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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): JUNE 18, 1998
CAMCO INTERNATIONAL INC.
(Exact name of Registrant as specified in charter)
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Delaware 1-10718 13-3517570
(State of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.)
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7030 Ardmore
Houston, Tx 77054
(713) 747-4000
(Address, including Zip Code, and Telephone Number, including Area Code, of
Principal Executive Office)
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Item 5. Other Events.
On June 18, 1998, Camco International Inc. entered into an Agreement
and Plan of Merger (the "Merger Agreement") with Schlumberger Technology
Corporation, a Texas corporation ("STC"), and Schlumberger OFS, Inc., a
Delaware corporation and a wholly-owned subsidiary of STC ("Sub"), providing
for the merger of Sub with and into Camco, with Camco surviving as a wholly-
owned subsidiary of STC (the "Merger"). STC is a wholly-owned subsidiary of
Schlumberger Limited, a publicly traded Netherlands Antilles corporation
("Schlumberger"). Pursuant to the Merger Agreement, the stockholders of Camco
will receive 1.18 shares of common stock, par value $.01 per share, of
Schlumberger ("Schlumberger Common Stock") for each share of common stock, par
value $.01 per share, of Camco ("Camco Common Stock"). In addition,
outstanding options to acquire shares of Camco Common Stock will be converted
into options to acquire 1.18 times as many shares of Schlumberger Common Stock
at an exercise price per share equal to the old exercise price per share
divided by 1.18.
Closing under the Merger Agreement is conditioned on, among other
things, approval by Camco's stockholders and receipt of all regulatory
approvals including but not limited to the expiration or termination of the
waiting period prescribed by the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended. It is intended that the Merger qualify as a tax-free
reorganization for federal income tax purposes and as a pooling of interests
for accounting purposes.
Under the Merger Agreement, Camco must pay a termination fee of $90
million if (1) Camco receives a Superior Proposal (as defined in the Merger
Agreement) and elects to terminate the agreement, (2) the Camco Board of
Directors recommends or proposes to recommend an alternate proposal and STC
exercises its right to terminate the agreement, (3) the Camco Board withdraws,
terminates or modifies its recommendation of the agreement in an adverse
manner, STC terminates the agreement and Camco consummates an alternative
transaction on or before September 30, 1999 or (4) there is an alternative
proposal outstanding, the Camco stockholders do not approve the Merger and
Camco consummates an alternative proposal on or before September 30, 1999.
Pursuant to a related Transaction Agreement, Schlumberger agrees to
sell to STC such number of shares of Schlumberger Common Stock as are required
to be delivered to stockholders of Camco under the Merger Agreement and to
register those shares with the Securities and Exchange Commission.
The description of the terms and provisions of the Merger Agreement in
this report is qualified in its entirety by reference to the Merger Agreement
and the Transaction Agreement that are filed as exhibits hereto and are
incorporated herein by this reference. A copy of the press release announcing
the signing of the Merger Agreement is filed as Exhibit 99.1 and is
incorporated herein by this reference.
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Prior to approving the Merger Agreement, the Board of Directors
amended Camco's Rights Agreement dated as of December 15, 1994, as amended, to
provide that neither Schlumberger nor any of its Subsidiaries would be an
Acquiring Person within the meaning of the Rights Agreement as a result of the
Merger Agreement or the transactions contemplated thereby. A copy of such
amendment to such Rights Agreement is filed as an exhibit hereto.
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Item 7. Financial Statements and Exhibits
(c) Exhibits
2.1 - Agreement and Plan of Merger among Schlumberger
Technology Corporation, a Texas corporation,
Schlumberger OFS, Inc., a Delaware corporation, and
Camco International Inc. dated as of June 18, 1998.
4.1 - Second Amendment to Rights Agreement dated June 18,
1998, between Camco International Inc. and First
Chicago Trust Company of New York.
10.1 - Transaction Agreement between Schlumberger Limited
and Camco International Inc., dated as of June 18,
1998.
99.1 - Press Release dated June 18, 1998, announcing the
signing of the Merger Agreement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAMCO INTERNATIONAL INC.
June 23, 1998 /s/ Ronald R. Randall
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INDEX TO EXHIBITS
Number Exhibit
2.3 Agreement and Plan of Merger among Schlumberger Technology
Corporation, a Texas corporation, Schlumberger OFS, Inc., a
Delaware corporation, and Camco International, Inc., a
Delaware corporation, dated as of June 18, 1998.
4.1 Second Amendment to Rights Agreement dated June 18, 1998,
between Camco International Inc. and First Chicago Trust
Company of New York.
10.1 Transaction Agreement between Schlumberger Limited and Camco
International Inc., a Delaware corporation, dated as of June
18, 1998.
99.1 Press Release dated June 18, 1998, announcing the signing of
the Merger Agreement.
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EXHIBIT 2.3
AGREEMENT AND PLAN OF MERGER
AMONG
SCHLUMBERGER TECHNOLOGY CORPORATION,
SCHLUMBERGER OFS, INC.
AND
CAMCO INTERNATIONAL INC.
DATED AS OF JUNE 18, 1998
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
1.1 The Merger; Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) Stock of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) Cancellation of Treasury Stock and Related Party Stock . . . . . . . . . . . . . . . . . . . 2
(c) Exchange Ratio for Camco Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(d) Conversion of Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(e) Adjustment of Conversion Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Distributions with Respect to Shares Prior to Exchange of Certificates . . . . . . . . . . . 5
(d) No Further Ownership Rights in Camco Common Stock . . . . . . . . . . . . . . . . . . . . . . 6
(e) No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Termination of Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(g) No Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Camco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Authority; No Violations; Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . 9
(d) SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(e) Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(f) Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(g) No Undisclosed Material Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(h) No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(i) Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(j) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(k) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(l) Employee Matters; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(m) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(n) Intangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(o) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(p) Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(q) State Takeover Statutes; Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(r) Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(s) Beneficial Ownership of Schlumberger Common Stock . . . . . . . . . . . . . . . . . . . . . 23
(t) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(u) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(v) Material Contracts and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(w) Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(x) Amendment to the Camco Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2 Representations and Warranties of STC and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Authority; No Violations, Consents and Approvals . . . . . . . . . . . . . . . . . . . . . 25
(d) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(e) Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(f) Beneficial Ownership of Camco Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 27
(g) Transaction Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(h) No Other Consideration for Camco Common Stock . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS OF CAMCO
4.1 Conduct of Business by Camco Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(b) Dividends; Changes in Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(c) Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(d) Governing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(e) No Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) No Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(g) No Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Certain Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(i) Indebtedness; Leases; Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . 30
(j) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(k) Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3 Pooling of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.2 Camco Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.3 Legal Conditions to Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.4 Agreements of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.5 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.6 Indemnification; Directors' and Officers' Insurance . . . . . . . . . . . . . . . . . . . . . . . 36
5.7 Agreement to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.8 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.9 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.10 Other Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.11 Advice of Changes; SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.12 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.13 Delivery of Schlumberger Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.14 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(a) Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(b) Benefits Accrued at the Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . 38
(c) General Agreement as to Employee Benefit Coverage after
the Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(d) Specific Agreements as to Employee Benefit Coverage after
the Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(f) Retention Bonus Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(g) Collective Bargaining Exception. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(h) Transferred Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger . . . . . . . . . . . . . . . . . . . 44
(a) Camco Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(b) NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(c) Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(d) S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(e) No Injunctions or Restraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(f) Pooling Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.2 Conditions of Obligations of STC and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(b) Performance of Obligations of Camco . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(c) Letters from Camco Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . 46
(d) Certifications and Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(e) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(f) Transaction Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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6.3 Conditions of Obligations of Camco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(b) Performance of Obligations of STC and Sub . . . . . . . . . . . . . . . . . . . . . . . . . 48
(c) Certifications and Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
(d) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(e) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(f) Transaction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII
GENERAL PROVISIONS
8.1 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.2 Nonsurvival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . 52
8.3 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.5 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.7 Entire Agreement; No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.9 No Remedy in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.10 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.11 Enforcement of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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GLOSSARY OF DEFINED TERMS
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Defined Term Defined in Section
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Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a)
AICPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Camco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Camco Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(l)(i)
Camco Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(l)(i)
Camco Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Camco Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
Camco ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(l)(ii)
Camco Intangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(n)
Camco Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(j)
Camco Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(j)
Camco Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(i)
Camco Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Camco Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2
Camco Retirees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
Camco Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Camco SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
Camco Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5
Camco Stock Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(o)(A)
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Confidentiality Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1
Constituent Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3(a)
Continuing Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
Conversion Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(c)
Current Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(k)
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(o)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(l)(i)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)(iii)
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
FASB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Fractional Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(e)
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
</TABLE>
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<PAGE> 7
<TABLE>
<S> <C>
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)(iii)
Hazardous Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(o)(B)
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)(iii)
Indemnified Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6
Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6
Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(e)
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(k)(ii)
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Notice of Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(b)
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(c)(iii)
OSHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(o)(A)
Pension Benefit Guaranty Corporation . . . . . . . . . . . . . . . . . . . . . . . . 3.1(l)(iv)
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)(iii)
Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(o)(C)
Remedial Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(o)(D)
Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(k)(i)
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(e)
Schlumberger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Schlumberger Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(c)
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(g)
STC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
STC Affiliated Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
STC Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2
STC Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
STC Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(d)
Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(c)
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3(a)
Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(k)
Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2(b)
Transaction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2(f)
Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
</TABLE>
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<PAGE> 8
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 18, 1998 (this
"Merger Agreement"), among Schlumberger Technology Corporation, a Texas
corporation ("STC"), Schlumberger OFS, Inc., a Delaware corporation and a
wholly owned subsidiary of STC ("Sub"), and Camco International Inc., a
Delaware corporation ("Camco").
WHEREAS, the Boards of Directors of STC, Sub and Camco have
each approved the merger of Sub with and into Camco (the "Merger") upon the
terms and subject to the conditions of this Merger Agreement, thus enabling STC
to acquire all of the stock of Camco solely in exchange for voting stock of
Schlumberger Limited, a Netherlands Antilles corporation and the parent of STC
("Schlumberger");
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests under the requirements
of Opinion No. 16, Business Combinations, of the Accounting Principles Board of
the American Institute of Certified Public Accountants (the "AICPA"), as
amended by Statements of Financial Accounting Standards Board (the "FASB"), and
the related interpretations of the AICPA, FASB, the Emerging Issues Task Force,
and the rules and regulations of the U.S. Securities and Exchange Commission
(the "SEC"); and
WHEREAS, STC, Sub and Camco desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger; Effective Time of the Merger. Upon the terms and
conditions of this Merger Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL"), Sub shall be merged with and into Camco at the
Effective Time (as hereinafter defined). The Merger shall become effective
immediately when a certificate of merger (the "Certificate of Merger"),
prepared and executed in accordance with the relevant provisions of the DGCL is
duly filed with the Secretary of State of the State of Delaware or, if agreed
to by the parties, at such time thereafter as is provided in the Certificate of
Merger (the "Effective Time"). The filing of the Certificate of Merger shall
be made as soon as practicable after the closing of the Merger (the "Closing").
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<PAGE> 9
1.2 Closing. The Closing shall take place at 10:00 a.m. on a date
to be specified by the parties, which shall be no later than the second
business day after satisfaction (or waiver in accordance with this Merger
Agreement) of the latest to occur of the conditions set forth in Article VI
(the "Closing Date"), at the offices of Baker & Botts, L.L.P., 910 Louisiana,
Houston, Texas, unless another date or place is agreed to in writing by the
parties.
1.3 Effects of the Merger.
(a) At the Effective Time: (i) Sub shall be merged with
and into Camco, the separate existence of Sub shall
cease and Camco shall continue as the surviving
corporation (Sub and Camco are sometimes referred to
herein as the "Constituent Corporations" and Camco is
sometimes referred to herein as the "Surviving
Corporation") and the merger shall have such effects
as are set forth in Section 259 of the DGCL; (ii) the
Certificate of Incorporation of Camco shall be
amended to change Camco's authorized shares of
capital stock to 1,000 shares, par value $.001 per
share, of common stock, and so amended shall be the
Certificate of Incorporation of the Surviving
Corporation; and (iii) the Bylaws of Camco as in
effect immediately prior to the Effective Time shall
be the Bylaws of the Surviving Corporation.
(b) The directors and officers of Sub at the Effective
Time shall, from and after the Effective Time, be the
directors and officers of the Surviving Corporation
and shall serve until their successors have been duly
elected or appointed and qualified or until their
earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of
Incorporation and Bylaws.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
common stock, par value $0.01 per share, of Camco ("Camco Common Stock") or
capital stock of Sub:
(a) Stock of Sub. Each share of common stock, par value
$1.00 per share, of Sub issued and outstanding
immediately prior to the Effective Time will be
converted into one share of common stock, par value
$.001 per share, of the Surviving Corporation, and
the stock of the Surviving Corporation issued on that
conversion will constitute all of the issued and
outstanding shares of capital stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Related Party
Stock. Each share of Camco Common Stock and all
other shares of capital stock of Camco that are owned
by Camco as treasury stock and any shares of Camco
Common Stock
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<PAGE> 10
and all other shares of capital stock of Camco owned
in any case by STC, any entity controlling STC or any
wholly owned Subsidiary (as hereinafter defined) of
such entities or by any wholly owned Subsidiary of
Camco shall be canceled and retired and shall cease
to exist and no Schlumberger Common Stock or cash in
lieu of fractional shares shall be delivered or
deliverable in exchange therefor. As used in this
Merger Agreement, the word "Subsidiary" means, with
respect to any party, any corporation or other
organization, whether incorporated or unincorporated,
of which: (i) such party or any other Subsidiary of
such party is a general partner (excluding
partnerships, the general partnership interests of
which are held by such party or any Subsidiary of
such party that do not have a majority of the voting
interest in such partnership); or (ii) 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 is, directly or
indirectly, owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party
and any one or more of its Subsidiaries.
(c) Exchange Ratio for Camco Common Stock. Subject to
the provisions of Section 2.2(e) hereof, each share
of Camco Common Stock issued and outstanding
immediately prior to the Effective Time (other than
shares to be canceled in accordance with Section
2.1(b)) shall, at the Effective Time and without the
requirement of any action by the holder thereof, be
exchanged for and converted into 1.18 (the
"Conversion Number") shares of voting common stock,
par value $.01 per share, of Schlumberger
("Schlumberger Common Stock") to be delivered by Sub
pursuant to the Merger. All references in this
Merger Agreement to the Camco Common Stock to be
received pursuant to the Merger shall be deemed to
include the Camco Stock Purchase Rights. All such
shares of Camco Common Stock, when so exchanged and
converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease
to exist, and each holder of a certificate
representing any such shares shall cease to have any
rights with respect thereto, except the right to
receive a certificate for the shares of Schlumberger
Common Stock and cash in lieu of fractional shares of
Schlumberger Common Stock as contemplated by Section
2.2(e), upon the surrender of such certificate for
shares of Camco Common Stock in accordance with
Section 2.2, without interest.
(d) Conversion of Stock Options. Each outstanding Camco
Stock Option (as defined in Section 5.5) shall be
converted as provided in Section 5.5.
(e) Adjustment of Conversion Number. If, subsequent to
the date of this Agreement but prior to the Effective
Time, the number of shares of Schlumberger Common
Stock issued and outstanding is changed as a result
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<PAGE> 11
of a stock split, reverse stock split, stock
dividend, recapitalization or other similar
transaction, the Conversion Number and other items
dependent thereon shall be appropriately adjusted
herein.
2.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Sub shall
deposit with Boston EquiServe LP or such other bank
or trust company designated by STC or another member
of the STC Affiliated Group (as defined below) and
reasonably acceptable to Camco (the "Exchange
Agent"), for the benefit of the holders of shares of
Camco Common Stock, for exchange in accordance with
this Article II, through the Exchange Agent,
certificates representing the shares of Schlumberger
Common Stock (such shares of Schlumberger Common
Stock, together with any dividends or distributions
with respect thereto, and any cash deposits by STC in
order to make payments in lieu of fractional shares
or cash generated by sales of fractional shares of
Schlumberger Common Stock in the open market pursuant
to Section 2.2(e) being hereinafter collectively
referred to as the "Exchange Fund") issuable pursuant
to Section 2.1 in exchange for outstanding shares of
Camco Common Stock. The Exchange Agent shall,
pursuant to irrevocable instructions, deliver the
Schlumberger Common Stock contemplated to be issued
pursuant to Section 2.1 out of the Exchange Fund.
The Exchange Fund shall not be used for any other
purpose. As used in this Merger Agreement, "STC
Affiliated Group" means any entity controlling STC
and any direct or indirect Subsidiary of such entity
or of STC.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of a
certificate or certificates which, immediately prior
to the Effective Time, represented outstanding shares
of Camco Common Stock (the "Certificates") (other
than Camco, STC, any entity controlling STC or any
wholly owned Subsidiaries of any such entities): (i)
a letter of transmittal (which shall specify that
delivery shall be effected and risk of loss and title
to the Certificates shall pass only upon delivery of
the Certificates to the Exchange Agent, and shall be
in such form and have such other provisions as STC or
a designated member of the STC Affiliated Group may
reasonably specify); and (ii) instructions for use in
effecting the surrender of the Certificates in
exchange for certificates representing shares of
Schlumberger Common Stock and any cash in lieu of a
fractional share of Schlumberger Common Stock. Upon
surrender of a Certificate for cancellation to the
Exchange Agent or to such other agent or agents as
may be appointed by STC or a designated member of the
STC Affiliated Group and reasonably acceptable to
Camco, together with such letter of transmittal, duly
executed, and any other required documents, the
holder of such Certificate shall be entitled to
receive in
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<PAGE> 12
exchange therefor a certificate representing that
number of whole shares of Schlumberger Common Stock
which such holder has the right to receive pursuant
to the provisions of this Article II and any cash in
lieu of fractional shares of Schlumberger Common
Stock as contemplated by Section 2.2(e), and the
Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of
Camco Common Stock which is not registered in the
transfer records of Camco, a certificate representing
the appropriate number of shares of Schlumberger
Common Stock may be issued to a transferee if the
Certificate representing such Camco Common Stock is
presented to the Exchange Agent accompanied by all
documents required to evidence and effect such
transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate
shall be deemed at any time after the Effective Time
to represent only the right to receive upon such
surrender the certificate representing shares of
Schlumberger Common Stock and cash in lieu of any
fractional shares of Schlumberger Common Stock as
contemplated by this Section 2.2 and all dividends
or other distributions thereon with a record date
after the Effective Time as contemplated by Section
2.2(c). The Exchange Agent shall not be entitled to
vote or exercise any rights of ownership with respect
to the Schlumberger Common Stock held by it from time
to time hereunder, except that it shall receive and
hold all dividends or other distributions paid or
distributed with respect thereto for the account of
persons entitled thereto.
(c) Distributions with Respect to Shares Prior to
Exchange of Certificates. No dividends or other
distributions with respect to Schlumberger Common
Stock declared or made after the Effective Time with
a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate with
respect to the Schlumberger Common Stock represented
thereby as a result of the exchange and conversion
provided in Section 2.1(c), and no cash payment in
lieu of fractional shares shall be paid to any such
holder pursuant to Section 2.2(e) until the holder of
such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following
surrender of any such Certificate, there shall be
paid to the holder thereof, without interest: (i) at
the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Schlumberger
Common Stock to which such holder is entitled
pursuant to Section 2.2(e) and the amount of
dividends or other distributions with a record date
after the Effective Time theretofore paid with
respect to such whole shares of Schlumberger Common
Stock; and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a
record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender
payable with respect to such whole shares of
Schlumberger Common Stock.
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<PAGE> 13
(d) No Further Ownership Rights in Camco Common Stock.
All shares of Schlumberger Common Stock issued in
exchange for and upon the conversion of Camco Common
Stock in accordance with the terms hereof (including
any cash paid pursuant to Section 2.2(c) or 2.2(e))
shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares
of Camco Common Stock, subject, however, to the
Surviving Corporation's obligation to pay any
dividends or make any other distributions with a
record date prior to the Effective Time that may have
been declared or made by Camco on such shares of
Camco Common Stock in accordance with the terms of
this Merger Agreement or prior to the date hereof and
which remain unpaid at the Effective Time, and after
the Effective Time there shall be no further
registration of transfers on the stock transfer books
of the Surviving Corporation of the shares of Camco
Common Stock that were outstanding immediately prior
to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled
and exchanged as provided in this Article II.
(e) No Fractional Shares. No certificates or scrip
representing fractional shares of Schlumberger Common
Stock shall be issued pursuant to this Article II,
and, except as provided in this Section 2.2(e), no
dividend or other distribution, stock split or
interest shall relate to any such fractional
security, and such fractional interests shall not
entitle the owner thereof to vote or to any rights of
a security holder of Schlumberger. In lieu of any
fractional security, STC shall pay or cause the
Exchange Agent to pay, to each holder of shares of
Camco Common Stock who would otherwise have been
entitled to a fraction of a share of Schlumberger
Common Stock pursuant to this Article II, an amount
in cash (without interest) equal to such holder's
proportionate interest in the sum of (i) the fraction
of a share of Schlumberger Common Stock to which such
holder would otherwise have been entitled, multiplied
by the closing sale price per share of Schlumberger
Common Stock on the New York Stock Exchange on the
last trading day immediately preceding the date of
the Effective Time, and (ii) the aggregate dividends
or other distributions that are payable with respect
to such shares of Schlumberger Common Stock pursuant
to Section 2.2(c) (such dividends and distributions
being herein called the "Fractional Dividends"). STC
shall timely make available to the Exchange Agent any
cash necessary to make payments in lieu of fractional
shares as aforesaid. For purposes of determining
whether a holder of shares of Camco Common Stock is
to receive payment in lieu of fractional shares, all
shares of Camco Common Stock held of record by such
holder shall be aggregated.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund that remains undistributed to the
former stockholders of Camco for one year after the
Effective Time shall be delivered to STC upon demand,
and any
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<PAGE> 14
stockholders of Camco who have not theretofore
complied with this Article II shall thereafter look
only to STC for payment of their claim for
Schlumberger Common Stock or any cash in lieu of
fractional shares of Schlumberger Common Stock and to
Schlumberger for any dividends or distributions with
respect to Schlumberger Common Stock.
(g) No Liability. Neither Camco nor STC or any other
member of the STC Affiliated Group shall be liable to
any holder of shares of Camco Common Stock or
Schlumberger Common Stock, as the case may be, for
such shares (or dividends or distributions with
respect thereto) or cash in lieu of fractional shares
of Schlumberger Common Stock delivered to a public
official pursuant to any applicable abandoned
property, escheat or similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Camco. Subject to the
exceptions set forth in the disclosure letter to be delivered to STC and Sub in
connection herewith (the "Camco Disclosure Letter"), Camco represents and
warrants to STC and Sub as follows:
(a) Organization, Standing and Power. Each of Camco and
its Subsidiaries is a corporation, limited liability
company or partnership duly organized, validly
existing and in good standing under the laws of its
state of incorporation or organization, has all
requisite corporate power and authority to own, lease
and operate its properties and to carry on its
business as now being conducted, and is duly
qualified and in good standing to do business in each
jurisdiction in which the business it is conducting,
or the operation, ownership or leasing of its
properties, makes such qualification necessary, other
than where the failure to be so organized or so to
qualify (individually or in the aggregate) would not
have a Material Adverse Effect (as defined below) on
Camco. Camco has heretofore delivered to STC
complete and correct copies of its Certificate of
Incorporation and Bylaws. Except as set forth in the
exhibits to the Camco SEC Documents (as defined in
Section 3.1(d)), Camco does not own, directly or
indirectly, any capital stock or other ownership
interest in any Subsidiary which would be required to
be listed as a Subsidiary of Camco under the rules of
the SEC with the filing by Camco of an Annual Report
on Form 10-K. As used in this Merger Agreement a
"Material Adverse Effect" shall mean any effect or
change that is or would be materially adverse to the
business, operations, assets, condition (financial or
otherwise) or results of operations of (i) in respect
of Camco, Camco and its direct and indirect
Subsidiaries, taken as a whole, and (ii) in respect
of the STC Affiliated Group, all the members of the
STC Affiliated Group taken as a whole; provided,
however, a Material Adverse Effect shall not include
(A) any effect or change, including changes in
national or international economic
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<PAGE> 15
conditions, relating to or affecting the oil and gas
service and equipment industry as a whole (including
a decline in worldwide oil and gas commodity prices),
(B) changes, or possible changes, in foreign,
Federal, state or local statutes and regulations, (C)
the loss of employees, customers or suppliers by
Camco or one or more of its Subsidiaries as a
consequence of any announcement relating to the
Merger or (D) any action taken or required to be
taken to satisfy any requirement imposed in
connection with the review of the Merger under the
HSR Act.
(b) Capital Structure. As of the date hereof, the
authorized capital stock of Camco consists of
100,000,000 shares of Camco Common Stock and
10,000,000 shares of preferred stock, par value $.01
per share ("Camco Preferred Stock"). One common
share purchase right (each, a "Camco Right") issued
pursuant to the Rights Agreement, dated as of
December 15, 1994, between Camco and First Chicago
Trust Company of New York, as rights agent, as
amended by the First Amendment to Rights Agreement,
dated as of October 21, 1997 (as so amended, the
"Rights Agreement"), is associated with each
outstanding share of Camco Common Stock. At the
close of business on June 8, 1998: (i) 37,968,796
shares of Camco Common Stock and no shares of Camco
Preferred Stock were issued and outstanding, and an
aggregate of 2,054,358 shares of Camco Common Stock
and no shares of Camco Preferred Stock were reserved
for issuance by Camco pursuant to the following
plans:
<TABLE>
<CAPTION>
Plan Shares Reserved
---- ---------------
<S> <C>
The Camco 1997 Long-Term Incentive Plan 988,703
The Camco 1993 Long-Term Incentive Plan 644,505
The Production Operators Corp. 1992 Long-Term
Incentive Plan 205,385
The Production Operators Corp. 1980 Long-Term
Incentive Plan 2,600
The 1996 Savings Related Share Option Scheme 81,500
The Camco Non-Employee Directors Stock Option
Plan 131,665
</TABLE>
(collectively, the "Camco Stock Plans"); (ii) 800,802
shares of Camco Common Stock were held by Camco in
its treasury; and (iii) no bonds, debentures, notes
or other indebtedness having the right to vote (or
convertible into securities having the right to vote)
on any matters on which Camco stockholders may vote
("Voting Debt") were issued or outstanding. Except
as set forth on Schedule 3.1(b) to the Camco
Disclosure Letter, all
-8-
<PAGE> 16
outstanding shares of Camco Common Stock are validly
issued, fully paid and nonassessable and are not
subject to preemptive rights. Except as set forth on
Schedule 3.1(b) to the Camco Disclosure Letter, all
outstanding shares of capital stock of the
Subsidiaries of Camco have been duly authorized and
validly issued and are fully paid and non-assessable
and were not issued in violation of any preemptive
rights or other preferential rights of subscription
or purchase other than those that have been waived or
otherwise cured or satisfied and all such shares are
owned by Camco, or a direct or indirect wholly owned
Subsidiary of Camco, free and clear of all liens,
charges, encumbrances, claims and options of any
nature. Except as set forth in this Section 3.1(b)
or on Schedule 3.1(b) to the Camco Disclosure Letter
and except for changes since June 8, 1998 resulting
from the exercise of employee stock options granted
pursuant to, or from issuances or purchases under,
the Camco Stock Plans or as contemplated by this
Merger Agreement, there are outstanding: (i) no
shares of capital stock, Voting Debt or other voting
securities of Camco; (ii) no securities of Camco or
any Subsidiary of Camco convertible into or
exchangeable for shares of capital stock, Voting Debt
or other voting securities of Camco or any Subsidiary
of Camco; and (iii) no options, warrants, calls,
rights (including preemptive rights), commitments or
agreements to which Camco or any Subsidiary of Camco
is a party or by which it is bound in any case
obligating Camco or any Subsidiary of Camco to issue,
deliver, sell, purchase, redeem or acquire, or cause
to be issued, delivered, sold, purchased, redeemed or
acquired, additional shares of capital stock or any
Voting Debt or other voting securities of Camco or of
any Subsidiary of Camco, or obligating Camco or any
Subsidiary of Camco to grant, extend or enter into
any such option, warrant, call, right, commitment or
agreement. There are not as of the date hereof and
there will not be at the Effective Time any
stockholder agreements, voting trusts or other
agreements or understandings to which Camco is a
party or by which it is bound relating to the voting
of any shares of the capital stock of Camco. There
are no restrictions on Camco to vote the stock of any
of its Subsidiaries.
(c) Authority; No Violations; Consents and Approvals.
(i) The Board of Directors of Camco has approved
the Merger and this Merger Agreement, by vote of the directors
with no negative vote, and declared the Merger and this Merger
Agreement to be in the best interests of the stockholders of
Camco. The directors of Camco have advised Camco and STC that
they intend to vote or cause to be voted all of the shares of
Camco Common Stock for which they have voting power in favor
of approval of the Merger and this Merger Agreement. Camco
has all requisite corporate power and authority to enter into
this Merger Agreement and, subject, with respect to
consummation of the Merger, to approval of this Merger
Agreement and the Merger by the stockholders of Camco in
accordance
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<PAGE> 17
with the DGCL, to consummate the transactions contemplated
hereby. The execution and delivery of this Merger Agreement
and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on
the part of Camco, subject, with respect to consummation of
the Merger, to approval of this Merger Agreement and the
Merger by the stockholders of Camco in accordance with the
DGCL. This Merger Agreement has been duly executed and
delivered by Camco and, subject, with respect to consummation
of the Merger, to approval of this Merger Agreement and the
Merger by the stockholders of Camco in accordance with the
DGCL, and assuming this Merger Agreement constitutes the valid
and binding obligation of STC and Sub, constitutes a valid and
binding obligation of Camco enforceable in accordance with its
terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or effecting creditors' rights and
to general principles of equity and limitations imposed on
indemnity obligations by applicable federal and state
securities laws.
(ii) Except as set forth on Schedule 3.1(c) to the
Camco Disclosure Letter, the execution and delivery of this
Merger Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss
of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of Camco or any of its Subsidiaries
under, any provision of (A) the Certificate of Incorporation
or Bylaws of Camco or any provision of the comparable charter
or organizational documents of any of its Subsidiaries, (B)
any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession,
franchise or license applicable to Camco or any of its
Subsidiaries or (C) assuming the consents, approvals,
authorizations or permits and filings or notifications
referred to in Schedule 3.1(c) to the Camco Disclosure Letter
and in subparagraph (iii) of this Section 3.1(c) are duly and
timely obtained or made and the approval of the Merger and
this Merger Agreement by the stockholders of Camco has been
obtained, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Camco or any of
its Subsidiaries or any of their respective properties or
assets, other than, in the case of clause (B) or (C), any such
conflicts, violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in
the aggregate, would not have a Material Adverse Effect on
Camco, materially impair the ability of Camco to perform its
obligations hereunder or prevent in any material respect the
consummation of any of the transactions contemplated hereby.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, or permit
from, any U.S. or non-U.S. court, administrative agency or
commission or other governmental authority or instrumentality
(a
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<PAGE> 18
"Governmental Entity"), is required by or with respect to
Camco or any of its Subsidiaries in connection with the
execution and delivery of this Merger Agreement by Camco or
the consummation by Camco of the transactions contemplated
hereby, as to which the failure to obtain or make would have a
Material Adverse Effect, except for: (A) the filing of a
premerger notification report by Camco under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and the expiration or termination of
the applicable waiting period with respect thereto; (B) the
filing with the SEC of (1) a proxy statement in preliminary
and definitive form relating to the meeting of Camco's
stockholders to be held in connection with the Merger (the
"Proxy Statement") and (2) such reports under Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and such other compliance with the Exchange Act and the
rules and regulations thereunder, as may be required in
connection with this Merger Agreement and the transactions
contemplated hereby; (C) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware;
(D) such filings and approvals as may be required by any
applicable state securities, "blue sky" or takeover laws, or
environmental laws; (E) such filings and approvals as may be
required by any applicable non-U.S. Governmental Entity; and
(F) such filings and approvals as may be required by any
non-U.S. premerger notification, securities, corporate or
other law, rule or regulation.
(d) SEC Documents. Camco has made available to STC a
true and complete copy of each report, schedule,
registration statement and definitive proxy statement
filed by Camco with the SEC since December 31, 1995
and prior to the date of this Merger Agreement (the
"Camco SEC Documents") which are all the documents
that Camco was required to file with the SEC since
such date. As of their respective dates, the Camco
SEC Documents complied in all material respects with
the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Camco SEC
Documents, and none of the Camco SEC Documents
contained when filed any untrue statement of a
material fact or omitted 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. The
consolidated financial statements of Camco included
in the Camco SEC Documents complied as to form in all
material respects with the published rules and
regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except
as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by
Rule 10-01 of Regulation S-X of the SEC) and fairly
present in accordance with applicable requirements of
GAAP (subject, in the case of the unaudited
statements, to normal year-end adjustments and other
adjustments discussed therein) the consolidated
financial position of Camco and its consolidated
Subsidiaries as of their respective dates and the
consolidated
-11-
<PAGE> 19
results of operations and the consolidated cash flows
of Camco and its consolidated Subsidiaries for the
periods presented therein.
(e) Information Supplied. None of the information
supplied or to be supplied by Camco for inclusion or
incorporation by reference in the Registration
Statement on Form S-4 to be filed with the SEC in
connection with the issuance of shares of
Schlumberger Common Stock in the Merger (the "S-4")
will, at the time the S-4 is filed with the SEC or
when it becomes effective under the Securities Act,
contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein
not misleading, and none of the information supplied
or to be supplied by Camco and included or
incorporated by reference in the Proxy Statement
will, at the date mailed to stockholders of Camco or
at the time of the meeting of such stockholders to be
held in connection with the Merger, contain any
untrue statement of a material fact or omit to state
any material fact required to be stated therein or
necessary in order to make the statements therein, in
light of the circumstances under which they are made,
not misleading. If at any time prior to the
Effective Time any event with respect to Camco or any
of its Subsidiaries, or with respect to other
information supplied by Camco for inclusion in the
Proxy Statement or S-4, shall occur which is required
to be described in an amendment of, or a supplement
to, the Proxy Statement or the S-4, such event shall
be so described, and such amendment or supplement
shall be promptly filed with the SEC and, as required
by law, disseminated to the stockholders of Camco.
The Proxy Statement, insofar as it relates to Camco
or its Subsidiaries or other information supplied by
Camco for inclusion therein, will comply as to form
in all material respects with the provisions of the
Exchange Act and the rules and regulations
thereunder, except that no representations or
warranties are made by Camco with respect to
statements made or incorporated by reference therein
based on information supplied by any member of the
STC Affiliated Group.
(f) Absence of Certain Changes or Events. Except as
disclosed in, or reflected in the financial
statements included in, the Camco SEC Documents or on
Schedule 3.1(f) to the Camco Disclosure Letter, or
except as contemplated by this Merger Agreement,
since December 31, 1997, there has not been: (i) any
declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or
property) with respect to any of Camco's capital
stock, except for regular quarterly cash dividends of
$.05 per share on Camco Common Stock; (ii) any
amendment of any material term of any outstanding
equity security of Camco or any Subsidiary; (iii) any
repurchase, redemption or other acquisition by Camco
or any Subsidiary of any outstanding shares of
capital stock or other equity securities of, or other
ownership interests in, Camco or any Subsidiary,
except as contemplated by Camco Benefit Plans;
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<PAGE> 20
(iv) any material change in any method of accounting
or accounting practice by Camco or any Subsidiary; or
(v) a Material Adverse Effect with respect to Camco.
(g) No Undisclosed Material Liabilities. Except as
disclosed in the Camco SEC Documents or on Schedule
3.1(g) to the Camco Disclosure Letter, there are no
liabilities of Camco or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, that
would have a Material Adverse Effect on Camco, other
than: (i) liabilities adequately provided for on the
balance sheet of Camco dated as of March 31, 1998
(including the notes thereto) contained in Camco's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998; (ii) liabilities incurred in the
ordinary course of business since March 31, 1998;
(iii) liabilities under this Merger Agreement and the
Transaction Agreement; and (iv) except as disclosed
on Schedule 3.1(l)(i) to the Camco Disclosure Letter
and in Section 5.14(f).
(h) No Default. Neither Camco nor any of its
Subsidiaries is in default or violation (and no event
has occurred which, with notice or the lapse of time
or both, would constitute a default or violation) of
any term, condition or provision of (i) in the case
of Camco and its Subsidiaries, their respective
charter and bylaws, (ii) except as disclosed in
Schedule 3.1(h) to the Camco Disclosure Letter, any
note, bond, mortgage, indenture, license, agreement
or other instrument or obligation to which Camco or
any of its Subsidiaries is now a party or by which
Camco or any of its Subsidiaries or any of their
respective properties or assets may be bound or (iii)
any order, writ, injunction, decree, statute, rule or
regulation applicable to Camco or any of its
Subsidiaries, except in the case of (ii) and (iii)
for defaults or violations which in the aggregate
would not have a Material Adverse Effect on Camco.
(i) Compliance with Applicable Laws. Camco and its
Subsidiaries hold all permits, licenses, variances,
exemptions, orders, franchises and approvals of all
Governmental Entities necessary for the lawful
conduct of their respective businesses (the "Camco
Permits"), except where the failure so to hold would
not have a Material Adverse Effect on Camco. Camco
and its Subsidiaries are in compliance with the terms
of the Camco Permits, except where the failure so to
comply would not have a Material Adverse Effect on
Camco. Except as disclosed in the Camco SEC
Documents or as set forth on Schedule 3.1(i), 3.1(k),
3.1(l), 3.1(m) or 3.1(o) to the Camco Disclosure
Letter, the businesses of Camco and its Subsidiaries
are not being conducted in violation of any law,
ordinance or regulation of any Governmental Entity,
except for possible violations which would not have a
Material Adverse Effect on Camco. Except as set
forth on Schedule 3.1(i) to the Camco Disclosure
Letter, no investigation or review by any
Governmental Entity with respect
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<PAGE> 21
to Camco or any of its Subsidiaries is pending or, to
the best knowledge of Camco, threatened, other than
those the outcome of which would not have a Material
Adverse Effect on Camco.
(j) Litigation. Except as disclosed in the Camco SEC
Documents or in the Camco litigation report
previously delivered to STC, there is no (i) suit,
action or proceeding pending, or, to the best
knowledge of Camco, threatened against or effecting
Camco or any Subsidiary of Camco ("Camco
Litigation"), or (ii) judgment, decree, injunction,
rule or order of any Governmental Entity or
arbitrator outstanding against Camco or any
Subsidiary of Camco ("Camco Order"), that would (in
any case) have a Material Adverse Effect on Camco or
prevent Camco from consummating the transactions
contemplated by this Merger Agreement.
(k) Taxes.
(i) Except as set forth on Schedule 3.1(k)(i) to
the Camco Disclosure Letter, each of Camco, each of its
Subsidiaries and any affiliated, combined or unitary group of
which any such corporation is or was a member has (A) timely
(taking into account any extensions) filed in correct form all
federal and all material state, local and non-U.S. returns,
declarations, reports, estimates, information returns and
statements ("Returns") required to be filed by or with respect
to it in respect of any Taxes (as hereinafter defined), (B)
timely paid all Taxes that are due and payable (except for
audit adjustments which would not have a Material Adverse
Effect on Camco in the aggregate or to the extent that
liability therefor is reserved for in Camco's unaudited
balance sheet at March 31, 1998 included in the most recent
Quarterly Report on Form 10-Q of Camco (the "Current Balance
Sheet")) for which Camco or any of its Subsidiaries may be
liable, (C) established reserves which are included in the
Current Balance Sheet that are adequate for the payment of all
Taxes not yet due and payable with respect to the results of
operations of Camco and its Subsidiaries through the date of
such Current Balance Sheet, and (D) complied in all respects
with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes and has in all respects
timely withheld from employee wages and paid over to the
proper governmental authorities all amounts required to be so
withheld and paid over, except where such failure to comply or
to withhold would not have a Material Adverse Effect on Camco.
(ii) Schedule 3.1(k)(ii) to the Camco Disclosure
Letter sets forth the last taxable period through which the
federal income Tax Returns of Camco and any of its
Subsidiaries have been examined by the Internal Revenue
Service ("IRS") or otherwise closed. Except to the extent
being contested in good faith, all deficiencies asserted as a
result of such examinations and any examination by any
applicable state, local or non-U.S. taxing authority have been
paid, fully settled or adequately provided for in the Current
Balance Sheet. Except as adequately provided for in the
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<PAGE> 22
Camco SEC Documents or as set forth in Schedule 3.1(k)(ii) to
the Camco Disclosure Letter, no federal, state, local or
non-U.S. Tax audits or other administrative proceedings or
court proceedings are presently pending with regard to any
Taxes for which Camco or any of its Subsidiaries would be
liable, no deficiency for any such Taxes has been proposed,
asserted or assessed pursuant to any such examination against
Camco or any of its Subsidiaries by any federal, state, local
or non-U.S. taxing authority with respect to any period.
(iii) Except as disclosed on Schedule 3.1(k)(iii)
to the Camco Disclosure Letter, neither Camco nor any of its
Subsidiaries has executed or entered into (or prior to the
close of business on the Closing Date will execute or enter
into) with the IRS or any other taxing authority (A) any
agreement or other document extending or having the effect of
extending the period for assessments or collection of any
Taxes for which Camco or any of its Subsidiaries would be
liable or (B) a closing agreement pursuant to Section 7121 of
the Code, or any predecessor provision thereof or any similar
provision of state, local or non-U.S. Tax law that relates to
the assets or operations of Camco or any of its Subsidiaries.
(iv) Except as disclosed on Schedule 3.1(k)(iv) to
the Camco Disclosure Letter, there are no liens or security
interests on any of the assets of Camco or any of its
Subsidiaries that arose in connection with any failure or
alleged failure to pay any Tax other than for taxes which are
not yet delinquent.
(v) Except as disclosed on Schedule 3.1(k)(v) to
the Camco Disclosure Letter, neither Camco 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.
(vi) Neither Camco nor any of its Subsidiaries has
made an election under Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply to any disposition of
a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by Camco or any of its
Subsidiaries.
(vii) Except as set forth in Camco SEC Documents or
as disclosed on Schedule 3.1(k)(vii) to the Camco Disclosure
Letter, neither Camco nor any of its Subsidiaries is a party
to, is bound by or has any obligation under any tax sharing
agreement, tax indemnity agreement or similar agreement or
arrangement.
(viii) Except as disclosed on Schedule 3.1(k)(viii)
to the Camco Disclosure Letter, neither Camco nor any of its
Subsidiaries has any liability for Taxes under Treas. Reg.
Section 1.1502-6, or any similar provision of state, local or
non-U.S. law, except for Taxes of the affiliated group of
which Camco is the common parent corporation, within the
meaning of Section 1504(a)(1) of the Code or any similar
provision of state, local or non-U.S. law.
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<PAGE> 23
(ix) Neither Camco nor any of its Subsidiaries has
participated in any international boycott within the meaning
of Section 999 of the Code.
(x) Except as disclosed on Schedule 3.1(k)(x) to
the Camco Disclosure Letter and minor locations not material
to the business of Camco and its U.S. Subsidiaries, neither
Camco nor any of its Subsidiaries has had a permanent
establishment in any foreign country, as defined in any
applicable treaty or convention between the United States and
such foreign country.
(xi) Neither Camco nor any of its Subsidiaries has
been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
For purposes of this Merger Agreement, "Taxes" shall mean all
federal, state, local, non-U.S. and other taxes, charges, fees,
levies, imposts, duties, licenses or other assessments, together with
any interest, penalties, additions to tax or additional amounts
imposed by any taxing authority.
(l) Employee Matters; ERISA.
(i) Benefit Plans. Schedule 3.1(l)(i) to the
Camco Disclosure Letter contains a true and complete list of
each of the following items: each employee benefit plan,
program or arrangement covering any current or former officer,
director, employee or independent contractor of Camco (or any
of its Subsidiaries) or any of their dependents or
beneficiaries (each, a "Camco Beneficiary") including, but not
limited to, any "employee benefit plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), whether or not terminated or
covered by ERISA, if Camco or any of its Subsidiaries could
have statutory or contractual liability with respect thereto
on or after the date hereof but excluding immaterial plans
maintained by Subsidiaries of Camco covering employees located
outside the United States where such plans cover fewer than
100 people. The items described above, together with each
management, employment, deferred compensation, severance,
change in control, bonus or other contract for personal
services with or covering any Camco Beneficiary, whether or
not terminated, if Camco or any of its Subsidiaries could have
statutory or contractual liability with respect thereto on or
after the date hereof, are referred to collectively herein as
the "Camco Benefit Plans."
(ii) Contributions and Payments. All material
contributions and other material payments required to have
been made by Camco or any entity required to be aggregated
therewith pursuant to Code Section 414 (a "Camco ERISA
Affiliate") with respect to any Camco Benefit Plan (or to any
person pursuant to the terms thereof) have been or will be
timely made and all such amounts properly accrued
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<PAGE> 24
through the date of this Merger Agreement have been reflected
in the financial statements of Camco included in the Camco SEC
Documents.
(iii) Qualification; Compliance. Each Camco Benefit
Plan that is intended to be "qualified" within the meaning of
Code Section 401(a) has been determined by the IRS to be so
qualified or the applicable remedial period applicable to the
Plan will not have ended prior to the Effective Time, and, to
the best knowledge of Camco, no event or condition exists or
has occurred that would reasonably be expected to result in
the revocation or denial of any such determination which would
have a Material Adverse Effect on Camco. With respect to each
Camco Benefit Plan, Camco and each Camco ERISA Affiliate are
in compliance with, and each Camco Benefit Plan and related
source of benefit payment is and has been operated in
compliance with, all applicable laws, rules and regulations
governing such plan or source, including, without limitation,
ERISA, the Code and applicable local law (including non-U.S.
law), except for violations that would not have a Material
Adverse Effect on Camco. To the best knowledge of Camco,
except as set forth in Schedule 3.1(l)(iii), no Camco Benefit
Plan is subject to any ongoing audit, investigation, or other
administrative proceeding of the IRS, the Department of Labor,
or any other federal, state, or local governmental entity or
is scheduled to be subject to such an audit investigation or
proceeding.
(iv) Liabilities. With respect to the Camco
Benefit Plans, individually and in the aggregate, and, to the
best knowledge of Camco, there exists no condition or set of
circumstances that could subject Camco or any Camco ERISA
Affiliate to any liability arising under the Code, ERISA or
any other applicable law (including, without limitation, any
liability to or under any such plan or to the Pension Benefit
Guaranty Corporation ("PBGC"), or under any indemnity
agreement to which Camco or any Camco ERISA Affiliate is a
party), which liability, excluding liability for benefit
claims, funding obligations and PBGC insurance premiums, each
payable in the ordinary course, would have a Material Adverse
Effect on Camco. No claim, action or litigation has been
made, commenced or, to the best knowledge of Camco,
threatened, by or against Camco or any of its Subsidiaries
with respect to any Camco Benefit Plan (other than for
benefits or PBGC premiums payable in the ordinary course) that
would have a Material Adverse Effect on Camco.
(v) Retiree Welfare Plans. Except as disclosed
in Schedule 3.1(l)(v) to the Camco Disclosure Letter, no Camco
Benefit Plan that is a "welfare plan" (within the meaning of
ERISA Section 3(1)) provides benefits for any retired or
former employees (other than as required pursuant to ERISA
Section 601).
(vi) Payments Resulting from Merger. Except as
disclosed on Schedules 3.1(k)(v), 3.1(l)(vi), 4.1(h) and 5.14
to the Camco Disclosure Letter, the consummation or
announcement of any transaction contemplated by this Merger
Agreement will not (either alone or upon the occurrence of any
additional or further
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<PAGE> 25
acts or events) result in (A) any payment (whether of
severance pay or otherwise) becoming due from the Company or
Camco or any of their Subsidiaries to any Camco Beneficiary or
to the trustee under any "rabbi trust" or similar arrangement,
or (B) any benefit under any Camco Benefit Plan being
established or increased, or becoming accelerated, vested or
payable.
(vii) Funded Status of Plans. Each Camco Benefit
Plan that is subject to either the minimum funding
requirements of ERISA Section 302 or to Title IV of ERISA has
assets that, as of the date hereof, have a fair market value
not less than the present value of the accrued benefit
obligations thereunder on a termination basis, as of the date
hereof, based on the actuarial methods, tables and assumptions
utilized by such plan's independent actuary in preparing such
plan's most recently prepared actuarial valuation report,
except to the extent that applicable law would require the use
of different actuarial assumptions if such plan was to be
terminated as of the date hereof, in which case those
different assumptions shall apply for purposes of this
representation. Camco and its Subsidiaries have no unfunded
liabilities, as determined under local funding requirements,
with respect to any Camco Benefit Plans that cover such
non-U.S. employees which would, in the aggregate, have a
Material Adverse Effect on Camco.
(viii) Multiemployer Plans. Except as described on
Schedule 3.1(l)(viii) to the Camco Disclosure Letter, no Camco
Benefit Plan is or was a "multiemployer plan" (within the
meaning of ERISA Section 4001(a)(3)), a multiple employer plan
described in Code Section 413(c), or a "multiple employer
welfare arrangement" (within the meaning of ERISA Section
3(40)). Except as disclosed in Schedule 3.1(l)(viii) to the
Camco Disclosure Letter, neither Camco nor any Camco ERISA
Affiliate has been obligated to contribute to, or otherwise
has or has had any liability with respect to, any
multiemployer plan, multiple employer plan, or multiple
employer welfare arrangement.
(m) Labor Matters. Except as set forth in Schedule
3.1(m) to the Camco Disclosure Letter,
(i) neither Camco nor any of its Subsidiaries is
a party to any collective bargaining agreement or other
current labor agreement with any labor union or organization,
and to the knowledge of Camco and its Subsidiaries there is no
current union representation dispute involving employees of
Camco or any of its Subsidiaries nor does Camco or any of its
Subsidiaries know of any activity or proceeding of any labor
organization (or representative thereof) or employee group (or
representative thereof) to organize any such employees;
(ii) there is no unfair labor practice charge or
grievance arising out of a collective bargaining agreement or
other grievance procedure against Camco or any of its
Subsidiaries pending, or, to the knowledge of Camco or any of
its Subsidiaries, threatened, that has, or would have, a
Material Adverse Effect on Camco;
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<PAGE> 26
(iii) there is no complaint, lawsuit or proceeding
in any forum by or on behalf of any present or former
employee, any applicant for employment or any classes of the
foregoing alleging breach of any express or implied contract
of employment, any law or regulation governing employment or
the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment
relationship against Camco or any of its Subsidiaries pending,
or, to the knowledge of Camco or any of its Subsidiaries,
threatened, that has, or would have, a Material Adverse Effect
on Camco;
(iv) there is no strike, dispute, slowdown, work
stoppage or lockout pending, or, to the knowledge of Camco or
any of its Subsidiaries, threatened, ]against or involving
Camco or any of its Subsidiaries that has, or could have, a
Material Adverse Effect on Camco;
(v) Camco and each of its Subsidiaries are in
compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment,
wages, hours of work and occupational safety and health,
except for non-compliance that does not have, and would not
have, a Material Adverse Effect on Camco; and
(vi) there is no proceeding, claim, suit, action
or governmental investigation pending or, to the knowledge of
Camco or any of its Subsidiaries, threatened, in respect to
which any current or former director, officer, employee or
agent of Camco or any of its Subsidiaries is or may be
entitled to claim indemnification from Camco or any of its
Subsidiaries (A) pursuant to their respective charters or
bylaws, (B) as provided in any indemnification agreement to
which Camco or any Subsidiary of Camco is a party or (C)
pursuant to applicable law that has, or would have, a Material
Adverse Effect on Camco.
(n) Intangible Property. Camco and its Subsidiaries
possess or have adequate rights to use all
trademarks, trade names, patents, service marks,
brand marks, brand names, computer programs,
database, industrial designs, know how, trade
secrets, copyrights and other intellectual property
rights which are material to the condition or conduct
of the business operations of Camco and its
Subsidiaries (collectively, the "Camco Intangible
Property"). Except as set forth on Schedule 3.1(n)
to the Camco Disclosure Letter, all of the Camco
Intangible Property is owned by Camco or its
Subsidiaries free and clear of any and all liens,
claims or encumbrances, except those the failure to
so own would not have a Material Adverse Effect on
Camco. To the knowledge of Camco, the operation of
the businesses of each of Camco or its Subsidiaries
does not, in any material respect, conflict with,
infringe upon, violate or
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<PAGE> 27
interfere with or constitute an appropriation of any
right, title, interest or goodwill, including,
without limitation, any intellectual property right,
trade secret, trademark, trade name, patent, service
mark, brand mark, brand name, computer program,
database, industrial design, copyright or any pending
application therefor of any other person and there
have been no claims made in connection therewith and
neither Camco nor any of its Subsidiaries has
received any notice of any claim or otherwise knows
that any of the Camco Intangible Property is invalid
or conflicts with the rights of any other person or
has not been used or enforced or has been failed to
be used or enforced in a manner that would result in
the abandonment, cancellation or unenforceability of
any of the Camco Intangible Property and would
individually or in the aggregate result in a Material
Adverse Effect on Camco. All failures of the
representations and warranties set forth in this
Section 3.1(n) to be true, in the aggregate, would
not result in a Material Adverse Effect on Camco.
(o) Environmental Matters.
For purposes of this Merger Agreement:
(A) "Environmental Law" means any
applicable law regulating, prohibiting or requiring
the notification of Releases into any part of the
natural environment, pertaining to the protection of
natural resources, the environment and public and
employee health and safety, or governing or
regulating the use, storage, handling,
transportation, treatment, processing, disposal or
generation of any Hazardous Materials, including,
without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA")
(42 U.S.C. Section 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801
et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.), the Clean Water Act
(33 U.S.C. Section 1251 et seq.), the Clean Air Act
(33 U.S.C. Section 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 7401 et
seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 136 et seq.),
Emergency Planning and Community Right to Know Act
(42 U.S.C. Section 11001 et seq.), Safe Drinking
Water Act (Section 42 U.S.C. Section 300 et seq.)
and the Occupational Safety and Health Act (29 U.S.C.
Section 651 et seq.) ("OSHA") and the regulations
promulgated pursuant thereto, and any other such
applicable county, province, state or local statutes,
and the regulations promulgated pursuant thereto, as
such laws have been and may be amended or
supplemented through the Closing Date.
(B) "Hazardous Material" means any
substance, material or waste which is regulated
pursuant to any Environmental Law by any public or
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<PAGE> 28
governmental authority in the jurisdictions in which
the applicable party or its Subsidiaries conducts
business, or in the United States, including, without
limitation, any material or substance which is
defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or
"restricted hazardous waste," "contaminant,"
"pollutant," "toxic waste" or "toxic substance" under
any provision of Environmental Law;
(C) "Release" means any release, spill,
effluent, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, or
into or out of any property owned, operated or leased
by the applicable party or its Subsidiaries; and
(D) "Remedial Action" means all actions,
including, without limitation, any capital
expenditures, required by a governmental entity or
required under any Environmental Law, or voluntarily
undertaken to (I) investigate, clean up, remove,
treat, or in any other way ameliorate or address any
Hazardous Materials or other substance in the indoor
or outdoor environment; (II) prevent the Release or
threat of Release, or minimize the further Release of
any Hazardous Material so it does not endanger or
threaten to endanger the public health or welfare of
the indoor or outdoor environment; (III) perform
pre-remedial studies and investigations or
post-remedial monitoring and care pertaining or
relating to a Release; or (IV) bring the applicable
party into compliance with any Environmental Law.
(i) Except as disclosed on Schedule 3.1(o) to the
Camco Disclosure Letter, the operations of Camco and its
Subsidiaries have been and, as of the Closing Date, will be in
compliance with all Environmental Laws, except where the
failure to so comply would not have a Material Adverse Effect
on Camco;
(ii) Except as disclosed on Schedule 3.1(o) to the
Camco Disclosure Letter, Camco and its Subsidiaries have
obtained and will, as of the Closing Date, maintain all
permits required under applicable Environmental Laws for the
continued operations of their respective businesses, except
such permits the lack of which would not have a Material
Adverse Effect on Camco;
(iii) Except as disclosed on Schedule 3.1(o) to the
Camco Disclosure Letter, Camco and its Subsidiaries are not
subject to any outstanding written orders, investigations or
material contracts with any Governmental Entity or other
person respecting (A) Environmental Laws, (B) Remedial Action
or (C) any Release or threatened Release of a Hazardous
Material which would have a Material Adverse Effect on Camco;
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<PAGE> 29
(iv) Except as disclosed on Schedule 3.1(o) to the
Camco Disclosure Letter, Camco and its Subsidiaries have not
received any written communication alleging, with respect to
any such party, the violation of or liability under any
Environmental Law or liability attributable to the Release of
any Hazardous Material, which violations or liabilities,
individually or in the aggregate, would have a Material
Adverse Effect on Camco;
(v) Except as disclosed on Schedule 3.1(o) to the
Camco Disclosure Letter, neither Camco nor any of its
Subsidiaries has any contingent liabilities in connection with
the Release of any Hazardous Material into the indoor or
outdoor environment (whether on-site or off-site) that,
individually or in the aggregate, would have a Material
Adverse Effect on Camco;
(vi) Except as disclosed on Schedule 3.1(o) to the
Camco Disclosure Letter, the operations of Camco or its
Subsidiaries involving the generation, transportation,
treatment, storage or disposal of Hazardous Material or any
state equivalent are in compliance with applicable
Environmental Laws, except where the failure to so comply,
individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Camco; and
(vii) Except as disclosed on Schedule 3.1(o) to the
Camco Disclosure Letter, to the knowledge of Camco, there is
not now on or in any property of Camco or its Subsidiaries any
of the following: (A) any underground storage tanks or surface
impoundments; (B) any asbestos-containing materials; or (C)
any polychlorinated biphenyls, any of which ((A), (B), or (C)
preceding), individually or in the aggregate, would have a
Material Adverse Effect on Camco.
(p) Opinion of Financial Advisor. Camco has received the
opinion of Morgan Stanley & Co. Incorporated (a copy
of which has been delivered to STC) to the effect
that, as of the date hereof, the Conversion Number is
fair from a financial point of view to such holders.
(q) State Takeover Statutes; Vote Required. Camco has
taken all action to assure that no state takeover
statute or similar statute or regulation, including,
without limitation, Section 203 of the DGCL, shall
apply to the Merger or any of the other transactions
contemplated hereby. The affirmative vote of the
holders of a majority of the outstanding shares of
Camco Common Stock is the only vote of the holders of
any class or series of Camco capital stock necessary
to approve this Merger Agreement and the transactions
contemplated hereby. Camco has taken such other
action with respect to any other anti-takeover
provisions in its Bylaws, Certificate of
Incorporation or the Rights Agreement to the extent
necessary to consummate the Merger on the terms set
forth in this Merger Agreement.
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<PAGE> 30
(r) Accounting Matters. To the best knowledge of Camco's
financial and accounting officers, prior to the date
hereof, neither Camco nor any of its Subsidiaries has
taken any action that (without giving effect to any
action taken or agreed to be taken by STC or any of
its Subsidiaries) would jeopardize the treatment of
the business combination to be effected by the Merger
as a pooling of interests for accounting purposes.
(s) Beneficial Ownership of Schlumberger Common Stock.
As of the date hereof, assuming the accuracy of the
representation set forth in Section 3.2(b), neither
Camco nor its Subsidiaries "beneficially owns" (as
defined in Rule 13d-3 under the Exchange Act) in the
aggregate one percent (1%) or more of the outstanding
Schlumberger Common Stock.
(t) Insurance. Camco maintains insurance coverage
reasonably adequate for the operation of the business
of Camco and each of its Subsidiaries (taking into
account the cost and availability of such insurance),
and the transactions contemplated hereby will not
materially adversely affect such coverage.
(u) Brokers. Except as disclosed on Schedule 3.1(u) to
the Camco Disclosure Letter hereof, no broker,
investment banker, or other person is entitled to any
broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by
this Merger Agreement based upon arrangements made by
or on behalf of Camco.
(v) Material Contracts and Agreements. All material
contracts of Camco and its Subsidiaries have been
included in Camco SEC Documents unless not required
to be so included pursuant to the rules and
regulations of the SEC. Schedule 3.1(v) to the Camco
Disclosure Letter sets forth a list of all written or
oral contracts, agreements or arrangements to which
Camco or any of its Subsidiaries or any of their
respective assets is bound which would be required to
be filed as exhibits to Camco's Annual Report on Form
10-K for the year ended December 31, 1997, or, based
on information currently available to Camco, are
expected to be required to be filed as an exhibit to
Camco's Annual Report on Form 10-K for the year ended
December 31, 1998.
(w) Title to Properties.
(i) Each of Camco and its Subsidiaries has good
and indefeasible title to, or valid leasehold interests in,
all its properties and assets purported to be owned by it in
the Camco SEC Documents, except for such as are no longer used
or useful in the conduct of its businesses or as have been
disposed of in the ordinary course of business, and except for
defects in title, easements, restrictive covenants and similar
encumbrances or impediments that, in the aggregate, do not and
will not materially
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<PAGE> 31
interfere with its ability to conduct its business as
currently conducted. All such assets and properties, other
than assets and properties in which Camco or any of the
Subsidiaries has leasehold interests, are free and clear of
all liens, other than those set forth in the Camco SEC
Documents, and except for liens, that, in the aggregate, do
not and will not materially interfere with the ability of
Camco or any of its Subsidiaries to conduct business as
currently conducted.
(ii) Except as would not have a Material Adverse
Effect on Camco, each of Camco and its Subsidiaries has
complied in all material respects with the terms of all leases
to which it is a party and under which it is in occupancy, and
all such leases are in full force and effect. Each of Camco
and its Subsidiaries enjoys peaceful and undisturbed
possession under all such leases.
(x) Amendment to the Camco Rights Agreement. Camco has
amended the Rights Agreement so that none of the
execution and delivery of this Merger Agreement, the
conversion of shares of Camco Common Stock into the
right to receive Schlumberger Common Stock in
accordance with Article II of this Merger Agreement,
and the consummation of the Merger or any other
transaction contemplated hereby will cause (A) the
Camco Rights to become exercisable under the Rights
Agreement, (B) any member of the STC Affiliated Group
to be deemed an "Acquiring Person" (as defined in the
Rights Agreement), (C) the provisions of Section 11
or Section 13 to become applicable to any such event
or (D) the "Distribution Date" or the "Share
Acquisition Date" (each as defined in the Rights
Agreement) to occur upon any such event, and so that
the "Expiration Date" (as defined in the Rights
Agreement) of the Camco Rights will occur immediately
prior to the Effective Time. Camco has delivered to
STC a true and complete copy of the Rights Agreement,
as amended to date.
3.2 Representations and Warranties of STC and Sub. Subject to the
exceptions set forth in the disclosure letter to be delivered to Camco in
connection herewith (the "STC Disclosure Letter"), STC and Sub jointly and
severally represent and warrant to Camco as follows:
(a) Organization, Standing and Power. Each of STC and
Sub is a corporation duly organized, validly existing
and in good standing under the laws of its state of
incorporation or organization, has all requisite
corporate power and authority to own, lease and
operate its properties and to carry on its business
as now being conducted, and is duly qualified and in
good standing to do business in each jurisdiction in
which the business it is conducting, or the
operation, ownership or leasing of its properties,
makes such qualification necessary, other than in
such jurisdictions where the failure to be so
organized or so to qualify (individually or in the
aggregate) would not have a Material Adverse Effect
on the STC Affiliated Group.
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<PAGE> 32
(b) Capital Structure. As of the date hereof, the
authorized capital stock of STC consists of 1,000
shares of common stock, par value $100 per share, 500
shares of which are validly issued, fully paid and
nonassessable, and are owned by Schlumberger and the
balance of which are not issued or outstanding. As
of the date hereof, the authorized capital stock of
Sub consists of 10,000 shares of common stock, par
value $1.00 per share, 1,000 shares of which are
validly issued, fully paid and nonassessable, and are
owned by STC and the balance of which are not issued
or outstanding. Sub was formed solely for the
purpose of participating in the Merger, has no assets
other than (i) that amount of cash which is required
for it to be organized as a corporation under the
DGCL and (ii) such shares of Schlumberger Common
Stock as are necessary to effect the transactions
contemplated hereby and has conducted no activities
to date, other than in connection with the Merger.
(c) Authority; No Violations, Consents and Approvals.
(i) Each of STC and Sub has all requisite
corporate power and authority to enter into this Merger
Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Merger Agreement
and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on
the part of STC and Sub. This Merger Agreement has been duly
executed and delivered by STC and Sub. Assuming this Merger
Agreement constitutes the valid and binding obligation of
Camco, it also constitutes a valid and binding obligation of
each of STC and Sub and is enforceable against each of them in
accordance with its terms; provided, however, that such
enforceability is subject to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
principles of equity and limitations imposed on indemnity
obligations by applicable federal and state securities laws.
(ii) Except as set forth on Schedule 3.2(c)(ii) to
the STC Disclosure Letter, the execution and delivery of this
Merger Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss
of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of STC or Sub under, any provision of (A)
the Certificate of Incorporation or Bylaws of STC or Sub, (B)
any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession,
franchise or license applicable to STC or Sub or (C) assuming
the consents, approvals, authorizations or permits and filings
or notifications referred to in Section 3.2(c)(iii) are duly
and timely obtained or made,
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<PAGE> 33
any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to STC or Sub or any of properties or
assets, other than, in the case of clause (B) or (C), any such
conflicts, violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in
the aggregate, would not have a Material Adverse Effect on the
STC Affiliated Group, materially impair the ability of STC or
Sub to perform its respective obligations hereunder or prevent
in any material respect the consummation of any of the
transactions contemplated hereby.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, or permit
from any Governmental Entity is required by or with respect to
STC or any other member of the STC Affiliated Group in
connection with the execution and delivery of this Merger
Agreement by STC and Sub or the consummation by STC and Sub of
the transactions contemplated hereby, as to which the failure
to obtain or make would have a Material Adverse Effect on the
STC Affiliated Group, except for: (A) the filing of a
premerger notification report under the HSR Act and the
expiration or termination of the applicable waiting period
with respect thereto; (B) the filing with the SEC of the Proxy
Statement, the S-4, such reports under Section 13(a) of the
Exchange Act and such other compliance with the Securities Act
and the Exchange Act and the rules and regulations thereunder
as may be required in connection with this Merger Agreement
and the transactions contemplated hereby, and the obtaining
from the SEC of such orders as may be so required; (C) the
filing of the Certificate of Merger with the Secretary of
State of the State of Delaware; (D) filings with, and approval
of, the New York Stock Exchange, Inc. (the "NYSE"); (E) such
filings and approvals as may be required by any applicable
state securities, "blue sky" or takeover laws or environmental
laws; (F) such filings and approvals as may be required by any
applicable non-U.S. Governmental Entity; and (G) such filings
and approvals as may be required by any non-U.S. premerger
notification, securities, corporate or other law, rule or
regulation.
(d) Litigation. Except as disclosed on Schedule 3.2(d)
to the STC Disclosure Letter, there is no (i) suit,
action or proceeding pending, or, to the best
knowledge of STC, threatened against or affecting any
member of the STC Affiliated Group ("STC
Litigation"), or (ii) judgment, decree, injunction,
rule or order of any Governmental Entity or
arbitrator outstanding against STC or any Subsidiary
of STC, that would (in any case) have a Material
Adverse Effect on the STC Affiliated Group or prevent
STC or Sub from consummating the transactions
contemplated by this Merger Agreement.
(e) Accounting Matters. To the best knowledge of STC's
financial and accounting officers, prior to the date
hereof, no member of the STC Affiliated Group has
taken any action that (without giving effect to any
action taken or agreed to be taken by Camco or any of
its Subsidiaries) would jeopardize the treatment of
the business combination to be effected by the Merger
as a pooling of interests for accounting purposes.
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<PAGE> 34
(f) Beneficial Ownership of Camco Common Stock. As of
the date hereof, neither STC nor any member of the
STC Affiliated Group "beneficially owns" (as defined
in Rule 13d-3 under the Exchange Act) any shares of
Camco Common Stock.
(g) Transaction Agreement. The representations and
warranties made by any member of the STC Affiliated
Group which is a party to the Transaction Agreement
are true and correct in all material respects as set
forth therein.
(h) No Other Consideration for Camco Common Stock.
Neither STC nor any member of the STC Affiliated
Group (i) owns any stock of Camco, (ii) has
previously owned any stock of Camco, except for stock
(if any) which was subsequently disposed of to
unrelated parties, (iii) has any plan or intention to
acquire any stock of Camco, other than as provided
herein, or (iv) has agreed to pay, will pay or will
cause to be paid any consideration (whether material
or immaterial) for shares of Camco capital stock
other than the shares of Schlumberger Common Stock
described herein and any payments in lieu of
fractional shares described in Section 2.2(e), which
consideration could cause the Merger to fail to
qualify as a reorganization under Section
368(a)(1)(B) of the Code.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS OF CAMCO
4.1 Conduct of Business by Camco Pending the Merger. During the
period from the date of this Merger Agreement and continuing until the
Effective Time, Camco agrees as to itself and its Subsidiaries that (except as
expressly contemplated or permitted by this Merger Agreement, or to the extent
that STC shall otherwise consent in writing):
(a) Ordinary Course. Except as provided on Schedule
4.1(a) to the Camco Disclosure Letter, each of Camco
and its Subsidiaries shall carry on its businesses in
the usual, regular and ordinary course in
substantially the same manner as heretofore conducted
and, to the extent consistent therewith, shall use
all reasonable efforts to preserve intact its present
business organizations, keep available the services
of its current officers and employees and endeavor to
preserve its relationships with customers, suppliers
and others having business dealings with it, in each
case consistent with past practices, to the end that
its goodwill and ongoing business shall not be
impaired in any material respect to the fullest
extent reasonably possible at the Effective Time.
(b) Dividends; Changes in Stock. Except as provided on
Schedule 4.1(b) to the Camco Disclosure Letter, Camco
shall not and it shall not permit any of its
Subsidiaries to: (i) declare or pay any dividends on
or make other
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<PAGE> 35
distributions in respect of any of its capital stock
or partnership interests, except for the declaration
and payment of regular quarterly cash dividends not
in excess of $.05 per share of Camco Common Stock and
dividends from a Subsidiary of Camco to Camco or
another Subsidiary of Camco and except for cash
distributions paid on or with respect to partnership
interests of a Subsidiary of Camco; (ii) split,
combine or reclassify any of its capital stock or
issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in
substitution for shares of Camco capital stock; or
(iii) repurchase, redeem or otherwise acquire, or
permit any of its Subsidiaries to purchase, redeem or
otherwise acquire, any shares of Camco's capital
stock, except as required by the terms of its
securities outstanding on the date hereof or as
contemplated by any existing employee benefit plan.
(c) Issuance of Securities. Except as provided on
Schedule 4.1(c) to the Camco Disclosure Letter, Camco
shall not, and it shall not permit any of its
Subsidiaries to, issue, deliver or sell, or authorize
or propose to issue, deliver or sell, any shares of
its capital stock of any class, any Voting Debt or
any securities convertible into, or any rights,
warrants or options to acquire, any such shares,
Voting Debt or convertible securities, other than:
(i) the issuance of Camco Common Stock upon the
exercise of stock options granted under the Camco
Stock Plans that are outstanding on the date hereof,
or in satisfaction of stock grants or stock-based
awards made prior to the date hereof pursuant to the
Camco Stock Plans; and (ii) issuances by a wholly
owned Subsidiary of its capital stock to its parent.
(d) Governing Documents. Except as contemplated hereby
or in connection herewith, Camco shall not amend or
propose to amend its Certificate of Incorporation or
Bylaws.
(e) No Acquisitions. Except for proposed acquisitions
listed on Schedule 4.1(e) to the Camco Disclosure
Letter, Camco shall not and it 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
involving the payment of consideration in excess of
$5 million in the aggregate without the prior written
consent of STC.
(f) No Dispositions. Other than: (i) dispositions or
proposed dispositions listed on Schedule 4.1(f) to
the Camco Disclosure Letter; (ii) as may be necessary
or required by law to consummate the transactions
contemplated hereby; (iii) sales or leases in the
ordinary course of business consistent with past
practice or (iv) other dispositions not aggregating
more than $5 million, Camco shall not and it shall
not permit any of its Subsidiaries to sell, lease,
encumber or
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otherwise dispose of, or agree to sell, lease
(whether such lease is an operating or capital
lease), encumber or otherwise dispose of, any of its
assets without the prior written consent of STC.
(g) No Dissolution, Etc. Except as otherwise permitted
or contemplated by this Merger Agreement, Camco shall
not authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial
liquidation or dissolution of Camco or any of its
Subsidiaries that would constitute a "significant
subsidiary" within the meaning of Rule 1.02 of
Regulation S-X promulgated under the Securities Act
(a "Significant Subsidiary").
(h) Certain Employee Matters. Except as set forth on
Schedules 3.1(k)(v), 3.1(l)(i), 3.1(l)(vi) and 4.1(h)
to the Camco Disclosure Letter and in Section 5.14
or as may be required by applicable law or any
agreement to which Camco or any Camco ERISA Affiliate
is a party on the date hereof or as expressly
contemplated by this Merger Agreement Camco shall
not, nor shall it permit any Camco ERISA Affiliate
to:
(i) amend, or increase the amount of (or
accelerate the payment or vesting of) any
benefit or amount payable under, any employee
benefit plan or any other contract,
agreement, commitment, arrangement, plan or
policy providing for compensation or benefits
to any current or former director, officer,
employee or independent contractor who would
be deemed to be an employee under applicable
guidelines published by the IRS, and
maintained by, contributed to or entered into
by, Camco or any Camco ERISA Affiliate,
including, without limitation, the existing
Camco Benefit Plans;
(ii) increase (or enter into any contract,
agreement, commitment or arrangement to
increase in any manner) the compensation or
fringe benefits, or otherwise to extend,
expand or enhance the engagement, employment
or any related rights, of any current or
former director, officer, employee or
independent contractor who would be deemed to
be an employee under applicable guidelines
published by the IRS, of Camco or any Camco
ERISA Affiliate, except increases in the
ordinary course of business consistent with
past practice;
(iii) adopt, establish or implement any plan,
policy or other arrangement providing for any
form of benefits or other compensation to any
current or former director, officer, employee
or independent contractor who would be deemed
to be an employee under applicable guidelines
published by the IRS, of Camco or any Camco
ERISA Affiliate;
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(iv) enter into or amend any employment agreement,
severance agreement, or other contract,
agreement or arrangement with any current or
former director, officer, employee or
independent contractor who would be deemed to
be an employee under applicable guidelines
published by the IRS, of Camco or any Camco
ERISA Affiliate; or
(v) pay or agree to pay any pension, retirement
allowance or other benefit not required or
contemplated by any of the existing Camco
Benefit Plans as in effect on the date of
this Merger Agreement to any current or
former director, officer, employee or
independent contractor who would be deemed to
be an employee under applicable guidelines
published by the IRS, of Camco or any Camco
ERISA Affiliate.
(i) Indebtedness; Leases; Capital Expenditures. Except
as set forth on Schedule 4.1(i) to the Camco
Disclosure Letter, Camco shall not, nor shall Camco
permit any of its Subsidiaries to, (A) incur any
indebtedness for borrowed money (except for working
capital under Camco's existing credit facilities, and
refinancings of existing debt that 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 Camco or any
of its Subsidiaries or guarantee any debt securities
of others if the aggregate amount of all such
indebtedness incurred or guaranteed exceeds $25
million, (B) except in the ordinary course of
business, 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 Camco or any of its
Subsidiaries in connection with any indebtedness
thereof, except for those securing purchase money
indebtedness or (C) commit to aggregate capital
expenditures in excess of $25 million outside the
capital budget, as approved by Camco prior to the
date hereof and disclosed on Schedule 4.1(i) to the
Camco Disclosure Letter.
(j) Taxes. Neither Camco nor any of its Subsidiaries
shall make any material election relating to Taxes or
compromise any material Tax liability.
(k) Accounting. Neither Camco nor any of its
Subsidiaries shall change any material accounting
principle used by it, except as required by
statement, rules or regulations promulgated by the
FASB or the SEC.
4.2 No Solicitation.
(a) Camco will not, and will not authorize or permit any
of its officers, directors, agents and other
representatives or those of any of its Subsidiaries
(collectively, "Camco Representatives") to, and will
not authorize any
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employee of Camco or any of its Subsidiaries to and
on becoming aware of will take all reasonable actions
to stop the employee from continuing to, directly or
indirectly, solicit or initiate or encourage
(including by way of furnishing information) any
prospective buyer or the making of any proposal that
constitutes, or may reasonably be expected to lead
to, an Acquisition Proposal (as defined herein) from
any person, or engage in any discussions or
negotiations relating thereto or accept any
Acquisition Proposal; provided, however, that,
notwithstanding any other provision of this Merger
Agreement, Camco may, prior to the vote of the
stockholders of Camco for approval of the Merger, but
not thereafter if the Merger is approved thereby, in
response and only in response to a written request
made without any solicitation, initiation,
encouragement, discussion or negotiation by Camco or
any Camco Representatives, furnish information
concerning Camco to any person or "group" (within the
meaning of Section 13(d)(3) of the Exchange Act)
pursuant to a confidentiality agreement on
substantiality the same terms (provided that the
Camco Board of Directors may, if required by its
fiduciary duties, permit an offer to be received from
such group in accordance with the terms of such
confidentiality agreement) as the Confidentiality
Agreements between Camco and STC described in Section
5.1 hereof, provided that the Board of Directors of
Camco shall conclude in good faith on the basis of
the written advice of outside counsel to Camco that
such action is necessary in order for the Board of
Directors of Camco to act in a manner that is
consistent with its fiduciary obligations under
applicable law. Camco shall immediately cease and
cause to be terminated any existing solicitation,
initiation, encouragement, activity, discussion or
negotiation with any parties conducted heretofore by
Camco or any Camco Representatives with respect to
any Acquisition Proposal existing on the date hereof.
Camco will promptly notify STC of the pendency of any
negotiations respecting, or the receipt of, any
Acquisition Proposal. It is understood that any
violation of this Section 4.2 by Camco or any Camco
Representative shall be deemed a material breach of
this Merger Agreement by Camco. As used in this
Merger Agreement, "Acquisition Proposal" shall mean
any proposal or offer, other than a proposal or offer
by STC or another member of the STC Affiliated
Group, for a tender or exchange offer, a merger,
consolidation or other business combination involving
Camco or any Significant Subsidiary of Camco or any
proposal to acquire in any manner a substantial (15%
or more) equity interest in, or substantially all of
the assets of, Camco or any of its Significant
Subsidiaries.
(b) Neither the Board of Directors of Camco nor any
committee thereof shall, except in connection with
the termination of this Merger Agreement pursuant to
Section 7.1(a), (b) or (d), (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse
to Schlumberger or STC, the approval or
recommendation by the Board of Directors of Camco or
any such committee
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<PAGE> 39
of this Merger Agreement or the Merger, or take any
action having such effect, or (ii) approve or
recommend, or propose to approve or recommend, any
Acquisition Proposal. Notwithstanding the foregoing,
in the event the Board of Directors of Camco receives
an Acquisition Proposal that, in the exercise of its
fiduciary obligations (as determined in good faith by
a majority of the disinterested members thereof based
on the advice of outside counsel), it determines to
be a Superior Proposal, the Board of Directors may
withdraw or modify its approval or recommendation of
this Merger Agreement or the Merger and may (subject
to the following sentence) terminate this Merger
Agreement, in each case at any time after midnight on
the second business day following STC's receipt of
written notice (a "Notice of Superior Proposal")
advising STC that the Board of Directors has received
an Acquisition Proposal which it has determined to be
a Superior Proposal, specifying the material terms
and conditions of such Superior Proposal (including
the proposed financing for such proposal and a copy
of any documents conveying such proposal) and
identifying the party making such Superior Proposal.
Camco may terminate this Merger Agreement pursuant to
the preceding sentence only if the stockholders of
Camco shall not yet have voted upon the Merger and
Camco shall have paid to STC the Termination Fee (as
defined in Section 7.2(b)). Any of the foregoing to
the contrary notwithstanding, Camco may engage in
discussions with any party that has made an
unsolicited takeover proposal for the limited purpose
of determining whether such proposal (as opposed to
any further negotiated proposal) is a Superior
Proposal. Nothing contained herein shall prohibit
Camco from taking and disclosing to its stockholders
a position contemplated by Rule 14e-2(a) following
STC's receipt of a Notice of Superior Proposal.
(c) For purposes of this Merger Agreement, a "Superior
Proposal" means any bona fide proposal to acquire,
directly or indirectly, all of the Camco Common Stock
then outstanding or all or substantially all of the
assets of Camco and its Subsidiaries, and otherwise
on terms which a majority of the disinterested
members of the Board of Directors of Camco determines
in its good faith reasonable judgment (based on the
written advice of a financial advisor of national
recognized reputation, a copy of which shall be
provided to STC) to be more favorable to Camco's
stockholders than the Merger. In reaching such good
faith determination, the Board of Directors of Camco
will give significant consideration to whether an
Acquisition Proposal includes definite financing.
4.3 Pooling of Interests. If so requested by STC, Camco shall,
and shall cause its independent accountants and other representatives to, fully
cooperate with STC, its independent accountants and other representatives in
seeking to obtain confirmation from the SEC that the Merger may be accounted
for as a "pooling of interests."
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Access to Information. Subject to the provisions of Section
5.3, upon reasonable notice, Camco shall afford to the officers, employees,
accountants, counsel and other representatives of STC, access, during normal
business hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records and, during such period,
Camco shall furnish promptly to STC or a designated member of the STC
Affiliated Group (a) a copy of each report, schedule, registration statement
and other document filed or received by it during such period purs uant to SEC
requirements and (b) all other information concerning its business, properties
and personnel as STC or the other members of the STC Affiliated Group may
reasonably request. Upon reasonable notice, STC shall provide the officers,
employees, accountants, counsel and other representatives of Camco such
information and materials concerning STC and the other members of the STC
Affiliated Group as is reasonably necessary for Camco to complete its due
diligence with respect to this Merger Agreement and the Transaction Agreement.
Camco agrees that neither Camco nor any of its Subsidiaries or any
representatives of any of the foregoing entities will use any information
obtained pursuant to this Section 5.1 for any purpose unrelated to the
consummation of the transactions contemplated by this Merger Agreement and the
Transaction Agreement. STC agrees that no member of the STC Affiliated Group,
or any representative of any member of the STC Affiliated Group will use any
information obtained pursuant to this Section 5.1 for any purpose unrelated to
the consummation of the transactions contemplated by this Merger Agreement and
the Transaction Agreement. Notwithstanding the foregoing, neither Camco nor
STC shall be required to give the other party any information that is subject
to a confidentiality agreement and that relates primarily to a party other than
Camco and its subsidiaries on the one hand or a member of the STC Affiliated
Group on the other. The Confidentiality Agreements dated as of May 11, 1998
between STC and Camco (the "Confidentiality Agreements") shall apply with
respect to information furnished thereunder or hereunder and any other
activities contemplated thereby.
5.2 Camco Stockholders' Meeting. Camco shall call a meeting of
its stockholders to be held as promptly as practicable after the date hereof
for the purpose of voting upon this Merger Agreement and the Merger. Subject
to Sections 4.2(a) and (b), Camco will, through its Board of Directors,
recommend to its stockholders approval of such matters and not rescind such
recommendation and shall use its best efforts to obtain approval and adoption
of this Merger Agreement and the Merger by its stockholders. Camco shall use
all reasonable efforts to hold such meeting as soon as practicable after the
date upon which the S-4 becomes effective.
5.3 Legal Conditions to Merger.
(i) Except as otherwise provided herein, each of Camco,
STC and Sub will take all reasonable actions
necessary to comply promptly with all legal
requirements that may be imposed on such party with
respect to the Merger (including, without limitation,
furnishing all information required under the HSR Act
and in connection with approvals of or filings with
any other Governmental Entity) and will promptly
cooperate with and furnish
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information to each other in connection with any such
requirements imposed upon any of them or any of their
Subsidiaries in connection with the Merger. Each of
Camco and STC will, and will cause its respective
Subsidiaries to, take all actions necessary to obtain
(and will cooperate with each other in obtaining) any
consent, acquiescence, authorization, order or
approval of, or any exemption or nonopposition by,
any Governmental Entity or court required to be
obtained or made by Camco, STC or any of their
Subsidiaries in connection with the Merger or the
taking of any action contemplated thereby or by this
Merger Agreement, including complying with any
requests or orders made by the Justice Department or
the Federal Trade Commission in connection with the
Merger.
(ii) Each of the parties hereto shall file a premerger
notification and report form under the HSR Act with
respect to the Merger as promptly as reasonably
possible following execution and delivery of this
Agreement. Each of the parties agrees to use
reasonable efforts to promptly respond to any request
for additional information pursuant to Section (e)(1)
of the HSR Act. Except as otherwise required by
United States regulatory considerations, Camco will
furnish to STC copies of all correspondence, filings
or communications (or memoranda setting forth the
substance thereof (collectively, "Company HSR
Documents")) between Camco, or any of its respective
representatives, on the one hand, and any
governmental entity, or members of the staff of such
agency or authority, on the other hand, with respect
to this Agreement or the Merger; provided; however,
that (x) with respect to documents and other
materials filed by or on behalf of Camco with the
Antitrust Division of the Department of Justice, the
Federal Trade Commission, or any state attorneys
general that are available for review by STC, copies
will not be required to be provided to STC and (y)
with respect to any Camco HSR Documents (1) that
contain any information which, in the reasonable
judgment of Fulbright & Jaworski L.L.P., should not
be furnished to STC because of antitrust
considerations or (2) relating to a request for
additional information pursuant to Section (e)(1) of
the HSR Act, the obligation of Camco to furnish any
such Camco HSR Documents to STC shall be satisfied by
the delivery of such Camco HSR Documents on a
confidential basis to Baker & Botts, L.L.P., pursuant
to a confidentiality agreement in form and substance
reasonably satisfactory to STC. Except as otherwise
required by United States regulatory considerations,
STC will furnish to Camco copies of all
correspondence, filings or communications (or
memoranda setting forth the substance thereof
(collectively, "STC HSR Documents")) between STC or
any of its representatives, on the one hand, and any
Governmental Entity, or member of the staff of such
agency or authority, on the other hand, and any
Governmental Entity, or member of the staff of such
agency or authority, on the other hand, with respect
to this Agreement or the Merger; provided, however,
that (x) with respect to documents and other
materials filed by or
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on behalf of STC with the Antitrust Division of the
Department of Justice, the Federal Trade Commission,
or any state attorneys general that are available for
review by Camco, copies will not be required to be
provided to Camco, and (y) with respect to any STC
HSR Documents (1) that contain information which, in
the reasonable judgment of Baker & Botts, L.L.P.,
should not be furnished to Camco because of antitrust
considerations or (2) relating to a request for
additional information pursuant to Section (e)(1) of
the HSR Act, the obligation of STC to furnish any
such STC HSR Documents to Camco shall be satisfied by
the delivery of such STC HSR Documents on a
confidential basis to Fulbright & Jaworski L.L.P.
pursuant to a confidentiality agreement in form and
substance reasonably satisfactory to Camco.
(iii) In the event that any governmental body with
jurisdiction of this Merger shall require any member
of the STC Affiliated Group to agree to take or not
to take any action as a condition to approving or not
objecting to the Merger, STC will take such action
(A) if the loss in annual revenues to the Surviving
Corporation would reasonably be expected not to
exceed $75 million during the ensuing twelve months
following the Closing, or (B) if STC otherwise
considers it reasonable and appropriate in the
circumstances to take such action.
5.4 Agreements of Others. No later than five days prior to the
day on which the meeting of stockholders of Camco to approve the Merger is
held, Camco shall use its best efforts to cause each person who STC reasonably
believes to be an affiliate of Camco within the meaning of Rule 145 of the
General Rules and Regulations of the SEC under the Securities Act, after
consultation with Camco and its legal counsel, to deliver (a) a written
agreement, in the form to be approved by STC and Camco, that such persons will
not sell, pledge, transfer or otherwise dispose of any shares of Schlumberger
Common Stock issued to such persons pursuant to the Merger or any other shares
of Schlumberger Common Stock that such persons control the disposition of,
except pursuant to an effective registration statement or in compliance with
Rule 145 or an exemption from the registration requirements of the Securities
Act and (b) a written agreement, in the form to be approved by STC and Camco,
that such persons will not sell or in any other way reduce his or her risk
relative to any shares of Schlumberger Common Stock received in the Merger
(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.
5.5 Stock Options. At the Effective Time, each outstanding option
to purchase Camco Common Stock and any stock appreciation rights related
thereto that has been granted pursuant to the Camco Stock Plans ("Camco Stock
Option"), whether vested or unvested, shall be deemed to constitute an option
to acquire, on the same terms and conditions as were applicable under such
Camco Stock Option, a number of shares of Schlumberger Common Stock equal to
the number of
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shares of Camco Common Stock purchasable pursuant to such Camco Stock Option
multiplied by the Conversion Number, at a price per share equal to the
per-share exercise price for the shares of Camco Common Stock purchasable
pursuant to such Camco Stock Option divided by the Conversion Number; provided,
however, that in the case of any Camco Stock Option to which Code Section 421
applies by reason of its qualification under any of the Code Sections 422-424,
the exercise price and number of shares subject to such option shall be
determined in a manner that meets the requirements for issuing or assuming a
stock option in a transaction to which Code Section 424(a) applies and provided
further, that the number of shares of Schlumberger Common Stock that may be
purchased upon exercise of such Camco Stock Option shall not include any
fractional share and, upon exercise of such Camco Stock Option, a cash payment
shall be made for any fractional share based upon the closing price of a share
of Schlumberger Common Stock on the NYSE on the last trading day of the
calendar month immediately preceding the date of exercise.
5.6 Indemnification; Directors' and Officers' Insurance.
(a) Camco shall, and from and after the Effective Time,
STC and the Surviving Corporation shall, indemnify,
defend and hold harmless each person who is now, or
has been at any time prior to the date hereof or who
becomes prior to the Effective Time, an officer or
director of Camco or any of its Subsidiaries or an
employee of Camco or any of its Subsidiaries who acts
as a fiduciary under any Camco Benefit Plans (the
"Indemnified Parties") against all losses, claims,
damages, costs, expenses (including attorneys' fees),
liabilities or judgments or amounts that are paid in
settlement with the approval of the indemnifying
party (which approval shall not be unreasonably
withheld) of or in connection with any threatened or
actual claim, action, suit, proceeding or
investigation based in whole or in part on or arising
in whole or in part out of the fact that such person
is or was a director, officer or such employee of
Camco or any Subsidiary, whether pertaining to any
matter existing or occurring at or prior to the
Effective Time and whether asserted or claimed prior
to, or at or after, the Effective Time (including
arising out of or relating to the Merger, the
consummation of the transactions contemplated herein,
and any action taken in connection therewith)
("Indemnified Liabilities"). Any Indemnified Party
wishing to claim indemnification under this Section
5.6, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify Camco (or
after the Effective Time, STC and the Surviving
Corporation), but the failure so to notify shall not
relieve a party from any liability that it may have
under this Section 5.6, except to the extent such
failure materially prejudices such party. The
Indemnified Parties as a group may retain only one
law firm to represent them with respect to each such
matter unless there is, under applicable standards of
professional conduct, a conflict on any significant
issue between the positions of any two or more
Indemnified Parties.
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(b) STC shall use its reasonable best efforts to purchase
and maintain in effect for the benefit of the
Indemnified Parties for a period of six years after
the Effective Time, directors' and officers'
liability insurance of at least the same coverage and
amounts containing terms and conditions that are no
less advantageous in any material respect to the
Indemnified Parties than that maintained by Camco and
its Subsidiaries as of the date of this Merger
Agreement with respect to matters arising before the
Effective Time, provided that STC shall not be
required to pay an annual premium for such insurance
in excess of two times the last annual premium paid
by Camco prior to the date hereof, but in such case
shall purchase as much coverage as possible for such
amount.
(c) All rights to indemnification for acts or omissions
occurring prior to the Effective Time now existing in
favor of the Indemnified Parties as provided in the
Certificate of Incorporation or by-laws of Camco or
its subsidiaries and in any indemnification
agreements to which they are parties shall survive
the Merger, and the Surviving Corporation shall
continue such indemnification rights for acts or
omissions prior to the Effective Time in full force
and effect in accordance with their terms and STC
shall be financially responsible therefor. The
provisions of this Section 5.6 are intended to be for
the benefit of, and shall be enforceable by, the
parties hereto and each Indemnified Party, and his or
her heirs and representatives.
5.7 Agreement to Defend. In the event any claim, action, suit,
investigation or other proceeding by any governmental body or other person or
other legal or administrative proceeding is commenced that questions the
validity or legality of the transactions contemplated hereby or seeks damages
in connection therewith, the parties hereto agree to cooperate and use their
reasonable efforts to defend against and respond thereto.
5.8 Accounting Matters. During the period from the date of this
Merger Agreement through the Effective Time, unless the parties shall otherwise
agree in writing, neither STC nor Camco or any of their respective Subsidiaries
shall take or fail to take any reasonable action which action or failure to act
would knowingly jeopardize the treatment of Camco's combination with Sub as a
pooling of interests for accounting purposes and each of STC and Camco will
take all reasonable steps to permit the Merger to be treated as a pooling of
interest for accounting purposes.
5.9 Public Announcements. STC and Camco will agree with each
other with respect to the contents thereof before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by this Merger Agreement, except as may be required by applicable
law or by obligations pursuant to any listing agreement with any national
securities exchange or transaction reporting system.
5.10 Other Actions. Except as contemplated by this Merger
Agreement, neither STC nor Camco shall, and shall not permit any of its
Subsidiaries to, take or agree or commit to take any
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action that is reasonably likely to result in any of its respective
representations or warranties hereunder being untrue in any material respect or
in any of the conditions to the Merger set forth in Article VI not being
satisfied.
5.11 Advice of Changes; SEC Filings. STC and Camco shall confer on
a regular basis with each other, report on operational matters and promptly
advise each other orally and in writing of any change or event having, or
which, insofar as can reasonably be foreseen, could have, a Material Adverse
Effect on the STC Affiliated Group or Camco, as the case may be. Camco and STC
shall promptly provide each other (or their respective counsel) copies of all
filings made by such party (or in the case of STC, made by Schlumberger) with
the SEC or any other state or federal Governmental Entity in connection with
this Merger Agreement and the transactions contemplated hereby.
5.12 Reorganization It is the intention of STC and Camco that the
Merger will qualify as a reorganization described in Section 368(a)(1)(B) of
the Code (and any comparable provisions of applicable state law). Neither
Camco nor STC (or any of their respective Subsidiaries) will take or omit to
take any action (whether before, on or after the Closing Date) that would cause
the Merger not to be so treated. The parties will characterize the Merger as
such a reorganization for purposes of all Returns and other filings.
5.13 Delivery of Schlumberger Common Stock. Prior to the Merger,
STC will acquire and will contribute to Sub that number of shares of
Schlumberger Common Stock which Sub is required to deliver pursuant to Section
2.1(c).
5.14 Employee Matters.
(a) Employment. STC and Camco agree that all employees
of Camco and its Subsidiaries immediately prior to
the Effective Time shall be employed by the Surviving
Corporation immediately after the Effective Time
(referred to herein during such continuing employment
as "Continuing Employees").
(b) Benefits Accrued at the Effective Time. STC will
take, or cause the appropriate member of the STC
Group (as defined below) to take, all actions
necessary to preserve and maintain with respect to
the Camco Benefit Plans in effect at the Effective
Time, benefits accrued and service credit accrued to
the Continuing Employees and the Camco Retirees
during employment with Camco and its Subsidiaries
prior to the Effective Time; provided, however, that
unless otherwise expressly provided in this
Agreement, nothing contained in this Section 5.14
shall preclude any member of the STC Group from
amending any such plan to cease the accrual of
benefits thereunder after the Effective Time or
terminating any such plan provided such amendment or
termination does not adversely affect the benefits
accrued thereunder, if any, at the Effective Time.
As used herein, the "STC Group" means the Surviving
Corporation and all members of the STC Affiliated
Group.
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(c) General Agreement as to Employee Benefit Coverage
after the Effective Time. Unless otherwise expressly
addressed in this Section 5.14, this Section 5.14(c)
shall govern the obligations of the STC Group with
respect to employee benefits for Continuing Employees
and for employees who are eligible for retirement
benefits attributable to employment with Camco or a
Camco Affiliate, whether before, at or after the
Effective Time (referred to herein as "Camco
Retirees").
(i) Benefit Coverage. STC will take, and cause
the appropriate member of the STC Group to
take, such actions as are necessary so that
for the remainder of the calendar year in
which the Effective Time occurs, Continuing
Employees and Camco Retirees will be provided
with employee benefit plans, programs,
policies and arrangements that are no less
favorable to such employees and retirees as
those provided as of the Effective Time.
Thereafter, the STC Group will provide the
Continuing Employees and Camco Retirees with
benefits that, in the aggregate, are not less
favorable than those then provided to
Similarly Situated Employees (as defined in
the next sentence). As used herein, the
phrase "Similarly Situated Employees" means
that group of employees (or retirees, as
applicable) of the STC Group principally
employed in the oil field service operations
of the STC Group generally whose job
descriptions, working conditions, wage rates
and other conditions of employment are (or
were) the most similar to those of the
Continuing Employees (or the Camco Retirees)
or, if there is no such group of employees, a
group of employees engaged in the drilling or
completing of oil and/or gas wells, all as
reasonably determined by STC.
(ii) Service Crediting. In the event a STC Group
employee benefit plan, program, policy or
arrangement is made available to Continuing
Employees or Camco Retirees, all periods of
service with Camco and its Subsidiaries and
any other entity that is within the same
controlled group as Camco under Section
414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA (the "Camco Controlled
Group"), will be credited to such employees
or retirees for all purposes (other than
accrual of benefits), including vesting and
the eligibility to participate and receive
benefits for which a specified period of
service is required under such STC Group
employee benefit plan, program, policy or
arrangement.
(iii) Certain Welfare Plan Provisions. STC will
take, or cause the appropriate member of the
STC Group to take, such actions as are
necessary so that Continuing Employees and
Camco Retirees shall not be subject to
preexisting condition exclusions or waiting
periods
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for welfare benefit plan coverages (except to
the extent so subject prior to the Effective
Time) under any STC Group welfare benefit
plan that is made available to them and shall
receive full credit for any copayments and
deductibles already incurred under the
comparable plan of Camco and its Subsidiaries
during the applicable plan year in which the
Effective Time occurs.
(d) Specific Agreements as to Employee Benefit Coverage
after the Effective Time. The following provisions
shall modify the obligations of the STC Group under
Section 5.14(c) to the extent set forth below.
(i) Severance Policies or Plans. For the period
commencing on the Effective Time and ending
on December 31, 1999, a Continuing Employee
who is not a party to an individual agreement
providing for the payment of severance
benefits shall be provided with continued
coverage under the Camco Benefit Plan
providing for severance benefit coverage to
the Continuing Employee at the Effective Time
or, if any member of the STC Group maintains
a severance plan that would otherwise cover
the Continuing Employee by its terms and such
plan would provide greater benefits to the
Continuing Employee, the employee instead
shall be provided with coverage under such
superior STC Group severance plan while
eligible for such plan during the period
commencing on the Effective Time and ending
on December 31, 1999. From and after January
1, 2000, for as long as the STC Group
maintains a severance plan for its Similarly
Situated Employees, a Continuing Employee who
is not a party to an individual severance
agreement shall be provided with coverage
under the STC Group severance plan.
Continuing Employees will accrue severance
plan credit at the same rate as Similarly
Situated Employees and, for this purpose,
years of service with the Camco Controlled
Group prior to the Effective Time will be
credited.
(ii) Management and Sales Incentive Compensation
Programs. The following provisions shall
apply to those Camco Benefit Plans that
provide for management and sales incentive
compensation and that are in effect at the
Effective Time. In the event that a
participant in an incentive compensation
program ceases to be an employee for any
reason other than termination for cause or
voluntary resignation, or in the event that a
participant is reassigned to a business unit
which is no longer within the Camco incentive
compensation measurements, the participant
will receive an incentive compensation
payment as measured against the plan at the
end of the prior quarter and based on an
annual award prorated for the fraction of the
year up to the change in employment status.
In the event that a reorganization results in
a
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business unit being removed from the Camco
incentive compensation measurements, the
measurements of the plan will be adjusted to
eliminate the objectives of that business
unit from the performance evaluation for
calculation of incentive compensation
payments for the remaining business units.
Voluntary resignation shall not include
termination under Section 2(a) of a Camco
Executive Severance Agreement.
(iii) Qualified Defined Contribution Plans. No
Camco Benefit Plan that is a qualified
defined contribution pension plan shall be
terminated in a manner that would generate a
distributable event to a participant (unless
the corresponding plan(s) maintained by the
STC Group for Similarly Situated Employees
are also so terminated). The STC Group may
make employer contributions under qualified
defined contribution plans for Continuing
Employees at a rate or level that differ from
the contributions made under such plans for
Similarly Situated Employees based on the
relative profits of the STC Group operating
unit or division employing Continuing
Employees as compared to the profits of the
STC Group operating unit or division
employing Similarly Situated Employees.
(iv) Qualified Defined Benefit Plans.
(A) Freeze of Benefit Accruals.
Benefit accruals by a participant in any
Camco Benefit Plan that is a qualified
defined benefit pension plan (a "Camco
Defined Benefit Plan") may be frozen by a
member of the STC Group at any time on or
after the close of the calendar year in which
the Effective Time occurs, provided that the
definition for compensation includes covered
earnings up to the date the plan is frozen
and further provided that Continuing
Employees then commence accruing a benefit
under a qualified defined benefit pension
plan sponsored by a member of the STC Group
(a "STC Group Defined Benefit Plan") if
Similarly Situated Employees are then
accruing a benefit under such a plan. An ad
hoc benefit adjustment shall be made to the
frozen benefit attributable to the Camco
Defined Benefit Plan to the extent such an
adjustment is made under a STC Group Defined
Benefit Plan.
(B) Service Crediting. In the
event that the benefit accrual of a
Continuing Employee under a Camco Defined
Benefit Plan is frozen, or a Camco Defined
Benefit Plan is merged into a STC Group
Defined Benefit Plan, the following service
crediting provisions (in addition to any
service crediting provisions of Section
5.14(c) that are not inconsistent with this
paragraph) shall apply to any benefit
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accrued after the Effective Time under such
STC Group Defined Benefit Plan: Continuing
Employees will be credited with service equal
to the employees' accrued vesting service
under the Camco Defined Benefit Plan for
periods prior to the Effective Time, for
purposes of vesting, eligibility to
participate, eligibility for enhanced levels
of benefit accrual and eligibility for early
retirement.
(C) Early Retirement.
Notwithstanding the foregoing, the early
retirement provisions of the Camco Defined
Benefit Plan that is merged into a STC Group
Defined Benefit Plan or under which the
accrued benefit of a Continuing Employee is
frozen shall continue to apply to the benefit
accrued under the provisions of the Camco
Defined Benefit Plan rather than the early
retirement provisions of the STC Group
Defined Benefit Plan. To the extent that a
Continuing Employee commences receipt of an
early retirement benefit under a STC Group
Defined Benefit Plan prior to the time that
the benefit accrued under a Camco Defined
Benefit Plan would be payable, the benefit
accrued under the Camco Defined Benefit Plan
shall nevertheless commence being paid at the
same time as the benefit under the STC Group
Defined Benefit Plan, but shall be
actuarially reduced to reflect such early
commencement.
(v) Retiree Medical Coverage. For so long as the
STC Group provides retiree medical coverage
to its eligible retiring Similarly Situated
Employees, retiree medical coverage under a
Camco Benefit Plan or a plan maintained by a
member of the STC Group shall be made
available to eligible Camco Retirees. The
STC Group may impose eligibility criteria of
attainment of age 60 during employment with
20 years of service (within the meaning of
the vesting service definition of the Camco
Benefit Plan that is a qualified defined
benefit pension plan and that covers the
employee at the Effective Time) for such
coverage, but no more restrictive eligibility
criteria unless such more restrictive
criteria also applies to Similarly Situated
Employees. However, a Continuing Employee
who, at the Effective Time, is age 55 and has
accrued 15 or more years of service shall be
eligible, upon an involuntary termination of
employment entitling the employee to benefits
under a STC Group or Camco severance plan or
agreement, for the same retiree medical
coverage provided to other Camco Retirees,
notwithstanding the age and service
eligibility criteria otherwise applicable for
retiree medical coverage. Camco Retirees may
be required to pay premiums for retiree
medical coverage up to, but not in excess of,
the highest premium permitted to be charged
for such continuation coverage under the
Consolidated Omnibus Budget
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Reconciliation Act of 1986 unless higher
premiums also are required from Similarly
Situated Employees who retire.
(vii) U.K. Performance Related Pay (PRP) Plans.
Camco Benefit Plans that are PRP plans will
not be discontinued prior to the close of the
calendar year in which the Effective Time
occurs.
(viii) Health Care and Dependent Care Flexible
Spending Accounts. Camco Benefit Plans that
are flexible spending accounts within the
meaning of Code Section 125 and the
regulations thereunder will not be
discontinued prior to the close of the
calendar year in which the Effective Time
occurs.
(e) Vacation. With respect to the calendar year in which
the Effective Time occurs, a Continuing Employee will
be permitted to take vacation after the Effective
Time (in accordance with the STC Group vacation
policies generally applicable to Similarly Situated
Employees) for accrued and unused vacation days
(determined under the vacation policies of Camco)
that such Continuing Employee is entitled to use for
the calendar year in which the Effective Time occurs.
Continuing Employees shall receive pay in lieu of
such unused vacation time at the end of the calendar
year in which the Effective Time occurs. In
addition, with respect to vacation time that is
earned during the calendar year in which the
Effective Time occurs (which may be taken in the
subsequent calendar year under the vacation policies
of Camco) (the "Vacation Accrual"), the Vacation
Accrual shall, on the first day of such subsequent
calendar year, be credited to the Continuing
Employees' vacation credit accounts under the
applicable STC Group vacation policy for the calendar
year following the Effective Time, up to the maximum
allowed under the vacation policies of the STC Group,
and the Continuing Employees will be paid for any
Vacation Accrual in excess of such maximum.
Continuing Employees will, in addition to having
their Vacation Accrual credited as of the first day
of the calendar year following the Effective Time,
accrue vacation time for calendar years commencing on
and after the Effective Time at the same rate as
Similarly Situated Employees and, for this purpose,
years of service with the Camco Controlled Group
prior to the Effective Time will be credited.
Notwithstanding the foregoing, the total vacation
time credited to a Continuing Employee's vacation
credit account for the calendar year following the
Effective Time (both by the Vacation Accrual credit
made at the beginning of the year and vacation
accrued thereafter) shall not exceed the maximum
allowed under the applicable vacation policies of the
STC Group.
(f) Retention Bonus Program. Notwithstanding the
provisions of Section 4.1(h), STC agrees that Camco
may establish a retention bonus program for the
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benefit of certain named Continuing Employees
("Eligible Employees"), subject to the following
limitations: The number of Eligible Employees shall
not exceed 100. The total amount of retention
bonuses potentially payable under the program shall
not exceed $5 million. A retention bonus will only
be paid to an Eligible Employee who remains in the
employ of the STC Group until the first to occur of
(i) the first anniversary of the Effective Time or
(ii) the date such Eligible Employee's employment is
involuntarily terminated other than for cause by any
member of the STC Group. Documentation of the
program (including the names and titles of the
Eligible Employees and the amount of the retention
bonus potentially payable to each Eligible Employee)
shall be subject to the comment and advance approval
of STC, which approval shall not unreasonably be
withheld.
(g) Collective Bargaining Exception. The provisions of
this Section 5.14 will not apply to Continuing
Employees or Camco Retirees who are covered by a
collective bargaining agreement to the extent such
provisions are inconsistent with the terms of any
applicable collective bargaining agreement.
(h) Transferred Employees. A Continuing Employee who is
transferred after the Effective Time to employment
with an operating unit, subsidiary or affiliate of
the STC Group other than the Surviving Corporation or
any of its subsidiaries shall participate in the
employee benefit plans, programs, policies and
arrangements that are maintained by said employing
entity for its employees.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger shall be subject
to the satisfaction prior to the Closing Date of the following conditions:
(a) Camco Stockholder Approval. This Merger Agreement
and the Merger shall have been approved and adopted
by the affirmative vote of the holders of a majority
of the outstanding shares of Camco Common Stock
entitled to vote thereon.
(b) NYSE Listing. The shares of Schlumberger Common
Stock issuable to Camco stockholders pursuant to this
Merger Agreement shall have been authorized for
listing on the NYSE upon official notice of issuance.
(c) Other Approvals. The waiting period applicable to
the consummation of the Merger under the HSR Act
shall have expired or been terminated and all
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filings required to be made prior to the Effective
Time with, and all consents, approvals, permits and
authorizations required to be obtained prior to the
Effective Time from, any Governmental Entity in
connection with the execution and delivery of this
Merger Agreement and the consummation of the
transactions contemplated hereby shall have been made
or obtained (as the case may be), except where the
failure to obtain such consents, approvals, permits
and authorizations would not be reasonably likely to
result in a Material Adverse Effect on the STC
Affiliated Group (assuming the Merger has taken
place) or to materially adversely affect the
consummation of the Merger.
(d) S-4. The S-4 shall have become effective under the
Securities Act and shall not be the subject of any
stop order or proceedings seeking a stop order.
(e) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent
injunction or other order issued by any court of
competent jurisdiction or other legal restraint or
prohibition (an "Injunction") preventing the
consummation of the Merger shall be in effect;
provided, however, that prior to invoking this
condition, each party shall have complied fully with
its obligations under Section 5.7 hereof and, in
addition, shall use all reasonable efforts to have
any such decree, ruling, injunction or order vacated,
except as otherwise contemplated by this Merger
Agreement.
(f) Pooling Accounting. Camco and STC or a designated
member of the STC Affiliated Group shall have
received a letter from each of Arthur Andersen LLP
and Price Waterhouse LLP, dated as of a date within
two days prior to the Closing Date, in form and
substance satisfactory to the respective receiving
persons, to the effect that, in accordance with
generally accepted accounting principles and the
applicable rules and regulations of the SEC,
Schlumberger and Camco are each eligible to be a
party to a Merger accounted for as a "pooling of
interests".
6.2 Conditions of Obligations of STC and Sub. The obligations of
STC and Sub to effect the Merger are subject to the satisfaction of the
following conditions, any or all of which may be waived in whole or in part by
STC.
(a) Representations and Warranties. Each of the
representations and warranties of Camco set forth in
this Merger Agreement shall be true and correct in
all material respects as of the date of this Merger
Agreement and (except to the extent such
representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as
of the Closing Date, except where the failure to be
so true and correct (without giving effect to the
individual materiality thresholds otherwise contained
in Section 3.1 hereof) would not have a Material
Adverse Effect on Camco (such that the aggregate of
the
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Material Adverse Effect on Camco hereunder exceeds
$200 million) and STC shall have received a
certificate dated the Closing Date on behalf of Camco
by the chief executive officer and chief financial
officer of Camco to that effect.
(b) Performance of Obligations of Camco. Camco shall
have performed in all material respects all
obligations required to be performed by it under this
Merger Agreement at or prior to the Closing Date.
(c) Letters from Camco Directors and Executive Officers.
STC shall have received from each director and
executive officer of Camco an executed copy of each
of the agreements described in Section 5.4.
(d) Certifications and Opinion. Camco shall have
furnished STC with:
(i) a certified copy of a resolution or
resolutions duly adopted by the Board of Directors of Camco
approving this Merger Agreement and consummation of the Merger
and the transactions contemplated hereby and directing the
submission of the Merger to a vote of the stockholders of
Camco;
(ii) a certified copy of a resolution or
resolutions duly adopted by the holders of a majority of the
outstanding shares of Camco Common Stock approving the Merger
and the transactions contemplated hereby;
(iii) a favorable opinion, dated the Closing Date,
in customary form and substance, of Ronald R. Randall,
Esquire, General Counsel of Camco, dated the Closing Date to
the effect that:
(A) Camco is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of Delaware and has
corporate power to own its properties and assets and
to carry on its business as presently conducted and
as described in the Registration Statement;
(B) Camco has the requisite corporate
power to effect the Merger as contemplated by this
Merger Agreement; the execution and delivery of this
Merger Agreement did not, and the consummation of the
Merger will not, violate any provision of Camco's
Certificate of Incorporation or Bylaws; and upon the
filing by the Surviving Corporation of the
Certificate of Merger, the Merger shall become
effective;
(C) Each of Camco's Significant
Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws
of its jurisdiction of incorporation, and has
corporate power to own its properties and assets and
to carry on its business as presently conducted; and
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(D) The Board of Directors of Camco has
taken all action required by the DGCL and its
Certificate of Incorporation or its Bylaws to approve
the Merger and to authorize the execution and
delivery of this Merger Agreement and the
transactions contemplated hereby; the Board of
Directors and the stockholders of Camco have taken
all action required by the DGCL and Camco's
Certificate of Incorporation and By-Laws to authorize
the Merger in accordance with the terms of this
Merger Agreement; and this Merger Agreement is a
valid and binding agreement of Camco enforceable in
accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other
similar laws or judicial decisions now or hereafter
in effect relating to creditors' rights generally or
governing the availability of equitable relief.
(e) Tax Opinion. STC or a designated member of the STC
Affiliated Group shall have received an opinion,
satisfactory to the receiving person, dated on or
about the date that is two days prior to the date the
Proxy Statement is first mailed to stockholders of
Camco, of Baker & Botts, L.L.P., to the effect that,
if the Merger is consummated in accordance with the
terms of this Merger Agreement, the Merger will be
treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a)
of the Code, Schlumberger, STC and Camco will each be
a party to that reorganization within the meaning of
Section 368(b) of the Code and no gain or loss will
be recognized by Schlumberger, STC or Sub as a result
of the Merger, which opinion shall not have been
withdrawn or modified in any material respect. A
second opinion, reconfirming the foregoing and dated
as of the Closing Date, satisfactory to the receiving
person, shall have been issued to STC or the
designated member of the STC Affiliated Group. In
rendering such opinions, such counsel may receive and
rely upon representations of fact contained in
certificates of Schlumberger, STC, Sub and Camco.
(f) Transaction Agreement. Each of the obligations
required to be performed by Camco under the
Transaction Agreement of even date herewith between
Schlumberger and Camco (the "Transaction Agreement")
at or prior to the Delivery Date (as defined in the
Transaction Agreement) shall have been performed in
all material respects and each of the conditions set
forth in Article V of the Transaction Agreement shall
have been satisfied or waived as set forth therein.
6.3 Conditions of Obligations of Camco. The obligation of Camco
to effect the Merger is subject to the satisfaction of the following
conditions, any or all of which may be waived in whole or in part by Camco:
(a) Representations and Warranties. Each of the
representations and warranties of STC and Sub set
forth in this Merger Agreement shall be true and
correct
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in all material respects as of the date of this
Merger Agreement and (except to the extent such
representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as
of the Closing Date, except where the failure to be
so true and correct (without giving effect to the
individual materiality thresholds otherwise contained
in Section 3.2 hereof) would not have a Material
Adverse Effect on the STC Affiliated Group (such that
the aggregate of the Material Adverse Effect on the
STC Affiliated Group hereunder exceeds $400 million)
and Camco shall have received a certificate dated the
Closing Date by a duly authorized officer of STC to
that effect.
(b) Performance of Obligations of STC and Sub. STC and
Sub shall have performed in all material respects all
obligations required to be performed by them under
this Merger Agreement at or prior to the Closing
Date.
(c) Certifications and Opinion. STC shall have furnished
Camco with:
(i) a certified copy of a resolution or
resolutions duly adopted by the Board of Directors or a duly
authorized committee thereof of STC and Sub approving this
Merger Agreement and consummation of the Merger and the
transactions contemplated hereby;
(ii) a favorable opinion, dated the Closing Date,
in customary form and substance, of David S. Browning,
Esquire, General Counsel of Schlumberger, to the effect that:
(A) Each of STC and Sub is a corporation
duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of
incorporation and has corporate power to own its
properties and assets and to carry on its business as
presently conducted and as described in the
Registration Statement; STC and Sub each has the
requisite corporate power to effect the Merger as
contemplated by this Merger Agreement; the execution
and delivery of this Merger Agreement did not, and
the consummation of the Merger will not, violate any
provision of STC's or Sub's Certificate of
Incorporation or Bylaws; and upon the filing by the
Surviving Corporation of the Certificate of Merger,
the Merger shall become effective;
(B) The respective Board of Directors of
STC and Sub have taken all action required under its
jurisdiction of incorporation, its Certificate of
Incorporation or its Bylaws to authorize the
execution and delivery of this Merger Agreement and
the transactions contemplated hereby, and to
authorize the Merger in accordance with the terms of
this Merger Agreement; and this Merger Agreement is a
valid and binding agreement of STC and Sub
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enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other
similar laws or judicial decisions now or hereafter
in effect relating to creditors' rights generally or
governing the availability of equitable relief.
(C) The shares of Schlumberger Common
Stock to be delivered to the holders of Camco Common
Stock pursuant to Article II are duly authorized and
when issued and delivered as contemplated by this
Merger Agreement will be legally and validly issued
and fully paid and nonassessable and no stockholders
of Schlumberger shall have any preemptive rights with
respect thereto either pursuant to the organizational
documents of Schlumberger or under applicable law of
the jurisdiction of Schlumberger's organization.
(d) Tax Opinion. Camco shall have received an opinion,
satisfactory to Camco, dated on or about the date
that is two days prior to the date the Proxy
Statement is first mailed to stockholders of Camco, a
copy of which will be furnished to STC, of Fulbright
& Jaworski L.L.P., to the effect that, if the Merger
is consummated in accordance with the terms of this
Merger Agreement, the Merger will be treated for
federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code,
Schlumberger, STC and Camco will each be a party to
that reorganization within the meaning of Section
368(b) of the Code, no gain or loss will be
recognized by the stockholders of Camco as a result
of the Merger upon the conversion of shares of Camco
Common Stock into shares of Schlumberger Common Stock
and no gain or loss will be recognized by Camco as a
result of the Merger, which opinion shall not have
been withdrawn or modified in any material respect.
A second opinion, reconfirming the foregoing and
dated as of the Closing Date, shall have been issued
to Camco and a copy shall have been provided to STC.
In rendering such opinions, such counsel may receive
and rely upon representations of fact contained in
certificates of Schlumberger, STC, Sub and Camco.
(e) Fairness Opinion. Morgan Stanley & Co. Incorporated
has not revoked, modified or changed its opinion
referred to in Section 3.1(p) in any manner adverse
to the holders of the Common Stock of Camco.
(f) Transaction Agreement. Each of the obligations
required to be performed by Schlumberger under the
Transaction Agreement at or prior to the Delivery
Date (as defined in the Transaction Agreement) shall
have been performed in all material respects and each
of the conditions set forth in Article V of the
Transaction Agreement shall have been satisfied or
waived as set forth therein.
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ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Merger Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after approval of the matters presented in connection with the Merger by the
stockholders of Camco:
(a) by mutual written consent of Camco and STC, or by
mutual action of their respective Boards of
Directors;
(b) by either Camco or STC if (i) the Merger shall not
have been consummated by December 31, 1998 (provided
that the right to terminate this Merger Agreement
under this clause (i) shall not be available to any
party whose breach of any representation or warranty
or failure to fulfill any covenant or agreement under
this Merger Agreement has been the cause of or
resulted in the failure of the Merger to occur on or
before such date); (ii) any court of competent
jurisdiction, or some other governmental body or
regulatory authority shall have issued an order,
decree or ruling or taken any other action
permanently restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling
or other action shall have become final and
nonappealable; or (iii) any required approval of the
stockholders of Camco shall not have been obtained by
reason of the failure to obtain the required vote
upon a vote held at a duly held meeting of
stockholders or at any adjournment thereof;
(c) by STC if (i) for any reason Camco fails to call and
hold a stockholders' meeting for the purpose of
voting upon this Merger Agreement and the Merger by
December 31, 1998; (ii) Camco shall have failed to
comply in any material respect with any of the
covenants or agreements contained in this Merger
Agreement to be complied with or performed by Camco
at or prior to such date of termination (provided
such breach has not been cured within 30 days
following receipt by Camco of notice of such breach
and is existing at the time of termination of this
Merger Agreement); (iii) any representations and
warranties of Camco contained in this Merger
Agreement shall not have been true when made
(provided such breach has not been cured within 30
days following receipt by Camco of notice of such
breach and is existing at the time of termination of
this Merger Agreement) or on and as of the Effective
Time as if made on and as of the Effective Time
(except to the extent it relates to a particular
date), except where the failure to be so true and
correct (without giving effect to the individual
materiality thresholds otherwise contained in Section
3.1 hereof) would not have a Material Adverse Effect
on Camco such that the aggregate of the Material
Adverse Effect on Camco exceeds $200 million; (iv)
the Board of Directors of Camco or any committee
thereof (A) withdraws, modifies or changes its
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recommendation of this Merger Agreement or the Merger
in a manner adverse to the STC Affiliated Group or
shall have resolved to do any of the foregoing, or
(B) approves or recommends, or proposes to approve or
recommend, any Acquisition Proposal; or (v) the
Transaction Agreement shall have been terminated by
Camco;
(d) by Camco if (i) STC or Sub shall have failed to
comply in any material respect with any of the
covenants or agreements contained in this Merger
Agreement to be complied with or performed by it at
or prior to such date of termination (provided such
breach has not been cured within 30 days following
receipt by STC of notice of such breach and is
existing at the time of termination of this Merger
Agreement); (ii) any representations and warranties
of STC or Sub contained in this Merger Agreement
shall not have been true when made (provided such
breach has not been cured within 30 days following
receipt by STC of notice of such breach and is
existing at the time of termination of this Merger
Agreement) or on and as of the Effective Time as if
made on and as of the Effective Time (except to the
extent it relates to a particular date), except where
the failure to be so true and correct (without giving
effect to the individual materiality thresholds
otherwise contained in Section 3.2 hereof) would not
have a Material Adverse Effect on the STC Affiliated
Group such that the aggregate of the Material Adverse
Effect on the STC Affiliated Group exceeds $400
million; (iii) pursuant to Section 4.2(b) or (iv) the
Transaction Agreement shall have been terminated by
Schlumberger.
7.2 Effect of Termination.
(a) In the event of termination of this Merger Agreement
by either Camco or STC as provided in Section 7.1,
this Merger Agreement shall forthwith become void and
there shall be no liability or obligation on the part
of Camco or any member of the STC Affiliated Group
except (i) with respect to this Section 7.2, the
third and fourth sentences of Section 5.1 and Section
8.1, and (ii) to the extent that such termination
results from the willful breach by a party hereto of
any of its representations or warranties or of any of
its covenants or agreements, in each case, as set
forth in this Merger Agreement except as provided in
Section 8.9.
(b) If STC or Camco, as applicable, terminates this
Merger Agreement pursuant to Section 4.2(b) or
Section 7.1(c)(iv)(B), Camco shall immediately pay
STC a fee of $90 million (the "Termination Fee") in
cash or by wire transfer of immediately available
funds to an account designated by STC.
(c) If STC terminates this Agreement pursuant to Section
7.1(c)(iv)(A), Camco shall owe to STC the Termination
Fee if Camco consummates a transaction
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<PAGE> 59
pursuant to an Acquisition Proposal on or prior to
September 30, 1999. The Termination Fee payable to
STC under this Section 7.2(c), if any, shall be
payable in cash or by wire transfer of immediately
available funds to an account designated by STC on
the consummation of the transaction, if any, referred
to above.
(d) Camco also agrees to pay to STC the Termination Fee
if (i) after the date hereof and before the
termination of this Merger Agreement, an Acquisition
Proposal shall have been made and publicly announced
by any party, (ii) the stockholders of Camco shall
not have approved the Merger and (iii) on or prior to
September 30, 1999, Camco consummated a transaction
pursuant to an Acquisition Proposal. The Termination
Fee payable under this Section 7.2(d) shall be
payable on the consummation of such transaction.
7.3 Amendment. This Merger Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of Camco, but, after any such
approval, no amendment shall be made which by law requires further approval by
such stockholders without such further approval. This Merger Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
7.4 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed: (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto; (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto; and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Payment of Expenses. Each party hereto shall pay its own
expenses incident to preparing for entering into and carrying out this Merger
Agreement and the consummation of the transactions contemplated hereby, whether
or not the Merger shall be consummated. In the event the Agreement is
terminated for any reason, STC shall reimburse Camco up to $5 million for the
actual cost of Camco's employee retention program.
8.2 Nonsurvival of Representations, Warranties and Agreements.
None of the representations, warranties and agreements in this Merger Agreement
or in any instrument delivered pursuant to this Merger Agreement shall survive
the Effective Time and any liability for breach or violation thereof shall
terminate absolutely and be of no further force and effect at and as of the
Effective Time, except for the agreements contained in Sections 2.1, 2.2, 5.5,
5.6, 5.12, 5.13 and 7.2 and this Article VIII and the agreements delivered
pursuant to Section 5.4. The Confidentiality
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<PAGE> 60
Agreements shall survive the execution and delivery of this Merger Agreement,
and the provisions of the Confidentiality Agreements shall apply to all
information and material delivered hereunder.
8.3 Knowledge. When used herein, the terms "knowledge", "known
to", "best knowledge" and terms of similar meaning shall mean the actual
knowledge of (a) with respect to Camco, (i) the Chief Financial Officer, the
Chief Accounting Officer, and the General Counsel and Secretary of Camco as of
the date of this Agreement and (ii) all of officers of Camco as of the Closing
Date and (b) with respect to the STC Affiliated Group, (A) (1) the President
and (2) the Vice President and Secretary of STC, as of the date of this
Agreement and (B) all of the officers of STC as of the Closing Date.
8.4 Notices. Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally, telegraphed or
telecopied or sent by certified or registered mail, postage prepaid, and shall
be deemed to be given, dated and received when so delivered personally,
telegraphed or telecopied or, if mailed, five business days after the date of
mailing to the following address or telecopy number, or to such other address
or addresses as such person may subsequently designate by notice given
hereunder:
(a) if to STC or Sub, to:
277 Park Avenue
New York, New York 10172
Attention: David S. Browning, Esquire
Fax: (212) 350-9457
with a copy to:
Baker & Botts, L.L.P.
910 Louisiana, Suite 3000
Houston, Texas 77002
Attention: Moulton A. Goodrum, Esquire
Fax: (713) 229-1522
and (b) if to Camco, to:
Camco International, Inc.
7030 Ardmore
Houston, Texas 77054
Attention: Ronald R. Randall, Esquire
Fax: (713) 749-5625
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<PAGE> 61
with a copy to:
Fulbright & Jaworski LLP
1301 McKinney, Suite 5100
Houston, Texas 77010
Attention: Michael C. Conlon, Esquire
Fax: (713) 651-5246
8.5 Interpretation. When a reference is made in this Merger
Agreement to Sections, such reference shall be to a Section of this Merger
Agreement unless otherwise indicated. The table of contents, glossary of
defined terms and headings contained in this Merger Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Merger Agreement. Whenever the word "include," "includes" or "including"
is used in this Merger Agreement, it shall be deemed to be followed by the
words "without limitation." The phrase "made available" in this Merger
Agreement shall mean that the information referred to has been made available
if requested by the party to whom such information is to be made available.
8.6 Counterparts. This Merger Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood
that all parties need not sign the same counterpart.
8.7 Entire Agreement; No Third-Party Beneficiaries. This Merger
Agreement (together with the Confidentiality Agreements, the Transaction
Agreement and any other documents and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereto and (b) except as provided in Section 5.6, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
8.8 Governing Law. This Merger Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
8.9 No Remedy in Certain Circumstances. Each party agrees that,
should any court or other competent authority hold any provision of this Merger
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith or not to take an action consistent
herewith or required hereby, the validity, legality and enforceability of the
remaining provisions and obligations contained or set forth herein shall not in
any way be affected or impaired thereby, unless the foregoing inconsistent
action or the failure to take an action constitutes a material breach of this
Merger Agreement or makes the Merger Agreement impossible to perform in which
case this Merger Agreement shall terminate pursuant to Article VII hereof.
Except as otherwise contemplated by this Merger Agreement, to the extent that a
party hereto took an action inconsistent herewith or failed to take action
consistent herewith or required hereby
-54-
<PAGE> 62
pursuant to an order or judgment of a court or other competent authority, such
party shall not incur any liability or obligation unless such party breached
its obligations under Section 5.3 hereof or did not in good faith seek to
resist or object to the imposition or entering of such order or judgment.
8.10 Assignment. Neither this Merger 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, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
any newly formed direct or indirect wholly owned Subsidiary of STC. Subject to
the preceding sentence, this Merger Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective
successors and assigns.
8.11 Enforcement of the Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Merger Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Merger
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States located in the State of Delaware or in the Chancery
Court of the State of Delaware, this being in addition to any other remedy to
which they are entitled at law or in equity. In addition, each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any
Federal or state court sitting in Wilmington, Delaware in the event any dispute
between the parties hereto arises out of this Agreement solely in connection
with such a suit between the parties, (b) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court and (c) agrees that it will not bring any action relating
to this Agreement in any court other than a Federal or state court sitting in
Wilmington, Delaware.
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<PAGE> 63
IN WITNESS WHEREOF, each party has caused this Merger
Agreement to be signed by its respective officers thereunto duly authorized,
all as of the date first written above.
SCHLUMBERGER TECHNOLOGY CORPORATION
By: /s/ ARTHUR LINDENAUER
----------------------------------------
Arthur Lindenauer
President
SCHLUMBERGER OFS, INC.
By: /s/ ARTHUR LINDENAUER
----------------------------------------
Arthur Lindenauer
President
CAMCO INTERNATIONAL, INC.
By: /s/ GILBERT H. TAUSCH
-----------------------------------------
Gilbert H. Tausch
President and Chief Executive Officer
<PAGE> 1
EXHIBIT 4.1
================================================================================
CAMCO INTERNATIONAL INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
SECOND AMENDMENT TO
RIGHTS AGREEMENT
June 18, 1998
================================================================================
<PAGE> 2
SECOND AMENDMENT TO
RIGHTS AGREEMENT
THIS SECOND AMENDMENT TO RIGHTS AGREEMENT (this "Second Amendment") is
entered into effective as of June 18, 1998 by and between Camco International,
Inc., a Delaware corporation (the "Company"), and First Chicago Trust Company
of New York (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement dated as of December 15, 1994 (the "Rights Agreement");
WHEREAS, the Company and the Rights Agent are parties to a First
Amendment to Rights Agreement dated as of October 21, 1997 (the "First
Amendment to Rights Agreement");
WHEREAS, the Board of Directors of the Company deems it advisable that
the Rights Agreement be amended to adjust the definition of Acquiring Person in
the Rights Agreement; and
WHEREAS, the Company and the Rights Agent desire to further amend the
Rights Agreement, pursuant to Section 27 of the Rights Agreement, as
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, the parties hereto hereby agree as follows:
1. Section 1(a) of the Rights Agreement is hereby amended to read
in its entirety as follows: "(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of
the Common Shares then outstanding, but shall not include the Company, any
wholly-owned Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company,
or any Person holding Common Shares for or pursuant to the terms of any such
plan to the extent, and only to the extent, of the Common Shares so held.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common Shares then
outstanding; provided, however, that if a Person becomes the Beneficial Owner
of 15% or more of the Common Shares then outstanding by reason of share
acquisitions by the Company and shall, after such share acquisitions by the
Company, become the Beneficial Owner of any additional Common Shares, then such
Person shall be deemed to be an "Acquiring Person". Notwithstanding the
foregoing, neither Schlumberger Limited nor any of its Subsidiaries shall be
deemed to be an "Acquiring Person" because of (i) the execution and delivery of
that certain Transaction Agreement between Schlumberger Limited and Camco
International Inc. dated as of June 18, 1998, (ii) the consummation of any of
the transactions contemplated thereby, (iii) the
<PAGE> 3
conversion of shares of Camco International Inc. Common Stock into the right to
receive Schlumberger Limited Common Stock as described therein or (iv) the
execution of consummation of the merger as contemplated by that certain
Agreement and Plan of Merger among Schlumberger Technology Corporation,
Schlumberger OFS, Inc. and Camco International Inc. dated as of June 18, 1998
and the consummation of the merger as contemplated thereby."
2. Each reference to the Rights Agreement in the Rights Agreement
shall, unless the context otherwise requires, mean the Rights Agreement as
amended by the First Amendment to Rights Agreement and this Second Amendment to
Rights Agreement.
3. The Rights Agreement, as amended hereby, is in all respects
ratified, approved and confirmed.
4. This Second Amendment to Rights Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to any principles of conflicts of law that, if applied, might require or
permit the application of the laws of a different jurisdiction.
5. The provisions of this Second Amendment to Rights Agreement
shall become effective upon the execution and delivery hereof by all parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement Amendment to be duly executed and attested, all as of the day and
year first above written.
Attest: CAMCO INTERNATIONAL INC.
By /s/ Ronald R. Randall By /s/ H. S. Yates
---------------------------- ----------------------------
Attest: FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By /s/ Shirley C. Grant By /s/ Joanne Gorostiola
---------------------------- ----------------------------
-2-
<PAGE> 1
EXHIBIT 10.1
TRANSACTION AGREEMENT
between
SCHLUMBERGER LIMITED
and
CAMCO INTERNATIONAL INC.
Dated as of June 18, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS.................................................................................1
ARTICLE II DELIVERY, REGISTRATION AND LISTING OF SCHLUMBERGER
STOCK.......................................................................................4
2.1 Delivery of Schlumberger Common Stock.......................................................4
2.2 Preparation of S-4 and the Proxy Statement..................................................4
2.3 Authorization for Shares and Stock Exchange Listing.........................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES..............................................................5
3.1 Representations and Warranties of Camco.....................................................5
(a) Authority; No Violations; Consents and Approvals.......................................5
(b) Litigation.............................................................................7
(c) Incorporation by Reference.............................................................7
3.2 Representations and Warranties of Schlumberger..............................................7
(a) Organization, Standing and Power.......................................................7
(b) Capital Structure......................................................................7
(c) Authority; No Violations, Consents and Approvals.......................................8
(d) SEC Documents.........................................................................10
(e) Information Supplied..................................................................10
(f) Absence of Certain Changes or Events..................................................11
(g) No Undisclosed Material Liabilities...................................................11
(h) Litigation............................................................................11
(i) No Vote Required......................................................................12
(j) Accounting Matters....................................................................12
(k) Beneficial Ownership of Camco Common Stock............................................12
(l) Material Contracts and Agreements.....................................................12
ARTICLE IV ADDITIONAL AGREEMENTS......................................................................12
4.1 Legal Conditions to Merger.................................................................12
4.2 Agreement to Defend........................................................................14
4.3 Accounting Matters.........................................................................14
4.4 Public Announcements.......................................................................14
4.5 Other Actions..............................................................................14
4.6 Advice of Changes; SEC Filings.............................................................14
4.7 Reorganization.............................................................................15
4.8 Takeover Defenses..........................................................................15
4.9 Letter of Camco's Accountants..............................................................15
4.10 Letter of Schlumberger's Accountants.......................................................15
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
4.11 Rights Agreement...........................................................................15
4.12 Stock Options..............................................................................16
ARTICLE V CONDITIONS PRECEDENT.......................................................................16
5.1 Conditions to Camco's Closing Deliveries...................................................16
(a) Representations and Warranties........................................................16
(b) Performance of Obligations of Schlumberger............................................16
(c) Certifications and Opinion............................................................16
(d) Fairness Opinion......................................................................17
5.2 Conditions to Schlumberger's Closing Deliveries............................................17
(a) Representations and Warranties........................................................18
(b) Performance of Obligations of Camco...................................................18
(c) Certifications and Opinion............................................................18
ARTICLE VI TERMINATION AND AMENDMENT..................................................................19
6.1 Termination................................................................................19
6.2 Effect of Termination......................................................................19
6.3 Amendment..................................................................................20
6.4 Extension; Waiver..........................................................................20
ARTICLE VII GENERAL PROVISIONS.........................................................................20
7.1 Payment of Expenses........................................................................20
7.2 Nonsurvival of Representations, Warranties and Agreements..................................20
7.3 Notices....................................................................................20
7.4 Interpretation.............................................................................21
7.5 Counterparts...............................................................................22
7.6 Entire Agreement; No Third-Party Beneficiaries.............................................22
7.7 Governing Law..............................................................................22
7.8 No Remedy in Certain Circumstances.........................................................22
7.9 Assignment.................................................................................22
7.10 Enforcement of the Agreement...............................................................22
</TABLE>
EXHIBITS:
Exhibit A - Agreement and Plan of Merger
-ii-
<PAGE> 4
TRANSACTION AGREEMENT
THIS TRANSACTION AGREEMENT, dated as of June 18, 1998 (this
"Transaction Agreement"), is by and between Schlumberger Limited, a Netherlands
Antilles corporation ("Schlumberger"), and Camco International Inc., a Delaware
corporation ("Camco").
WHEREAS, pursuant to that certain Agreement and Plan of Merger
of even date herewith, among Schlumberger Technology Corporation, a Texas
corporation and a wholly owned subsidiary of Schlumberger ("STC"), Schlumberger
OFS, Inc., a Delaware corporation and a wholly owned Subsidiary of STC ("Sub"),
and Camco (the "Merger Agreement"), Sub will be merged with and into Camco with
Camco becoming a wholly owned subsidiary of STC (the "Merger");
WHEREAS, the Board of Directors at Camco and Schlumberger have
each determined that this Transaction Agreement and the transactions
contemplated hereby are in the best interests of their respective stockholders;
WHEREAS, pursuant to the Merger Agreement, each outstanding
share of common stock, par value $.01 per share, of Camco ("Camco Common Stock")
will be exchanged for and converted into 1.18 (the "Conversion Number") shares
of voting common stock, par value $.01 per share of Schlumberger ("Schlumberger
Common Stock"); and
WHEREAS, Schlumberger desires to make certain representations
and commitments in connection with the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Transaction Agreement, the following terms
shall have the following meanings:
"Camco" has the meaning set forth in the preamble hereto.
"Camco Common Stock" has the meaning set forth in the recitals
hereto.
"Camco Disclosure Letter" means the disclosure letter
delivered by Camco to STC pursuant to the Merger Agreement.
"Camco Litigation" has the meaning set forth in Section 3.1(b)
hereof.
-1-
<PAGE> 5
"Camco Order" has the meaning set forth in Section 3.1(j) of
the Merger Agreement.
"Camco Stock Option" has the meaning set forth in Section 5.5
of the Merger Agreement.
"Certificate of Merger" has the meaning set forth in Section
1.1 of the Merger Agreement.
"Closing" has the meaning set forth in Section 1.1 of the
Merger Agreement.
"Closing Date" has the meaning set forth in Section 1.2 of the
Merger Agreement.
"Code" has the meaning set forth in the recitals to the Merger
Agreement.
"Confidentiality Agreements" has the meaning set forth in
Section 5.1 of the Merger Agreement.
"Conversion Number" has the meaning set forth in the recitals
hereto.
"Delivery Date" has the meaning set forth in Section 2.1
hereof.
"DGCL" has the meaning set forth in Section 1.1 of the Merger
Agreement.
"Effective Time" has the meaning set forth in Section 1.1 of
the Merger Agreement.
"Exchange Act" has the meaning set forth in Section
3.1(a)(iii) hereof.
"GAAP" has the meaning set forth in Section 3.1(d) of the
Merger Agreement.
"Governmental Entity" has the meaning set forth in Section
3.1(a)(iii) hereof.
"HSR Act" has the meaning set forth in Section 3.1(a)(iii)
hereof.
"Knowledge" "known to", "best knowledge" and terms of similar
meaning shall mean (a) with respect to Camco, (i) the Chief Financial Officer,
the Chief Accounting Officer and the General Counsel and Secretary of Camco as
of the date of this Agreement and (ii) all of the officers of Camco as of the
Closing Date and (b) with respect to Schlumberger, (A) (1) the Executive Vice
President, Chief Financial Officer and (2) the General Counsel and Secretary of
Schlumberger, as of the date of this Agreement and (B) all of the officers of
Schlumberger as of the Closing Date.
"Material Adverse Effect" has the meaning set forth in Section
3.1(a)(i) hereof.
"Merger" has the meaning set forth in the recitals hereto.
-2-
<PAGE> 6
"Merger Agreement" has the meaning set forth in the recitals
hereto.
"NYSE" has the meaning set forth in Section 3.2(c)(iii)
hereof.
"Proxy Statement" has the meaning set forth in Section
3.1(a)(iii) hereof.
"Returns" has the meaning set forth in Section 3.1(k)(i) of
the Merger Agreement.
"Rights Agreement" has the meaning set forth in Section 3.1(b)
of the Merger Agreement.
"S-4" has the meaning set forth in Section 3.1(e) of the
Merger Agreement.
"Schlumberger" has the meaning set forth in the preamble
hereto.
"Schlumberger Common Stock" has the meaning set forth in the
recitals hereto.
"Schlumberger Disclosure Letter" means the disclosure letter
delivered by Schlumberger to Camco pursuant to this Transaction Agreement.
"Schlumberger Litigation" has the meaning set forth in Section
3.2(h) hereof.
"Schlumberger Option Plans" has the meaning set forth in
Section 3.2(b) hereof.
"Schlumberger Preferred Stock" has the meaning set forth in
3.2(b) hereof.
"Schlumberger SEC Documents" has the meaning set forth in
Section 3.2(d) hereof.
"SEC" has the meaning set forth in Section 3.1(a) of the
Merger Agreement.
"Securities Act" has the meaning set forth in Section 3.1(d)
of the Merger Agreement.
"Significant Subsidiary" has the meaning set forth in Section
4.1(g) of the Merger Agreement.
"STC" has the meaning set forth in the recitals hereto.
"Sub" has the meaning set forth in the recitals hereto.
"Subsidiary" has the meaning set forth in Section 2.1(b) of
the Merger Agreement.
"Voting Debt" has the meaning set forth in Section 3.1(b) of
the Merger Agreement.
-3-
<PAGE> 7
ARTICLE II
DELIVERY, REGISTRATION AND
LISTING OF SCHLUMBERGER STOCK
2.1 Delivery of Schlumberger Common Stock. Prior to the Merger, upon
the request of STC and subject to the conditions set forth in Section 5.2
hereof, Schlumberger will sell to STC all or any portion of that number of
shares of Schlumberger Common Stock which are to be received by the holders of
Camco Common Stock in exchange for and upon conversion of the Camco Common Stock
pursuant to Section 2.1(c) of the Merger Agreement. The date on which
Schlumberger delivers such Schlumberger Common Stock to STC is referred to in
this Transaction Agreement as the "Delivery Date". Schlumberger acknowledges
that, pursuant to Section 2.1(e) of the Merger Agreement, if subsequent to the
date of this Agreement but prior to the Effective Time, the number of shares of
Schlumberger Common Stock issued and outstanding is changed as a result of a
stock split, reverse stock split, stock dividend, recapitalization or other
similar transaction, the Conversion Number and other items dependent thereon
will be appropriately adjusted in the Merger Agreement and this Transaction
Agreement.
2.2 Preparation of S-4 and the Proxy Statement. Schlumberger and Camco
shall promptly prepare and file with the SEC the Proxy Statement and
Schlumberger shall prepare and file with the SEC the S-4, in which the Proxy
Statement will be included as a prospectus. Each of Schlumberger and Camco shall
use its best efforts to have the S-4 declared effective under the Securities Act
as promptly as practicable after such filing. Each of Camco and Schlumberger
shall use its best efforts to cause the Proxy Statement to be mailed to
stockholders of Camco at the earliest practicable date. Schlumberger shall use
its best efforts to obtain all necessary state securities laws or "blue sky"
permits, approvals and registrations in connection with the issuance of
Schlumberger Common Stock in the Merger and upon the exercise of Camco Stock
Options and Camco shall furnish all information concerning Camco and the holders
of Camco Common Stock as may be reasonably requested in connection with
obtaining such permits, approvals and registrations.
2.3 Authorization for Shares and Stock Exchange Listing. Prior to the
Effective Time, Schlumberger shall have taken all action necessary to permit it
to issue the number of shares of Schlumberger Common Stock required to be issued
pursuant to Section 2.1 of the Merger Agreement. Schlumberger shall use all
reasonable efforts to cause the shares of Schlumberger Common Stock to be
delivered in the Merger to be approved for listing on the NYSE, subject to
official notice of issuance, prior to the Closing Date.
-4-
<PAGE> 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Camco. Camco represents and
warrants to Schlumberger as follows:
(a) Authority; No Violations; Consents and Approvals.
(i) Camco has all requisite corporate power and
authority to enter into this Transaction Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Transaction Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part
of Camco. This Transaction Agreement has been duly executed
and delivered by Camco and assuming this Transaction Agreement
constitutes the valid and binding obligation of Schlumberger,
constitutes a valid and binding obligation of Camco
enforceable in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity and
limitations imposed on indemnity obligations by applicable
federal and state securities laws.
(ii) Except as set forth on Schedule 3.1(c) to the
Camco Disclosure Letter, the execution and delivery of this
Transaction Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss
of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of Camco or any of its Subsidiaries
under, any provision of (A) the Certificate of Incorporation
or Bylaws of Camco or any provision of the comparable charter
or organizational documents of any of its Subsidiaries, (B)
any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession,
franchise or license applicable to Camco or any of its
Subsidiaries or (C) assuming the consents, approvals,
authorizations or permits and filings or notifications
referred to in Section 3.1(a)(iii) are duly and timely
obtained or made and the approval of the Merger and the Merger
Agreement by the stockholders of Camco has been obtained, any
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Camco or any of its Subsidiaries or
any of their respective properties or assets, other than, in
the case of clause (B) or (C), any such conflicts, violations,
defaults, rights, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would not
have a Material Adverse Effect (as defined below) on Camco,
materially impair the
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<PAGE> 9
ability of Camco to perform its obligations hereunder or
prevent the consummation of any of the transactions
contemplated hereby. As used in this Transaction Agreement a
"Material Adverse Effect" shall mean, any effect or change
that is or would be materially adverse to the business,
operations, assets, condition (financial or otherwise) or
results of operations of (x) in respect of Camco, Camco and
its direct and indirect Subsidiaries, taken as a whole, and
(y) in respect of the STC Affiliated Group, the STC Affiliated
Group taken as a whole; provided, however, a Material Adverse
Effect shall not include (1) any effect or change, including
changes in national or international economic conditions,
relating to or affecting the oil and gas service and equipment
industry as a whole (including a decline in worldwide oil and
gas commodity prices), (2) changes, or possible changes, in
foreign, federal, state or local statutes and regulations, (3)
the loss of employees, customers or suppliers by Camco or one
or more of its Subsidiaries as a direct or indirect
consequence of any announcement relating to the Merger or (4)
any action taken or required to be taken to satisfy any
requirement imposed in connection with the review of the
Merger under the HSR Act. As used herein, the term
"Consideration" means the number of shares of Camco Common
Stock outstanding on the day prior to the date of this
Agreement multiplied by the Conversion Number and then
multiplied by the closing sales price of Schlumberger Common
Stock on the NYSE on the last trading day prior to the date of
this Agreement.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, or permit
from, any U.S. or non-U.S. court, administrative agency or
commission or other governmental authority or instrumentality
(a "Governmental Entity") is required by or with respect to
Camco or any of its Subsidiaries in connection with the
execution and delivery of this Transaction Agreement by Camco
or the consummation by Camco of the transactions contemplated
hereby, as to which the failure to obtain or make would have a
Material Adverse Effect on Camco, except for: (A) the filing
of a premerger notification report by Camco under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and the expiration or termination of
the applicable waiting period with respect thereto; (B) the
filing with the SEC of (1) a proxy statement in preliminary
and definitive form relating to the meeting of Camco's
stockholders to be held in connection with the Merger (the
"Proxy Statement") and (2) such reports under Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and such other compliance with the Exchange Act and the
rules and regulations thereunder, as may be required in
connection with this Transaction Agreement, the Merger
Agreement and the transactions contemplated hereby and
thereby; (C) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware; (D) such filings
and approvals as may be required by any applicable state
securities, "blue sky" or takeover laws, or environmental
laws; (E) such filings and approvals as may be required by any
applicable non-U.S.
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<PAGE> 10
Governmental Entity; and (F) such filings and approvals as may
be required by any non-U.S. premerger notification,
securities, corporate or other law, rule or regulation.
(b) Litigation. Except as disclosed in the Camco SEC Documents
or in the Camco litigation report previously delivered to Schlumberger,
there is no (i) suit, action or proceeding pending or, to the best
knowledge of Camco, threatened against or affecting Camco or any
Subsidiary of Camco ("Camco Litigation"), or (ii) Camco Order, that
would (in any case) have a Material Adverse Effect on Camco or prevent
Camco from consummating the transactions contemplated by this
Transaction Agreement.
(c) Incorporation by Reference. Each of the representations
and warranties made by Camco in the Merger Agreement is incorporated by
reference herein as if fully set forth herein together with the
definitions of the defined terms used therein, mutatis mutandis, so
that references to the recipient of any such representations and
warranties shall be deemed to be references to Schlumberger. Each such
representation and warranty so incorporated herein by reference is
hereby confirmed directly to Schlumberger.
3.2 Representations and Warranties of Schlumberger. Schlumberger
represents and warrants to Camco as follows:
(a) Organization, Standing and Power. Schlumberger is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, has all requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in
which the business it is conducting, or the operation, ownership or
leasing of its properties, makes such qualification necessary, other
than where (individually as in the aggregate) the failure to be so
organized or so to qualify would not have a Material Adverse Effect on
Schlumberger. Complete and correct copies of the Certificates of
Incorporation and Bylaws of Schlumberger have heretofore been made
available to Camco.
(b) Capital Structure. As of the date hereof, the authorized
capital stock of Schlumberger consists of 1,000,000,000 shares of
Schlumberger Common Stock and 200,000,000 shares of preferred stock
("Schlumberger Preferred Stock"). At the close of business on May 31,
1998 (i) 498,941,351 shares of Schlumberger Common Stock were issued
and outstanding and an aggregate of 58,644,415 shares of Schlumberger
Common Stock were reserved for issuance pursuant to Schlumberger's:
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<PAGE> 11
<TABLE>
<S> <C>
Discounted Stock Purchase Plan............................................ 14,624,867
1998 Stock Option Plan ................................................... 12,000,000
1979 Stock Incentive Plan ................................................ 119,300
1979 Incentive Stock Option Plan.......................................... 86,044
1994 Stock Option Plan ................................................... 19,557,184
1989 Stock Incentive Plan ................................................ 12,247,263
IVS Stock Option Plan .................................................... 9,757
</TABLE>
(collectively, the "Schlumberger Option Plans"); (ii) 120,201,108
shares of Schlumberger Common Stock were held by Schlumberger in its
treasury or by its wholly owned Subsidiaries; (iii) a warrant to
acquire 15,000,000 shares of Schlumberger Common Stock at an exercise
price per share of $29.975 was outstanding; (iv) no shares of
Schlumberger Preferred Stock were outstanding; and (v) no Voting Debt
was outstanding. All outstanding shares of Schlumberger Common Stock
are, and the shares of Schlumberger Common Stock when issued in
accordance with this Transaction Agreement, and upon exercise of the
Camco Stock Options to be assumed pursuant to the Merger, will be,
validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except as set forth on Schedule 3.2(b) to the
Schlumberger Disclosure Letter, all outstanding shares of capital stock
of the Significant Subsidiaries of Schlumberger have been duly
authorized and validly issued and are fully paid and non-assessable,
and were not issued in violation of any preemptive rights or other
preferential rights of subscription or purchase other than those that
have been waived or otherwise cured or satisfied, and, except as set
forth in the Schlumberger SEC Documents or Schedule 3.2(b) to the
Schlumberger Disclosure Letter, all such shares are owned by
Schlumberger or a direct or indirect wholly owned Subsidiary of
Schlumberger, free and clear of all liens, charges, encumbrances,
claims and options of any nature.
(c) Authority; No Violations, Consents and Approvals.
(i) Schlumberger has all requisite corporate power
and authority to enter into this Transaction Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Transaction Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part
of Schlumberger. This Transaction Agreement has been duly
executed and delivered by Schlumberger. Assuming this
Transaction Agreement constitutes the valid and binding
obligation of Camco, it also constitutes a valid and binding
obligation of Schlumberger and is enforceable against
Schlumberger in accordance with its terms; provided, however,
that such enforceability is subject to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
principles of equity and limitations imposed on indemnity
obligations by applicable federal and state securities laws.
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<PAGE> 12
(ii) Except as set forth an Schedule 3.2(c)(ii) to
the Schlumberger Disclosure Letter, the execution and delivery
of this Transaction Agreement does not, and the consummation
of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or
to the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Schlumberger or any of
its Subsidiaries under, any provision of (A) the Certificate
of Incorporation or Bylaws of Schlumberger or any provision of
the comparable charter or organizational documents of any of
its Significant Subsidiaries, (B) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or
license applicable to Schlumberger or any of its Subsidiaries
or (C) assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in Section
3.2(c)(iii) are duly and timely obtained or made and the
approval of the Merger and this Transaction Agreement by the
stockholders of Schlumberger has been obtained, any judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to Schlumberger or any of its Subsidiaries or any
of their respective properties or assets, other than, in the
case of clause (B) or (C), any such conflicts, violations,
defaults, rights, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would not
have a Material Adverse Effect on Schlumberger or prevent in
any material respect the consummation of any of the
transactions contemplated hereby.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, or permit
from, any Governmental Entity is required by or with respect
to Schlumberger or any of its Subsidiaries in connection with
the execution and delivery of this Transaction Agreement by
Schlumberger or the consummation by Schlumberger of the
transactions contemplated hereby, as to which the failure to
obtain or make would have a Material Adverse Effect on
Schlumberger, except for: (A) the filing of a premerger
notification report by Schlumberger under the HSR Act and the
expiration or termination of the applicable waiting period
with respect thereto; (B) the filing with the SEC of the Proxy
Statement, the S-4, such reports under Section 13(a) of the
Exchange Act and such other compliance with the Securities Act
and the Exchange Act and the rules and regulations thereunder
as may be required in connection with this Transaction
Agreement, the Merger Agreement and the transactions
contemplated hereby and thereby, and the obtaining from the
SEC of such orders as may be so required; (C) the filing of
the Certificate of Merger with the Secretary of State of the
State of Delaware; (D) filings with, and approval of, the New
York Stock Exchange, Inc. (the "NYSE"); (E) such filings and
approvals as may be required by any applicable state
securities, "blue sky" or takeover laws or environmental laws;
(F) such filings and approvals as may be required by any
applicable non-U.S. Governmental Entity; and (G) such filings
and approvals as may
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<PAGE> 13
be required by any non-U.S. premerger notification,
securities, corporate or other law, rule or regulation.
(d) SEC Documents. A true and complete copy of each report,
schedule, registration statement and definitive proxy statement filed
by Schlumberger with the SEC since January 1, 1995 and prior to the
date of this Transaction Agreement (the "Schlumberger SEC Documents")
has been made available to Camco. The Schlumberger SEC Documents are
all the documents (other than preliminary material) that Schlumberger
was required to file with the SEC since such date. As of their
respective dates, the Schlumberger SEC Documents complied in all
material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such Schlumberger SEC Documents, and none
of the Schlumberger SEC Documents contained when filed any untrue
statement of a material fact or omitted 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. The financial statements of Schlumberger included in the
Schlumberger SEC Documents complied as to form in all material respects
with the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as permitted
by Rule 10-01 of Regulation S-X of the SEC) and fairly present in
accordance with applicable requirements of GAAP (subject, in the case
of the unaudited statements, to normal year-end adjustments and other
adjustments discussed therein) the consolidated financial position of
Schlumberger and its consolidated Subsidiaries as of their respective
dates and the consolidated results of operations and the consolidated
cash flows of Schlumberger and its consolidated Subsidiaries for the
periods presented therein.
(e) Information Supplied. None of the information supplied or
to be supplied by Schlumberger or any of its Subsidiaries for inclusion
or incorporation by reference in the S-4 will, at the time the S-4 is
filed with SEC or when it becomes effective under the Securities Act
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and none of the information supplied
or to be supplied by Schlumberger or any of its Subsidiaries and
included or incorporated by reference in the Proxy Statement will, at
the date mailed to stockholders of Camco or at the time of the meeting
of such stockholders to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective Time any
event with respect to Schlumberger or any of its Subsidiaries, or with
respect to other information supplied by Schlumberger or any of its
Subsidiaries for inclusion in the Proxy Statement or S-4, shall occur
which is required to be described in an amendment of, or a supplement
to, the Proxy Statement or the S-4, such event shall be so described,
and such amendment or supplement shall be promptly filed with
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<PAGE> 14
the SEC. The Proxy Statement, insofar as it relates to Schlumberger or
Subsidiaries of Schlumberger or other information supplied by
Schlumberger or any of its Subsidiaries for inclusion therein, will
comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder, except that no
representations or warranties are made by Schlumberger with respect to
statements made or incorporated by reference therein based on
information supplied by Camco or any of Camco's Subsidiaries.
(f) Absence of Certain Changes or Events. Except as disclosed
in, or reflected in the financial statements included in, the
Schlumberger SEC Documents or on Schedule 3.2(f) to the Schlumberger
Disclosure Letter, or except as contemplated by this Transaction
Agreement or the Merger Agreement, since December 31, 1997 there has
not been: (i) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect
to any of Schlumberger's capital stock, except for regular quarterly
cash dividends of $.1875 per share on Schlumberger Common Stock with
usual record and payment dates for such dividends; (ii) any amendment
of any material term of any outstanding equity security of Schlumberger
or any Significant Subsidiary; (iii) any material change in any method
of accounting or accounting practice by Schlumberger or any Significant
Subsidiary; or (iv) any other transaction, commitment, dispute or other
event or condition (financial or otherwise) of any character (whether
or not in the ordinary course of business) that would have a Material
Adverse Effect on Schlumberger.
(g) No Undisclosed Material Liabilities. Except as disclosed
in the Schlumberger SEC Documents or on Schedule 3.2(g) to the
Schlumberger Disclosure Letter, there are no liabilities of
Schlumberger or any of its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise,
that would have a Material Adverse Effect on Schlumberger, other than:
(i) liabilities adequately provided for on the balance sheet of
Schlumberger dated as of March 31, 1998 (including the notes thereto)
contained in Schlumberger's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998; (ii) liabilities incurred in the ordinary
course of business since March 31, 1998; and (iii) liabilities under
this Transaction Agreement and the Merger Agreement.
(h) Litigation. Except as disclosed in the Schlumberger SEC
Documents or on Schedule 3.2(h) to the Schlumberger Disclosure Letter,
there is no (i) suit, action or proceeding pending or, to the best
knowledge of Schlumberger, threatened against or affecting Schlumberger
or any Subsidiary of Schlumberger ("Schlumberger Litigation"), or (ii)
judgment, decree, injunction, rule or order of any Governmental Entity
or arbitrator outstanding against Schlumberger or any Subsidiary of
Schlumberger that (in any case) would have a Material Adverse Effect on
Schlumberger or prevent Schlumberger from consummating the transactions
contemplated by this Transaction Agreement or by the Merger Agreement.
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<PAGE> 15
(i) No Vote Required. No vote of the holders of any class or
series of Schlumberger capital stock is necessary to approve the
issuance of Schlumberger Common Stock pursuant to this Transaction
Agreement and the transactions contemplated hereby.
(j) Accounting Matters. To the best knowledge of the financial
and accounting officers of Schlumberger prior to the date hereof,
neither Schlumberger nor any of its Affiliates has taken any action
that (without giving effect to any action taken or agreed to be taken
by Camco or any of its Affiliates) would jeopardize the treatment of
the business combination to be effected by the Merger as a pooling of
interests for accounting purposes.
(k) Beneficial Ownership of Camco Common Stock. As of the date
hereof, neither Schlumberger nor its Subsidiaries "beneficially owns"
(as defined in Rule 13d-3 under the Exchange Act) any shares of Camco
Common Stock.
(l) Material Contracts and Agreements. All material contracts
of Schlumberger or its Subsidiaries have been included in the
Schlumberger SEC Documents unless not required to be included pursuant
to the rules and regulations of the SEC. Schedule 3.2(l) of the
Schlumberger Disclosure Letter sets forth a list of all written or oral
contracts, agreements or arrangements to which Schlumberger or any of
its Subsidiaries or any of their respective assets are bound which meet
the definition of material contracts set forth in Section 6.01 of
Regulation S-K promulgated under the Securities Act and which have not
been included in the Schlumberger SEC Documents.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Legal Conditions to Merger.
(a) Except as otherwise provided herein, Camco and
Schlumberger will each take all reasonable actions necessary to comply
promptly with all legal requirements that may be imposed on such party
with respect to the Merger (including, without limitation, furnishing
all information required under the HSR Act and in connection with
approvals of or filings with any other Governmental Entity) and will
promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any
of their Subsidiaries in connection with the Merger. Each of Camco and
Schlumberger will, and will cause its respective Subsidiaries to, take
all actions necessary to obtain (and will cooperate with each other in
obtaining) any consent, acquiescence, authorization, order or approval
of, or any exemption or nonopposition by, any Governmental Entity or
court required to be obtained or made by Camco, Schlumberger or any of
their Subsidiaries in connection with the Merger or the taking of any
action contemplated thereby, by the Merger Agreement or by this
Transaction Agreement, including
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<PAGE> 16
complying with any requests or orders made by the Justice Department or
the Federal Trade Commission in connection with the Merger.
(b) Each of the parties hereto shall file a premerger
notification and report form under the HSR Act with respect to the
Merger as promptly as reasonably possible following execution and
delivery of this Agreement. Each of the parties agrees to use
reasonable efforts to promptly respond to any request for additional
information pursuant to Section (e)(1) of the HSR Act. Except as
otherwise required by United States regulatory considerations, Camco
will furnish to Schlumberger copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof
(collectively, "Company HSR Documents")) between Camco, or any of its
respective representatives, on the one hand, and any governmental
entity, or members of the staff of such agency or authority, on the
other hand, with respect to this Agreement, the Merger Agreement or the
Merger; provided; however, that (x) with respect to documents and other
materials filed by or on behalf of Camco with the Antitrust Division of
the Department of Justice, the Federal Trade Commission, or any state
attorneys general that are available for review by Schlumberger, copies
will not be required to be provided to Schlumberger and (y) with
respect to any Camco HSR Documents (1) that contain any information
which, in the reasonable judgment of Fulbright & Jaworski L.L.P.,
should not be furnished to Schlumberger because of antitrust
considerations or (2) relating to a request for additional information
pursuant to Section (e)(1) of the HSR Act, the obligation of Camco to
furnish any such Camco HSR Documents to Schlumberger shall be satisfied
by the delivery of such Camco HSR Documents on a confidential basis to
Baker & Botts, L.L.P., pursuant to a confidentiality agreement in form
and substance reasonably satisfactory to Schlumberger. Except as
otherwise required by United States regulatory considerations,
Schlumberger will furnish to Camco copies of all correspondence,
filings or communications (or memoranda setting forth the substance
thereof (collectively, "Schlumberger HSR Documents")) between
Schlumberger or any of its representatives, on the one hand, and any
Governmental Entity, or member of the staff of such agency or
authority, on the other hand, and any Governmental Entity, or member of
the staff of such agency or authority, on the other hand, with respect
to this Agreement, the Merger Agreement or the Merger; provided,
however, that (x) with respect to documents and other materials filed
by or on behalf of Schlumberger with the Antitrust Division of the
Department of Justice, the Federal Trade Commission, or any state
attorneys general that are available for review by Camco, copies will
not be required to be provided to Camco, and (y) with respect to any
Schlumberger HSR Documents (1) that contain information which, in the
reasonable judgment of Baker & Botts, L.L.P., should not be furnished
to Camco because of antitrust considerations or (2) relating to a
request for additional information pursuant to Section (e)(1) of the
HSR Act, the obligation of Schlumberger to furnish any such
Schlumberger HSR Documents to Camco shall be satisfied by the delivery
of such Schlumberger HSR Documents on a confidential basis to Fulbright
& Jaworski L.L.P. pursuant to a confidentiality agreement in form and
substance reasonably satisfactory to Camco.
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<PAGE> 17
(c) In the event that any governmental body with jurisdiction
of this Merger shall require Schlumberger or any of its Subsidiaries to
agree to take or not to take any action as a condition to approving or
not objecting to the Merger, Schlumberger will take such action (i) if
the loss in annual revenues to the Surviving Corporation would
reasonably be expected not to exceed $75 million during the ensuing
twelve months following the Closing, or (ii) if Schlumberger otherwise
considers it reasonable and appropriate in the circumstances to take
such action.
4.2 Agreement to Defend. In the event any claim, action, suit,
investigation or other proceeding by any governmental body or other person or
other legal or administrative proceeding is commenced that questions the
validity or legality of the transactions contemplated hereby or seeks damages in
connection therewith, the parties hereto agree to cooperate and use their
reasonable efforts to defend against and respond thereto.
4.3 Accounting Matters. During the period from the date of this
Transaction Agreement through the Effective Time, unless the parties shall
otherwise agree in writing, neither Schlumberger nor Camco or any of their
respective Subsidiaries shall knowingly take or fail to take any reasonable
action which action or failure to act would jeopardize the treatment of the
Merger as a pooling of interests for accounting purposes.
4.4 Public Announcements. Schlumberger and Camco will consult with each
other before issuing any press release or otherwise making any public statements
with respect to the transactions contemplated by this Transaction Agreement, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange or transaction reporting system.
4.5 Other Actions. Except as contemplated by this Transaction Agreement
or the Merger Agreement, neither Schlumberger nor Camco shall, and neither shall
permit any of its Subsidiaries to, take or agree or commit to take or omit to
take any action that is reasonably likely to result in any of its respective
representations or warranties hereunder or under the Merger Agreement being
untrue in any material respect or in any of the conditions to the Merger set
forth in Article VI to the Merger Agreement not being satisfied.
4.6 Advice of Changes; SEC Filings. Schlumberger and Camco shall confer
on a regular basis with each other, report on operational matters of Camco and
promptly advise each other orally and in writing of any change or event having,
or which, insofar as can reasonably be foreseen, could have, a Material Adverse
Effect on Schlumberger or Camco, as the case may be. Subject to the provisions
of Section 4.1, Camco and Schlumberger shall promptly provide each other (or
their respective counsel) copies of all filings made by such party with the SEC
or any other state or federal Governmental Entity in connection with this
Transaction Agreement or the Merger Agreement and the transactions contemplated
hereby and thereby.
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<PAGE> 18
4.7 Reorganization. It is the intention of Schlumberger and Camco that
the Merger will qualify as a reorganization described in Section 368(a)(1)(B) of
the Code (and any comparable provisions of applicable state law). Neither
Schlumberger nor Camco (nor any of their respective Subsidiaries) will take or
omit to take any action (whether before, on or after the Closing Date) that
would cause the Merger not to be so treated. The parties (and their respective
Subsidiaries) will characterize the Merger as such a reorganization for purposes
of all Returns and other filings.
4.8 Takeover Defenses. Schlumberger and Camco shall each take such
action with respect to any takeover provisions in its respective Certificate of
Incorporation or Bylaws or afforded it by statute to the extent necessary to
consummate the Merger on the terms set forth in the Merger Agreement.
4.9 Letter of Camco's Accountants. Camco shall use its best efforts to
cause to be delivered to Schlumberger a letter of Arthur Andersen LLP, Camco's
independent public accountants, dated a date within two business days before the
date on which the S-4 shall become effective and addressed to Schlumberger and
Camco, in form and substance reasonably satisfactory to Schlumberger and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the S-4. In
connection with Camco's efforts to obtain such letter, if requested by Arthur
Andersen LLP, Schlumberger shall provide a representation letter to Arthur
Andersen LLP complying with SAS 72, if then required.
4.10 Letter of Schlumberger's Accountants. Schlumberger shall use its
best efforts to cause to be delivered to Camco a letter of Price Waterhouse LLP,
Schlumberger's independent public accountants, dated a date within two business
days before the date on which the S-4 shall become effective and addressed to
Camco and Schlumberger, in form and substance reasonably satisfactory to Camco
and customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the S-4. In
connection with Schlumberger's efforts to obtain such letter, if requested by
Price Waterhouse LLP, Camco shall provide a representation letter to Price
Waterhouse LLP complying with SAS 72, if then required.
4.11 Rights Agreement. Prior to the Effective Time, the Board of
Directors of Camco shall take any action (including, as necessary, amending or
terminating (but with respect to termination, only as of immediately prior to
the Effective Time) the Rights Agreement) necessary so that none of the
execution and delivery of this Transaction Agreement, the conversion of shares
of Camco Common Stock into the right to receive Schlumberger Common Stock in
accordance with Article II of this Transaction Agreement, and the consummation
of the Merger or any other transaction contemplated hereby will cause (a) the
Camco Rights to become exercisable under the Rights Agreement, (b) Schlumberger
or any of its Subsidiaries to be deemed an "Acquiring Person" (as defined in the
Rights Agreement), (c) the provisions of Section 11 or Section 13 of the Rights
Agreement to become applicable to any such event or (d) the "Distribution Date"
or the "Share Acquisition Date" (each as defined in the Rights Agreement) to
occur upon any such event, and so that the "Expiration Date" (as defined in the
Rights Agreement) of the Camco Rights will occur
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immediately prior to the Effective Time. Without the prior written consent of
Schlumberger, neither the Board of Directors of Camco nor Camco shall take any
other action to terminate the Rights Agreement, redeem the Camco Rights, cause
any person not to be or become an "Acquiring Person" or otherwise amend the
Rights Agreement in a manner, or take any other action under the Rights
Agreement, adverse to Schlumberger.
4.12 Stock Options. Schlumberger shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Schlumberger
Common Stock for delivery upon exercise of the Camco Stock Options assumed by
STC in accordance with Section 2.1(d) and Section 5.5 of the Merger Agreement.
As soon as possible after the Effective Time, Schlumberger shall file with the
SEC a registration statement on Form S-8 (or any successor form) with respect to
the shares of Schlumberger Common Stock subject to the Camco Stock Options.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Camco's Closing Deliveries. The obligations of Camco
under Section 5.2 hereof are subject to the conditions that the Merger Agreement
shall not have been terminated, that each of the conditions set forth in Article
VI of the Merger Agreement other than those conditions to be satisfied at the
Closing shall have been satisfied or waived as set forth therein and that each
of the following conditions shall have been satisfied or waived by Camco:
(a) Representations and Warranties. Each of the
representations and warranties of Schlumberger set forth in this
Transaction Agreement shall be true and correct in all material
respects as of the date of this Transaction Agreement and (except to
the extent such representations and warranties speak as of an earlier
date) as of the Delivery Date as though made on and as of the Delivery
Date, except where the failure to be so true and correct (without
giving effect to the individual materiality thresholds otherwise
contained in Section 3.2 hereof) would not have a Material Adverse
Effect on Schlumberger (such that the aggregate of the Material Adverse
Effect on Schlumberger hereunder exceeds $400 million) and Schlumberger
shall have received a certificate dated the Delivery Date by a duly
authorized officer of Schlumberger to that effect.
(b) Performance of Obligations of Schlumberger. Schlumberger
shall have performed in all material respects all obligations required
to be performed by it under this Transaction Agreement at or prior to
the Delivery Date.
(c) Certifications and Opinion. Schlumberger shall have
furnished Camco with:
(i) a certified copy of a resolution or resolutions
duly adopted by the Board of Directors or a duly authorized
committee thereof of Schlumberger approving this Transaction
Agreement and the transactions contemplated hereby; and
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<PAGE> 20
(ii) a favorable opinion, dated the Closing Date, in
customary form and substance, of David S. Browning, Esquire,
General Counsel of Schlumberger, to the effect that:
(A) Schlumberger is a corporation duly
incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation
and has corporate power to own its properties and
assets and to carry on its business as presently
conducted and as described in the Registration
Statement; and the execution and delivery of this
Transaction Agreement did not, and the consummation
of the transactions contemplated hereby will not,
violate any provision of Schlumberger's Certificate
of Incorporation or Bylaws;
(B) the Board of Directors of Schlumberger
has taken all action required under its jurisdiction
of incorporation, its Certificate of Incorporation or
its Bylaws to authorize the execution and delivery of
this Transaction Agreement and the transactions
contemplated hereby; and this Transaction Agreement
is a valid and binding agreement of Schlumberger
enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other
similar laws or judicial decisions now or hereafter
in effect relating to creditors' rights generally or
governing the availability of equitable relief; and
(C) the Schlumberger Shares to be delivered
to the holders of Camco Common Stock pursuant to
Article II of the Merger Agreement are duly
authorized and when issued and delivered as
contemplated by the Merger Agreement will be legally
and validly issued and fully paid and nonassessable
and no stockholders of Schlumberger shall have any
preemptive rights with respect thereto either
pursuant to the organizational documents of
Schlumberger or under applicable law of the
jurisdiction of Schlumberger's organization.
(d) Fairness Opinion. Morgan Stanley & Co. Incorporated has
not revoked, modified or changed its opinion referred to in Section 3.1(p) of
the Merger Agreement in any manner adverse to the holders of the Common Stock of
Camco.
5.2 Conditions to Schlumberger's Closing Deliveries. The obligations of
Schlumberger under Section 2.1 and Section 5.1 hereof are subject to the
conditions that the Merger Agreement shall not have been terminated, that each
of the conditions set forth in Article VI of the Merger Agreement other than
those conditions to be satisfied at Closing shall have been satisfied or waived
as set forth therein and that each of the following conditions shall have been
satisfied or waived by Schlumberger:
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<PAGE> 21
(a) Representations and Warranties. Each of the
representations and warranties of Camco set forth in this Transaction
Agreement shall be true and correct in all material respects as of the
date of this Transaction Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Delivery Date as though made on and as of the Deliver Date, except
where the failure to be so true and correct (without giving effect to
the individual materiality thresholds otherwise contained in Section
3.1 hereof) would not have a Material Adverse Effect on Camco (such
that the aggregate of the Material Adverse Effect on Camco hereunder
exceeds $200 million) and Schlumberger shall have received a
certificate dated the Delivery Date on behalf of Camco by the chief
executive officer and chief financial officer of Camco to that effect.
(b) Performance of Obligations of Camco. Camco shall have
performed in all material respects all obligations required to be
performed by it under this Transaction Agreement at or prior to the
Delivery Date.
(c) Certifications and Opinion. Camco shall have furnished
Schlumberger with:
(i) a certified copy of a resolution or resolutions
duly adopted by the Board of Directors of Camco approving this
Transaction Agreement and consummation of the transactions
contemplated hereby; and
(ii) a favorable opinion, dated the Delivery Date, in
customary form and substance, of Ronald R. Randall, Esquire,
General Counsel of Camco, to the effect that:
(A) the execution and delivery of this
Transaction Agreement did not violate any provision
of Camco's Certificate of Incorporation or Bylaws;
and
(B) the Board of Directors of Camco has
taken all action required by the DGCL and its
Certificate of Incorporation or its Bylaws to
authorize the execution and delivery of this
Transaction Agreement and the transactions
contemplated hereby; and this Transaction Agreement
is a valid and binding agreement of Camco enforceable
in accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other
similar laws or judicial decisions now or hereafter
in effect relating to creditors' rights generally or
governing the availability of equitable relief.
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ARTICLE VI
TERMINATION AND AMENDMENT
6.1 Termination. This Transaction Agreement shall automatically
terminate if the Merger Agreement is terminated. In addition, this Transaction
Agreement may be terminated:
(a) by mutual written consent of Camco and Schlumberger, or by
mutual action of their respective Boards of Directors;
(b) by Schlumberger if (i) Camco shall have failed to comply
in any material respect with any of the covenants or agreements
contained in this Transaction Agreement to be complied with or
performed by Camco at or prior to such date of termination (provided
such breach has not been cured within 30 days following receipt by
Camco of notice of such breach and is existing at the time of
termination of this Transaction Agreement); or (ii) any representations
and warranties of Camco contained in this Transaction Agreement shall
not have been true when made (provided such breach has not been cured
within 30 days following receipt by Camco of notice of such breach and
is existing at the time of termination of this Transaction Agreement)
or on and as of the Effective Time as if made on and as of the
Effective Time (except to the extent it relates to a particular date),
except where the failure to be so true and correct (without giving
effect to the individual materiality thresholds otherwise contained in
Section 3.1 hereof) would not have a Material Adverse Effect on Camco
such that the aggregate of the Material Adverse Effect on Camco exceeds
$200 million; and
(c) by Camco if (i) Schlumberger shall have failed to comply
in any material respect with any of the covenants or agreements
contained in this Transaction Agreement to be complied with or
performed by it at or prior to such date of termination (provided such
breach has not been cured within 30 days following receipt by
Schlumberger of notice of such breach and is existing at the time of
termination of this Transaction Agreement); or (ii) any representations
and warranties of Schlumberger contained in this Transaction Agreement
shall not have been true when made (provided such breach has not been
cured within 30 days following receipt by Schlumberger of notice of
such breach and is existing at the time of termination of this
Transaction Agreement) or on and as of the Effective Time as if made on
and as of the Effective Time (except to the extent it relates to a
particular date), except where the failure to be so true and correct
(without giving effect to the individual materiality thresholds
otherwise contained in Section 3.2 hereof) would not have a Material
Adverse Effect on Schlumberger such that the aggregate of the Material
Adverse Effect on Schlumberger exceeds $400 million.
6.2 Effect of Termination. In the event of termination of this
Transaction Agreement by either Camco or Schlumberger as provided in Section
6.1, this Transaction Agreement shall forthwith become void and there shall be
no liability or obligation on the part of Schlumberger or
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<PAGE> 23
Camco under this Termination Agreement except (a) with respect to Section 7.1,
and (b) to the extent that such termination results from the willful breach by a
party hereto of any of its representations or warranties or of any of its
covenants or agreements, in each case, as set forth in this Transaction
Agreement except as provided in Section 8.9. Nothing herein shall be construed
to limit any of the rights and obligations under the Merger Agreement.
6.3 Amendment. This Transaction Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of Camco, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Transaction Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
6.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, 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 contained
herein or in any document delivered pursuant hereto; and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE VII
GENERAL PROVISIONS
7.1 Payment of Expenses. Each party hereto shall pay its own expenses
incident to preparing for entering into and carrying out this Transaction
Agreement and the consummation of the transactions contemplated hereby, whether
or not the Merger shall be consummated, except that the filing fees with respect
to the Proxy Statement, and the S-4 shall be paid by Schlumberger.
7.2 Nonsurvival of Representations, Warranties and Agreements. None of
the representations, warranties and agreements in this Transaction Agreement or
in any instrument delivered pursuant to this Transaction Agreement shall survive
the Effective Time and any liability for breach or violation thereof shall
terminate absolutely and be of no further force and effect at and as of the
Effective Time, except for the agreements contained in Section 6.2 and this
Article VI and the representations, covenants and agreements contained in
Section 4.7. The Confidentiality Agreements shall survive the execution and
delivery of this Transaction Agreement, and the provisions of the
Confidentiality Agreements shall apply to all information and material delivered
hereunder.
7.3 Notices. Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally, telegraphed or
telecopied or sent by certified or registered
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<PAGE> 24
mail, postage prepaid, and shall be deemed to be given, dated and received when
so delivered personally, telegraphed or telecopied or, if mailed, five business
days after the date of mailing to the following address or telecopy number, or
to such other address or addresses as such person may subsequently designate by
notice given hereunder:
(a) if to Schlumberger, to:
Schlumberger Limited
277 Park Avenue
New York, New York 10172
Attention: David S. Browning, Esquire
Fax: (212) 350-9457
with a copy to:
Baker & Botts, L.L.P.
910 Louisiana, Suite 3000
Houston, Texas 77002
Attention: Moulton A. Goodrum, Esquire
Fax: (713) 229-1522
and (b) if to Camco, to:
Camco International, Inc.
7030 Ardmore
Houston, Texas 77054
Attention: Ronald R. Randall, Esquire
Fax: (713) 749-5625
with a copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010
Attention: Michael C. Conlon, Esquire
Fax: (713) 651-5246
7.4 Interpretation. When a reference is made in this Transaction
Agreement to Sections, such reference shall be to a Section of this Transaction
Agreement unless otherwise indicated. The table of contents, glossary of defined
terms and headings contained in this Transaction Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Transaction Agreement. Whenever the word "include", "includes" or
"including" is used in this Transaction Agreement, it shall be deemed to be
followed by the words "without limitation." The
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<PAGE> 25
phrase "made available" in this Transaction Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available.
7.5 Counterparts. This Transaction Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
7.6 Entire Agreement; No Third-Party Beneficiaries. This Transaction
Agreement (together with the Confidentiality Agreements, the Merger Agreement
and any other documents and instruments referred to herein) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereto
and is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
7.7 Governing Law. This Transaction Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
7.8 No Remedy in Certain Circumstances. Each party agrees that, should
any court or other competent authority hold any provision of this Transaction
Agreement or part hereof to be null, void or unenforceable, or order any party
to take any action inconsistent herewith or not to take an action consistent
herewith or required hereby, the validity, legality and enforceability of the
remaining provisions and obligations contained or set forth herein shall not in
any way be affected or impaired thereby, unless the foregoing inconsistent
action or the failure to take an action constitutes a material breach of this
Transaction Agreement or makes this Transaction Agreement impossible to perform,
in which case this Transaction Agreement shall terminate pursuant to Article VI
hereof. Except as otherwise contemplated by this Transaction Agreement, to the
extent that a party hereto took an action inconsistent herewith or failed to
take action consistent herewith or required hereby pursuant to an order or
judgment of a court or other competent authority, such party shall not incur any
liability or obligation unless such party breached its obligations under Section
4.1 hereof or did not in good faith seek to resist or object to the imposition
or entering of such order or judgment.
7.9 Assignment. Neither this Transaction 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
Transaction Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
7.10 Enforcement of the Agreement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Transaction
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the
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<PAGE> 26
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Transaction Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States located in the State of Delaware or in
the Chancery Court of the State of Delaware, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of any
Federal or state court sitting in Wilmington, Delaware in the event any dispute
between the parties hereto arises out of this Agreement solely in connection
with such a suit between the parties, (b) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court and (c) agrees that it will not bring any action relating to
this Agreement in any court other than a Federal or state court sitting in
Wilmington, Delaware.
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<PAGE> 27
IN WITNESS WHEREOF, each party has caused this Transaction Agreement to
be signed by its respective officers thereunto duly authorized, all as of the
date first written above.
SCHLUMBERGER LIMITED
By: /S/ VICTOR E. GRIJALVA
--------------------------------
Victor E. Grijalva
Vice Chairman
CAMCO INTERNATIONAL, INC.
By: /S/ GILBERT H. TAUSCH
--------------------------------
Gilbert H. Tausch
President and Chief
Executive Officer
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE: FRIDAY, JUNE 19, 1998
SCHLUMBERGER AND CAMCO ANNOUNCE MERGER AGREEMENT
New York, June 19 -- Schlumberger [NYSE:SLB] and Camco [NYSE:CAM] today
announced the signing of a definitive merger agreement by Schlumberger
Technology Corporation, a wholly-owned subsidiary of Schlumberger, and Camco,
which was unanimously approved by the boards of directors of the companies.
The combined company will offer an unmatched array of oilfield services to its
customers for reservoir optimization throughout the world.
Under the terms of the agreement, Camco shareholders will receive 1.18 newly
issued shares of Schlumberger common stock for each outstanding share of Camco
common stock. The exchange ratio is fixed and not subject to adjustment. The
transaction is expected to be tax free to Camco shareholders and will be
accounted for as a pooling of interests. Based on the closing price of
Schlumberger yesterday at $69 15/16 and Camco's 38 million common shares
outstanding, the transaction is currently valued at about $3.14 billion.
Consolidated operating revenue and net income of Schlumberger and Camco would
have been approximately $11.6 billion and $1.38 billion in 1997. The current
combined market capitalization is approximately $37 billion. Camco will be
operated as a division within the Schlumberger Oilfield Services group.
Euan Baird, Chairman and Chief Executive Officer of Schlumberger, said, "This
combination provides an exciting opportunity to further enhance our position as
the leader in the reservoir optimization business. The highly complementary
activities of Camco improve our capability to respond to customers' demands for
integrated solutions and to engineer systems to improve the productivity of
their oil and gas operations."
Gilbert Tausch, Chairman and Chief Executive Officer of Camco, said, "This
merger satisfies Camco's strategic plan to be able to participate in more
phases of our customers' field operations. Camco will be able to add its
technology of production operations to the well known technology of
Schlumberger in areas of reservoir enhancement. We have practically no overlap
of operations and have worked successfully with Schlumberger in many areas of
the world."
Schlumberger and Camco have historically been the most profitable companies in
their peer group. Both companies have an extensive geographic presence
worldwide, exhibit an excellent cultural fit and share strengths in
relationships with customers, governments and suppliers.
The merger will enhance services for customers, broaden opportunities for
employees, and add value for shareholders. The transaction is expected to be
accretive to earnings per share in 1999, which is anticipated to be the first
full year of combined operations. It is subject to the approval of Camco
shareholders as well as customary regulatory approvals. The transaction is
expected to close around the end of the third quarter of 1998.
<PAGE> 2
Schlumberger is a worldwide leader in technical services with 63,500 employees
and operations in over 100 countries. In 1997, revenue was $10.65 billion.
Camco International Inc. is a worldwide oilfield equipment and service company
providing specialized products and services in drilling, well completion,
production and well services for the oil and gas industry. Camco's trade names
include Camco Coiled Tubing Services, Camco Products, Camco Wireline, Hycalog,
Lasalle Engineering, Lawrence Technology, Production Operators, Reda, Reed Tool
and Site Oil Tools.
# # #
For further information, contact:
Simone Crook
Director Investor Relations & Communications
Schlumberger Limited New York
Phone: (1-212) 350-9432
Email: [email protected]
Claude Suter
Investor Relations & Communications
Schlumberger Limited Paris
Phone: (33-1) 40 62 13 30
Email: [email protected]
Bruce Longaker
Vice President, Finance
Camco International Inc. - Houston
Phone: (1-713) 749-5650
