Item 1.01 Entry Into a Material Definitive Agreement.
On March 12, 2021, Cactus, Inc. (the "Company") completed an underwritten public
offering of its Class A common stock on behalf of certain selling stockholders
(the "Offering"). In the Offering, Cadent Energy Partners, L.P. ("Cadent") sold
4,111,250 shares of Class A common stock, and as a result, Cadent's ownership
interest in the Company decreased from 11.1% to 5.6% following the Offering. On
March 24, 2021, Cadent notified the Company of its intention to withdraw from
the Stockholders' Agreement, dated as of January 29, 2018 (the "Original
Stockholders' Agreement") by and between Cadent, the Company and Cactus WH
Enterprises, LLC ("Cactus WH Enterprises"), an entity controlled by the
Company's President and Chief Executive Officer and Senior Vice President and
Chief Operating Officer. The Original Stockholders' Agreement was entered into
in connection with the Company's initial public offering and, among other
things, provided each of Cadent and Cactus WH Enterprises with the right to
designate a certain number of nominees to the Company's board of directors (the
"Board") so long as they and their respective affiliates collectively
beneficially owned at least 5% of the outstanding shares of the Company's common
stock. Pursuant to the Original Stockholders' Agreement, the Company, Cadent and
Cactus WH Enterprises were required to take all necessary action, to the fullest
extent permitted by applicable law (including with respect to any fiduciary
duties under Delaware law), to cause the election of the nominees designated by
Cadent and Cactus WH Enterprises. The Original Stockholders' Agreement was to
terminate on January 29, 2023.
On March 24, 2021, Cactus and Cactus WH Enterprises amended and restated the
Stockholders' Agreement (the "Amended and Restated Stockholder's Agreement").
The Amended and Restated Stockholder's Agreement provides Cactus WH Enterprises
with the same rights to designate Board nominees as the Original Agreement.
Among other things, the Amended and Restated Stockholder's Agreement provides
Cactus WH Enterprises with the right to designate a number of nominees (each, a
"CWHE Director") to the Board such that:
•at least 50% of the directors on the Board are CWHE Directors for so long as
Cactus WH Enterprises and its affiliates collectively beneficially own at least
20% of the outstanding shares of common stock;
•at least 25% of the directors on the Board are CWHE Directors for so long as
Cactus WH Enterprises and its affiliates collectively beneficially own less than
20% but at least 10% of the outstanding shares of common stock;
•at least one of the directors on the Board are CWHE Directors for so long as
Cactus WH Enterprises and its affiliates collectively beneficially own less than
10% but at least 5% of the outstanding shares of common stock; and
•once Cactus WH Enterprises and its affiliates collectively own less than 5% of
the outstanding shares of common stock, Cactus WH Enterprises will not have any
Board designation rights.
In the event that the percentage ownership of Cactus WH Enterprises declines
such that the number of CWHE Directors exceeds the number of directors that
Cactus WH Enterprises is then entitled to designate to the Board under the
Amended and Restated Stockholder's Agreement, then if requested by the Company,
Cactus WH Enterprises shall take such actions as are reasonably necessary to
remove such excess CWHE Directors from the Board.
Currently, Scott Bender, Joel Bender and Alan Semple are each deemed to be
designees of Cactus WH Enterprises. As a result of the entry into the Amended
and Restated Stockholder's Agreement, Cadent no longer has the right to nominate
any directors for election to the Board other than its rights to nominate, elect
or remove directors arising under the Company's amended and restated certificate
of incorporation, its amended and restated bylaws or the Delaware General
Corporation Law.
Pursuant to the Amended and Restated Stockholder's Agreement, the Company and
Cactus WH Enterprises are required to take all necessary action, to the fullest
extent permitted by applicable law (including with respect to any fiduciary
duties under Delaware law), to cause the election of the nominees designated by
Cactus WH Enterprises.
The rights granted to Cactus WH Enterprises to designate directors are in
addition to the rights that Cactus WH Enterprises or any of its affiliates may
have to nominate, elect or remove directors under the Company's amended and
restated certificate of incorporation, its amended and restated bylaws or the
Delaware General Corporation Law.
The Amended and Restated Stockholder's Agreement will expire on January 29, 2023
unless earlier terminated pursuant to its terms.
The foregoing description is qualified in its entirety by reference to the full
text of the Underwriting Agreement, which is attached as Exhibit 10.1 to this
Current Report on Form 8-K and incorporated in this Item 1.01 by reference.
Item 1.02 Termination of a Material Definitive Agreement.
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The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 1.02 by reference.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 3.03 by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Amended and Restated Stockholder's Agreement dated as of March
24 , 2021, by and between Cactus, Inc. and Cactus WH Enterprises,
LLC
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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