Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On June 16,
2019, Keane Group, Inc. (Keane) entered into an Agreement and Plan of Merger (the Merger Agreement) with C&J Energy Services, Inc. (C&J) and King Merger Sub Corp. (Merger Sub).
The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (a) Merger Sub
will merge with and into C&J (the Merger), with C&J surviving and continuing as the surviving corporation in the Merger as a direct, wholly-owned subsidiary of Keane, and (b) at the effective time of the Merger (the
Effective Time), each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately before the Effective Time shall be converted into and become one validly issued, fully paid and
non-assessable
share of common stock, par value $0.01 per share, of the surviving corporation and each outstanding share of common stock of C&J (other than shares beneficially owned by C&J) will be converted
into the right to receive 1.6149 shares of common stock of Keane, plus cash in lieu of any fractional shares that otherwise would have been issued. Immediately following the Effective Time, C&J shall be merged with and into King Merger Sub II
LLC (LLC Sub), with LLC Sub continuing as the surviving entity as a direct, wholly-owned subsidiary of Keane.
At the
Effective Time, Keane will be renamed and Keane common stock, including the shares to be issued in the Merger, will be listed on the New York Stock Exchange under a new ticker symbol. Following the Effective Time, Keanes prior common
stockholders will own an aggregate of approximately 50% of the outstanding shares of common stock of the combined company and C&Js prior common stockholders will own an aggregate of approximately 50% of the outstanding shares of common
stock of the combined company, both of which calculations are on a fully diluted basis including exercisable options only. The Merger Agreement permits C&J to pay its stockholders a cash dividend of up to $1.00 per share prior to the Effective
Time.
The board of directors of Keane, following the unanimous recommendation of a special committee of independent directors (the
Special Committee) of the board of directors of Keane, unanimously (a) determined that the Merger Agreement and the transactions contemplated thereby are fair to, and in the best interests of, Keane and the holders of Keane common
stock, (b) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, on the terms and subject to the conditions set forth in the Merger Agreement, (c) directed that the issuance of Keane common stock
in connection with the Merger (the Keane Stock Issuance) be submitted for approval to the holders of Keane common stock and (d) subject to Section 7.2 of the Merger Agreement, resolved to recommend that the holders of Keane
common stock vote in favor of the Keane Stock Issuance. The board of directors of Merger Sub has unanimously (a) determined that the Merger Agreement and the transactions contemplated thereby are fair to, and in the best interests of, Merger
Sub and Keane, its sole stockholder, (b) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, on the terms and subject to the conditions set forth in the Merger Agreement, (c) determined to submit
the approval of the adoption of the Merger Agreement and the transactions contemplated thereby, to Keane, as sole stockholder of Merger Sub, and (d) resolved to recommend to Keane, as sole stockholder of Merger Sub, that Keane approve the
adoption of this Agreement and the Merger Agreement and the transactions contemplated thereby. The board of directors of C&J has unanimously (a) determined that the Merger Agreement and the transactions contemplated thereby, are fair to,
and in the best interests of, C&J and the holders of shares of C&Js common stock, (b) approved and declared advisable the Merger Agreement and the transactions contemplated thereby on the terms and subject to the conditions set
forth in the Merger Agreement, (c) directed that the Merger Agreement be submitted for adoption to the holders of C&Js common stock and (d) subject to Section 7.2 of the Merger Agreement, resolved to recommend that the
holders of C&Js common stock vote in favor of the adoption of the Merger Agreement.
At the Effective Time, Keane will enter
into a Second Amended and Restated Stockholders Agreement (the Second Amended and Restated Stockholders Agreement) with Keane Investor Holdings LLC (Keane Investor) primarily to provide that Keane Investor will be
entitled to designate, subject to certain conditions, (a) two directors to the board of directors of the combined company if it beneficially owns at least 12.5% of the issued and outstanding common stock of the combined company or (b) one
director to the board of directors of the combined company if it beneficially owns at least 7.5% of the issued and outstanding common stock of the combined company. The form of the Second Amended and Restated Stockholders Agreement is attached
as Exhibit A to the Merger Agreement, which is filed as Exhibit 2.1 hereto.
Treatment of Equity Awards
Pursuant to the Merger Agreement, at the Effective Time, (a) each outstanding C&J stock option will convert into a stock option
relating to shares of Keane common stock on the terms set forth in the Merger Agreement, (b) each outstanding C&J performance share award will convert into a Keane performance share award relating to shares of Keane common stock on the
terms set forth in the Merger Agreement, (c) each outstanding C&J restricted stock unit award will convert into a Keane restricted stock unit award relating to shares of Keane common stock on the terms set forth in the Merger Agreement, and
(d) each outstanding C&J restricted stock award will convert into a restricted award relating to shares of Keane common stock on the terms set forth in the Merger Agreement. The number of shares of C&J common stock subject to C&J
performance share awards shall be deemed to be the number of shares subject to the C&J performance share award with performance deemed achieved at target performance levels.