0000002178FALSE00000021782022-08-112022-08-11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 11,
2022
ADAMS RESOURCES & ENERGY, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
1-7908 |
74-1753147 |
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(State or other jurisdiction |
(Commission |
(IRS Employer
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of incorporation) |
File Number) |
Identification No.)
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17 South Briar Hollow Lane, Suite 100, Houston, Texas
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77027 |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
(713) 881-3600
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Common Stock, $0.10 par value |
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AE |
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NYSE American LLC |
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 1.01 Entry into a Material Definitive Agreement.
Firebird & Phoenix Acquisition
On August 12, 2022, GulfMark Asset Holdings, LLC (“GulfMark
Holdings”), a Texas limited liability company and subsidiary of
Adams Resources & Energy, Inc., a Delaware corporation (the
“Company” or “Adams”), as buyer and each of Scott Bosard, Trey
Bosard and Tyler Bosard as sellers (collectively, the “Sellers”),
entered into a purchase agreement (the “Purchase Agreement”) to
acquire all of the equity of Firebird Bulk Carriers, Inc., a Texas
corporation (“Firebird”), and Phoenix Oil, Inc., a Texas
corporation (“Phoenix”), for a purchase price of approximately
$32.4 million in cash and $500,000 in shares of common stock of the
Company. Firebird is an interstate bulk motor carrier of crude oil,
condensate, fuels, oils and other petroleum products, and Phoenix
recycles and repurposes off-specification fuels, lubricants, crude
oil and other chemicals from producers in the United
States.
Pursuant to the Purchase Agreement, the purchase price is subject
to customary post-closing adjustment provisions, including an
earn-out payable to Sellers to the extent the earnings before
interest, taxes, depreciation and amortization (EBITDA) of Phoenix
exceeds a specified threshold during the 12 full calendar months
after the closing date. The Purchase Agreement contains customary
representations and warranties of GulfMark Holdings and Sellers and
indemnification provisions under which GulfMark Holdings, on the
one hand, and the Sellers, on the other, have agreed to indemnify
each other against certain liabilities. Neither the Company,
GulfMark Holdings nor any of their affiliates had any material
relationships with any of the Sellers at the time they entered into
the Purchase Agreement.
The description of the Purchase Agreement contained in this Item
1.01 does not purport to be complete and is qualified in its
entirety by the full text of the Purchase Agreement, a copy of
which is filed herewith as Exhibit 2.1, and incorporated by
reference herein.
The representations, warranties and covenants contained in the
Purchase Agreement have been made solely for the purpose of such
agreement and as of specific dates, for the benefit of the parties
to the Purchase Agreement. In addition, such representations,
warranties and covenants (i) may have been qualified by
confidential disclosures exchanged between the parties, (ii) are
subject to materiality qualifications contained in the Purchase
Agreement which may differ from what may be viewed as material by
investors, and (iii) have been included in the Purchase Agreement
for the purpose of allocating risk between the contracting parties
rather than establishing matters of facts. Accordingly, the
Purchase Agreement has been filed as an exhibit hereto to provide
investors with information regarding the terms of the Purchase
Agreement, and not to provide investors with any other factual
information regarding the parties, their respective businesses, or
the actual conduct of their respective businesses during the period
prior to the consummation of the transactions contemplated by the
Purchase Agreement. Investors should not rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of actual facts or circumstances, and
the subject matter of representations and warranties may change
after the date as of which such representations or warranties were
made. Moreover, information concerning the subject matter of the
representations, warranties and covenants may change after the date
of the Purchase Agreement, which subsequent information may or may
not be fully reflected in the Company’s public
disclosures.
Limited Waiver Agreement and Amendment No. 1 to the Credit
Agreement
On August 11, 2022, the Company and GulfMark Holdings, GulfMark
Energy, Inc. (“GulfMark Energy”) and Service Transport Company
(“Service Transport”), each a wholly owned subsidiary of the
Company, as borrowers (collectively, the “Borrowers” and each
individually, a “Borrower”) entered into a Limited Waiver Agreement
and Amendment No. 1 to the Credit Agreement (“Amendment No. 1”)
with the subsidiary guarantors of the Borrowers and Wells Fargo
Bank, National Association, as administrative agent and issuing
lender, and the other lenders party thereto (collectively, the
“Lenders”).
Pursuant to the terms of Amendment No. 1, the parties agreed to
increase the borrowing capacity under the existing credit agreement
to a total of $60.0 million (increased from $40.0 million) and
extend the maturity date to August 11, 2025. Amendment No. 1 also
waives certain specific non-financial events of default that
existed under
the credit agreement as a result of the Company forming GulfMark
Holdings as a new subsidiary and entering into certain other
inter-company transactions.
From time to time, certain of the Lenders, their affiliates and/or
their predecessors have provided commercial banking, investment
banking and other financial advisory services to Adams or its
subsidiaries. The Lenders and their affiliates may, from time to
time in the future, engage in transactions with and perform
services for Adams and its subsidiaries in the ordinary course of
business.
The description of Amendment No. 1 contained in this Item 1.01 does
not purport to be complete and is qualified in its entirety by the
full text of Amendment No. 1, a copy of which is filed herewith as
Exhibit 10.1, and incorporated by reference herein.
Item 2.01. Completion of Acquisition or Disposition of
Assets.
The information discussed under Item 1.01 under the heading
Firebird & Phoenix Acquisition
of this Current Report on Form 8-K is incorporated by reference
into this Item 2.01.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information set forth in Item 1.01 under the heading
Limited Waiver Agreement and Amendment No. 1 to the Credit
Agreement
of this Current Report on Form 8-K is incorporated by reference
into this Item 2.03.
Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Appointment of Additional Director
On August 12, 2022, Kevin J. Roycraft, Chief Executive Officer and
President of the Company, accepted an appointment to the Company’s
board of directors. In connection with his appointment, the board
of directors increased the size of the board from seven to eight
members. As an executive of the Company, Mr. Roycraft will not
receive any additional compensation in connection with his services
on the board of directors and will not serve on any committees of
the board.
Additional Executive Officer
On August 12, 2022, Trey Bosard, age 40, entered into an employment
agreement (the “Employment Agreement”) to serve as the President of
Phoenix in connection with the acquisition of Phoenix by GulfMark
Holdings. Mr. Bosard joined Phoenix in 2009 and served in various
positions of increasing responsibilities, most recently as Vice
President.
Pursuant to the terms of the Employment Agreement, Mr. Bosard will
receive a base salary of $130,000, a restricted stock unit grant of
approximately $500,000 vesting in partial installments on each of
the first three anniversaries of the grant date, cash
performance-based bonuses, a vehicle and cell-phone allowance and
certain other benefits, including the right to participate in other
employee benefits programs. The restricted stock award was granted
as an inducement award pursuant to Section 711(a) of the NYSE
American Company Guide and is not being made under the Company’s
amended and restated 2018 Long Term Incentive Plan.
The description of the Employment Agreement contained in this Item
1.01 does not purport to be complete and is qualified in its
entirety by the full text of the Employment Agreement, a copy of
which is filed herewith as Exhibit 10.2, and incorporated by
reference herein.
Change of Control Plan
On August 12, 2022, the board of directors of the Company adopted a
Change of Control Plan (the “Plan”). The Plan’s participants
include the Company’s Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, Chief Accounting Officer, and the
President of any of the Company’s subsidiaries (collectively, the
“Participants”). Under the Plan, participants will receive
severance benefits if they are terminated without
Cause
by the Company, or resigns for
Good Reason
following a
Change of Control
of the Company (each, a “Qualifying Termination”) (italicized terms
being defined in
Exhibit A
of the Plan). The Participants become applicable to receive the
severance benefits if the Qualifying Termination occurs within the
90-day period preceding a Change of Control or within the
twenty-four (24) month period commencing on a Change of
Control.
In the event of a Qualifying Termination, the Participant shall
receive the following compensation, subject to certain exceptions
as described more fully in the Plan:
•A
cash lump sum payment equal to the sum of (i) his or her base
salary and (ii) any bonuses received that year under any plan,
program, agreement or arrangement that the Company has entered into
with the Participant (the “Target Bonus”), multiplied by two for
the Chief Executive Officer, and by 1.5 for the other
Participants;
•A
cash lump sum payment of Participant’s bonus amount for any prior
fiscal year not yet paid at the date of termination, if any, paid
at the greater of Target Bonus or actual performance;
•A
cash lump sum payment equal to a pro rata portion of the
Participant’s Target Bonus for the year of termination, determined
by multiplying the amount the Target Bonus by a fraction, the
numerator of which is the number of days in the then-current fiscal
year through the termination date and the denominator of which is
365;
•In
the event a Participant timely elects to continue health insurance
coverage with the Company under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), the Company will subsidize
the Employer portion of such COBRA coverage for the lesser of (1)
of twelve (12) months or (2) Participant’s first day of eligibility
for a successor employer-provided group health plan. The amount
that the Company will pay on behalf of a Participant will be equal
to the amount paid for similarly situated active employees of the
Employer and based on medical and/or dental coverage on the day
immediately before the day the Employer notifies the Participant
that his or her employment will be terminated; and
•All
outstanding and unvested stock option, performance shares,
restricted stock units, and restricted stock awards held by
Participant under the Company’s Long Term Incentive Plan, as
amended and restated, or any successor plan thereto, subject solely
to time-based vesting shall vest in full and any restrictions or
forfeiture provisions applicable to restricted stock awards shall
lapse, notwithstanding the provisions of any equity incentive plan
or any award agreement(s) between the Participant and the Company
thereunder. Equity awards which vest in whole or part on
achievement of performance criteria shall vest based on the
assumption of performance at target as defined in any award
agreement. If the Participant’s employment is terminated by the
Company other than for Cause within ninety (90) days preceding a
Change of Control, any acceleration of vesting for time-based
awards shall occur on such Change of Control.
The foregoing description of the Plan is not complete and is
qualified in its entirety by reference to the full text of the
Plan, which is attached hereto as Exhibit 10.3, to this Current
Report on Form 8-K and is incorporated herein by
reference.
Item 7.01 Regulation FD Disclosure.
In connection with closing the transactions set forth in the
Purchase Agreement, the Company issued a press release on August
15, 2022, a copy of which is filed herewith as Exhibit 99.1, and
incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses
acquired
The Company intends to file the financial statements required by
Item 9.01(a), in accordance with Rule 3-14 of Regulation S-X, by
amendment to this Current Report on Form 8-K no later than 71
calendar days following the date that this Current Report on Form
8-K is required to be filed.
(b) Pro forma financial
information
The Company intends to file the pro forma financial information
required by Item 9.01(b) by amendment to this Current Report on
Form 8-K no later than 71 calendar days following the date that
this Current Report on Form 8-K is required to be
filed.
(d) Exhibits.
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10.1 |
Limited Waiver Agreement
and Amendment No. 1, dated August 11, 2022, to Credit Agreement,
dated May 4, 2021, by and among Adams Resources & Energy, Inc.,
GulfMark Asset Holdings, LLC, and Service Transport Company, as
Borrowers, the Lenders referred to herein, as Lenders, and Wells
Fargo Bank, National Association, as Administrative Agent and
Issuing Lender.
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10.2 |
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10.3 |
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99.1 |
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104 |
Cover Page Interactive Data File — the cover page interactive data
file does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document. |
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The schedules to the Purchase Agreement have been omitted from this
filing pursuant to Item 601(b)(2) of Regulation S-K. The Company
will furnish copies of such schedules to the SEC upon its request;
provided, however, that the Company may request confidential
treatment pursuant to Rule 24b-2 of the Exchange Act for any
schedule so furnished.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
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ADAMS RESOURCES & ENERGY, INC. |
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Date: |
August 17, 2022 |
By: |
/s/ Tracy E. Ohmart |
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Tracy E. Ohmart |
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Chief Financial Officer |
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(Principal Financial Officer and |
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Principal Accounting Officer) |
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