C&J Energy Services, Inc. (NASDAQ:C) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement.
The description of the Rights Agreement included under Item 3.03
of this Current Report on Form 8-K is incorporated by reference
herein.
Item3.03 Material Modifications to Rights of Security
Holders.
On January6, 2017, the Board of Directors (the
Board) of CJ Energy Services, Inc. (the
Company) declared a dividend of one preferred
stock purchase right (each a Right) for each
outstanding share of the Companys common stock, par value $0.01
per share (the Common Stock). The dividend is
payable on January6, 2017 (the Record Date) to
holders of record as of the close of business on such date. The
description and terms of the Rights are set forth in that certain
Rights Agreement (the Rights Agreement) dated
January6, 2017 between the Company and American Stock Transfer
Trust Company, LLC, as Rights Agent (the Rights
Agent). The following description of the Rights
Agreement is only a summary, and is not complete, and should be
read together with the entire Rights Agreement, which has been
filed as Exhibit 4.1 to this Current Report on Form 8-K. A copy
of the agreement is also available free of charge from the
Company.
The Board adopted the Rights Agreement to protect stockholders
from coercive or otherwise unfair takeover tactics. In general
terms, the Rights Agreement imposes a significant penalty upon
any person or group that acquires 15% or more of the outstanding
common stock of the Company without the approval of the Board,
subject to certain exceptions described in the definition of
Acquiring Person under the subheading Exercisability below. The
Rights Agreement will not interfere with any merger or other
business combination which receives prior approval of the Board.
The Rights
The Board authorized the issuance of a Right with respect to each
outstanding share of Common Stock on the Record Date. The Rights
will initially trade with, and will be inseparable from, the
Common Stock, and the registered holders of the Common Stock will
be deemed to be the registered holders of the Rights. Issuances
of new shares of Common Stock after the Record Date but before
the Distribution Date, as defined under the subheading
Exercisability below, will be accompanied by new Rights.
Prior to the Distribution Date, the Rights will be evidenced by
the certificates for (or by the book entry account that evidences
record ownership of) the Common Stock. After the Distribution
Date, the Rights Agent will mail separate certificates
(Rights Certificates) evidencing the Rights to
each record holder of the Common Stock as of the close of
business on the Distribution Date, and thereafter the Rights will
be transferable separately from the Common Stock.
Exercisability
The Rights will not be exercisable until after the Distribution
Date. After the Distribution Date, each Right will be exercisable
to purchase, for $80.00 (the Purchase Price),
one one-hundredth of a share of Series A Participating Cumulative
Preferred Stock, par value $0.01 per share (the Preferred
Stock). This portion of a share of Preferred Stock will
give the stockholder approximately the same dividend, voting or
liquidation rights as would one share of Common Stock. Prior to
exercise, Rights holders in their capacity as such have no rights
as a stockholder of the Company, including the right to vote and
to receive dividends.
The Distribution Date generally means the
earlier of:
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the close of business on the 10th business day after the date of the first public announcement that a person or any of its affiliates and associates has become an Acquiring Person, as defined below, and |
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the close of business on the 10th business day (or such later day as may be designated by the Board before any person has become an Acquiring Person) after the date of the commencement of a tender or exchange offer by any person which would, if consummated, result in such person becoming an Acquiring Person. |
An Acquiring Person generally means any person
who or which, together with all affiliates and associates of such
person obtains beneficial ownership of 15% or more of shares of
outstanding Common Stock, with certain
exceptions, including that BlueMountain Foinaven Master Fund
L.P., Blue Mountain Credit Alternatives Master Fund L.P.,
BlueMountain Guadalupe Peak Fund L.P., BlueMountain Summit
Trading L.P., BlueMountain Montenvers Master Fund SCA SICAV-SIF,
BlueMountain Logan Opportunities Master Fund L.P., BlueMountain
Kicking Horse Fund L.P., BlueMountain Capital Management, LLC,
GSO Capital Solutions Fund II (Luxembourg) S.a.r.l., GSO Capital
Partners LP, Solus Opportunities Fund 5 LP, Solus Opportunities
Fund 3 LP, Ultra Master Ltd, SOLA LTD, Solus Alternative Asset
Management LP, any holder of Common Stock party to the
Stockholders Agreement or any of their respective affiliates or
related funds will not be considered an Acquiring Person so long
as such person does not acquire beneficial ownership of 35% or
more of shares of outstanding Common Stock.
Certain securities that are the subject of, the reference
securities for, or that otherwise underlie derivative instruments
will be treated as beneficial ownership of the number of shares
of the Common Stock to which such derivative relates (whether or
not such interests are considered to be ownership of the
underlying Common Stock or are reportable for purposes of
Regulation 13D of the Securities Exchange Act of 1934, as amended
(the Exchange Act).
Preferred Stock
The value of one one-hundredth interest in a share of Preferred
Stock should approximate the value of one share of Common Stock,
subject to adjustment. Each one one-hundredth of a share of
Preferred Stock, if issued:
| will not be redeemable, |
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will entitle holders to quarterly dividend payments of $0.01 per one one-hundredth of a share of Preferred Stock, or an amount equal to the dividend paid on one share of Common Stock, whichever is greater, |
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will entitle holders upon liquidation either to receive $0.01 per one one-hundredth of a share of Preferred Stock, or an amount equal to the payment made on one share of Common Stock, whichever is greater, |
| will have the same voting power as one share of Common Stock, |
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if shares of the Common Stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of Common Stock. |
Consequences of a Person or Group Becoming an Acquiring
Person
Flip in. Subject to the Companys exchange rights,
described below, at any time after any person has become an
Acquiring Person, each holder of a Right (other than an Acquiring
Person, its affiliates and associates) will be entitled to
purchase for each Right held, at the Purchase Price, a number of
shares of Common Stock having a market value of twice the
Purchase Price.
Exchange. At any time on or after any person has become
an Acquiring Person (but before any person becomes the beneficial
owner of 50% or more of the outstanding shares of Common Stock or
the occurrence of any of the events described in the next
paragraph), the Board may exchange all or part of the Rights
(other than Rights beneficially owned by an Acquiring Person, its
affiliates and associates) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right.
Flip over. If, after any person has become an Acquiring
Person, (1)the Company is involved in a merger or other business
combination in which the Company is not the surviving corporation
or its Common Stock is exchanged for other securities or assets
or (2)the Company and/or one or more of its subsidiaries sell or
otherwise transfer assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
subsidiaries, taken as a whole, then each Right (other than
Rights beneficially owned by an Acquiring Person, its affiliates
and associates) will entitle the holder to purchase for each
Right held, for the Purchase Price, a number of shares of common
stock of the other party to such business combination or sale (or
in certain circumstances, an affiliate) having a market value of
twice the Purchase Price.
Expiration
The Rights will expire on January6, 2020, unless earlier
exercised, exchanged, amended or redeemed.
Redemption
The Board may redeem all of the Rights at a price of $0.0001 per
Right at any time before any person has become an Acquiring
Person. If the Board redeems any Rights, it must redeem all of
the Rights. Once the Rights are redeemed, the only right of the
holders of Rights will be to receive the redemption price per
Right. The redemption price will be subject to adjustment.
Amendment
At any time before any person has become an Acquiring Person, the
Rights Agreement may be amended in any respect. After such time,
the Rights Agreement may be amended (i)to cure any ambiguity,
(ii)to correct any defective or inconsistent provision or (iii)in
any respect that does not adversely affect Rights holders (other
than any Acquiring Person, its affiliates and associates).
Anti-dilution
The Rights Agreement includes anti-dilution provisions designed
to prevent efforts to diminish the effectiveness of the Rights.
A copy of the Rights Agreement is available free of
charge from the Company. The foregoing description of the Rights
Agreement is qualified in its entirety by reference to the full
text of the Rights Agreement, as amended from time to time, the
complete terms of which are incorporated herein by reference. A
copy of the Rights Agreements has been filed as Exhibit 4.1 to
this Current Report on Form 8-K.
Item5.03 Amendments to Articles of Incorporation or
Bylaws.
In connection with the adoption of the Rights Agreement
referenced in Item 3.03 above, the Board has approved a
Certificate of Designation establishing the Preferred Stock and
the rights, preferences and privileges thereof. The Certificate
of Designation was filed with the Secretary of State of the State
of Delaware on January6, 2017. The Certificate of Designation is
attached hereto as Exhibit 3.1 and is incorporated herein by
reference. The information set forth under Item 3.03 above is
incorporated herein by reference.
Item7.01 Regulation FD Disclosure.
On January6, 2017, the Company issued a press release announcing,
among other matters, the issuance of the Rights and adoption of
the Rights Plan, as disclosed herein, a copy of which is
furnished as Exhibit 99.1 hereto to Item 7.01 of Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the
information furnished to this Item 7.01, and including Exhibit
99.1 furnished herewith, shall not be deemed filed for purposes
of Section18 of the Exchange Act, nor shall such be deemed
incorporated by reference in any filing under the Securities Act
of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
Item9.01 Financial Statements and Exhibits.
Exhibit Number |
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| 3.1 |
Certificate of Designation of Series A Participating Cumulative Preferred Stock of CJ Energy Services, Inc. |
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| 4.1 |
Rights Agreement, dated as of January6, 2017, between CJ Energy Services, Inc. and American Stock Transfer Trust Company, LLC, as Rights Agent, which includes the Form of Certificate of Designation of Series A Participating Cumulative Preferred Stock of CJ Energy Services, Inc. as Exhibit A, the Summary of Terms of Rights Agreement as Exhibit B and the Form of Right Certificate as Exhibit C. |
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| 99.1 | Press Release dated January6, 2017. |