Item 1.01 Entry into a Material Definitive Agreement.
The Merger Agreement
On
On
Consideration
Stock Issuance. Under the terms of the Merger Agreement and at the Effective
Time, each share of Nuverra's common stock, par value
Assumption of Liabilities.
Treatment of Company Warrants. From and after the Effective Time, all holders of
Company warrants to purchase Company Common Stock shall have the right to
acquire and receive, upon the exercise of such Company warrants and payment of
the applicable exercise price, the number of shares of Select Class A Common
Stock that would have been issued or paid to such holders if they had exercised
the Company warrants by means of a Cash Exercise (as defined in the Warrant
Agreement between the Company and
Treatment of Company RSU Awards. Each award of outstanding but unvested shares of time-based restricted stock units settleable in Company Common Stock (each, a "Company RSU Award") and granted pursuant to Nuverra's 2017 Long Term Incentive Plan, as amended from time to time (the "2017 Plan"), that does not vest by its terms at the Effective Time and is outstanding as of immediately prior to the Effective Time shall automatically be cancelled and converted into a restricted stock unit award covering shares of Select Class A Common Stock ("Converted Select RSU Award"), with respect to that number of shares of Select Class A Common Stock that is equal to the product of (i) the number of shares of Company Common Stock subject to such Company RSU Award as of immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, rounded down to the nearest whole share. Following the Effective Time, the Converted Select RSU Award shall be subject to such other terms and conditions (including with respect to vesting) as applied to the corresponding Company RSU Award immediately prior to the Effective Time. At the Effective Time, each Company RSU Award that does vest by its terms at the Effective Time and is outstanding as of immediately prior to the Effective Time shall automatically vest in full and be cancelled and converted into the right to receive a number of shares of Select Class A Common Stock equal to the product of (i) the number of shares of Company Common Stock subject to such RSU Award as of immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, rounded down to the nearest whole share.
Treatment of Company PSU Awards. At the Effective Time, each award of outstanding but unvested shares of performance-based restricted stock units settleable in Company Common Stock and granted pursuant to the 2017 Plan (each, a "Company PSU Award") that is outstanding as of immediately prior to the Effective Time shall automatically be cancelled and converted into a performance-based restricted stock unit award covering shares of Select Class A
--------------------------------------------------------------------------------
Common Stock ("Converted Select PSU Award"), with respect to that number of shares of Select Class A Common Stock that is equal to the product of (i) the number of shares of Company Common Stock that would have been earned pursuant to such Company PSU Award based on actual achievement of any performance-based vesting conditions as of immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, rounded down to the nearest whole share. Following the Effective Time, the Converted Select PSU Award shall be subject to such other terms and conditions (other than any performance-based vesting conditions) as applied to the corresponding Company PSU Award immediately prior to the Effective Time.
Treatment of Company Restricted Stock Awards for Directors. At the Effective Time, each award of outstanding but unvested shares of restricted Company Common Stock granted pursuant to Nuverra's 2018 Restricted Stock Plan for Directors that is outstanding as of immediately prior to the Effective Time shall automatically vest in full and be cancelled and converted into the right to receive a number of shares of Select Class A Common Stock equal to the product of (i) the number of shares of Company Common Stock subject to such Company Restricted Stock Award as of immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio, rounded down to the nearest whole share.
Termination of Company Stock Plans. If requested by Select, the Company shall cause any or all of the Company stock plans to terminate at the Effective Time.
Conditions to the Mergers
The closing of the Transactions is subject to the satisfaction or waiver of
closing conditions, including, among others, (1) the
Other Terms of the Merger Agreement
The Merger Agreement contains mutual customary representations and warranties
made by each of the
In addition, the Merger Agreement contains covenants that require the Company to use reasonable best efforts to cause certain principal stockholders of the Company (the "Company Designated Stockholders") to duly execute and deliver a written consent approving the Merger Agreement within twenty-four (24) hours of the Registration Statement becoming effective and receiving a copy of the consent statement/prospectus included therein. In the event the Company Designated Stockholders fail to deliver such written consent, Select shall have the option to terminate the Merger Agreement or elect to have the Company use its reasonable best efforts to call a special meeting of the stockholders for the purpose of obtaining stockholder approval of the Merger Agreement.
Nuverra and Select may each terminate the Merger Agreement if the other commits
certain breaches, subject to certain exceptions. Furthermore, the Merger
Agreement may be terminated if the Merger has not been consummated by
--------------------------------------------------------------------------------
The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by the text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Merger Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company or Select. The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Merger Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that these schedules contain information that is material to an investment decision. The representations and warranties in the Merger Agreement should not be relied upon as characterizations of the actual state of facts about the Company or Select.
The Support Agreements
Concurrent with the execution of the Merger Agreement, the Company and each
Company Designated Stockholder entered into a support agreement (each, a
"Support Agreement"), pursuant to which such stockholders agreed to, among other
things, vote through the use of a written consent, the shares of Company Common
Stock beneficially owned by them (i) in favor of the adoption of the Merger
Agreement and the Transactions promptly following the time when the Registration
Statement is declared effective by the
Pursuant to the Support Agreements, none of the Company Designated Stockholder nor any of its affiliates or representatives are permitted to solicit, initiate, or knowingly take any action to facilitate or encourage, and not to participate or engage in any discussions or negotiations, or cooperate in any way with respect to, any inquiries or the making of, any proposal of an alternative transaction. In addition, the Support Agreement generally restricts transactions in Company Common Stock and derivative securities thereof, subject to certain exceptions. In the event the Company board of directors withdraws its recommendation with respect to the Transactions in violation of the Merger Agreement, the Company Designated Stockholder remains obligated under the Support Agreement to vote in favor of the Transactions. Each Support Agreement will terminate upon the earlier to occur of (x) the closing of the Mergers or (z) the date of termination of the Merger Agreement.
The foregoing description of the Support Agreements is not complete and is qualified in its entirety by the text of the Support Agreements, which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Additional Information and Where to Find It.
In connection with the Transactions, the Company intends to file relevant
materials with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit Number Description 2.1* Agreement and Plan of Merger, datedDecember 12, 2021 , by and among Select Energy Services, Inc.,Navy Merger Sub, Inc. ,Navy Holdco, LLC , andNuverra Environmental Solutions, Inc. 10.1 Support Agreement, datedDecember 12, 2021 , by and among Select Energy Services, Inc.,Navy Merger Sub, Inc. ,Navy Holdco, LLC ,Nuverra Environmental Solutions, Inc. , andGates Capital Management, Inc. 10.2 Support Agreement, datedDecember 12, 2021 , by and among Select Energy Services, Inc.,Navy Merger Sub, Inc. ,Navy Holdco, LLC ,Nuverra Environmental Solutions, Inc. ,Ascribe II Investments LLC and Ascribe III Investments LLC. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
* The schedules and exhibits to this agreement have been omitted in accordance
with Regulation S-K Item 601(b)(2). The Company agrees to furnish
supplementally a copy of any omitted exhibit or schedule to the
request.
--------------------------------------------------------------------------------
© Edgar Online, source