. Except as previously
disclosed to Parent in writing, to the knowledge of the Company, the Company and
its Subsidiaries own or possess adequate licenses or other valid rights to use
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all patents, patent rights, trademarks, trademark rights and proprietary
information used or held for use in connection with their respective businesses
as currently being conducted, except where the failure to own or possess such
licenses and other rights would not have, individually or in the aggregate, a
Company Material Adverse Effect, and to the knowledge of the Company, there are
no assertions or claims challenging the validity of any of the foregoing which
are likely to have, individually or in the aggregate, a Company Material Adverse
Effect. To the knowledge of the Company, the conduct of the Company's and its
Subsidiaries' respective businesses as currently conducted does not conflict
with any patents, patent rights, licenses, trademarks, trademark rights, trade
names, trade name rights or copyrights of others in any way likely to have,
individually or in the aggregate, a Company Material Adverse Effect. To the
knowledge of the Company, there is no material infringement of any proprietary
right owned by or licensed by or to the Company or any of its Subsidiaries which
is likely to have, individually or in the aggregate, a Company Material Adverse
Effect.
5.15. Insurance. The Company has previously delivered to Parent a
schedule listing the officers' and directors' liability insurance policies,
primary and excess casualty insurance policies providing coverage for bodily
injury and property damage to third parties, including products liability and
completed operations coverage, and worker's compensation insurance policies
maintained by the Company and its Subsidiaries. The Company and its Subsidiaries
maintain insurance coverage reasonably adequate for the operation of their
respective businesses (taking into account the cost and availability of such
insurance).
5.16. No Brokers. The Company has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of the Company or Parent to pay any finder's fees, brokerage or
agent's commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby, except that the Company has retained Goldman, Sachs & Co. as its
financial advisor and A.G. Edwards & Sons, Inc. as financial advisor to the
Special Committee to the Company's board of directors, the arrangements with
which have been disclosed in writing to Parent prior to the date hereof.
5.17. Opinion of Financial Advisor. The Company has received (a) the
opinion of Goldman, Sachs & Co. to the effect that, as of the date thereof, the
Company Exchange Ratio is fair to the holders of the Company Common Stock (other
than Barnickel) and (b) the opinion of A.G. Edwards & Sons, Inc. to the effect
that, as of the date thereof, the Company Exchange Ratio is fair, from a
financial point of view, to the holders of Company Common Stock (other than
Barnickel); it being understood and acknowledged by Parent that such opinions
have been rendered for the benefit of the Board of Directors of the Company, and
are not intended to, and may not, be relied upon by Parent, its affiliates or
their respective Subsidiaries.
5.18. Parent Stock Ownership. Neither the Company nor any of its
Subsidiaries owns any shares of Parent Common Stock or other securities
convertible into or otherwise exercisable to acquire Parent Common Stock.
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5.19. Reorganization. To the Company's knowledge, neither the Company
nor any of its stockholders has taken or failed to take any action, as a result
of which the Company Merger would not qualify as a reorganization within the
meaning of section 368(a) of the Code (and comparable provisions of applicable
state or local law).
5.20. Vote Required. Except as provided by Section 9.2(c), the
affirmative vote of the holders of at least a majority of the outstanding shares
of Company Common Stock is the only vote of the holders of any class or series
of Company capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
5.21. Amendment to the Company Rights Agreement. The Board of
Directors of the Company has resolved to amend the Company Rights Agreement so
that none of the execution and delivery of this Agreement, the conversion of
shares of Company Common Stock and Barnickel Common Stock into the right to
receive Parent Common Stock in accordance with Article 4 of this Agreement, and
the consummation of the Company Merger and the Barnickel Merger or any other
transaction contemplated hereby will cause (i) the Company Rights to become
exerciseable under the Company Rights Agreement, (ii) Barnickel, Parent or any
of its Subsidiaries to be deemed an "Acquiring Person" (as defined in the
Company Rights Agreement), (iii) any such event to be deemed a "flip-over
transaction or event" or (iv) the "Stock Acquisition Date" or the "Distribution
Date" (each as defined in the Company Rights Agreement) to occur upon any such
event, and so that the "Expiration Date" (as defined in the Company Rights
Agreement) of the Company Rights will occur immediately prior to the Barnickel
Effective Time. The Company has delivered to Parent a true and complete copy of
the Company Rights Agreement, as amended to date.
ARTICLE 6
6. Representations and Warranties of Barnickel. Except as set forth in
the disclosure letter delivered to Parent concurrently with the execution hereof
(the "Barnickel Disclosure Letter"), Barnickel represents and warrants to Parent
that:
6.1. Existence; Good Standing; Corporate Authority. Barnickel is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation. Barnickel is duly qualified to do
business as a foreign corporation and is in good standing under the laws of any
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified would not have,
individually or in the aggregate, a Barnickel Material Adverse Effect (as
defined below). Barnickel has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as now
conducted. The copies of Barnickel's articles of incorporation and bylaws
previously made available to Parent are true and correct and contain all
amendments as of the date hereof. As used in this Agreement, the phrase
"Barnickel Material Adverse Effect" shall mean a material adverse effect on (a)
the business, condition (financial or otherwise) or results of operations of
Barnickel or (b) the ability of Barnickel to consummate the transactions
contemplated by this Agreement.
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6.2. Authorization, Validity and Effect of Agreements. Barnickel has
the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The consummation
by Barnickel of the transactions contemplated hereby has been duly authorized by
all requisite corporate action, other than, with respect to the Barnickel
Merger, the approval and adoption of this Agreement by Barnickel's stockholders.
This Agreement constitutes the valid and legally binding obligation of
Barnickel, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.
6.3. Capitalization. The authorized capital stock of Barnickel
consists of 8,800 shares of Barnickel Common Stock and, as of December 31, 1996
and the date hereof, there were 8,800 shares of Barnickel Common Stock issued
and outstanding. All such issued and outstanding shares of Barnickel Common
Stock are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. As of the date of this Agreement, except as set forth in this
Section 6.3, there are no outstanding shares of capital stock and there are no
options, warrants, calls, subscriptions, convertible securities, or other
rights, agreements or commitments which obligate Barnickel to issue, transfer or
sell any shares of capital stock or other voting securities of Barnickel.
Barnickel has no outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
Barnickel on any matter.
6.4. Subsidiaries. Barnickel has no Subsidiaries. As of the date of
this Agreement, Barnickel owns beneficially 5,337,360 shares of Company Common
Stock, free and clear of all Liens. As of October 31, 1970, Barnickel was the
sole beneficial owner of 667,170 shares of Company Common Stock, and the only
change in Barnickel's ownership of Company Common Stock since such date has been
receipt of shares as a result of three two-for-one stock splits.
6.5. No Violation of Law. To Barnickel's knowledge, Barnickel is not
in violation of any order of any court, governmental authority or arbitration
board or tribunal, or any law, ordinance, governmental rule or regulation to
which Barnickel or any of its properties or assets is subject, except as would
not have, individually or in the aggregate, a Barnickel Material Adverse Effect.
6.6. No Conflict. (a) Neither the execution and delivery by Barnickel
of this Agreement nor the consummation by Barnickel of the transactions
contemplated hereby in accordance with the terms hereof, will: (i) conflict with
or result in a breach of any provisions of the articles of incorporation or
bylaws of Barnickel; (ii) violate, or conflict with, or result in a breach of
any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination or in a right of termination or cancellation of, or give rise to a
right of purchase under, or accelerate the performance required by, or result in
the creation of any Lien upon any of the properties of Barnickel under, or
result in being declared void, voidable, or without further binding effect, or
otherwise result in a detriment to Barnickel under, any of the terms, conditions
or provisions of, any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, lease, contract, agreement, joint venture or other instrument
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<PAGE>
or obligation to which Barnickel is a party, or by which Barnickel or any of its
properties is bound or affected; or (iii) contravene or conflict with or
constitute a violation of any provision of any law, rule, regulation, judgment,
order or decree binding upon or applicable to Barnickel, except, in the case of
matters described in clause (ii) or (iii), as would not have, individually or in
the aggregate, a Barnickel Material Adverse Effect.
(b) Neither the execution and delivery by Barnickel of this Agreement
nor the consummation by Barnickel of the transactions contemplated hereby in
accordance with the terms hereof will require any consent, approval or
authorization of, or filing or registration with, any governmental or regulatory
authority, other than Regulatory Filings, except for any consent, approval or
authorization the failure of which to obtain and for any filing or registration
the failure of which to make would not have a Barnickel Material Adverse Effect.
6.7. Financial Statements. Barnickel has made available to Parent its
audited balance sheets at October 31, 1996 and 1995 and audited statements of
income, retained earnings and cash flows for the years then ended (the foregoing
financial statements being collectively referred to herein as the "Barnickel
Financial Statements"). The Barnickel Financial Statements are complete and
correct in all material respects. Each of the balance sheets of Barnickel
included in Barnickel Financial Statements (including the related notes and
schedules) fairly presents the financial position of Barnickel as of its date
and each of the statements of income, retained earnings and cash flows of
Barnickel included in the Barnickel Financial Statements (including any related
notes and schedules) fairly presents the results of operations, retained
earnings or cash flows, as the case may be, of Barnickel for the periods set
forth therein, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. Except as and to the extent set forth on the balance sheet of
Barnickel at October 31, 1996, including all notes thereto, Barnickel has no
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) that would be required to be reflected on, or reserved against in,
a balance sheet of Barnickel or in the notes thereto prepared in accordance with
generally accepted accounting principles consistently applied, other than
liabilities or obligations which would not have, individually or in the
aggregate, a Barnickel Material Adverse Effect and liabilities and obligations
arising in the ordinary course of business since such date.
6.8. Litigation. Except as disclosed in the Barnickel Financial
Statements, there are no actions, suits or proceedings pending against Barnickel
or, to Barnickel's knowledge, threatened against Barnickel, at law or in equity,
or before or by any federal or state commission, board, bureau, agency or
instrumentality, that are likely to have, individually or in the aggregate, a
Barnickel Material Adverse Effect. There are no outstanding judgments, decrees,
injunctions, awards or orders against Barnickel that are likely to have,
individually or in the aggregate, a Barnickel Material Adverse Effect. Schedule
6.8 of the Barnickel Disclosure Letter contains, as of the date of this
Agreement, an accurate and complete list of all actions, suits and proceedings
pending or, to the knowledge of Barnickel, threatened against Barnickel.
6.9. Absence of Certain Changes. Since October 31, 1996, there has not
been (i) any change in the financial condition or business of Barnickel which
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has had or is likely to have an adverse effect which is material to the
financial condition or business of Barnickel, other than any adverse change
resulting from adverse changes in general economic conditions or stock market
fluctuations, (ii) any material change by Barnickel in its accounting methods,
principles or practices or its tax methods, practices or elections, (iii) any
declaration, setting aside or payment of any dividend or distribution in respect
of any capital stock of Barnickel or any redemption, purchase or other
acquisition of any of its securities, except dividends on the Barnickel Common
Stock disclosed in the Barnickel Disclosure Letter and dividends after the date
hereof permitted by Section 8.2, or (iv) any increase in or establishment of any
bonus, insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option, stock purchase or other employee benefit plan, except in
the ordinary course of business.
6.10. Taxes. (a) Barnickel has (i) duly filed (or there has been filed
on its behalf) on a timely basis with appropriate governmental authorities all
tax returns, statements, reports, declarations, estimates and forms required to
be filed by it, on or prior to the date hereof, except to the extent that any
failure to file would not have, individually or in the aggregate, a Barnickel
Material Adverse Effect and (ii) duly paid or deposited in full on a timely
basis or made adequate provisions in accordance with generally accepted
accounting principles (or there has been paid or deposited or adequate provision
has been made on its behalf) for the payment of all taxes required to be paid by
Barnickel for all periods ending through the date hereof, except to the extent
that any failure to pay or deposit or make adequate provision for the payment of
such taxes would not have, individually or in the aggregate, a Barnickel
Material Adverse Effect.
(b)(i) The federal income tax returns of Barnickel have been examined
by the IRS (or the applicable statutes of limitation for the assessment of
federal income taxes for such periods have expired) for all periods through and
including October 31, 1993; (ii) except to the extent being contested in good
faith, all material deficiencies asserted as a result of such examinations and
any other examinations of Barnickel by any taxing authority have been paid
fully, settled or adequately provided for in the Barnickel Financial Statements;
(iii) as of the date hereof, Barnickel has not granted any requests, agreements,
consents or waivers to extend the statutory period of limitations applicable to
the assessment of any taxes with respect to any tax returns of Barnickel; (iv)
Barnickel is not a party to any tax sharing or tax indemnity agreement; and (v)
Barnickel is not a party to an agreement which provides for the payment of any
amount that would constitute a "parachute payment" within the meaning of Section
280G of the Code.
6.11. Employee Benefit Plans. Schedule 6.11 of the Barnickel
Disclosure Letter contains a list of all material employee benefit plans and
other benefit arrangements, including all "employee benefit plans" as defined in
ERISA, covering employees of Barnickel (the "Barnickel Benefit Plans"). True and
complete copies of the Barnickel Benefit Plans and, if applicable, the most
recent Form 5500 and annual reports for each such plan have been made available
to Parent. All applicable reporting and disclosure requirements have been met
with respect to the Barnickel Benefit Plans except for any noncompliance that
would not result in a material liability to Barnickel. There has been no
"reportable event," as that term is defined in Section 4043 of ERISA, with
respect to the Barnickel Benefit Plans subject to Title IV of ERISA, which event
is likely to result in a material liability to Barnickel. To the extent
applicable, the Barnickel Benefit Plans comply, in all material respects, with
the requirements of ERISA and the Code, and any Barnickel Benefit Plan intended
to be qualified under section 401(a) of the Code has been determined by the IRS
to be so qualified. The Barnickel Benefit Plans have been maintained and
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operated, in all material respects, in accordance with their terms and there is
no material liability for breaches of fiduciary duty in connection with the
Barnickel Benefit Plans. To Barnickel's knowledge, there are no pending or
anticipated material claims against or otherwise involving any Barnickel Benefit
Plan and no suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of Barnickel Benefit Plan activities) has been
brought against or with respect to any such Barnickel Benefit Plan, except for
any of the foregoing which would not have a Barnickel Material Adverse Effect.
All material contributions required to be made as of the date hereof to
Barnickel Benefit Plans have been made or provided for. Barnickel does not
maintain or contribute to any material plan or arrangement which provides or has
any liability to provide life insurance, medical or other employee welfare
benefits to any employee or former employee upon his retirement or termination
of employment and Barnickel has not represented, promised or contracted (whether
in oral or written form) to any employee or former employee that such benefits
would be provided. With respect to the Barnickel Benefit Plans or any "employee
pension benefit plans," as defined in Section 3(2) of ERISA, that are subject to
Title IV of ERISA and have been maintained or contributed to within six years
prior to the Barnickel Effective Time by Barnickel or any trade or business
(whether or not incorporated) which is under common control, or which is treated
as a single employer, with Barnickel under Sections 414(b), (c), (m), or (o) of
the Code, (i) Barnickel has not incurred any direct or indirect liability under
title IV of ERISA in connection with any termination thereof or withdrawal
therefrom; (ii) there does not exist any accumulated funding deficiency within
the meaning of section 412 of the Code or section 302 of ERISA, whether or not
waived; and (iii) the actuarial value of the assets equal or exceed the
actuarial present value of the benefit liabilities, within the meaning of
Section 4041 of ERISA, based upon reasonable actuarial assumptions and asset
valuation principles, except, in each case, for any liability or any excise tax
which would not have a Barnickel Material Adverse Effect. No prohibited
transaction has occurred with respect to any Barnickel Benefit Plan that would
result in the imposition of any excise tax or other liability under the Code or
ERISA which would have a Barnickel Material Adverse Affect. Neither Barnickel
nor any trade or business (whether or not incorporated) which is under common
control, or which is treated as a single employer, with Barnickel under Sections
414(b), (c), (m), or (o) of the Code, contributes to, or has an obligation to
contribute to, and has not within six years prior to the Barnickel Effective
Time contributed to, or had an obligation to contribute to, a multiemployer plan
within the meaning of Section 3(37) of ERISA. The execution of, and performance
of the transactions contemplated in, this Agreement will not (either alone or
upon the occurrence of any additional or subsequent events) constitute an event
under any benefit plan, policy, arrangement or agreement or any trust or loan
that will or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligations to fund benefits with respect to any employee.
6.12. Labor Matters. Barnickel is not a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization. To Barnickel's knowledge, there are no
organizational efforts with respect to the formation of a collective bargaining
unit presently being made or threatened involving employees of Barnickel.
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6.13. Environmental Matters. To the knowledge of Barnickel, and
except as would not have, individually or in the aggregate, a Barnickel Material
Adverse Effect:
(a) there are not any past or present conditions or circumstances that
interfere with the conduct of the business of Barnickel in the manner now
conducted or which interfere with compliance with any order of any court,
governmental authority or arbitration board or tribunal, or any Environmental
Law;
(b) there are not any past or present conditions or circumstances at,
or arising out of, any current or former businesses, assets or properties of
Barnickel, including but not limited to on-site or off-site disposal or release
of any chemical substance, product or waste, which may give rise to: (i)
liabilities or obligations for any cleanup, remediation, disposal or corrective
action under any Environmental Law or (ii) claims arising for personal injury,
property damage, or damage to natural resources; and
(c) Barnickel has not (i) received any notice of noncompliance with,
violation of, or liability or potential liability under any Environmental Law or
(ii) entered into any consent decree or order or is subject to any order of any
court or governmental authority or tribunal under any Environmental Law or
relating to the cleanup of any hazardous materials contamination.
6.14. Trademarks, Patents and Copyrights. Except as previously
disclosed to Parent in writing, to the knowledge of the Barnickel, Barnickel
owns or possesses adequate licenses or other valid rights to use all patents,
patent rights, trademarks, trademark rights and proprietary information used or
held for use in connection with its business as currently being conducted,
except where the failure to own or possess such licenses and other rights would
not have, individually or in the aggregate, a Barnickel Material Adverse Effect,
and to the knowledge of Barnickel, there are no assertions or claims challenging
the validity of any of the foregoing which are likely to have, individually or
in the aggregate, a Barnickel Material Adverse Effect. To the knowledge of
Barnickel, the conduct of Barnickel's business as currently conducted does not
conflict with any patents, patent rights, licenses, trademarks, trademark
rights, trade names, trade name rights or copyrights of others in any way likely
to have, individually or in the aggregate, a Barnickel Material Adverse Effect.
To the knowledge of Barnickel, there is no material infringement of any
proprietary right owned by or licensed by or to Barnickel which is likely to
have, individually or in the aggregate, a Barnickel Material Adverse Effect.
6.15. Insurance. Barnickel has previously delivered to Parent a
schedule listing the officers' and directors' liability insurance policies,
primary and excess casualty insurance policies providing coverage for bodily
injury and property damage to third parties, including products liability and
completed operations coverage, and worker's compensation insurance policies
maintained by the Barnickel. Barnickel maintains insurance coverage reasonably
adequate for the operation of its business (taking into account the cost and
availability of such insurance).
6.16. No Brokers. Barnickel has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Barnickel or Parent to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
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to this Agreement or the consummation of the transactions contemplated hereby,
except that Barnickel has retained Morgan Stanley & Co. Incorporated as its
financial advisor, the arrangements with which have been disclosed in writing to
Parent prior to the date hereof.
6.17. Opinion of Financial Advisor. Barnickel has received the opinion
of Morgan Stanley & Co. Incorporated, to the effect that, as of the date
thereof, the Barnickel Exchange Ratio is fair, from a financial point of view,
to the holders of Barnickel Common Stock; it being understood and acknowledged
by Parent that such opinion has been rendered for the benefit of the Board of
Directors of Barnickel, and is not intended to, and may not, be relied upon by
Parent, its affiliates or their respective Subsidiaries.
6.18. Parent Stock Ownership. Barnickel owns no shares of Parent
Common Stock or any other securities convertible into or otherwise exercisable
to acquire Parent Common Stock.
6.19. Reorganization. To Barnickel's knowledge, neither Barnickel nor
any of its stockholders has taken or failed to take any action, as a result of
which the Barnickel Merger or the Company Merger would not qualify as a
reorganization within the meaning of section 368(a) of the Code (and comparable
provisions of applicable state or local law).
6.20. Vote Required. The affirmative vote of the holders of at least
two-thirds of the outstanding shares of Barnickel Common Stock is the only vote
of the holders of any class or series of Barnickel capital stock necessary to
approve this Agreement and the transactions contemplated hereby.
ARTICLE 7
7. Representations and Warranties of Parent, Merger Sub and Merger
Grandsub. Except as disclosed with reasonable specificity in the Parent Reports
(as defined in Section 7.7), Parent, Merger Sub and Merger Grandsub, jointly and
severally, represent and warrant to each of the Company and Barnickel that:
7.1. Existence; Good Standing; Corporate Authority. Parent, Merger Sub
and Merger Grandsub are corporations duly incorporated, validly existing and in
good standing under the laws of their respective jurisdictions of incorporation.
Parent is duly qualified to do business as a foreign corporation and is in good
standing under the laws of any jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be so
qualified would not have, individually or in the aggregate, a Parent Material
Adverse Effect. Parent has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now conducted.
The copies of Parent's certificate of incorporation and bylaws previously made
available to the Company and Barnickel are true and correct and contain all
amendments as of the date hereof. As used in this Agreement, the phrase "Parent
Material Adverse Effect" shall mean a material adverse effect on (a) the
business, condition (financial or otherwise) or results of operations of Parent
and its Subsidiaries on a consolidated basis or (b) the ability of Parent,
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Merger Sub or Merger Grandsub to consummate the transactions contemplated by
this Agreement.
7.2. Authorization, Validity and Effect of Agreements. Each of Parent,
Merger Sub and Merger Grandsub has the requisite corporate power and authority
to execute and deliver this Agreement and all agreements and documents
contemplated hereby. The consummation by Parent, Merger Sub and Merger Grandsub
of the transactions contemplated hereby including the issuance and delivery by
Parent of shares of Parent Common Stock pursuant to the Mergers has been duly
authorized by all requisite corporate action other than, if required by the
rules of the NYSE, approval of the issuance of the shares of Parent Common Stock
pursuant to the Mergers contemplated hereby by Parent's stockholders. This
Agreement constitutes the valid and legally binding obligation of each of
Parent, Merger Sub and Merger Grandsub, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity.
7.3. Capitalization. The authorized capital stock of Parent consists
of 400,000,000 shares of Parent Common Stock and 15,000,000 shares of preferred
stock, par value $1.00 per share, of Parent ("Parent Preferred Stock"), and, as
of December 27, 1996, there were 145,175,748 shares of Parent Common Stock
issued and outstanding and no shares of Parent Preferred Stock issued and
outstanding. All such issued and outstanding shares of Parent Common Stock are
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. The shares of Parent Common Stock to be issued in connection
with the Mergers, when issued in accordance with this Agreement, will be validly
issued, fully paid and nonassessable. As of the date of this Agreement, except
as set forth in this Section 7.3 and except for any shares of Parent Common
Stock issued pursuant to plans described in the Parent Reports (as defined in
Section 7.7), there are no outstanding shares of capital stock and there are no
options, warrants, calls, subscriptions, convertible securities or other rights,
agreements or commitments which obligate Parent or any of its Subsidiaries to
issue, transfer or sell any shares of capital stock or other voting securities
of Parent or any of its Subsidiaries. Parent has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of Parent on any matter except as described
in the Parent Reports.
7.4. Subsidiaries. (a) Each of Parent's Subsidiaries is a corporation
or partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own, operate and lease its properties and to
carry on its business as it is now being conducted, and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership,
operation or lease of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so qualified
or to be in good standing would not have a Parent Material Adverse Effect.
(b) All of the outstanding shares of capital stock of Merger Sub are
owned directly by Parent and all of the outstanding shares of capital stock of
Merger Grandsub are owned directly by Merger Sub. Each of Merger Sub and Merger
Grandsub was formed solely for the purpose of engaging in the transactions
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contemplated hereby and has not engaged in any activities other than in
connection with the transactions contemplated by this Agreement.
7.5. No Violation of Law. To Parent's knowledge, neither Parent nor
any of its Subsidiaries is in violation of any order of any court, governmental
authority or arbitration board or tribunal, or any law, ordinance, governmental
rule or regulation to which Parent or any of its Subsidiaries or any of their
respective properties or assets is subject, except as would not have,
individually or in the aggregate, a Parent Material Adverse Effect.
7.6. No Conflict. (a) Neither the execution and delivery by Parent,
Merger Sub and Merger Grandsub of this Agreement, nor the consummation by
Parent, Merger Sub and Merger Grandsub of the transactions contemplated hereby
in accordance with the terms hereof, will: (i) conflict with or result in a
breach of any provisions of the certificate of incorporation or bylaws of
Parent, Merger Sub or Merger Grandsub; (ii) violate, or conflict with, or result
in a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or in a right of termination or cancellation of, or
give rise to a right of purchase under or accelerate the performance required
by, or result in the creation of any Lien upon any of the properties of Parent
or its Subsidiaries under, or result in being declared void, voidable, or
without further binding effect, or otherwise result in a detriment to Parent or
any of its Subsidiaries under any of the terms, conditions or provisions of, any
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
lease, contract, agreement, joint venture or other instrument or obligation to
which Parent or any of its Subsidiaries is a party, or by which Parent or any of
its Subsidiaries or any of their properties is bound or affected; or (iii)
contravene or conflict with or constitute a violation of any provision of any
law, rule, regulation, judgment, order or decree binding upon or applicable to
Parent or any of its Subsidiaries, except, in the case of matters described in
clause (ii) or (iii), as would not have, individually or in the aggregate, a
Parent Material Adverse Effect.
(b) Neither the execution and delivery by Parent, Merger Sub or Merger
Grandsub of this Agreement nor the consummation by Parent, Merger Sub or Merger
Grandsub of the transactions contemplated hereby in accordance with the terms
hereof will require any consent, approval or authorization of, or filing or
registration with, any governmental or regulatory authority, other than
Regulatory Filings, except for any consent, approval or authorization the
failure of which to obtain and for any filing or registration the failure of
which to make would not have a Parent Material Adverse Effect.
7.7. SEC Documents. Parent has made available to the Company each
registration statement, report, proxy statement or information statement (other
than preliminary materials) filed by Parent with the SEC since September 30,
1995, each in the form (including exhibits and any amendments thereto) filed
with the SEC (collectively, the "Parent Reports"). As of their respective dates,
the Parent Reports (i) were prepared in all material respects in accordance with
the applicable requirements of the Securities Act, the Exchange Act, and the
rules and regulations thereunder and (ii) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading except for such
statements, if any, as have been modified by subsequent filings with the SEC
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prior to the date hereof. Each of the consolidated balance sheets included in or
incorporated by reference into the Parent Reports (including the related notes
and schedules) fairly presents the consolidated financial position of Parent and
its Subsidiaries as of its date and each of the consolidated statements of
income, cash flows and retained earnings included in or incorporated by
reference into the Parent Reports (including any related notes and schedules)
fairly presents the results of operations, cash flows or retained earnings, as
the case may be, of Parent and its Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to (x) such exceptions as
may be permitted by Form 10-Q of the SEC and (y) normal year-end audit
adjustments), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. Except as and to the extent set forth on the consolidated balance
sheet of Parent and its Subsidiaries at September 30, 1996, including all notes
thereto, neither Parent nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on, or reserved against in, a balance
sheet of Parent or in the notes thereto prepared in accordance with generally
accepted accounting principles consistently applied, other than liabilities or
obligations which would not have, individually or in the aggregate, a Parent
Material Adverse Effect and liabilities and obligations arising in the ordinary
course of business since such date.
7.8. Litigation. There are no actions, suits or proceedings pending
against Parent or any of its Subsidiaries or, to Parent's knowledge, threatened
against Parent or any of its Subsidiaries, at law or in equity, or before or by
any federal or state commission, board, bureau, agency or instrumentality, that
are likely to have, individually or in the aggregate, a Parent Material Adverse
Effect. There are no outstanding judgments, decrees, injunctions, awards or
orders against Parent or any of its Subsidiaries that would have, individually
or the in aggregate, a Parent Material Adverse Effect.
7.9. Absence of Certain Changes. Since October 31, 1996, there has not
been (i) any change in the financial condition or business of Parent or its
Subsidiaries which has had or is likely to have an adverse effect which is
material to the financial condition or business of Parent and its Subsidiaries,
other than any adverse change resulting from adverse changes in general economic
conditions, stock market fluctuations or conditions or adverse changes in or
affecting the oilfield service and process industries generally, (ii) any
material change by Parent in its accounting methods, principles or practices or
its tax methods, practices or elections, (iii) any declaration, setting aside or
payment of any dividend or distribution in respect of any capital stock of
Parent or any redemption, purchase or other acquisition of any of its
securities, except dividends on the Parent Common Stock at a rate of not more
than $0.115 per share per quarter, or (iv) any increase in or establishment of
any bonus, insurance, severance, deferred compensation, pension, retirement,
profit sharing, stock option, stock purchase or other employee benefit plan,
except in the ordinary course of business.
7.10. Taxes. (a) Parent and its Subsidiaries have (i) duly filed (or
there has been filed on their behalf) on a timely basis with appropriate
governmental authorities all tax returns, statements, reports, declarations,
estimates and forms required to be filed by them, on or prior to the date
hereof, except to the extent that any failure to file would not have,
individually or in the aggregate, a Parent Material Adverse Effect and (ii) duly
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paid or deposited in full on a timely basis or made adequate provisions in
accordance with generally accepted accounting principles (or there has been paid
or deposited or adequate provision has been made on their behalf) for the
payment of all taxes required to be paid by Parent or its Subsidiaries for all
periods ending through the date hereof, except to the extent that any failure to
pay or deposit or make adequate provision for the payment of such taxes would
not have, individually or in the aggregate, a Parent Material Adverse Effect.
(b)(i) The federal income tax returns of Parent and each of its
Subsidiaries have been examined by the IRS (or the applicable statutes of
limitation for the assessment of federal income taxes for such periods have
expired) for all periods through and including September 30, 1991; (ii) except
to the extent being contested in good faith, all material deficiencies asserted
as a result of such examinations and any other examinations of Parent and its
Subsidiaries by any taxing authority have been paid fully, settled or adequately
provided for in the financial statements contained in the Parent Reports; (iii)
as of the date hereof, neither Parent nor any of its Subsidiaries has granted
any requests, agreements, consents or waivers to extend the statutory period of
limitations applicable to the assessment of any taxes with respect to any tax
returns of Parent or any of its Subsidiaries except that Parent and its
Subsidiaries have agreed to extend the applicable Federal statutory period of
limitations to January 31, 1998 for the fiscal years ended September 26, 1992
and October 2, 1993; and (iv) neither Parent nor any of its Subsidiaries is a
party to any tax sharing or tax indemnity agreement.
7.11. Employee Benefit Plans. True and complete copies of all material
employee benefit plans and other benefit arrangements, including all "employee
benefit plans" as defined in ERISA, covering employees of Parent and its
Subsidiaries (the "Parent Benefit Plans") and, if applicable, the most recent
Form 5500 and annual reports for each such plan have been made available to each
of the Company and Barnickel. All applicable reporting and disclosure
requirements have been met with respect to the Parent Benefit Plans except for
any noncompliance that would not result in a material liability to Parent. There
has been no material "reportable event," as that term is defined in Section 4043
of ERISA, with respect to the Parent Benefit Plans subject to Title IV of ERISA,
which event is likely to result in a material liability to Parent. To the extent
applicable, the Parent Benefit Plans comply, in all material respects, with the
requirements of ERISA and the Code, and any Parent Benefit Plan intended to be
qualified under section 401(a) of the Code has been determined by the IRS to be
so qualified. The Parent Benefit Plans have been maintained and operated, in all
material respects, in accordance with their terms and there is no material
liability for breaches of fiduciary duty in connection with the Parent Benefit
Plans. To Parent's knowledge, there are no pending or anticipated claims against
or otherwise involving any Parent Benefit Plan and no suit, action or other
litigation (excluding claims for benefits incurred in the ordinary course of
Parent Benefit Plan activities) has been brought against or with respect to any
such Parent Benefit Plan, except for any of the foregoing which would not have a
Parent Material Adverse Effect. All material contributions required to be made
as of the date hereof to the Parent Benefit Plans have been made or provided
for. Parent does not maintain or contribute to any material plan or arrangement
which provides or has any liability to provide life insurance, medical or other
employee welfare benefits to any employee or former employee upon his retirement
or termination of employment and Parent has not represented, promised or
contracted (whether in oral or written form) to any employee or former employee
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that such benefits would be provided. With respect to the Parent Benefit Plans
or any "employee pension benefit plans," as defined in Section 3(2) of ERISA,
that are subject to Title IV of ERISA and have been maintained or contributed to
within six years prior to the Company Effective Time by Parent, its Subsidiaries
or any trade or business (whether or not incorporated) which is under common
control, or which is treated as a single employer, with Parent or any of its
Subsidiaries under Sections 414(b), (c), (m), or (o) of the Code, (i) neither
Parent nor any of its Subsidiaries has incurred any direct or indirect liability
under title IV of ERISA in connection with any termination thereof or withdrawal
therefrom; (ii) there does not exist any accumulated funding deficiency within
the meaning of section 412 of the Code or section 302 of ERISA, whether or not
waived; and (iii) the actuarial value of the assets equal or exceed the
actuarial present value of the benefit liabilities, within the meaning of
Section 4041 of ERISA, based upon reasonable actuarial assumptions and asset
valuation principles, except, in each case, for any liability or any exercise
tax which would not have a Parent Material Adverse Effect. Neither Parent nor
any of its Subsidiaries nor any trade or business (whether or not incorporated)
which is under common control, or which is treated as a single employer, with
Parent or any of its Subsidiaries under Sections 414(b), (c), (m), or (o) of the
Code, contributes to, or has an obligation to contribute to, and has not within
six years prior to the Company Effective Time contributed to, or had an
obligation to contribute to, a multiemployer plan within the meaning of Section
3(37) of ERISA. No prohibited transaction has occurred with respect to any
Parent Benefit Plan that would result in the imposition of any excise tax or
other liability under the Code or ERISA which would have a Parent Material
Adverse Effect. The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) constitute an event under any benefit plan,
policy, arrangement or agreement or any trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligations to
fund benefits with respect to any employee.
7.12. Environmental Matters. To the knowledge of Parent, and except
as would not have, individually or in the aggregate, a Parent Material Adverse
Effect:
(a) there are not any past or present conditions or circumstances that
interfere with the conduct of the business of Parent and each of its
Subsidiaries in the manner now conducted or which interfere with compliance with
any order of any court, governmental authority or arbitration board or tribunal,
or any Environmental Law;
(b) there are not any past or present conditions or circumstances at,
or arising out of, any current or former businesses, assets or properties of
Parent or any Subsidiary of Parent, including but not limited to on-site or
off-site disposal or release of any chemical substance, product or waste, which
may give rise to: (i) liabilities or obligations for any cleanup, remediation,
disposal or corrective action under any Environmental Law or (ii) claims arising
for personal injury, property damage, or damage to natural resources; and
(c) neither Parent nor any of its Subsidiaries has (i) received any
notice of noncompliance with, violation of, or liability or potential liability
under any Environmental Law or (ii) entered into any consent decree or order or
is subject to any order of any court or governmental authority or tribunal under
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any Environmental Law or relating to the cleanup of any hazardous materials
contamination.
7.13. Trademarks, Patents and Copyrights. Except as previously
disclosed to the Company and Barnickel in writing, to the knowledge of Parent,
Parent and its Subsidiaries own or possess adequate licenses or other valid
rights to use all patents, patent rights, trademarks, trademark rights and
proprietary information used or held for use in connection with their respective
businesses as currently being conducted, except where the failure to own or
possess such licenses and other rights would not have, individually or in the
aggregate, a Parent Material Adverse Effect, and to the knowledge of Parent,
there are no assertions or claims challenging the validity of any of the
foregoing which are likely to have, individually or in the aggregate, a Parent
Material Adverse Effect. To the knowledge of Parent, the conduct of Parent's and
its Subsidiaries' respective businesses as currently conducted does not conflict
with any patents, patent rights, licenses, trademarks, trademark rights, trade
names, trade name rights or copyrights of others in any way likely to have,
individually or in the aggregate, a Parent Material Adverse Effect. To the
knowledge of the Parent, there is no material infringement of any proprietary
right owned by or licensed by or to Parent or any of its Subsidiaries which is
likely to have, individually or in the aggregate, a Parent Material Adverse
Effect.
7.14. Insurance. Parent and its Subsidiaries maintain insurance
coverage reasonably adequate for the operation of their respective businesses
(taking into account the cost and availability of such insurance).
7.15. No Brokers. Parent has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of the Company, Barnickel or Parent to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby, except that Parent has retained Merrill Lynch & Co. as its
financial advisor, the arrangements with which have been disclosed in writing to
the Company and Barnickel prior to the date hereof.
7.16. Opinion of Financial Advisor. Parent has received the opinion
of Merrill Lynch & Co. to the effect that, as of the date thereof, the
consideration to be paid by Parent pursuant to the Mergers is fair to Parent
from a financial point of view.
7.17. Barnickel and Company Stock Ownership. Neither Parent nor any
of its Subsidiaries owns any shares of capital stock of the Company or of
Barnickel or any other securities convertible into capital stock of Barnickel or
of the Company.
7.18. Reorganization. To Parent's knowledge, neither Parent nor any of
its stockholders has taken or failed to take any action, as a result of which
the Company Merger or the Barnickel Merger would not qualify as a reorganization
within the meaning of section 368(a) of the Code (and comparable provisions of
applicable state or local law).
7.19. Vote Required. No vote of the holders of any class or series of
Parent capital stock is necessary to approve the issuance of Parent Common Stock
pursuant to this Agreement and the transactions contemplated hereby unless the
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rules of the NYSE require the vote of Parent stockholders as a result of the
aggregate number of shares of Parent Common Stock to be issued in the Mergers.
ARTICLE 8
8. Covenants.
8.1. Acquisition Proposals. (a) Each of the Company and Barnickel
agrees that (i) prior to the Company Effective Time, neither it nor any of its
Subsidiaries shall, and each of them shall not knowingly permit any of its
officers, directors, employees, agents or representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) to, solicit or encourage (including by way of furnishing
material non-public information), directly or indirectly, any inquiry, proposal
or offer (including, without limitation, any proposal or offer to its
stockholders) with respect to a tender offer, merger, consolidation or similar
transaction involving, or any purchase of 20% or more of the assets on a
consolidated basis or 20% or more of the capital stock of, the Company (any such
proposal or offer being hereinafter referred to as a "Company Acquisition
Proposal") or Barnickel (any such proposal or offer being hereinafter referred
to as a "Barnickel Acquisition Proposal" and, collectively with a Company
Acquisition Proposal, "Acquisition Proposals") or engage in any negotiations
concerning an Acquisition Proposal; and (ii) it will immediately cease and cause
to be terminated any existing negotiations with any parties conducted heretofore
with respect to any of the foregoing; provided that nothing contained in this
Agreement shall prevent the Company, Barnickel or their respective Board of
Directors from (A) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to a Company Acquisition Proposal or a Barnickel Acquisition
Proposal, as the case may be, or (B) providing information (pursuant to a
confidentiality agreement in reasonably customary form) to or engaging in any
negotiations or discussions with any person or entity who has made an
unsolicited bona fide Acquisition Proposal that is superior to the Company
Merger or the Barnickel Merger, as the case may be, and is reasonably capable of
being financed, if the Board of Directors of the Company or the Board of
Directors of Barnickel, as the case may be, after consultation with such party's
outside legal counsel, determines that the failure to do so would be
inconsistent with its fiduciary obligations.
(b) Prior to taking any action referred to in Section 8.1(a), if the
Company or Barnickel intends to participate in any such discussions or
negotiations or provide any such information to any such third party, the
Company or Barnickel, as the case may be, shall give reasonable prior notice to
Parent of each such action. The Company or Barnickel, as the case may be, will
promptly notify Parent of any such requests for such information or the receipt
of any Acquisition Proposal, including the identity of the person or group
engaging in such discussions or negotiations, requesting such information or
making such Acquisition Proposal, and the material terms and conditions of any
Acquisition Proposal.
(c) Nothing in this Section 8.1 shall permit the Company or Barnickel
to enter into any agreement with respect to an Acquisition Proposal during the
term of this Agreement, it being agreed that during the term of this Agreement,
neither the Company nor Barnickel shall enter into any agreement with any person
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that provides for, or in any way facilitates, an Acquisition Proposal, other
than a confidentiality agreement in reasonably customary form.
8.2. Conduct of the Company and Barnickel's Businesses. Prior to the
Company Effective Time, except as set forth in the Company Disclosure Letter or
the Barnickel Disclosure Letter or as contemplated by any other provision of
this Agreement, unless the other parties have consented in writing thereto, each
of the Company and Barnickel:
(a) shall, and shall cause each of their respective Subsidiaries to,
conduct its operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(b) shall use their best efforts, and shall cause each of their
respective Subsidiaries to use its best efforts, to preserve intact their
business organizations and goodwill, keep available the services of their
respective officers and employees and maintain satisfactory relationships with
those persons having business relationships with them;
(c) shall not amend their certificate or articles of incorporation or
bylaws;
(d) shall promptly notify the other parties of any material change in
its condition (financial or otherwise) or business or any material litigation or
material governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the breach in any material
respect of any representation or warranty contained herein;
(e) shall promptly deliver to the other parties true and correct
copies of any report, statement or schedule filed with the SEC subsequent to the
date of this Agreement;
(f) shall not (i) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on the date
hereof, or referred to in clause (ii) below and disclosed pursuant to this
Agreement, issue any shares of its capital stock, effect any stock split or
otherwise change its capitalization as it existed on the date hereof, (ii)
grant, confer or award any option, warrant, conversion right or other right not
existing on the date hereof to acquire any shares of its capital stock except,
in the case of the Company, the automatic awards to non-employee directors
pursuant to Article V of the 1993 Plan, (iii) increase any compensation or enter
into or amend any employment agreement with any of its present or future
officers or directors, except for normal increases consistent with past practice
and the payment of cash bonuses to officers pursuant to and consistent with
Section 8.13(e) hereof, or (iv) adopt any new employee benefit plan (including
any stock option, stock benefit or stock purchase plan) or amend any existing
employee benefit plan in any material respect, except for changes which are less
favorable to participants in such plans;
(g) shall not (i) declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital stock or
(ii) redeem, purchase or otherwise acquire any shares of its capital stock or,
in the case of the Company, capital stock of any of its Subsidiaries, or make
any commitment for any such action, except (x) in the case of the Company, for
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the declaration and payment of regular, quarterly dividends, consistent with
past practice, not to exceed $0.28 per share of Company Common Stock per quarter
and (y) in the case of Barnickel, except for the declaration and payment of cash
dividends consistent with past practice and Section 8.14;
(h) shall not, and shall not permit any of its Subsidiaries to, sell,
lease or otherwise dispose of any of its assets (including capital stock of
Subsidiaries) which are material, individually or in the aggregate, except in
the ordinary course of business, and except in the case of Barnickel, sales of
portfolio securities;
(i) shall not, and shall not permit any of its Subsidiaries to,
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or agree to
acquire any assets or securities in each case which are material, individually
or in the aggregate, except in the case of Barnickel, investments in cash
equivalents and investment-grade securities;
(j) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(k) shall, and shall cause any of its Subsidiaries to, use reasonable
efforts to maintain with financially responsible insurance companies insurance
in such amounts and against such risks and losses as are customary for companies
engaged in their respective businesses;
(l) shall not (i) make or rescind any material express or deemed
election relating to taxes unless it is reasonably expected that such action
will not materially and adversely affect the Company or Barnickel, as the case
may be, including elections for any and all joint ventures, partnerships,
limited liability companies, working interests or other investments where the
Company or Barnickel, as the case may be, has the capacity to make such binding
election, (ii) settle or compromise any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to taxes, except where such settlement or compromise will not
materially and adversely affect the Company or Barnickel, as the case may be, or
(iii) change in any material respect any of its methods of reporting income or
deductions for federal income tax purposes from those expected to be employed in
the preparation of its federal income tax return for the taxable year ending
October 31, 1996, except as may be required by applicable law or except for such
changes that are reasonably expected not to materially and adversely affect the
Company or Barnickel, as the case may be;
(m) in the case of the Company, shall not, nor shall it permit any of
its Subsidiaries to, (i) incur any indebtedness for borrowed money (except for
working capital under the Company's existing credit facilities, and (x)
refinancings of existing debt and (y) other immaterial borrowings that, in the
case of either (x) or (y), permit prepayment of such debt without penalty (other
than LIBOR breakage costs)) or guarantee any such indebtedness or issue or sell
any debt securities or warrants or rights to acquire any debt securities of such
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party or any of its Subsidiaries or guarantee any debt securities of others,
(ii) except in the ordinary course of business, enter into any material lease
(whether such lease is an operating or capital lease) or create any material
mortgages, liens, security interests or other encumbrances on the property of
the Company or any of its Subsidiaries in connection with any indebtedness
thereof, or (iii) make or commit to make aggregate capital expenditures in
excess of $3 million over the fiscal 1997 capital expenditures budget previously
disclosed to Parent by the Company;
(n) in the case of Barnickel, shall not (i) incur any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any of its
debt securities or warrants or rights to acquire any of its debt securities or
guarantee any debt securities of others, (ii) enter into any lease (whether such
lease is an operating or capital lease) or create any mortgages, liens, security
interests or other encumbrances on the property of Barnickel in connection with
any indebtedness thereof or (iii) commit to aggregate capital expenditures in
excess of $10,000;
(o) shall not purchase any shares of Parent Common Stock and, in the
case of Barnickel shall not (i) sell or dispose of or encumber any shares of
Company Common Stock or (ii) purchase or otherwise acquire any shares of Company
Common Stock;
(p) shall not, nor shall it permit any of its Subsidiaries to, agree
in writing or otherwise to take any action inconsistent with the foregoing; and
(q) shall not take any action that is likely to delay materially (but
in any event by more than 10 business days) or adversely affect the ability of
any of the parties hereto to obtain any consent, authorization, order or
approval of any governmental commission, board or other regulatory body or the
expiration of any applicable waiting period required to consummate the
transactions contemplated by this Agreement.
8.2A Conduct of Parent's Business. Prior to the Company Effective
Time, except as expressly contemplated by any other provision of this Agreement,
unless the other parties have consented in writing thereto, Parent:
(a) shall not amend its Restated Certificate of Incorporation or
Bylaws in any way that materially and adversely affects the rights of holders of
Parent Common Stock;
(b) shall promptly notify the other parties of any material change in
its condition (financial or otherwise) or business or any material litigation
or material governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the breach in
any material respect of any representation or warranty contained herein;
(c) during the period beginning five business days prior to the Parent
Pricing Period and ending at the Company Effective Time, shall not (and shall
cause its Subsidiaries not to) issue or sell any shares of Parent's capital
stock or the capital stock of any of its Subsidiaries (or securities convertible
into or exchangeable for capital stock) for less than the fair market value
thereof, except for issuances pursuant to employee benefit plans or pursuant to
outstanding options, warrants or convertible securities in accordance with their
terms, in each case as in existence on the date hereof, and shall not issue to
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holders of Parent's capital stock any rights to purchase any shares of Parent's
capital stock for less than the fair market value thereof if the ex-dividend
date for such distribution would be during the period beginning five business
days prior to the Parent Pricing Period and ending at the Company Effective
Time;
(d) shall not (and shall cause its Subsidiaries not to) engage in any
substantial repurchase at a material premium, recapitalization, restructuring or
reorganization with respect to the Parent Common Stock;
(e) during the period beginning five business days prior to the
mailing of the Proxy Statement/Prospectus and ending at the Company Effective
Time, shall not (and shall cause its Subsidiaries not to) redeem, repurchase or
otherwise acquire any shares of Parent Common Stock (other than pursuant to
existing employee benefit plans);
(f) shall not declare, set aside or pay any dividend or make any other
distribution or payment with respect to any shares of Parent Common Stock, or
make any commitment for any such action, except regular quarterly cash dividends
in amounts consistent with past practice;
(g) shall not, and shall not permit any of its Subsidiaries to,
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or agree to
acquire any assets if (i) such entity or business is engaged in the U.S.
oilfield production chemicals business with revenues in SIC codes in which
either Parent or the Company has revenues or (ii) such action is likely to (a)
have a material adverse effect on the ability of Parent to consummate the
transactions contemplated by this Agreement or (b) delay materially (but in any
event by more than 10 business days) the Barnickel Effective Time or the Company
Effective Time;
(h) other than any acquisition as to which the purchase price is not
in excess of $200 million, shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof the
principal business of which is not related to the oilfield service industry, the
manufacture and sale of products for use in, or the provision of services
relating to the exploration, development or production of oil or natural gas or
other minerals or other businesses engaged in by Parent on the date hereof; and
(i) subject to Section 8.4, shall not take any action that is likely
to delay materially (but in any event by more than 10 business days) or
adversely affect the ability of any of the parties hereto to obtain any consent,
authorization, order or approval of any governmental commission, board or other
regulatory body or the expiration of any applicable waiting period required to
consummate the transactions contemplated by this Agreement.
8.3. Meetings of Stockholders. (a) Each of Parent, if a vote of its
stockholders is required by the rules of the NYSE, Barnickel and the Company
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will take all action necessary in accordance with applicable law and its
certificate or articles of incorporation and bylaws to convene a meeting of its
stockholders as promptly as practicable to consider and vote upon (i) in the
case of Parent, the approval of the issuance of the shares of Parent Common
Stock pursuant to the Mergers contemplated hereby and (ii) in the case of
Barnickel and the Company, the approval of this Agreement and the transactions
contemplated hereby. Barnickel and the Company shall coordinate and cooperate
with respect to the timing of such meetings and shall use their best efforts to
hold such meetings on the same day and in any event, the vote of the Company
stockholders shall be taken prior to the vote of the Barnickel stockholders.
(b) Parent, if a vote of its stockholders is required by the rules of
the NYSE, Barnickel and the Company, through their respective Boards of
Directors, shall recommend approval of such matters subject to the determination
by the Board of Directors of the Company and the Board of Directors of Barnickel
after consultation with their respective counsel that recommending approval of
such matters would not be inconsistent with its fiduciary obligations.
Additionally, the Board of Directors of the Company or the Board of Directors of
Barnickel may at any time prior to the Company Effective Time withdraw, modify,
or change any recommendation and declaration regarding this Agreement or the
Mergers, or recommend and declare advisable any other offer or proposal, if in
the opinion of such Board of Directors after consultation with its counsel the
failure to so withdraw, modify, or change its recommendation and declaration
would be inconsistent with its fiduciary obligations.
8.4. Filings; Other Action. Subject to the terms and conditions herein
provided, the Company, Barnickel and Parent shall: (a) promptly (but in not more
than 10 business days from the date hereof) make their respective filings and
thereafter make any other required submissions under the HSR Act with respect to
the Mergers; (b) use their best efforts to cooperate with one another in (i)
determining which filings are required to be made prior to the Company Effective
Time with, and which consents, approvals, permits or authorizations are required
to be obtained prior to the Company Effective Time from, governmental or
regulatory authorities of the United States, the several states and foreign
jurisdictions in connection with the execution and delivery of this Agreement
and the consummation of the Mergers and the transactions contemplated hereby and
(ii) timely making all such filings and timely seeking all such consents,
approvals, permits or authorizations; (c) furnish the others with copies of all
correspondence, filings and communications (and memoranda setting forth the
substance thereof) between them and their affiliates and their respective
representatives, on the one hand, and any governmental or regulatory authority
or members or their respective staffs, on the other hand, with respect to this
Agreement and the transactions contemplated hereby; (d) furnish the others with
such necessary information and reasonable assistance as such other parties and
their respective affiliates may reasonably request in connection with their
preparation of necessary filings, registrations or submissions of information to
any governmental or regulatory authorities, including without limitation any
filings necessary under the provisions of the HSR Act; (e) use their
commercially reasonable efforts to take, or cause to be taken, all other action
and do, or cause to be done, all other things necessary, proper or appropriate
to consummate and make effective the Mergers and the transactions contemplated
by this Agreement including, without limitation, the resolution of objections,
if any, as may be asserted by any governmental authority with respect to the
Mergers and the transactions contemplated hereby under any antitrust or trade or
regulatory laws or regulations of any governmental authority and (f) use their
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commercially reasonable efforts to lift or rescind any injunction or restraining
order or other order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby and use their commercially
reasonable efforts to defend any litigation seeking to enjoin, prevent or delay
the consummation of the Mergers or the transactions contemplated hereby or
seeking material damages. In complying with the foregoing, Parent, Barnickel and
the Company shall each use all commercially reasonable measures available to
them to consummate the transactions contemplated hereby, so long as such
measures would not have a material adverse effect on the U.S. oilfield
production chemicals businesses of the Company or Parent (including any
Subsidiaries thereof), but shall not be required to take measures that would
have such a material adverse effect.
8.5. Inspection of Records. From the date hereof to the Company
Effective Time, each of the Company and Barnickel, on the one hand, and Parent,
on the other hand, shall allow all designated officers, attorneys, accountants
and other representatives of Parent or the Company and Barnickel, as the case
may be, access at all reasonable times upon reasonable notice to the records and
files, correspondence, audits and properties, as well as to all information
relating to commitments, contracts, titles and financial position, or otherwise
pertaining to the business and affairs of Parent, the Company and Barnickel and
their respective Subsidiaries; provided that no investigation pursuant to this
Section 8.5 shall affect any representation or warranty given by any party
hereunder, and provided further that notwithstanding the provision of
information or investigation by any party, no party shall be deemed to make any
representation or warranty except as expressly set forth in this Agreement.
Notwithstanding the foregoing, no party shall be required to provide any
information which it reasonably believes it may not provide to the other party
by reason of applicable law, rules or regulations, which constitutes information
protected by attorney/client privilege, or which it is required to keep
confidential by reason of contract or agreement with third parties. The parties
hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply. Each of
Parent, Barnickel and the Company agrees that it will not, and will cause its
respective representatives not to, use any information obtained pursuant to this
Section 8.5 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. All non-public information obtained pursuant to
this Section 8.5 shall be governed by the Confidentiality Agreements (as defined
in Section 11.4).
8.6. Publicity. The parties will consult with each other and will
mutually agree upon any press releases or public announcements pertaining to
this Agreement or the transactions contemplated hereby and shall not issue any
such press releases or make any such public announcements prior to such
consultation and agreement, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange, in which case the party proposing to issue such press release or make
such public announcement shall use its best efforts to consult in good faith
with the other party before issuing any such press releases or making any such
public announcements.
8.7. Registration Statement. (a) Each of Parent, the Company and
Barnickel shall cooperate and promptly prepare and Parent shall file with the
SEC as soon as practicable a Registration Statement on Form S-4 (the "Form S-4")
under the Securities Act, with respect to the Parent Common Stock issuable in
the Mergers, a portion of which Registration Statement shall also serve as the
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joint proxy statement with respect to the meetings of the stockholders of
Parent, if a vote of the stockholders of Parent is required by the rules of the
NYSE, of the Company and of Barnickel in connection with the Mergers (the "Proxy
Statement/Prospectus"). The respective parties will cause the Proxy
Statement/Prospectus and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder. Parent shall use its best efforts, and
the Company and Barnickel will cooperate with Parent, to have the Form S-4
declared effective by the SEC as promptly as practicable. Parent shall use its
reasonable best efforts to obtain, prior to the effective date of the Form S-4,
all necessary state securities law or "Blue Sky" permits or approvals required
to carry out the transactions contemplated by this Agreement and will pay all
expenses incident thereto. Parent will advise the Company and Barnickel,
promptly after it receives notice thereof, of the time when the Form S-4 has
become effective or any supplement or amendment has been filed, the issuance of
any stop order, the suspension of the qualification of the Parent Common Stock
issuable in connection with the Mergers for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Proxy
Statement/Prospectus or the Form S-4 or comments thereon and responses thereto
or requests by the SEC for additional information.
(b) Each of Parent, if a vote of its stockholders is required pursuant
to the rules of the NYSE, Barnickel and the Company will each use its best
efforts to cause the Proxy Statement/Prospectus to be mailed to its stockholders
as promptly as practicable after the date hereof.
(c) Each of Parent, the Company and Barnickel agrees that the
information provided by it for inclusion in the Proxy Statement/Prospectus and
each amendment or supplement thereto, at the time of mailing thereof and at the
time of the respective meetings of stockholders of Parent, if any, of Barnickel
and of the Company, or, in the case of information provided by it for inclusion
in the Form S-4 or any amendment or supplement thereto, at the time it is filed
or becomes effective, (i) will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and (ii) will comply as to form in all material
respects with the provisions of the Exchange Act.
8.8. Listing Application. Parent shall promptly prepare
and submit to the NYSE a listing application covering the shares of Parent
Common Stock issuable in the Mergers, and shall use its best efforts to obtain,
prior to the Barnickel Effective Time, approval for the listing of such Parent
Common Stock, subject to official notice of issuance.
8.9. Letters of Accountants. (a) The Company shall use its reasonable
best efforts to cause to be delivered to Parent "comfort" letters of Price
Waterhouse LLP ("Price Waterhouse"), the Company's independent public
accountants, dated the effective date of the Form S-4 and the Closing Date,
respectively, and addressed to Parent with regard to certain financial
information regarding the Company included in the Form S-4, in form and
substance reasonably satisfactory to Parent and customary in scope and substance
for "comfort" letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.
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(b) Barnickel shall use its reasonable best efforts to cause to be
delivered to Parent "comfort" letters of Price Waterhouse, Barnickel's
independent public accountants, dated the effective date of the Form S-4 and the
Closing Date, respectively, and addressed to Parent, with respect to certain
financial information regarding Barnickel included in the Form S-4, in form and
substance reasonably satisfactory to Parent and customary in scope and substance
for "comfort" letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.
(c) Parent shall use its reasonable best efforts to cause to be
delivered to each of the Company and Barnickel "comfort" letters of Deloitte &
Touche LLP, Parent's independent public accountants, dated the effective date of
the Form S-4 and the Closing Date, respectively, and addressed to each of the
Company and Barnickel, with regard to certain financial information regarding
Parent included in the Form S-4, in form and substance reasonably satisfactory
to the Company and Barnickel and customary in scope and substance for "comfort"
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
8.10. Agreements of Rule 145 Affiliates. Prior to the Barnickel
Effective Time, each of Barnickel and the Company shall cause to be prepared and
delivered to Parent a list identifying all persons who, at the time of the
meeting of Barnickel's stockholders or the meeting of the Company's stockholders
pursuant to Section 8.3, as the case may be, may be deemed to be "affiliates" of
Barnickel or of the Company, as the case may be, as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act (the "Rule 145
Affiliates"). Parent shall be entitled to place restrictive legends on any
shares of Parent Common Stock received by such Rule 145 Affiliates. Barnickel or
the Company, as the case may be, shall use its best efforts to cause each person
who is identified as a Rule 145 Affiliate in such list to deliver to Parent, at
or prior to the Barnickel Effective Time, a written agreement, in the form to be
approved by the parties hereto, that such Rule 145 Affiliate will not sell,
pledge, transfer or otherwise dispose of any shares of Parent Common Stock
issued to such Rule 145 Affiliate pursuant to the Mergers, except pursuant to an
effective registration statement or in compliance with Rule 145 or an exemption
from the registration requirements of the Securities Act. Barnickel or the
Company, as the case may be, shall, to the extent necessary, use its best
efforts to cause each person who is identified as a Rule 145 Affiliate in such
list to sign on or prior to the thirtieth day prior to the Barnickel Effective
Time, a written agreement, in the form to be approved by Barnickel or the
Company, as the case may be, and Parent, that such party will not sell or in any
other way reduce such party's risk relative to any shares of Parent Common Stock
received in the Mergers (within the meaning of Section 201.01 of the SEC's
Financial Reporting Release No. 1), until such time as financial results
(including combined sales and net income) covering at least 30 days of
post-merger operations have been published, except as permitted by Staff
Accounting Bulletin No. 76 (or any successor thereto) issued by the SEC.
8.11. Expenses. Whether or not the Mergers are consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, except
as expressly provided herein.
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8.12. Indemnification and Insurance. (a) From and after the Company
Effective Time, Parent shall indemnify, defend and hold harmless to the fullest
extent permitted under applicable law each person who is now, or has been at any
time prior to the date hereof, an officer or director of the Company or
Barnickel (or any Subsidiary or division thereof), (individually, an
"Indemnified Party" and, collectively, the "Indemnified Parties"), against all
losses, claims, damages, liabilities, costs or expenses (including reasonable
attorneys' fees), judgments, fines, penalties and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation arising out
of or pertaining to acts or omissions, or alleged acts or omissions, by them in
their capacities as such, whether commenced, asserted or claimed before or after
the Company Effective Time. In the event of any such claim, action, suit,
proceeding or investigation (an "Action"), (i) Parent shall pay, as incurred,
the reasonable fees and expenses of counsel selected by the Indemnified Party,
which counsel shall be reasonably acceptable to Parent, in advance of the final
disposition of any such Action to the fullest extent permitted by applicable
law, upon receipt of any undertaking required by applicable law, and (ii)
Barnickel Surviving Corporation and Surviving Corporation will cooperate in the
defense of any such matter; provided, however, that Parent shall not be liable
for any settlement effected without its written consent (which consent shall not
be unreasonably withheld), and provided further, that Parent shall not be
obligated pursuant to this Section 8.12 to pay the fees and disbursements of
more than one counsel for all Indemnified Parties in any single Action, unless,
in the opinion of counsel for any of the Indemnified Parties, there is a
conflict of interests between two or more of such Indemnified Parties.
(b) The parties agree that the rights to indemnification, including
provisions relating to advances of expenses incurred in defense of any action or
suit, in the certificate or articles of incorporation and bylaws of the Company
and Barnickel with respect to matters occurring through the Company Effective
Time, shall survive the Mergers and shall continue in full force and effect for
a period of six years from the Company Effective Time; provided, however, that
all rights to indemnification in respect of any Action pending or asserted
within such period shall continue until the disposition of such Action.
(c) (i) For a period of six years after the Company Effective Time,
Parent shall cause to be maintained officers' and directors' liability insurance
covering the Indemnified Parties who are currently covered, in their capacities
as officers and directors, by the Company's existing officers' and directors'
liability insurance policies on terms substantially no less advantageous to the
Indemnified Parties than such existing insurance.
(ii) For a period of six years after the Barnickel Effective
Time, Parent shall cause to be maintained officers' and directors' liability
insurance covering the Indemnified Parties who are currently covered, in their
capacities as officers and directors, by Barnickel's existing officers' and
directors' liability insurance policies on terms substantially no less
advantageous to the Indemnified Parties than such existing insurance.
(d) Parent shall pay all expenses, including reasonable attorneys'
fees, that may be incurred by any Indemnified Parties in enforcing the indemnity
and other obligations provided for in this Section 8.12.
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(e) The rights of each Indemnified Party hereunder shall be in
addition to any other rights such Indemnified Party may have under the
certificate or articles of incorporation or bylaws of the Company or Barnickel,
under the DGCL or the MGBCL or otherwise. The provisions of this Section 8.12
shall survive the consummation of the Mergers and expressly are intended to
benefit each of the Indemnified Parties.
(f) In the event Parent, Surviving Corporation or Barnickel Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets to any person,
then and in either such case, proper provision shall be made so that the
successors and assigns of Parent, Surviving Corporation or Barnickel Surviving
Corporation, as the case may be, shall assume the obligations set forth in this
Section 8.12.
(g) Barnickel Surviving Corporation and Surviving Corporation shall be
jointly and severally liable with Parent for all of Parent's obligations under
this Section 8.12.
8.13. Certain Benefits. (a) From and after the Company Effective Time,
Parent and its Subsidiaries will honor in accordance with their terms and this
Agreement the executive, employment and other agreements and arrangements set
forth in Section 8.13(a)(i) of the Company Disclosure Letter between the Company
or its Subsidiaries and certain employees and former employees thereof (the
"Employment Agreements") and certain executives and former executives thereof
("Executive Agreements") and one other individual, and all of the Company
Benefit Plans; provided, however, that nothing herein shall preclude any change
in any Company Benefit Plan effected on a prospective basis that is permitted
pursuant to this Section 8.13. Parent hereby acknowledges that the consummation
of the Company Merger will result in a "change of control" under the Executive
Agreements and the Employment Agreements. Parent shall cause the Surviving
Corporation (i) to assume the obligations of the Company under the Company
Benefit Plans set forth on Schedule 8.13(a)(ii) of the Company Disclosure Letter
substantially as in effect immediately prior to the Company Effective Time, to
cover all Company Employees (as defined in Section 8.13(g)) who are participants
therein immediately prior to the Company Effective Time and who remain eligible
to participate in such Company Benefit Plans pursuant to the terms thereof;
provided, that the Surviving Corporation may amend such plans, other than the
Petrolite Corporation Vacation Plan and the Petrolite Corporation Severance
Plan, at any time following the Company Effective Time to provide benefits to
Company Employees which in the aggregate are comparable to those applicable to
similarly situated employees of Parent or, (ii) in lieu thereof, to provide
benefits to such Company Employees under Parent Benefit Plans so that the
aggregate benefits to such Company Employees are comparable to those that are
applicable to similarly situated employees of Parent. After the Company
Effective Time, any Company Employee who is or becomes entitled to continued
medical coverage pursuant to an agreement with the Company set forth in Section
8.13(a)(i) of the Company Disclosure Letter will be entitled to participate
under any medical plan sponsored by Parent or the Surviving Corporation which
covers Company Employees under the same terms and for payment of the same level
of premiums as specified in his or her agreement. The Surviving Corporation and
Parent shall not be obligated hereunder to cover any employee who is hired or
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assigned to work at a Company facility after the Company Effective Time under
any employee benefit plan, program or arrangement. With respect to the Parent
Benefit Plans, Parent and the Surviving Corporation shall grant to all Company
Employees, from and after the Company Effective Time, credit for all service
with the Company and its affiliates and predecessors prior to the Company
Effective Time for seniority, eligibility to participate, eligibility for
benefits and vesting purposes. To the extent Parent Benefit Plans provide
medical or dental welfare benefits, such plans shall waive any pre-existing
conditions and actively-at-work exclusions with respect to Company Employees
(but only to the extent such Company Employees were provided coverage under the
Company Benefit Plans) and shall provide that any expenses incurred on or before
the Company Effective Time by or on behalf of any Company Employees shall be
taken into account under the Parent Benefit Plans for purposes of satisfying
applicable deductible, coinsurance and maximum out-of-pocket provisions.
(b) Parent agrees to maintain the Petrolite Corporation Severance Plan
as in effect on the date hereof for a period of one year from the Company
Effective Time for the benefit of Company Employees.
(c) Parent agrees that any Company Employee who continues to be
employed by the Surviving Corporation or Parent or any Subsidiary thereof on
November 1, 1997 will continue to be entitled to take the same paid vacation he
or she would have earned under the Petrolite Corporation Vacation Policy as in
effect on the date hereof to be taken during the period ending October 31, 1998.
(d) Promptly following the Company Effective Time, Parent shall cause
the Surviving Corporation to amend the Petrolite Corporation Retirement Plan
(the "PCRP") to provide that any Company Employee who continues in employment
for at least three (3) months following the Company Effective Time or whose
employment is terminated during such period without Cause (as defined in Section
8.13(e)) shall be provided with one additional year of service under the PCRP,
for all purposes for which such service is recognized under the PCRP. If
required by applicable law, the additional benefits with respect thereto will be
provided under a supplemental arrangement.
(e) (i) With respect to the Company's Annual Bonus Plan and Division
Cash Incentive and Bonus Plans (collectively, the "Incentive Plans"), the
determination of whether the performance targets have been met for the fiscal
year ending October 31, 1997, shall be made based on the actual performance for
such fiscal year or applicable portion thereof; provided, however, that the
impact that the Company Expenses may have on the applicable performance results
used to determine whether the performance targets have been met under the
Incentive Plans shall be disregarded. As used herein, "Company Expenses" shall
mean all fees and expenses (including, without limitation, all fees and expenses
of counsel, financial advisors, accountants, environmental and other experts and
consultants and all printing and advertising expenses) actually incurred or
accrued by the Company or incurred on the Company's behalf, or incurred by
Parent, Merger Sub, Merger Grandsub or Barnickel and assumed by the Company,
whether pursuant to this Agreement or as a result of the Company Merger or
otherwise, in connection with this Agreement and the transactions contemplated
hereby (including, without limitation, in connection with the previously
announced proposed consent solicitation by Barnickel, the negotiation,
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preparation, execution and performance of this Agreement, the structuring of the
Mergers, any agreements related hereto or thereto and any filings to be made in
connection therewith) whether incurred or accrued prior to or after the Company
Effective Time.
(ii) Bonuses payable pursuant to the Incentive Plans for the
period from November 1, 1996 to October 31, 1997 (the "Bonus Period") will be
determined and paid pursuant to the provisions of such Incentive Plans except as
provided in this Section 8.13(e). Schedule 8.13(e) lists the Incentive Plans and
the sets forth the aggregate maximum bonus amount payable to participants
thereunder ("Participants") for the Bonus Period. The Company shall determine
the bonus amounts to be paid to each Participant for the period from November 1,
1996 through the Closing Date based on the criteria established for the
applicable Incentive Plan, and shall pay such amounts to the Participant on or
before the Closing Date. The bonus amount paid to a Participant by the Company
pursuant to this Section 8.13(e) shall not exceed such Participant's maximum
bonus amount for the Bonus Period under the applicable Incentive Plan (the
"Maximum Bonus Amount") multiplied by a fraction, the numerator of which is the
number of calendar days from November 1, 1996 through and including the Closing
Date and the denominator of which is 365 (the "Prorated Maximum Bonus Amount").
Before December 1, 1997, Parent shall determine the bonus amount to be paid to
each Participant for the period from the Closing Date through October 31, 1997,
based on criteria established by Parent, and the Surviving Corporation shall pay
that amount to the Participant; provided, however, (i) the bonus so paid to each
Participant shall not be less than 80% of the amount determined by multiplying
the difference between such Participant's Maximum Bonus Amount and such
Participant's Prorated Maximum Bonus Amount by a fraction, the numerator of
which is the bonus amount paid to such Participant by the Company on or before
the Closing Date pursuant to this Section 8.13(e) and the denominator of which
is such Participant's Prorated Maximum Bonus Amount; and (ii) the Surviving
Corporation shall pay the minimum amount determined in accordance with clause
(i) above to any Participant whose employment is terminated without Cause after
the Closing Date and before payment is made by the Surviving Corporation
pursuant to this Section 8.13(e). "Cause" shall mean acts of theft, unethical
conduct or dishonesty affecting the assets, properties or business of the
Surviving Corporation or Parent, willful misconduct or material dereliction of
duty. Notwithstanding the foregoing, no payment shall be made with respect to
the Bonus Period following the date hereof to any Participant who is a party to
an Executive Agreement unless such Participant agrees in advance in writing that
to the extent that the receipt of any such payment would cause other payments
payable to such Participant pursuant to his or her Executive Agreement which
would otherwise be deductible by the Company for federal income tax purposes to
become non-deductible for such purposes pursuant to Section 280G of the Code,
such excess payment shall reduce any severance amounts payable to such
Participant pursuant to his or her Executive Agreement.
(f) It is the intent of Parent that for a period of two years
following the Company Effective Time, any reductions in workforce in respect of
employees of Parent and the Surviving Corporation shall be made on a fair and
equitable basis, without regard to whether employment commenced with Parent or
the Company or their respective Subsidiaries, and that any Company Employee
whose employment is terminated or job is eliminated by Parent or any of its
Subsidiaries during such period shall be entitled to participate on a fair and
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equitable basis in the job opportunity and employment placement programs offered
by Parent or any of its Subsidiaries.
(g) For purposes of this Section 8.13, the term "Company Employees"
shall mean all individuals employed by the Company and its Subsidiaries
(including those on lay-off, disability or leave of absence, paid or unpaid)
immediately prior to the Company Effective Time.
8.14. Reorganization; Pooling. (a) From and after the date hereof and
until the Company Effective Time, none of Parent, the Company, Barnickel or any
of their respective Subsidiaries shall knowingly (i) take any action, or fail to
take any action, as a result of which the Barnickel Merger or the Company Merger
would fail to qualify as a reorganization within the meaning of section 368(a)
of the Code (and any comparable provisions of applicable state or local law); or
(ii) enter into any contract, agreement, commitment or arrangement to take or
fail to take any such action. Each of the parties shall use its reasonable
efforts to obtain the opinions of counsel referred to in Sections 9.2(b) and
9.3(b).
(b) From and after the date hereof and until the Company Effective
Time, none of the Company, Barnickel or any of their respective Subsidiaries
shall, to the extent necessary, knowingly take any action, or fail to take any
action, that would prevent the treatment of the Barnickel Merger or the Company
Merger as a "pooling of interests" for financial accounting purposes.
(c) Following the Company Effective Time, neither Parent nor any of
its Subsidiaries shall knowingly take any action or knowingly cause any action
to be taken which would cause the Barnickel Merger or the Company Merger to fail
to qualify as a reorganization within the meaning of section 368(a) of the Code
(and any comparable provisions of applicable state or local law).
(d) From and after the Barnickel Effective Time and until the Company
Effective Time, Parent agrees that it will not take any actions that would cause
either (i) Barnickel not to be a wholly owned Subsidiary of Parent or (ii)
Merger Grandsub not to be a wholly owned Subsidiary of Barnickel.
8.15. Certain Tax Agreements. At or before the Closing, Barnickel will
(i) provide to Parent a duly executed statement described in U.S. Treasury
regulation section 1.897-2(h)(1), which is issued by Barnickel and is dated not
more than 30 days before the Closing Date, certifying that the Barnickel Common
Stock is not a United States real property interest and (ii) provide to the IRS
a duly executed notice described in U.S. Treasury regulation section 1.897-
2(h)(2).
8.16. Obligations of Merger Sub and Merger Grandsub. Parent will take
all action necessary to cause each of Merger Sub and Merger Grandsub to perform
its obligations under this Agreement and to consummate the Barnickel Merger and
the Company Merger, respectively, on the terms and conditions set forth in this
Agreement. Neither Merger Sub nor Merger Grandsub will issue any shares of its
capital stock, any securities convertible into or exchangeable for its capital
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stock, or any option, warrant or other right to acquire its capital stock to any
person or entity other than Parent.
8.17. Rights Agreement. Prior to the Barnickel Effective Time, the
Board of Directors of the Company shall take any action (including, if
necessary, amending or terminating (but with respect to termination, only as of
immediately prior to the Barnickel Effective Time) the Rights Agreement)
necessary so that none of the execution and delivery of this Agreement, the
conversion of shares of Company Common Stock and Barnickel Common Stock into the
right to receive Parent Common Stock in accordance with Article 4 of this
Agreement, and the consummation of the Company Merger and the Barnickel Merger
or any other transaction contemplated hereby will cause (i) the Company Rights
to become exerciseable under the Company Rights Agreement, (ii) Barnickel,
Parent or any of its Subsidiaries to be deemed an "Acquiring Person" (as defined
in the Company Rights Agreement), (iii) any such event to be deemed a "flip-over
transaction or event" or (iv) the "Stock Acquisition Date" or the "Distribution
Date" (each as defined in the Company Rights Agreement) to occur upon any such
event, and so that the "Expiration Date" (as defined in the Company Rights
Agreement) of the Company Rights will occur immediately prior to the Barnickel
Effective Time. Neither the Board of Directors of the Company nor the Company
shall take any other action to terminate the Company Rights Agreement, redeem
the Company Rights, cause any person not to be or become an "Acquiring Person"
or otherwise amend the Company Rights Agreement in a manner adverse to Parent.
8.18. Mutuality of Mergers. Each of Parent, Merger Sub and Barnickel
agrees that it shall not effect the Barnickel Merger until all conditions
precedent to the obligations of Parent, Merger Grandsub and the Company to
effect the Company Merger have been satisfied or waived, other than the
condition to the Company Merger set forth in Section 9.2(d) hereof.
ARTICLE 9
9. Conditions.
9.1. Conditions to Each Party's Obligation to Effect the Mergers. The
respective obligation of each party to effect the Mergers shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a) (i) This Agreement, the Company Merger and the transactions
contemplated hereby shall have been approved by the affirmative vote of holders
of a majority of the issued and outstanding shares of Company Common Stock
entitled to vote thereon.
(ii) This Agreement, the Barnickel Merger and the transactions
contemplated hereby shall have been approved by the affirmative vote of the
holders of at least two-thirds of the issued and outstanding shares of Barnickel
Common Stock entitled to vote thereon.
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(iii) The issuance of the shares of Parent Common Stock pursuant
to the Mergers shall have been approved by the holders of issued and outstanding
shares of Parent Common Stock as and to the extent required by the rules of the
NYSE.
(b) The waiting period applicable to the consummation of the Mergers
under the HSR Act shall have expired or been terminated.
(c) None of the parties hereto shall be subject to any decree, order
or injunction of a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement; provided,
however, that prior to invoking this condition each party agrees to comply with
Section 8.4, and with respect to other matters, to use its commercially
reasonable efforts to have any such decree, order or injunction lifted or
vacated; and no statute, rule or regulation shall have been enacted by any
governmental authority which prohibits or makes unlawful the consummation of
either of the Mergers.
(d) The Form S-4 shall have become effective and no stop order with
respect thereto shall be in effect.
(e) The shares of Parent Common Stock to be issued pursuant to the
Mergers shall have been authorized for listing on the NYSE, subject to official
notice of issuance.
9.2. Conditions to Obligation of the Company to Effect the Company
Merger. The obligation of the Company to effect the Company Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Parent shall have performed in all material respects its covenants
and agreements contained in this Agreement required to be performed on or prior
to the Closing Date and the representations and warranties of Parent, Merger Sub
and Merger Grandsub contained in this Agreement and in any document delivered in
connection herewith shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date (except for representations
and warranties made as of a specified date, which need be true and correct in
all material respects only as of the specified date), and the Company shall have
received a certificate of the President or a Vice President of Parent, dated the
Closing Date, certifying to such effect.
(b) The Company shall have received the opinion of Fried, Frank,
Harris, Shriver & Jacobson, special counsel to the Company, in form and
substance reasonably satisfactory to the Company, dated the Closing Date, to the
effect that the Company Merger will be treated for federal income tax purposes
as a reorganization within the meaning of section 368(a) of the Code. In
rendering such opinion, special counsel to the Company shall be entitled to rely
upon representations of officers of the Company, Barnickel and Parent and
stockholders of the Company substantially in the form of Exhibits B, C and D
hereto and as to such other matters as such counsel may reasonably request.
(c) This Agreement, the Company Merger and the transactions
contemplated hereby shall have been approved by the holders of a majority of the
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outstanding shares of Company Common Stock voting on such matter, excluding for
these purposes shares of Company Common Stock owned by Barnickel.
(d) The Barnickel Merger shall have been consummated.
9.3. Conditions to Obligation of Barnickel to Effect the Barnickel
Merger. The obligation of Barnickel to effect the Barnickel Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Parent shall have performed in all material respects its covenants
and agreements contained in this Agreement required to be performed on or prior
to the Closing Date and the representations and warranties of Parent, Merger Sub
and Merger Grandsub contained in this Agreement and in any document delivered in
connection herewith shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date (except for representations
and warranties made as of a specified date, which need be true and correct in
all material respects only as of the specified date) and Barnickel shall have
received a certificate of the President or a Vice President of Parent, dated the
Closing Date, certifying to such effect.
(b) Barnickel shall have received the opinion of Lowenhaupt &
Chasnoff, L.L.C., special counsel to Barnickel, in form and substance reasonably
satisfactory to Barnickel, dated the Closing Date, to the effect that the
Barnickel Merger will be treated for federal income tax purposes as a
reorganization within the meaning of section 368(a) of the Code. In rendering
such opinion, special counsel to Barnickel shall be entitled to rely upon
representations of officers of the Company, Barnickel and Parent and
stockholders of Barnickel substantially in the form of Exhibits B, C and D
hereto and as to such other matters as such counsel may reasonably request,
(c) All conditions to the Company Merger other than the condition set
forth in Section 9.2(d) hereto shall have been satisfied or waived.
9.4. Conditions to Obligation of Parent, Merger Sub and Merger
Grandsub to Effect the Mergers. The obligations of Parent and Merger Sub to
effect the Barnickel Merger and the obligations of Parent and Merger Grandsub to
effect the Company Merger shall be subject to the fulfillment at or prior to the
Closing Date of the following conditions:
(a) The Company shall have performed in all material respects its
covenants and agreements contained in this Agreement required to be performed on
or prior to the Closing Date and the representations and warranties of the
Company contained in this Agreement and in any document delivered in connection
herewith shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date (except for representations and
warranties made as of a specified date, which need be true and correct in all
material respects only as of the specified date), and Parent shall have received
a certificate of the President and the Chief Financial Officer of the Company,
dated the Closing Date, certifying to such effect.
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(b) Barnickel shall have performed in all material respects its
covenants and agreements contained in this Agreement required to be performed on
or prior to the Closing Date and the representations and warranties of Barnickel
contained in this Agreement and in any document delivered in connection herewith
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date (except for representations and warranties
made as of a specified date, which need be true and correct in all material
respects only as of the specified date), and Parent shall have received a
certificate of the President or a Vice President of Barnickel, dated the Closing
Date, certifying to such effect.
(c) No decree, order or injunction of a court of competent
jurisdiction, and no order of any governmental authority and no other legal
restraint or prohibition in any such case arising under any Antitrust Law (as
defined in Section 10.6(d)) ("Injunction") shall be in effect (i) imposing any
limitation upon the ability of Parent or any of its Subsidiaries effectively to
control the business or operations of the Company, Barnickel or any of their
respective Subsidiaries or (ii) prohibiting or imposing any limitation upon
Parent's or any of its Subsidiaries' ownership or operation of all or any
portion of the business or assets or properties of Parent, the Company or
Barnickel or any of their respective Subsidiaries or compelling Parent, the
Company or Barnickel or any of their respective Subsidiaries to divest or hold
separate all or any portion of the business or assets or properties of Parent,
the Company or Barnickel or any of their respective Subsidiaries, or imposing
any other limitation upon any of them in the conduct of their businesses, which
in the case of (i) or (ii) would have a material adverse effect on the U.S.
oilfield production chemicals business of the Company or Parent (including any
Subsidiaries thereof), and no suit or proceeding by a governmental authority
seeking such an Injunction or an Injunction preventing or making illegal the
consummation of any of the Mergers shall be pending; provided, however, prior to
invoking this condition, Parent agrees to comply with Section 8.4.
(d) At the Barnickel Effective Time, the aggregate number of shares of
Barnickel Common Stock held by Dissenting Stockholders shall not exceed 10% of
the total number of issued and outstanding shares of Barnickel Common Stock.
ARTICLE 10
10. Termination.
10.1. Termination by Mutual Consent. This Agreement may be terminated
at any time prior to the Company Effective Time, before or after the approval of
this Agreement by the stockholders of the Company, Barnickel or, if applicable,
Parent by the mutual written consent of the Company, Barnickel and Parent.
10.2. Termination by Parent, Barnickel or the Company. This Agreement
may be terminated by action of the Board of Directors of Parent, of Barnickel or
of the Company if:
(a) the Mergers shall not have been consummated by September 5, 1997;
provided, however, that the right to terminate this Agreement pursuant to this
clause (a) shall not be available to any party whose failure to perform or
observe in any material respect any of its obligations under this Agreement in
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any manner shall have been the cause of, or resulted in, the failure of the
Mergers to occur on or before such date; provided, further, if approval by
Parent's stockholders of the issuance of Parent Common Stock pursuant to the
Mergers is required by the rules of the NYSE and such approval has not yet been
obtained, that such date may be extended from time to time by the Company by
written notice to Parent and Barnickel for up to an additional 120 days in the
aggregate, but in no event to a date earlier than the earliest date on which the
Parent may obtain such approval under SEC regulations, NYSE rules and the DGCL;
or
(b) the approval of the Company's stockholders required by Section
9.1(a) shall not have been obtained at a meeting duly convened therefor or at
any adjournment thereof; or
(c) the approval of Barnickel's stockholders required by Section
9.1(a) shall not have been obtained at a meeting duly convened therefor or at
any adjournment thereof; or
(d) the approval of Parent's stockholders if required by Section
9.1(a) shall not have been obtained at a meeting duly convened therefor or at
any adjournment thereof; or
(e) a United States federal or state court of competent jurisdiction
or United States federal or state governmental, regulatory or administrative
agency or commission shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non-appealable; provided, however, that
the party seeking to terminate this Agreement pursuant to this clause (e) shall
have complied with Section 8.4 and with respect to other matters shall have used
its commercially reasonable efforts to remove such injunction, order or decree.
10.3. Termination by the Company. This Agreement may be terminated at
any time prior to the Barnickel Effective Time, before or after the adoption and
approval by the stockholders of the Company referred to in Section 9.1(a)(i), by
action of the Board of Directors of the Company after consultation with its
legal advisors and Barnickel, if:
(a) the Board of Directors of the Company determines that proceeding
with the transactions contemplated hereby would be inconsistent with its
fiduciary obligations by reason of a Company Acquisition Proposal; provided that
the Company may not effect such termination pursuant to this Section 10.3(a)
unless and until (i) Parent receives at least one week's prior written notice
from the Company of its intention to effect such termination pursuant to this
Section 10.3(a); (ii) during such week, the Company shall, and shall cause its
respective financial and legal advisors to, consider any adjustment in the terms
and conditions of this Agreement that Parent may propose; and provided, further,
that any termination of this Agreement pursuant to this Section 10.3(a) shall
not be effective until the Company has made the payment required by Section
10.6(a)(i); or
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(b) (i) there has been a breach by Parent, Merger Sub or Merger
Grandsub of any representation, warranty, covenant or agreement set forth in
this Agreement or if any representation or warranty of Parent, Merger Sub or
Merger Grandsub shall have become untrue, in either case such that the
conditions set forth in Section 9.2(a) would not be satisfied and (ii) such
breach is not curable, or, if curable, is not cured within 30 days after written
notice of such breach is given to Parent by the Company or Barnickel; provided,
however, that the right to terminate this Agreement pursuant to this Section
10.3(b) shall not be available to the Company if it, at such time, is in
material breach of any representation, warranty, covenant or agreement set forth
in this Agreement such that the condition set forth in Section 9.4(a) shall not
be satisfied; or
(c) the approval of the Company's stockholders required by Section
9.2(c) shall not have been obtained at a meeting duly convened therefor or at
any adjournment thereof.
10.4. Termination by Barnickel. This Agreement may be terminated at
any time prior to the Barnickel Effective Time, before or after the adoption and
approval by the stockholders of Barnickel referred to in Section 9.1(a)(ii), by
action of the Board of Directors of Barnickel after consultation with its legal
advisors and the Company, if:
(a) the Board of Directors of Barnickel determines that proceeding
with the transactions contemplated hereby would be inconsistent with its
fiduciary obligations by reason of a Barnickel Acquisition Proposal; provided
that Barnickel may not effect such termination pursuant to this Section 10.4(a)
unless and until (i) Parent receives at least one week's prior written notice
from Barnickel of its intention to effect such termination pursuant to this
Section 10.4(a); (ii) during such week, Barnickel shall, and shall cause its
respective financial and legal advisors to, consider any adjustment in the terms
and conditions of this Agreement that Parent may propose; and provided, further,
that any termination of this Agreement pursuant to this Section 10.4(a) shall
not be effective until Barnickel has made the payment required by Section
10.6(b)(i); or
(b) (i) there has been a breach by Parent, Merger Sub or Merger
Grandsub of any representation, warranty, covenant or agreement set forth in
this Agreement or if any representation or warranty of Parent, Merger Sub or
Merger Grandsub shall have become untrue, in either case such that the
conditions set forth in Section 9.3(a) would not be satisfied and (ii) such
breach is not curable, or, if curable, is not cured within 30 days after written
notice of such breach is given to Parent by the Company or Barnickel; provided,
however, that the right to terminate this Agreement pursuant to this Section
10.4(b) shall not be available to Barnickel if it, at such time, is in material
breach of any representation, warranty, covenant or agreement set forth in this
Agreement such that the condition set forth in Section 9.4(b) shall not be
satisfied.
10.5. Termination by Parent. This Agreement may be terminated at any
time prior to the Barnickel Effective Time, before or after any approval by the
stockholders of Parent referred to in Section 9.1(a)(iii), by action of the
Board of Directors of Parent, if:
(a) (i) there has been a breach by Barnickel of any representation,
warranty, covenant or agreement set forth in this Agreement or if any
representation or warranty of Barnickel shall have become untrue, in either case
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such that the conditions set forth in Section 9.4(b) would not be satisfied and
(ii) such breach is not curable, or, if curable, is not cured within 30 days
after written notice of such breach is given by Parent to Barnickel; or
(b) (i) there has been a breach by the Company of any representation
or warranty contained in this Agreement or if any representation or warranty of
the Company shall have become untrue, in either case such that the conditions
set forth in Section 9.4(a) would not be satisfied and (ii) such breach is not
curable, or, if curable, is not cured within 30 days after written notice of
such breach is given by Parent to the Company; or
(c) the Board of Directors of Barnickel shall have withdrawn or
materially modified, in a manner adverse to Parent, its approval or
recommendation of the Barnickel Merger or recommended a Barnickel Acquisition
Proposal, or resolved to do so; or
(d) the Board of Directors of the Company shall have withdrawn or
materially modified, in a manner adverse to Parent, its approval or
recommendation of the Company Merger or recommended a Company Acquisition
Proposal, or resolved to do so;
provided, however, that the right to terminate this Agreement pursuant to
Section 10.5(a) or (b) shall not be available to Parent if it, at such time, is
in material breach of any representation, warranty, covenant or agreement set
forth in this Agreement such that the conditions set forth in either Section
9.2(a) or 9.3(a) shall not be satisfied.
10.6. Effect of Termination. (a) If this Agreement is terminated
(i) by the Company pursuant to Section 10.3(a); or
(ii) after the public announcement of a Company Acquisition Proposal,
by Barnickel, the Company or Parent pursuant to Section 10.2(b) (unless the
condition Section 9.2(c) shall have been satisfied)or by the Company pursuant to
Section 10.3(c); or
(iii) after receipt by the Company's Board of Directors or the public
announcement of a Company Acquisition Proposal, by Parent pursuant to Section
10.5(d);
then the Company shall pay Parent a fee of $27 million in cash by wire transfer
to an account designated by Parent; provided, however, that the fee payable
under this Section 10.6(a) shall be reduced by the amount of any Transaction
Expenses paid to Parent pursuant to Section 10.6(c).
(b) If this Agreement is terminated
(i) by Barnickel pursuant to Section 10.4(a); or
(ii) by Barnickel, the Company or Parent pursuant to Section
10.2(c) (unless the stockholder vote required by Section 9.1(a)(i) shall have
been taken and the condition specified in Section 9.2(c) shall not have been
satisfied after the public announcement of a Company Acquisition Proposal); or
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(iii) after receipt by the Barnickel Board of Directors or the
public announcement of a Company Acquisition Proposal, by Barnickel, the Company
or Parent pursuant to Section 10.2(b), if the condition specified in Section
9.2(c) shall have been satisfied; or
(iv) after receipt by Barnickel's Board of Directors or the
public announcement of a Barnickel Acquisition Proposal or a Company Acquisition
Proposal, by Parent pursuant to Section 10.5(c);
then Barnickel shall (x) pay Parent a fee of $20 million in cash
by wire transfer to an account designated by Parent; provided, however, that the
fee payable under this Section 10.6(b), shall be reduced by the amount of any
Transaction Expenses paid to Parent pursuant to Section 10.6(c) and (y)
reimburse the Company for all of its Transaction Expenses (as defined in clause
(c)(iv) below) upon receipt of reasonable documentation therefor. The amount of
any fees payable by Barnickel to Parent pursuant to this Section 10.6(b) shall
be further reduced by the amount of any fees payable by the Company to Parent
pursuant to Section 10.6(a).
(c) (i) If this Agreement is terminated pursuant to Section 10.2(d) by
reason of the failure of Parent's stockholders to approve the issuance of the
shares of Parent Common Stock pursuant to the Mergers contemplated hereby (other
than in a circumstance requiring the payment of the amount provided for in
Section 10.6(d)), then Parent shall, upon receipt of reasonable documentation
therefor, reimburse each of the Company and Barnickel for all of their
respective Transaction Expenses.
(ii) If this Agreement is terminated (x) pursuant to Section 10.2(b)
by reason of the failure of the Company's stockholders to approve and adopt this
Agreement and the transactions contemplated hereby or (y) pursuant to Section
10.3(c), by reason of the failure of the holders of a majority of the
outstanding shares of Company Common Stock voting on such matter (excluding for
these purposes Company Common Stock owned by Barnickel) to approve this
Agreement and the transactions contemplated hereby, then the Company shall, upon
receipt of reasonable documentation therefor, reimburse each of Parent and
Barnickel for all of their respective Transaction Expenses, except that if the
stockholder vote required by Section 9.2(c) shall have been obtained, but the
stockholder vote required by Section 9.1(a)(i) shall not have been obtained,
then Barnickel, in lieu of the Company, shall reimburse each of Parent and the
Company for all of their respective Transaction Expenses.
(iii) If this Agreement is terminated pursuant to Section 10.2(c) by
reason of the failure of the Barnickel stockholders to approve and adopt this
Agreement and the transactions contemplated hereby, then Barnickel shall, upon
receipt of reasonable documentation therefor, reimburse each of Parent and the
Company for all of its Transaction Expenses.
(iv) "Transaction Expenses" shall mean all reasonable out-of-pocket
expenses and fees (including, without limitation, all fees and expenses of
counsel, financial advisors, accountants, environmental and other experts and
consultants and all printing and advertising expenses) actually incurred or
accrued by a party or incurred on such party's behalf in connection with this
Agreement and the transactions contemplated hereby (including, without
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limitation, in connection with the negotiation, preparation, execution,
performance and termination of this Agreement, the structuring of the Mergers,
any agreements related hereto or thereto and any filings to be made in
connection therewith) to the extent incurred or accrued prior to the termination
of this Agreement.
(d) If this Agreement is terminated (A) by Parent, the Company or
Barnickel pursuant to Section 10.2(e) as a result of an Injunction or other
action relating to any antitrust, trade, or regulatory laws or regulations of
any governmental, regulatory or administrative authority, agency or commission
(U.S. or foreign) ("Antitrust Laws") or (B) by Parent, the Company or Barnickel
pursuant to (i) Section 10.2(a) at a time when the nonconsummation of the
Mergers is a result of the failure to satisfy the conditions set forth in
Sections 9.1(b) or (c) or Section 9.4(c) by reason, in any such case, of any
Antitrust Law or (ii) Section 10.2(d) at a time when the conditions set forth in
Sections 9.1(b) or (c) or Section 9.4(c) shall not have been satisfied by
reason, in any such case, of any Antitrust Law, and neither the Company nor
Barnickel shall have failed to perform or observe, in any material respect, any
of its obligations under this Agreement (including, without limitation, Section
8.4), then Parent shall, on the day of such termination, pay to the Company a
fee of $30 million in cash by wire transfer of immediately available funds to an
account designated by the Company.
(e) In the event of termination of this Agreement and the abandonment
of the Mergers pursuant to this Article 10, all obligations of the parties
hereto shall terminate, except the obligations of the parties pursuant to this
Section 10.6 and Section 8.11 and except for the provisions of Sections 11.3,
11.4, 11.6, 11.8, 11.9, 11.12, 11.13 and 11.14. Moreover, in the event of
termination of this Agreement pursuant to Section 10.2(a), 10.2(e), 10.3, 10.4
or 10.5, nothing herein shall prejudice the ability of a non-breaching party
from seeking damages from any other party for any willful breach of this
Agreement, including, without limitation, attorneys' fees and the right to
pursue any remedy at law or in equity; provided, that (i) in the event Parent
receives any fee pursuant to Section 10.6(a) or (b), as the case may be, it
shall not assert or pursue in any manner, directly or indirectly, any claim or
cause of action against either of the Company or Barnickel or any of its
officers or directors based in whole or in part upon a breach of this Agreement
by them or their receipt, consideration, negotiation, recommendation, or
approval of a Barnickel Acquisition Proposal or a Company Acquisition Proposal
or the exercise (x) by the Company of its right of termination under Section
10.3(a) or (y) by Barnickel of its right of termination under Section 10.4(a);
and (ii) in the event the Company receives the payment pursuant to Section
10.6(d), such payment shall not prejudice the ability of the Company to seek
damages against Parent for any breach of the provisions of Section 8.4. Any
payment received by the Company pursuant to Section 10.6(d) shall be credited
against any such damages awarded to the Company.
10.7. Extension; Waiver. At any time prior to the Company Effective
Time, each party may by action taken by its Board of Directors, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
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waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE 11
11. General Provisions.
11.1. Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Mergers;
provided, however, that the agreements contained in Article 4 and in Sections
8.10, 8.11, 8.12, 8.13, 8.14, and this Article 11 and the agreements delivered
pursuant to this Agreement shall survive the Mergers. The Confidentiality
Agreements shall survive any termination of this Agreement, and the provisions
of such Confidentiality Agreements shall apply to all information and material
delivered by any party hereunder.
11.2. Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission or by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
(a) if to Parent, Merger Sub, or Merger Grandsub:
Lawrence O'Donnell, III
Baker Hughes Incorporated
3900 Essex Lane
Houston, Texas 77027
Facsimile: (713) 439-8472
with a copy to:
J. David Kirkland, Jr., Esq.
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, Texas 77002-4995
Facsimile: (713) 229-1522
55
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(b) if to the Company:
Charles R. Miller
Petrolite Corporation
369 Marshall Avenue
St. Louis, Missouri 63119-1897
Facsimile: (314) 968-6045
with a copy to:
Stuart Z. Katz, Esq.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
Facsimile: (212) 859-4000
(c) if to Barnickel:
Jules Chasnoff
Lowenhaupt & Chasnoff, L.L.C.
105 Broadway, Suite 600
St. Louis, MO 63102
Facsimile: (314) 436-2667
with a copy to:
Don G. Lents, Esq.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, Missouri 63102-2750
Facsimile: (314) 259-2020
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
11.3. Assignment; Binding Effect; Benefit. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, except for the provisions
of Article 4 and Sections 8.12 and 8.13 (a) through (e) and 10.6(e) and except
56
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as provided in any agreements delivered pursuant hereto (collectively, the
"Third Party Provisions"), nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement. The
Third Party Provisions may be enforced by the beneficiaries thereof.
11.4. Entire Agreement. This Agreement, the exhibits to this
Agreement, the Company Disclosure Letter, the Barnickel Disclosure Letter, the
confidentiality agreement dated January 9, 1997, between Parent and the Company,
the confidentiality agreement, dated July 19, 1996, between Barnickel and Parent
and the Confidentiality Agreement dated February 23, 1997 among Parent, the
Company and Barnickel (collectively, the "Confidentiality Agreements"), and any
documents delivered by the parties in connection herewith constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto. During the term of this Agreement, no party hereto shall
terminate any of the foregoing Confidentiality Agreements.
11.5. Amendments. This Agreement may be amended by the parties hereto,
by action taken or authorized by their Boards of Directors, at any time before
or after approval of matters presented in connection with the Mergers by the
stockholders of the Company, Barnickel or Parent, but after any such stockholder
approval, no amendment shall be made which by law requires the further approval
of stockholders without obtaining such further approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
11.6. Governing Law. Except to the extent that Missouri law is
mandatorily applicable to the Barnickel Merger, the obligations of the members
of Barnickel's Board of Directors and the rights of the stockholders of
Barnickel, this Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its rules of conflict of
laws. Each of the Company, Barnickel and Parent hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Delaware and of the United States of America located in the
State of Delaware (the "Delaware Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such courts), waives
any objection to the laying of venue of any such litigation in the Delaware
Courts and agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum. Barnickel
hereby agrees to service of process in any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby by certified mail,
return receipt requested, postage prepaid to Barnickel (with a copy as specified
in Section 11.2) at its address for notice specified in Section 11.2.
11.7. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
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hereof each signed by less than all, but together signed by all of the parties
hereto.
11.8. Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
11.9. Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa. In this agreement, the phrase "to the knowledge of" and similar phrases
relating to knowledge of the Company, Barnickel or Parent, as the case may be,
shall mean the actual knowledge of its executive officers and with respect to
the Company, its Director of Safety, Health and Environmental Affairs.
11.10. Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
11.11. Incorporation of Exhibits. The Company Disclosure Letter, the
Barnickel Disclosure Letter, and all exhibits attached hereto and referred to
herein are hereby incorporated herein and made a part hereof for all purposes as
if fully set forth herein.
11.12. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
11.13. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any Delaware Court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
11.14. Obligation of Parent. Whenever this Agreement requires Merger
Sub or Merger Grandsub (or their respective successors) to take any action, such
requirement shall be deemed to include an undertaking on the part of Parent to
cause Merger Sub or Merger Grandsub, as the case may be, to take such action and
a guarantee of the performance thereof.
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11.15. Subsidiaries. As used in this Agreement, the word "Subsidiary"
when used with respect to any party means any corporation or other organization,
whether incorporated or unincorporated, of which such party directly or
indirectly owns or controls at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization, or any organization of which such party is a
general partner.
IN WITNESS WHEREOF, the parties have executed this Agreement and
caused the same to be duly delivered on their behalf on the day and year first
written above.
BAKER HUGHES INCORPORATED
By: /s/ ERIC MATTSON
----------------------------------
Name: Eric Mattson
Title: Senior Vice President
and Chief Financial Officer
BAKER HUGHES MISSOURI, INC.
By: /s/ ERIC MATTSON
----------------------------------
Name: Eric Mattson
Title: President
BAKER HUGHES DELAWARE, INC.
By: /s/ ERIC MATTSON
----------------------------------
Name: Eric Mattson
Title: President
PETROLITE CORPORATION
By: /s/ PAUL H. HATFIELD
----------------------------------
Name: Paul H. Hatfield
Title: Chairman, President and
Chief Executive Officer
WM. S. BARNICKEL & COMPANY
By: /s/ V. RAYMOND STRANGHOENER
----------------------------------
Name: V. Raymond Stranghoener
Title: Vice President
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EXHIBIT A
CUSTODIAL AGREEMENT
This Custodial Agreement ("Agreement") is dated as of ____________,
1997 by and between Wm. S. Barnickel & Company, a Missouri corporation
("Barnickel"), Baker Hughes Incorporated, a Delaware corporation ("Parent"), and
Boatmen's Trust Company (and any successor thereto, "Continuity Custodian"). The
parties enter into this Agreement on behalf of certain third-party beneficiaries
referred to in the Agreement and Plan of Merger dated as of February 25, 1997
("Merger Agreement") involving Barnickel and Parent, as holders of Barnickel
Common Stock.
RECITALS
A. Barnickel and Parent are parties to the Merger Agreement with
respect to the Barnickel Merger which is intended to qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended ("Code").
B. As part of the Barnickel Merger, Parent will issue to each holder
of Barnickel Common Stock the number of shares of Parent Common Stock to which
such holder is entitled under the Merger Agreement.
C. In order to facilitate qualification of the Barnickel Merger as a
reorganization within the meaning of Section 368(a) of the Code, certificates
representing the Continuity Fraction of the shares of Parent Common Stock issued
to each holder of Barnickel Common Stock shall be delivered by Parent on behalf
of such holder to the Continuity Custodian for deposit in a custody account
("Continuity Account").
D. All capitalized terms used herein and not otherwise defined herein
shall have the respective meaning ascribed thereto in the Merger Agreement.
Now, therefore, in consideration of the foregoing and the covenants
and agreements set forth below, the parties hereto agree as follows:
ARTICLE I
CONTINUITY ACCOUNT
Section 1.01. Appointment. Barnickel hereby appoints the Continuity
Custodian to act for the benefit of the holders of Barnickel Common Stock in
accordance with the terms of this Agreement.
Section 1.02. Deposit of Parent Common Stock. Promptly upon surrender
of any Barnickel Certificate for cancellation to the Exchange Agent together
with a Letter of Transmittal with respect thereto, Parent, on behalf of the
holder of record of such Barnickel Certificate, shall deliver to the Continuity
Custodian for deposit a certificate standing in the name of such holder
<PAGE>
representing the Continuity Fraction of the shares of Parent Common Stock issued
to such holder (less any fractional share) ("Continuity Shares"). Such
Continuity Shares shall remain titled on Parent's books in the name of such
holder (individually, "Continuity Shareholder" and together with other such
holders, "Continuity Shareholders"), and such holder shall have all other rights
of a shareholder, including the right to vote the Continuity Shares, during the
term of this Agreement.
Section 1.03. Continuity Custodian's Duties and Authority. Subject to
the terms and conditions set forth on Annex I attached hereto, which is
incorporated herein by reference, the Continuity Custodian shall perform the
following duties and shall have the following authority:
(a) The Continuity Custodian shall hold and safely keep all Continuity
Shares in the Continuity Account until the fifth anniversary of the Closing Date
("Termination Date"), unless earlier delivered to the Continuity Shareholders in
accordance with Section 1.03(b) of this Agreement, and shall take reasonable
steps to provide for the physical safety of such Continuity Shares from theft,
disappearance or destruction.
(b) If, at any time, or from time to time, before the Termination
Date, the Continuity Custodian receives written notice from Lowenhaupt &
Chasnoff, L.L.C. (or any successor counsel appointed by a majority in interest
of the Continuity Shareholders) that such counsel is of the opinion that a sale
or other transfer of all or a portion of the Continuity Shares by a Continuity
Shareholder, which sale or transfer is described in reasonable detail in a
written notice provided to such counsel, would not violate the "continuity of
shareholder interest" requirements then imposed under Section 368 of the Code
and the U.S. Treasury regulations thereunder with respect to the Barnickel
Merger, the Continuity Custodian shall deliver certificates representing any
such Continuity Shares to the appropriate Continuity Shareholder or in
accordance with written instructions from such shareholder.
(c) As soon as practicable following the Termination Date (and in any
event within 90 days thereafter), the Continuity Custodian shall deliver
certificates representing any Continuity Shares remaining in the Continuity
Account to the appropriate Continuity Shareholders or in accordance with written
instructions from them.
Section 1.04. Parent's duties. Parent shall perform the following
duties:
(a) Parent shall cause all certificates representing Continuity Shares
to be endorsed with the following legend during the term of this Agreement:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO AND TRANSFERABLE ONLY IN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF A
CUSTODIAL AGREEMENT DATED AS OF _________, 1997;
PROVIDED, THAT THIS LEGEND SHALL BE VOID AND OF
NO FURTHER EFFECT NOT LATER THAN THE FIFTH
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ANNIVERSARY OF SUCH DATE. A COPY OF THE
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF
THE CORPORATION.
(b) Parent shall not issue any new certificate representing any
Continuity Share in lieu of any such certificate purportedly lost, stolen,
destroyed or mutilated without the written consent of the Continuity Custodian.
(c) Parent shall direct all dividend payments and proxy and other
shareholder materials to each Continuity Shareholder at the address indicated in
such Continuity Shareholder's Letter of Transmittal or as subsequently
instructed by such Continuity Shareholder; provided, however, that dividends
paid with respect to Continuity Shares in the form of additional shares of
Parent Common Stock shall be delivered to the Continuity Custodian and held in
the Continuity Account.
Section 1.05. Fees and Expenses.
(a) The Continuity Custodian shall be entitled to an annual fee for
its services under this Agreement at the rate of $5,000 and to reimbursement for
all reasonable expenses, including reasonable attorney's fees.
(b) Lowenhaupt & Chasnoff, L.L.C. (or any successor counsel appointed
by the Continuity Custodian) shall be entitled to reasonable attorney's fees for
services rendered prior to the Termination Date or, if earlier, the date that no
Continuity Shares remain in the Continuity Account for any services provided by
it in accordance with Section 1.03(b) of this Agreement; provided, however, that
Barnickel Surviving Corporation's obligation to pay for such services shall not
exceed $25,000 in any 12-month period.
(c) All fees and expenses payable pursuant to clauses (a) and (b) of
this Section 1.05 shall be paid by Barnickel Surviving Corporation out of its
own funds and no funds will be supplied, directly or indirectly, by Parent for
payment of such fees and expenses and Parent will not, directly or indirectly,
reimburse Barnickel Surviving Corporation for payment of such fees and expenses.
Section 1.06. Resignation. The Continuity Custodian may resign from
such position upon notice of such resignation to the Continuity Shareholders and
written acceptance of such position under the terms of this Agreement by
Mercantile Trust Company N.A., (or any successor thereto) or if it is unable or
unwilling to serve, Commerce Bank, N.A., (or any successor thereto) or if it is
unable or unwilling to serve, United Missouri Bank (or any successor thereto).
Section 1.07. Assignment. Except in accordance with Section 1.03(b) of
this Agreement or upon death, no Continuity Shareholder shall have any power to
sell, assign, transfer, encumber or in any other manner dispose of any interest
in any of the Continuity Shares or the Continuity Account before the Termination
Date.
3
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ARTICLE II
MISCELLANEOUS
Section 2.01. Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be sufficiently given if (i) delivered personally, (ii) mailed by
certified or registered mail, return receipt requested; or (iii) transmitted by
facsimile. The address for notice to each party is as shown on the signature
page of this Agreement, or as subsequently modified by written notice. The
address for notice to each Continuity Shareholder shall be as indicated in such
Continuity Shareholder's Letter of Transmittal, or as subsequently modified by
written notice.
Section 2.02. Amendments and Waivers. No amendment of this Agreement
shall be valid unless (i) written; (ii) agreed to by Continuity Shareholders
representing a majority of the Continuity Shares; and (iii) consented to by
Parent and the Continuity Custodian, which consent shall not be unreasonably
withheld if such amendment would not have an adverse effect on Parent or the
Continuity Custodian. No waiver by a party of any covenant shall be deemed to
extend to any prior or subsequent covenant.
Section 2.03. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the permitted successors and assigns of the
parties.
Section 2.04. Governing Law. This Agreement shall be governed by and
construed in accordance with Missouri law.
Section 2.05. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be deemed an original.
Section 2.06. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes any prior oral or written understandings, agreements or
representations by or between the parties with respect thereto.
Section 2.07. Headings. The section headings of this Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement.
Section 2.08. Severability. Each provision of this Agreement is
distinct and severable and if any such provision shall be held to be invalid,
illegal or against public policy, the validity or the legality of the remainder
of this Agreement shall not be affected thereby.
Section 2.09. Tax Reporting. Unless otherwise required by U.S.
Treasury regulations to be issued in the future, the parties to this Agreement
will treat the Continuity Shares and any other shares of Parent Common Stock
deposited with the Continuity Custodian hereunder for purposes of Section
468B(g) of the Code and for all other income tax purposes as being owned by the
Continuity Shareholders during the period such shares are held by the
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<PAGE>
Continuity Custodian hereunder. The parties to this Agreement will make any
elections or filings required to characterize such shares in a manner consistent
with the preceding sentence.
The parties have executed this Agreement as of the date first above
written.
BAKER HUGHES INCORPORATED
3900 Essex Lane
Houston, Texas 77027
Attn: Lawrence O'Donnell, III
By:
-------------------------------------
Title:
----------------------------------
WM. S. BARNICKEL & COMPANY
c/o Jules Chasnoff
Lowenhaupt & Chasnoff, L.L.C.
10 S. Broadway Suite 600
St. Louis, MO 63102
By:
-------------------------------------
Title:
----------------------------------
BOATMEN'S TRUST COMPANY
510 Locust Street
St. Louis, MO 63101
Attn: Corporate Trust Division
By:
-------------------------------------
Title:
----------------------------------
5
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ANNEX I
GENERAL TERMS AND CONDITIONS
The following provisions shall be part of the Agreement to which this exhibit is
attached:
1) The duties of Boatmen's Trust Company or any successor thereto, (the
"Custodian") shall be as expressed under the Agreement and the Custodian shall
have no implied duties. The permissive right or power to take any action shall
not be construed as a duty to take action under any circumstances and the
Custodian shall not be liable except in the event of its gross negligence or
willful misconduct.
2) The Custodian shall not be obligated to risk its own funds in the
administration of the account and shall have a lien against any funds,
securities or other property in its possession or control (the "Account") for
its fees, expenses and advancements. The Custodian need not take any action
under the Agreement which may involve it in any expense or liability until
indemnified to its satisfaction for any expense or liability it reasonably
believes it may incur.
3) Any recitals contained in the Agreement shall be deemed to be those of the
parties thereto and not the Custodian.
4) Unless specifically required by the Agreement, the Custodian shall not be
required to give any bond or surety or report to any Court despite any statute,
custom or rule to the contrary.
5) The Custodian shall be protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram, or other paper or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person and persons.
6) The Custodian may execute any of the duties under the Agreement by or through
agents or receivers.
7) The Custodian shall not be required to take notice or be deemed to have
notice of any default or other fact or event under the Agreement unless the
Custodian shall be specifically notified in writing of such default, fact or
event.
8) The Custodian may engage legal counsel, who may be counsel for any party to
the Agreement, and shall not be liable for any act or omission taken or suffered
pursuant to the opinion of such counsel. The fees and expenses of such counsel
shall be deemed to be a proper expense for which the Custodian will have a lien
against the Account.
9) Unless specifically required by the terms of the Agreement, the Custodian
need not take notice of or enforce any other document or relationship,
including, without limiting the generality of the foregoing, any contract,
settlement, arrangement, plan, assignment, pledge, release, decree or the like,
but its duties shall be solely as set out in the Agreement.
<PAGE>
10) Acquiror hereby agrees to indemnify and save harmless the Custodian from and
against any loss, liability or expense reasonably incurred, without negligence
or bad faith on its part, arising out of or in connection with the Agreement,
including the expense of defending itself against any claim or liability in the
premises. This indemnity agreement shall survive the termination of the
Agreement.
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EXHIBIT B
COMPANY
OFFICER'S CERTIFICATE
The undersigned officer of Petrolite Corporation (the "Company") hereby
certifies that as of (i) the date hereof, (ii) the Barnickel Effective Time and
(iii) the Company Effective Time:
1. Unless otherwise specified, capitalized terms shall have the meanings
assigned to them in the Agreement and Plan of Merger (the "Merger Agreement")
dated as of February 25, 1997 among the Company, Baker Hughes Incorporated
("Parent"), Baker Hughes Missouri, Inc. ("Merger Sub"), Baker Hughes Delaware,
Inc. ("Merger Grandsub"), and Wm. S. Barnickel & Company ("Barnickel").
2. To the best knowledge of the management of the Company, the Company has
no shareholder that owns, directly or beneficially, 5% or more of the Company
Common Stock, other than Barnickel and those shareholders listed on Schedule A
hereto. To the best knowledge of the management of the Company, there is no plan
or intention on the part of shareholders of the Company to sell, exchange, or
otherwise dispose of a number of shares of Parent Common Stock received in the
Company Merger that would reduce the Company shareholders' ownership of Parent
Common Stock (excluding shares owned by Barnickel and the 5% shareholders listed
on Schedule A) to a number of shares having a value, as of the date of the
Company Merger, of less than 50 percent (1) of the value of all of the formerly
outstanding stock of the Company (other than stock held by Barnickel) as of the
same date. For purposes of this representation, shares of the Company Common
Stock exchanged for cash in lieu of fractional shares of
- ---------------
(1) Such percentage may be reduced to such lower amount as satisfactory to
special counsel to the Company.
<PAGE>
Parent Common Stock in the Company Merger will be treated as outstanding Company
Common Stock on the date of the Company Merger. Moreover, shares of Company
Common Stock and shares of Parent Common Stock held by the Company shareholders
and otherwise sold, redeemed, or disposed of prior or subsequent to the Company
Merger will be considered in making this representation.
3. The Company and the shareholders of the Company will pay their
respective expenses, if any, incurred in connection with the Company Merger.
4. On the date of the Company Merger, the Company will not have outstanding
any warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in the Company that, if
exercised or converted, would affect Barnickel's acquisition or retention of
control of the Company, as defined in Section 368(c).(2)
5. Less than 50% of the value of the Company's total assets are invested in
stocks and securities within the meaning of Section 368(a)(2)(F)(iii) and (iv).
6. The formula set forth in the Merger Agreement for the exchange of Parent
Common Stock for the stock of the Company is the result of arm's-length
bargaining. The fair market value of the Parent Common Stock received by each
Company shareholder in the Company Merger, plus the cash received in lieu of a
fractional share of Parent Common Stock, will be approximately equal to the fair
market value of the Company stock surrendered in the Company Merger. Company
shareholders will not receive any consideration in exchange for the Company
stock other than Parent Common Stock and cash in lieu of fractional shares of
Parent Common Stock.
- ---------------
(2) All references to "Section" are to the Internal Revenue Code of 1986, as
presently in force.
2
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7. At the time of the Company Merger, the fair market value of the assets
of the Company will exceed the sum of its liabilities and the liabilities to
which its assets are subject.
8. No Company shareholder will receive Parent Common Stock as separate
consideration for, or allocable to, any employment agreement. No shareholder of
the Company who is also an employee of Barnickel or the Company will receive
compensation as separate consideration for, or allocable to, any of his or her
stock.
9. The Company is not under the jurisdiction of a court in a title 11 or
similar case within the meaning of Section 368(a)(3)(A).
10. In the Company Merger, shares of Company Common Stock will be exchanged
solely for shares of Parent Common Stock. For purposes of this representation,
shares of Company stock exchanged for cash or other property originating with
Parent or a direct or indirect subsidiary of Parent (excluding cash received in
lieu of fractional shares of Parent Stock) will be treated as Company Common
Stock outstanding at the time of the Company Merger.
11. No liabilities of the Company or its shareholders will be assumed by
Parent in the Company Merger nor will any of the Company stock acquired in the
Company Merger be subject to any liabilities.
12. There will be no dissenters' rights in connection with the Company
Merger.
PETROLITE CORPORATION
Dated: By:
-------------------------- ----------------------------------
Name:
Title:
3
<PAGE>
EXHIBIT C
BARNICKEL
OFFICER'S CERTIFICATE
The undersigned officer of Wm. S. Barnickel & Company ("Barnickel")
hereby certifies that as of (i) the date hereof, (ii) the Barnickel Effective
Time and (iii) the Company Effective Time:
1. Unless otherwise specified, capitalized terms shall have the
meanings assigned to them in the Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 25, 1997 among Barnickel, Baker Hughes
Incorporated ("Parent"), Baker Hughes Missouri, Inc. ("Merger Sub"), Baker
Hughes Delaware, Inc. ("Merger Grandsub"), and Petrolite Corporation (the
"Company").
2. To the best knowledge of the management of Barnickel, Barnickel has
no shareholder that owns, directly or beneficially, 1% or more of the Barnickel
Common Stock, other than those shareholders listed on Schedule A hereto. To the
best knowledge of the management of Barnickel, there is no plan or intention on
the part of shareholders of Barnickel to sell, exchange, or otherwise dispose of
a number of shares of Parent Common Stock received in the Barnickel Merger that
would reduce the Barnickel shareholders' ownership of Parent Common Stock to a
number of shares having a value, as of the date of the Barnickel Merger, of less
than 50 percent of the value of all of the formerly outstanding stock of
Barnickel as of the same date. For purposes of this representation, shares of
Barnickel Common Stock exchanged in the Barnickel Merger for cash in lieu of
fractional shares of Parent Common Stock or surrendered by Dissenting
Stockholders will be treated as outstanding Barnickel stock on the date of the
Barnickel Merger. Moreover, shares of Barnickel Stock and shares of Parent
Common Stock held by Barnickel shareholders and otherwise sold, redeemed, or
disposed of prior or subsequent to the Barnickel Merger will be considered in
making this representation.
<PAGE>
3. Barnickel and the shareholders of Barnickel will pay their
respective expenses, if any, incurred in connection with the Barnickel Merger,
subject to the terms of the Custodial Agreement.
4. There is no intercorporate indebtedness existing between Parent and
Barnickel or between Merger Sub and Barnickel that was issued, acquired, or will
be settled at a discount.
5. On the date of the Barnickel Merger, Barnickel will not have
outstanding any warrants, options, convertible securities, or any other type of
right pursuant to which any person could acquire stock in Barnickel that, if
exercised or converted, would affect Parent's acquisition or retention of
control of Barnickel, as defined in Section 368(c).(1)
6. At the Barnickel Effective Time, Barnickel will hold at least 90%
of the fair market value of its net assets and at least 70% of the fair market
value of its gross assets held immediately prior to the Barnickel Merger. For
purposes of this representation, there shall be included as assets of Barnickel
held immediately prior to the Barnickel Merger amounts originating with
Barnickel that are used (i) to pay Dissenting Stockholders, (ii) to pay
Barnickel shareholders who receive cash in lieu of fractional shares of Parent
Stock in the Barnickel Merger, (iii) to pay reorganization expenses, (iv) to pay
creditors of Barnickel (other than amounts paid in the course of ordinary
business), and (v) to make redemptions and distributions (except for regular,
normal dividends). [This representation will be deleted if it can not be given.]
7. In the Barnickel Merger, shares of Barnickel Common Stock will be
exchanged solely for shares of Parent Common Stock. For purposes of this
representation, shares of Barnickel stock exchanged for cash or other property
originating with Parent or a direct or indirect subsidiary of Parent (including
- ---------------
(1) All references made to "Section" are to the Internal Revenue Code of 1986,
as presently in force.
2
<PAGE>
cash received in lieu of fractional shares of Parent Common Stock) will be
treated as Barnickel stock outstanding at the time of the Barnickel Merger.
8. The formula set forth in the Merger Agreement for the exchange of
Parent Common Stock for the stock of Barnickel is the result of arm's-length
bargaining. The fair market value of the Parent Common Stock received by each
Barnickel shareholder in the Barnickel Merger, plus the cash received in lieu of
a fractional share of Parent Common Stock, will be approximately equal to the
fair market value of the Barnickel stock surrendered in the Barnickel Merger.
Barnickel shareholders will not receive any consideration in exchange for the
Barnickel stock other than Parent Common Stock, cash in lieu of fractional
shares of Parent Stock, and cash or other property received by Dissenting
Stockholders.
9. At the time of the Barnickel Merger, the fair market value of the
assets of Barnickel will exceed the sum of its liabilities and the liabilities
to which its assets are subject.
10. No Barnickel shareholder will receive Parent Common Stock as
separate consideration for, or allocable to, any employment agreement. No
shareholder of Barnickel who is also an employee of Barnickel or the Company
will receive compensation as separate consideration for, or allocable to, any of
his or her stock.
11. Barnickel is not under the jurisdiction of a court in a title 11
or similar case within the meaning of Section 368(a)(3)(A).
12. Barnickel directly owns 5,337,360 shares of Company Common Stock,
none of which was acquired either (i) after February 23, 1992 (other than
through a stock split) or (ii) in contemplation of the Mergers.
WM. S. BARNICKEL & COMPANY
Dated: By:
-------------------------- ------------------------------------
Name:
Title:
3
<PAGE>
EXHIBIT D
PARENT
OFFICER'S CERTIFICATE
The undersigned officer of Baker Hughes Incorporated, a Delaware
corporation ("Parent") hereby certifies as of (i) the date hereof, (ii) the
Barnickel Effective Time and (iii) the Company Effective Time that:
1. Unless otherwise specified, capitalized terms shall have the
meanings assigned to them in the Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 25, 1997 among Parent, Baker Hughes Missouri,
Inc. ("Merger Sub"), Baker Hughes Delaware, Inc. ("Merger Grandsub"), Petrolite
Corporation (the "Company") and Wm. S. Barnickel & Company ("Barnickel").
2. Immediately prior to the Barnickel Merger, Parent will own all of
the issued and outstanding stock of Merger Sub, and Merger Sub will own all of
the issued and outstanding stock of Merger Grandsub.
3. Neither Parent nor any of its affiliates has any plan or intention
to reacquire any of the Parent Common Stock issued in the Barnickel Merger or
the Company Merger.
4. Parent has no plan or intention to liquidate Barnickel or to cause
Barnickel to liquidate the Company; to merge Barnickel with and into another
corporation or to cause Barnickel to merge the Company with and into another
corporation; to sell or otherwise dispose of the stock of Barnickel; to cause
Barnickel to sell or otherwise dispose of the stock of the Company; or to cause
either of Barnickel or the Company to sell or otherwise dispose of any of its
assets or any of the assets acquired from Merger Sub, except for (i)
dispositions of assets of Barnickel other than its stock of the Company or (ii)
dispositions made in the ordinary course of business.
<PAGE>
5. Following the Mergers, Parent will cause Barnickel to continue to
hold its stock of the Company and will cause the Company to continue its
historic business or use a significant portion of its historic business assets
in a business.
6. Parent and Merger Sub will pay their respective expenses, if any,
incurred in connection with the Mergers.
7. There is no intercorporate indebtedness existing between Parent and
Barnickel or between Merger Sub and Barnickel that was issued, acquired, or will
be settled at a discount.
8. With respect to each of Parent (as of each of the Barnickel
Effective Time and the Company Effective Time) and Merger Sub (as of the
Barnickel Effective Time), less than 50 percent of the value of its total assets
are invested in stocks and securities within the meaning of Section
368(a)(2)(F)(iii) and (iv).(1)
9. Parent does not own, nor has it owned during the past five years,
any shares of Barnickel Common Stock or the Company Common stock.
10. Merger Sub will have no liabilities assumed by Barnickel, and will
not transfer to Barnickel any assets subject to liabilities, in the Barnickel
Merger.
11. Parent has no plan or intention as part of the plan of the Mergers
to cause Barnickel or the Company to issue after the Barnickel Effective Time or
the Company Effective Time, respectively, additional shares of stock of
Barnickel or the Company, or any warrants, options, convertible securities, or
any other type of right pursuant to which any person could acquire stock in
Barnickel or the Company.
12. Immediately following the Barnickel Merger, Barnickel will hold at
least 90% of the fair market value of its net assets and at least 70% of the
fair market value of its gross assets held immediately prior to the Barnickel
Merger.
- ---------------
(1) All references to "Section" are to the Internal Revenue Code of 1986, as
presently in force.
2
<PAGE>
13. In the Barnickel Merger, shares of Barnickel stock will be
exchanged solely for shares of Parent Common Stock. For purposes of this
representation, shares of Barnickel Common Stock exchanged for cash or other
property originating with Parent or a direct or indirect subsidiary of Parent
(including cash received in lieu of fractional shares of Parent Common Stock)
will be treated as Barnickel stock outstanding at the time of the Barnickel
Merger.
14. The formula set forth in the Merger Agreement for the exchange of
Parent Common Stock for the stock of Barnickel is the result of arm's-length
bargaining. The fair market value of the Parent Common Stock received by each
Barnickel shareholder in the Barnickel Merger, plus the cash received in lieu of
a fractional share of Parent Common Stock, will be approximately equal to the
fair market value of the Barnickel stock surrendered in the Barnickel Merger.
Barnickel shareholders will not receive any consideration in exchange for the
Barnickel stock other than Parent Stock, cash in lieu of fractional shares of
Parent Stock, and cash or other property received by Dissenting Stockholders.
15. No Barnickel shareholder will receive Parent Stock as separate
consideration for, or allocable to, any employment agreement. No shareholder of
Barnickel who is also an employee of Barnickel or the Company will receive
compensation as separate consideration for, or allocable to, any of his or her
stock.
16. In the Company Merger, shares of Company Common Stock will be
exchanged solely for shares of Parent Common Stock. For purposes of this
representation, shares of Company stock exchanged for cash or other property
originating with Parent or a direct or indirect subsidiary of Parent (excluding
cash received in lieu of fractional shares of Parent Stock) will be treated as
Company stock outstanding at the time of the Company Merger.
17. No liabilities of the Company or its shareholders will be assumed
by Parent in the Company Merger nor will any of the Company stock acquired in
the Company Common Stock be subject to any liabilities.
3
<PAGE>
18. The formula set forth in the Merger Agreement for the exchange of
Parent Common Stock for the stock of the Company is the result of arm's-length
bargaining. The fair market value of the Parent Common Stock received by each
Company shareholder in the Company Merger, plus the cash received in lieu of a
fractional share of Parent Common Stock, will be approximately equal to the fair
market value of the Company stock surrendered in the Company Merger. Company
shareholders will not receive any consideration in exchange for the Company
stock other than Parent Common Stock, and cash in lieu of fractional shares of
Parent Common Stock.
19. No Company shareholder will receive Parent Common Stock as separate
consideration for, or allocable to, any employment agreement. No shareholder of
the Company who is also an employee of Barnickel or the Company will receive
compensation as separate consideration for, or allocable to, any of his or her
stock.
BAKER HUGHES INCORPORATED
Dated: By:
--------------------------- -------------------------------------
Name:
Title:
4
