EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
SCHLUMBERGER TECHNOLOGY CORPORATION,
SCHLUMBERGER OFS, INC.
AND
CAMCO INTERNATIONAL INC.
DATED AS OF JUNE 18, 1998
TABLE OF CONTENTS
Page
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
Defined Term Defined in Section
------------ ------------------
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)
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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)
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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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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 ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, 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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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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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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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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(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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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
-7-
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:
Plan Shares Reserved
---- ---------------
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
(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-
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
-9-
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
-10-
"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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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-
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;
-12-
(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 other wise,
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
-13-
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
-14-
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. (S) 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.
-15-
(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
-16-
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
-17-
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
-18-
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;
(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
-19-
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 ▇▇▇▇, brand ▇▇▇▇, 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
-20-
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;
-21-
(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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & 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.
-22-
(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
-23-
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.
-24-
(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,
-25-
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.
-26-
(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
-27-
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
-28-
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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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 pursuant 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
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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 & ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ & ▇▇▇▇▇, 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 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 ▇▇▇▇▇ & ▇▇▇▇▇,
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 & ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇, 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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 ▇▇▇▇▇ & ▇▇▇▇▇, 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 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, 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 &
▇▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & 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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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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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:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and (b) if to Camco, to:
Camco International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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
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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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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/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
SCHLUMBERGER OFS, INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
CAMCO INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer