EXHIBIT 10.30
AGREEMENT AND PLAN OF MERGER
AMONG
BAKER HUGHES INCORPORATED,
BAKER HUGHES DELAWARE I, INC.
AND
WESTERN ATLAS INC.
DATED AS OF MAY 10, 1998
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TABLE OF CONTENTS
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ARTICLE 1
THE MERGER
Section 1.1 The Merger.................................................. 5 Section 1.2 The Closing................................................. 5 Section 1.3 Effective Time.............................................. 5
ARTICLE 2
CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION Section 2.1 Certificate of Incorporation................................ 5 Section 2.2 Bylaws...................................................... 5
ARTICLE 3
DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION AND PARENT Section 3.1 Directors of Surviving Corporation.......................... 5 Section 3.2 Officers of Surviving Corporation........................... 6 Section 3.3 Parent Board of Directors; President........................ 6
ARTICLE 4
CONVERSION OF COMPANY COMMON STOCK Section 4.1 Certain Definitions......................................... 6 Section 4.2 Conversion of Company Stock................................. 7 Section 4.3 Exchange of Certificates Representing Company Common
Stock....................................................... 8 Section 4.4 Adjustment of Exchange Ratio................................ 10 Section 4.5 Rule 16b-3 Approval......................................... 11
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY Section 5.1 Existence; Good Standing; Corporate Authority............... 11 Section 5.2 Authorization, Validity and Effect of Agreements............ 11 Section 5.3 Capitalization.............................................. 11 Section 5.4 Significant Subsidiaries.................................... 12 Section 5.5 No Violation of Law......................................... 12 Section 5.6 No Conflict................................................. 13 Section 5.7 SEC Documents............................................... 13 Section 5.8 Litigation.................................................. 14 Section 5.9 Absence of Certain Changes.................................. 14 Section 5.10 Taxes....................................................... 15 Section 5.11 Employee Benefit Plans...................................... 16 Section 5.12 Labor Matters............................................... 17 Section 5.13 Environmental Matters....................................... 17 Section 5.14 Intellectual Property....................................... 18 Section 5.15 Insurance................................................... 18 Section 5.16 No Brokers.................................................. 18 Section 5.17 Opinion of Financial Advisor................................ 18 Section 5.18 Parent Stock Ownership...................................... 19 Section 5.19 Reorganization.............................................. 19 Section 5.20 Pooling..................................................... 19 Section 5.21 Vote Required............................................... 19 Section 5.22 Amendment to the Company Rights Agreement................... 19
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB Section 6.1 Existence; Good Standing; Corporate Authority............... 20 Section 6.2 Authorization, Validity and Effect of Agreements............ 20 Section 6.3 Capitalization.............................................. 20 Section 6.4 Significant Subsidiaries.................................... 21 Section 6.5 No Violation of Law......................................... 21 Section 6.6 No Conflict................................................. 21 Section 6.7 SEC Documents............................................... 22 Section 6.8 Litigation.................................................. 23 Section 6.9 Absence of Certain Changes.................................. 23 Section 6.10 Taxes....................................................... 23 Section 6.11 Employee Benefit Plans...................................... 24 Section 6.12 Labor Matters............................................... 26 Section 6.13 Environmental Matters....................................... 26 Section 6.14 Intellectual Property....................................... 26 Section 6.15 Insurance................................................... 27 Section 6.16 No Brokers.................................................. 27 Section 6.17 Opinion of Financial Advisor................................ 27 Section 6.18 Company Stock Ownership..................................... 27 Section 6.19 Reorganization.............................................. 27 Section 6.20 Pooling..................................................... 27 Section 6.21 Vote Required............................................... 27 Section 6.22 Certain Approvals........................................... 27 Section 6.23 Certain Contracts........................................... 28
ARTICLE 7
COVENANTS Section 7.1 Conduct of Businesses....................................... 28 Section 7.2 No Solicitation by the Company.............................. 31 Section 7.3 No Solicitation by Parent................................... 32 Section 7.4 Meetings of Stockholders.................................... 33 Section 7.5 Filings; Best Efforts....................................... 33 Section 7.6 Inspection.................................................. 35 Section 7.7 Publicity................................................... 36 Section 7.8 Registration Statement...................................... 36 Section 7.9 Listing Application......................................... 37 Section 7.10 Letters of Accountants...................................... 37 Section 7.11 Agreements of Rule 145 Affiliates........................... 37 Section 7.12 Expenses.................................................... 38 Section 7.13 Indemnification and Insurance............................... 38 Section 7.14 Certain Benefits............................................ 39 Section 7.15 Reorganization; Pooling..................................... 42 Section 7.16 Rights Agreement............................................ 42
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ARTICLE 8
CONDITIONS
Section 8.1 Conditions to Each Party's Obligation to Effect the
Merger...................................................... 43 Section 8.2 Conditions to Obligation of the Company to Effect the
Merger...................................................... 44 Section 8.3 Conditions to Obligation of Parent and Merger Sub to Effect
the Merger.................................................. 44
ARTICLE 9
TERMINATION Section 9.1 Termination by Mutual Consent............................... 45 Section 9.2 Termination by Parent or the Company........................ 45 Section 9.3 Termination by the Company.................................. 46 Section 9.4 Termination by Parent....................................... 47 Section 9.5 Effect of Termination....................................... 47 Section 9.6 Extension; Waiver........................................... 49
ARTICLE 10
GENERAL PROVISIONS Section 10.1 Nonsurvival of Representations, Warranties and Agreements... 49 Section 10.2 Notices..................................................... 50 Section 10.3 Assignment; Binding Effect; Benefit......................... 50 Section 10.4 Entire Agreement............................................ 51 Section 10.5 Amendments.................................................. 51 Section 10.6 Governing Law............................................... 51 Section 10.7 Counterparts................................................ 51 Section 10.8 Headings.................................................... 51 Section 10.9 Interpretation.............................................. 52 Section 10.10 Waivers..................................................... 52 Section 10.11 Incorporation of Exhibits................................... 52 Section 10.12 Severability................................................ 52 Section 10.13 Enforcement of Agreement.................................... 52 Section 10.14 Obligation of Parent........................................ 53 Section 10.15 Subsidiaries................................................ 53
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of May 10, 1998 is among Baker Hughes Incorporated, a Delaware corporation ("Parent"), Baker Hughes Delaware I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent ("Merger Sub"), and Western Atlas Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, Parent and the Company have each determined to engage in a strategic business combination with the other;
WHEREAS, in furtherance thereof, the parties hereto desire to merge Merger Sub with and into the Company (the "Merger"), with the Company surviving as a direct, wholly owned subsidiary of Parent, pursuant to which each share of the Company Common Stock (as defined in Section 4.1) will be converted into the right to receive Parent Common Stock (as defined in Section 4.1);
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the Company have determined the Merger, in the manner contemplated herein, to be desirable and in the best interests of their respective corporations and stockholders and to be consistent with, and in furtherance of, their respective business strategies and goals, and, by resolutions duly adopted, have approved and adopted this Agreement;
WHEREAS, for federal income tax purposes, it is intended that the Merger qualify as a reorganization within the meaning of section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, for financial accounting purposes, it is intended that the Merger be accounted for as a "pooling of interests" under U.S. generally accepted accounting principles;
NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties, covenants and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
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THE MERGER
SECTION 1.1 The Merger. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.3), Merger Sub shall be merged with and into the Company in accordance with this Agreement, and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the "Surviving Corporation"). The Merger shall have the effects specified in the Delaware General Corporation Law (the "DGCL").
SECTION 1.2 The Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the "Closing") shall take place (a) at the offices of Baker & Botts, L.L.P., One Shell Plaza, 910
Louisiana Houston, Texas, at 9:00 a.m., local time, on the first business day immediately following the day on which the last to be fulfilled or waived of the conditions set forth in Article 8 shall be fulfilled or waived in accordance herewith or (b) at such other time, date or place as Parent and the Company may agree. The date on which the Closing occurs is hereinafter referred to as the "Closing Date."
SECTION 1.3 Effective Time. If all the conditions to the Merger set forth in Article 8 shall have been fulfilled or waived in accordance herewith and this Agreement shall not have been terminated as provided in Article 9, Parent, Merger Sub and the Company shall cause a certificate of merger (the "Certificate of Merger") meeting the requirements of section 251 of the DGCL to be properly executed and filed in accordance with such section on the Closing Date. The Merger shall become effective at the time of filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL, or at such later time that the parties hereto shall have agreed upon and designated in such filing as the effective time of the Merger (the "Effective Time").
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ARTICLE 2
CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
SECTION 2.1 Certificate of Incorporation. The certificate of incorporation of the Company in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation, until duly amended in accordance with applicable law.
SECTION 2.2 Bylaws. The bylaws of Merger Sub in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation, until duly amended in accordance with applicable law.
ARTICLE 3
DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION AND PARENT
SECTION 3.1 Directors of Surviving Corporation. The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving
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Corporation as of the Effective Time.
SECTION 3.2 Officers of Surviving Corporation. The officers of the Company immediately prior to the Effective Time shall be the officers of the Surviving Corporation as of the Effective Time.
SECTION 3.3 Parent Board of Directors; President. John R. Russell shall be elected as President of Parent as of the Effective Time, and Max L. Lukens shall continue as Chairman of the Board of Directors and Chief Executive Officer of Parent. The Board of Directors of Parent will take such action as may be necessary to cause the election or appointment of Alton J. Brann, John R. Russell and two other persons designated by the Company after consultation with the Parent to be directors of Parent as of the Effective Time; provided that the Company shall not designate any person not currently a member of the Company's Board of Directors to which the Parent shall have reasonably objected. Such new directors shall be designated into the classes of directors of Parent in accordance with the Parent's bylaws in such classes as the Company shall indicate, John R. Russell shall be appointed to the Executive Committee of Parent's Board of Directors and not less than one such new director shall be appointed to each of the other committees of such Board.
ARTICLE 4
CONVERSION OF COMPANY COMMON STOCK
SECTION 4.1 Certain Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
(a) "Company Common Stock" shall mean the common stock, par value
$1.00 per share, of the Company.
(b) "Parent Common Stock" shall mean the common stock, par value $1.00
per share, of Parent.
(c) "Exchange Ratio" shall equal (i) 2.4, if the Parent Share Price is
greater than or equal to $38.25 but less than or equal to $42.75; (ii) if
the Parent Share Price is greater than $42.75 but less than or equal to
$44.75, that fraction, rounded to the nearest thousandth, or if there shall
not be a nearest thousandth, to the next lower thousandth, equal to the
quotient obtained by dividing $102.60 by the Parent Share Price; (iii) if
the Parent Share Price is greater than $44.75, 2.293; and (iv) if the
Parent Share Price is less than $38.25, that fraction, rounded to the
nearest thousandth, or if there shall not be a nearest thousandth, to the
next higher thousandth, equal to the quotient obtained by dividing $91.80
by the Parent Share Price; provided, however, that except as provided in
Section 9.3(d), the Exchange Ratio shall in no event be greater than 2.623,
notwithstanding that the Parent Share Price is less than $35.00.
(d) "Parent Share Price" shall mean the average of the per share
closing prices of Parent Common Stock as reported on the consolidated
transaction reporting system for securities traded on the New York
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Stock Exchange, Inc. ("NYSE") (as reported in the New York City edition of
The Wall Street Journal or, if not reported thereby, another authoritative
source) for the 20 consecutive trading days ending on the fifth trading day
prior to the Closing Date, appropriately adjusted for any stock splits,
reverse stock splits, stock dividends, recapitalizations or other similar
transactions.
(e) "Stock Option Agreements" shall mean (i) the Stock Option
Agreement dated the date hereof between Parent and the Company pursuant to
which Parent has granted to the Company an option to purchase a certain
number of shares of Parent Common Stock and (ii) the Stock Option Agreement
dated the date hereof between the Company and Parent pursuant to which the
Company has granted to Parent an option to purchase a certain number of
shares of Company Common Stock.
SECTION 4.2 Conversion of Company Stock.
(a) At the Effective Time, each share of the common stock, par value
$0.01 per share, of Merger Sub outstanding immediately prior to the
Effective Time shall be converted into and become one fully paid and
non-assessable share of Common Stock, par value $1.00 per share, of the
Surviving Corporation.
(b) At the Effective Time, each share of the Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares of Company Common Stock (i) held in the Company's treasury or (ii)
owned by Parent, Merger Sub or any other wholly owned Subsidiary (as
defined in Section 10.15) of Parent or the Company) shall, by virtue of the
Merger and without any action on the part of the holder thereof, be
converted into the right to receive a number of shares of Parent Common
Stock equal to the Exchange Ratio.
(c) As a result of the Merger and without any action on the part of
the holder thereof, each share of the Company Common Stock shall cease to
be outstanding and shall be canceled and retired and shall cease to exist,
and each holder of a certificate (a "Certificate") representing any shares
of the Company Common Stock shall thereafter cease to have any rights with
respect to such shares of the Company Common Stock, except the right to
receive, without interest, Parent Common Stock and cash for fractional
shares of Parent Common Stock in accordance with Sections 4.3(b) and 4.3(e)
upon the surrender of such Certificate.
(d) Each share of the Company Common Stock issued and held in the
Company's treasury, and each share of the Company Common Stock owned by
Parent, Merger Sub or any other wholly owned Subsidiary of Parent or the
Company shall, at the Effective Time and by virtue of the Merger, cease to
be outstanding and shall be canceled and retired without payment of any
consideration therefor, and no stock of Parent or other consideration shall
be delivered in exchange therefor.
(e) (i) At the Effective Time, all options (individually, a "Company
Option" and collectively, the "Company Options") then outstanding under the
Western Atlas Inc. 1993 Stock Incentive Plan and the Western Atlas Inc.
Director Stock Option Plan (collectively, the "Company Stock Option Plans")
shall remain outstanding following the Effective Time. At the Effective
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Time, the Company Options shall, by virtue of the Merger and without any
further action on the part of the Company or the holder of any Company
Option, be assumed by Parent in such manner that Parent (i) is a
corporation "assuming a stock option in a transaction to which section
424(a) applied" within the meaning of section 424 of the Code or (ii) to
the extent that section 424 of the Code does not apply to any Company
Option, would be such a corporation were section 424 of the Code applicable
to such option. Each Company Option assumed by Parent shall be exercisable
upon the same terms and conditions as under the applicable Company Stock
Option Plan and the applicable option agreement issued thereunder, except
that (i) each Company Option shall be exercisable for that whole number of
shares of Parent Common Stock (rounded to the nearest whole share) into
which the number of shares of the Company Common Stock subject to such
Company Option immediately prior to the Effective Time would be converted
under Section 4.2(b), and (ii) the option price per share of Parent Common
Stock shall be an amount equal to the option price per share of Company
Common Stock subject to such Company Option in effect
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immediately prior to the Effective Time divided by the Exchange Ratio (the
price per share, as so determined, being rounded upward to the nearest full
cent).
(ii) Parent shall take all corporate action necessary to reserve for
issuance a number of shares of Parent Common Stock equal to the number of
shares of Parent Common Stock issuable upon the exercise of the Company
Options assumed by Parent pursuant to this Section 4.2(e). From and after
the date of this Agreement, except as provided in Section 7.1(f), no
additional options shall be granted by the Company or its Subsidiaries
under the Company Stock Option Plans or otherwise. At the Effective Time or
as soon as practicable, but in no event more than three business days,
thereafter, Parent shall file with the Securities and Exchange Commission
(the "SEC") a Registration Statement on Form S-8 covering all shares of
Parent Common Stock to be issued upon exercise of the Company Options and
shall cause such registration statement to remain effective for as long as
there are outstanding any Company Options.
SECTION 4.3 Exchange of Certificates Representing Company Common Stock.
(a) As of the Effective Time, Parent shall deposit, or shall cause to
be deposited, with an exchange agent selected by Parent, which shall be
Parent's transfer agent for the Parent Common Stock or such other party
reasonably satisfactory to the Company (the "Exchange Agent"), for the
benefit of the holders of shares of Company Common Stock, for exchange in
accordance with this Article 4, certificates representing the shares of
Parent Common Stock and the cash in lieu of fractional shares (such cash
and certificates for shares of Parent Common Stock, together with any
dividends or distributions with respect thereto, being hereinafter referred
to as the "Exchange Fund") to be issued pursuant to Section 4.2 and paid
pursuant to this Section 4.3 in exchange for outstanding shares of Company
Common Stock.
(b) Promptly after the Effective Time, Parent shall cause the Exchange
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Agent to mail to each holder of record of one or more Certificates (other
than to holders of Company Common Stock that, pursuant to Section 4.2(d),
are canceled without payment of any consideration therefor): (A) a letter
of transmittal (the "Letter of Transmittal") which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent
and shall be in such form and have such other provisions as Parent and the
Company may reasonably specify and (B) instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing
shares of Parent Common Stock and cash in lieu of fractional shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent together
with such Letter of Transmittal, duly executed and completed in accordance
with the instructions thereto, the holder of such Certificate shall be
entitled to receive in exchange therefor (x) a certificate representing
that number of whole shares of Parent Common Stock and (y) a check
representing the amount of cash in lieu of fractional shares, if any, and
unpaid dividends and distributions, if any, which such holder has the right
to receive in respect of the Certificate surrendered pursuant to the
provisions of this Article 4, after giving effect to any required
withholding tax, and the Certificate so surrende ...