dated 13 march 2017 john wood group plc and amec foster ... · conformed copy dated 13 march 2017...
TRANSCRIPT
CONFORMED COPY
DATED 13 March 2017
JOHN WOOD GROUP PLC
and
AMEC FOSTER WHEELER PLC
___________________________________________
CO-OPERATION AGREEMENT
___________________________________________
Slaughter and May
One Bunhill Row
London, EC1Y 8YY
(SRN/PIRD/CPXM/AXJD)
542925105
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CONTENTS
1. Interpretation 1
2. Publication of the Announcement and terms of the Combination 9
3. Undertakings in relation to satisfaction of the Merger Conditions 10
4. Undertakings in relation to satisfaction of the Regulatory Conditions 13
5. Scheme Document 15
6. Wood Group public documents and shareholder approval 16
7. Implementation of the Scheme and switching to an Offer 18
8. Conduct of business 20
9. Employees and share plans 21
10. Directors’ and officers’ insurance 21
11. Break Fee 22
12. Code and the Listing Rules 24
13. Termination 25
14. Representations and Warranties 27
15. Notices 28
16. Remedies and waivers 29
17. Variation 30
18. Invalidity 30
19. Entire Agreement 30
20. Language 31
21. Contracts (Rights of Third Parties) Act 1999 31
22. Assignment 31
23. Costs and expenses 31
24. Further assurance 31
25. Counterparts 31
26. Governing law and jurisdiction 32
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THIS AGREEMENT is entered into on 13 March 2017
BETWEEN:
1. JOHN WOOD GROUP PLC, a public limited company incorporated in Scotland, with its
registered address at 15 Justice Mill Lane, Aberdeen, AB11 6EQ and company number
036219 (“Wood Group”); and
2. AMEC FOSTER WHEELER PLC, a public limited company incorporated in England and
Wales with its registered address at Booths Park, Chelford Road, Knutsford, Cheshire,
WA16 8QZ and company number 01675285 (“AMEC”),
together referred to as the “parties” and each as a “party” to this Agreement.
WHEREAS:
(A) Wood Group and AMEC propose to announce a recommended offer by Wood Group to
acquire the entire issued and to be issued ordinary share capital of AMEC (the
“Combination”), on the terms and subject to the conditions set out in the Announcement.
(B) It is intended that the Combination will be effected by way of a scheme of arrangement of
AMEC pursuant to Part 26 of the Act (the “Scheme”), but Wood Group reserves the right,
as set out in the Announcement and this Agreement, to elect to implement the
Combination by way of a takeover offer (the “Offer”).
(C) The parties have agreed to take certain steps to effect the completion of the Combination
and wish to enter into this Agreement to record their respective obligations relating to
such matters.
IT IS AGREED AS FOLLOWS:
1. Interpretation
1.1 In this Agreement, the following words and expressions have the meanings given below:
“Acceptance
Condition”
means the acceptance condition to any Offer;
“Act” means the Companies Act 2006;
“Agreed Switch” has the meaning given in Clause 7.3;
“AMEC Board
Recommendation”
means the unanimous and unconditional recommendation
from the AMEC Directors to the AMEC shareholders to vote in
favour of the AMEC Resolutions, or, if Wood Group proceeds
by way of the Offer, to accept the Offer, as the case may be;
“AMEC Directors” means the directors of AMEC from time to time;
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“AMEC General
Meeting”
means the general meeting of the shareholders of AMEC (and
any adjournment thereof) to be convened in connection with
the Scheme for the purpose of considering, and if thought fit
approving, the AMEC Resolutions;
“AMEC Group” means AMEC, its subsidiaries and its subsidiary undertakings
from time to time and “member of the AMEC Group” shall be
construed accordingly;
“AMEC Remuneration
Committee”
means the remuneration committee of the board of directors
of AMEC;
“AMEC Resolutions” means such shareholder resolutions of AMEC as are
necessary to approve, implement and effect the Scheme,
including a resolution to amend the articles of association of
AMEC by the adoption and inclusion of a new article under
which any AMEC Shares issued or transferred after the AMEC
General Meeting shall either be subject to the Scheme or
(after the Effective Date) shall be immediately transferred to
Wood Group (or as it may direct) in exchange for the same
consideration as is due under the Scheme;
“AMEC Shares” means the ordinary shares in the capital of AMEC from time
to time;
“AMEC Share Plans” means the AMEC Performance Share Plan, the AMEC
Restricted Share Plan, the AMEC Long-Term Incentive Plan,
the AMEC UK Savings Related Share Option Scheme, the
AMEC International Savings Related Share Option Scheme
and the AMEC Omnibus Plan and one-off awards as disclosed
to Wood Group;
“Announcement” means the announcement detailing the terms and conditions
of the Combination to be made pursuant to Rule 2.7 of the
Code, in substantially the form set out in Schedule 2 (Form of
Announcement);
“Break Fee” means, subject to Clauses 11.5 and 12.2(C), the sum of
£25,000,000 (twenty-five million pounds sterling);
“Break Fee Event” has the meaning given in Clause 11.1;
“Business Day” means a day, other than an English public holiday, Saturday
or Sunday, when banks are open in London for general
banking business;
“Clearances” means all approvals, consents, clearances, permissions,
confirmations, comfort letters and waivers that may need to be
obtained and waiting periods that may need to have expired
or been terminated early, from or under any of the laws,
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regulations or practices applied by any Relevant Authority (or
under any agreements or arrangements to which any
Relevant Authority is a party), in each case that are necessary
and / or expedient to satisfy one or more of the Regulatory
Conditions or Merger Conditions;
“CMA” means the UK’s Competition and Markets Authority;
“Code” means the City Code on Takeovers and Mergers as issued
from time to time by or on behalf of the Panel;
“Combination” has the meaning given in Recital (A);
“Combined Group” means, following the Combination, the AMEC Group and the
Wood Group Group;
“Competing Proposal” means:
(i) an offer (including a partial, exchange or tender offer),
merger, acquisition, dual-listed structure, scheme of
arrangement, reverse takeover and/or business
merger (or the announcement of a firm intention to do
the same), the purpose of which is to acquire, directly
or indirectly, 30 per cent. or more of the issued or to be
issued ordinary share capital of AMEC (when
aggregated with the shares already held by the
acquirer and any person acting or deemed to be
acting in concert with the acquirer) or any
arrangement or series of arrangements which results
in any party acquiring, consolidating or increasing
‘control’ (as defined in the Code) of AMEC;
(ii) the acquisition or disposal, directly or indirectly, of all
or a significant proportion (being 25 per cent. or more)
of the business, assets and/or undertakings of the
AMEC Group calculated by reference to any of its
revenue, profits or value taken as a whole;
(iii) a demerger, or any material reorganisation and/or
liquidation, involving all or a significant portion (being
25 per cent. or more) of the AMEC Group calculated
by reference to any of its revenue, profits or value
taken as a whole; or
(iv) any other transaction which would be alternative to, or
inconsistent with, or would be reasonably likely
materially to preclude, impede or delay or prejudice
the implementation of the Combination (including, for
the avoidance of doubt, any transaction or
arrangement which would constitute a class 1
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transaction for the purposes of the Listing Rules
undertaken by a member of the AMEC Group),
in each case which is not effected by Wood Group (or a person
acting in concert with Wood Group) or at Wood Group’s
direction or with Wood Group’s written agreement, whether
implemented in a single transaction or a series of transactions
and whether conditional or otherwise; provided that the
ongoing disposal of AMEC’s nuclear operations as announced
by AMEC in December 2016 shall not constitute a “Competing
Proposal”;
“Conditions” means:
(i) for so long as the Combination is being implemented
by means of the Scheme, the terms and conditions to
the implementation of the Scheme as set out in
Appendix 1 to the Announcement, as may be
amended by Wood Group with the Panel’s consent
(and for so long as the Scheme is unanimously and
unconditionally recommended by the AMEC
Directors, with the consent of AMEC); and
(ii) for so long as the Combination is being implemented
by means of an Offer, the terms and conditions
referred to in (i) above, as amended by replacing the
Scheme Condition with the Acceptance Condition and
as may be further amended by Wood Group with the
agreement of the Panel (and, in the case of an Agreed
Switch and, for so long as the Offer is unanimously
and unconditionally recommended by the AMEC
Directors, with the consent of AMEC),
and “Condition” shall be construed accordingly;
“Court” means the High Court of Justice in England and Wales;
“Court Meeting” means the meeting of the holders of AMEC Shares in issue on
the date of the Scheme Document or issued after the date of
despatch of the Scheme Document but prior to the Voting
Record Time (excluding any AMEC Shares held beneficially
by any member of the Wood Group Group or held in treasury)
(and any adjournment thereof) or of any class or classes
thereof to be convened pursuant to section 896 of the Act for
the purpose of considering, and if thought fit approving (with
or without modification), the Scheme;
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“Effective Date” means the date upon which either:
(i) the Scheme becomes effective in accordance with its
terms; or
(ii) if Wood Group elects to implement the Combination
by means of an Offer, the date on which the Offer
becomes or is declared unconditional in all respects;
“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated
thereunder;
“Extended Date” has the meaning given in Clause 6.1;
“HMRC” means Her Majesty’s Revenue & Customs;
“Listing Rules” means the rules and regulations made by the Financial
Conduct Authority pursuant to Part 6 of the Financial Services
and Markets Act 2000 and contained in the Financial Conduct
Authority’s publication of the same name;
“Long Stop Date” means 14 February 2018, or (with the prior written consent of
Wood Group and AMEC) 31 March 2018, or such later date
as may be agreed in writing by AMEC and Wood Group (with
the Panel’s consent and as the Court may approve (if such
approval(s) are required));
“Merger Conditions” means the Conditions set out in paragraphs 2-7 and
paragraphs 12-15 (so far as, in the case of paragraphs 12-15,
the relevant “Third Party” under those Conditions is a Relevant
Antitrust Authority) of Part A of Appendix 1 to the
Announcement;
“New Wood Group
Shares”
means the new Wood Group shares proposed to be issued to
holders of AMEC Shares in connection with the Combination;
“Offer” has the meaning given in Recital (B);
“Offer Document” means an offer document published by or on behalf of Wood
Group in connection with any Offer, including (as the context
requires) any revised offer document;
“Panel” means the UK Panel on Takeovers and Mergers;
“Prospectus Rules” means the “prospectus rules” made by the Financial Conduct
Authority pursuant to Part 6 to the Financial Services and
Markets Act 2000, referred to in section 73A(4) of the same,
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and contained in the Financial Conduct Authority’s publication
of the same name;
“Regulatory
Conditions”
means the Conditions set out in paragraphs 8-11 and
paragraphs 12-15 (so far as, in the case of paragraphs 12-15,
the relevant “Third Party” under those Conditions is a Relevant
Regulatory Authority) of Part A of Appendix 1 to the
Announcement;
“Regulatory
Information Service”
means a regulatory information service as defined in the
Listing Rules;
“Relevant Antitrust
Authority”
means any national or supranational authority acting in its
capacity as an anti-trust or merger control authority;
“Relevant Authority” means a Relevant Antitrust Authority or a Relevant Regulatory
Authority;
“Relevant Regulatory
Authority”
means any central bank, ministry, governmental, quasi-
governmental (including the European Union), supranational,
statutory, regulatory or investigative body or authority
(including any sectoral ministry or regulator and any foreign
investment review body), national, state, municipal or local
government (including any subdivision, court, administrative
agency or commission or other authority thereof), any entity
owned or controlled by them, any private body exercising any
regulatory, taxing, importing or other authority, trade agency,
association, institution or professional or environmental body
in any relevant jurisdiction, but excluding any such authority
acting in the capacity of an anti-trust or merger control
authority;
“Sanction Hearing” means the court hearing (and any adjournment thereof) to
sanction the Scheme pursuant to section 899 of the Act, at
which the Scheme Order is expected to be granted;
“SAR” means share appreciation rights
“Scheme” has the meaning given in Recital (B);
“Scheme Condition” means those conditions referred to in paragraph 1 of Part A of
Appendix 1 to the Announcement;
“Scheme Document” means the circular addressed to the shareholders of AMEC
containing, inter alia, the details of the Combination and
notices convening the Court Meeting and the AMEC General
Meeting, including (as the context requires) any
supplementary scheme document;
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“Scheme Order” means the order of the Court sanctioning the Scheme
pursuant to section 899 of the Act;
“Scheme Record
Time”
means the time and date specified as such in the Scheme
Document or such later time as Wood Group and AMEC may
agree;
“Securities Act” means the United States Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder;
“Shareholder Approval
Long Stop Date”
means 15 June 2017 or such other date as may be agreed in
writing by AMEC and Wood Group;
“Sharesave Plans” means the AMEC UK Savings Related Share Option Scheme
and the AMEC International Savings Related Share Option
Scheme;
“Switch” has the meaning given in Clause 7.3;
“VAT” means any tax imposed in compliance with Directive
2006/112/EEC and any similar tax which may be imposed in
substitution for or in addition to such tax;
“Voting Record Time” has the meaning given to it in the Announcement;
“Wood Group Board
Recommendation”
has the meaning given in Clause 6.3;
“Wood Group Board
Recommendation
Change”
has the meaning given in Clause 6.4;
“Wood Group Circular” means the circular to be dispatched to the shareholders of
Wood Group in connection with the Combination and
convening the Wood Group General Meeting, including any
supplementary circular;
“Wood Group
Directors”
means the directors of Wood Group from time to time;
“Wood Group General
Meeting”
means the meeting of the shareholders of Wood Group (and
any adjournment thereof) to be convened for the purpose of
considering, and if thought fit approving, the Wood Group
Resolutions (as well as any incidental or related matter that
Wood Group may wish to place before such meeting, provided
for the avoidance of doubt that the Combination shall not be
made conditional upon approval of any resolution in respect
of any such matter);
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“Wood Group Group” means Wood Group, its subsidiaries and its subsidiary
undertakings from time to time and “member of the Wood
Group Group” shall be construed accordingly;
“Wood Group
Prospectus”
means the prospectus required to be published by Wood
Group in respect of the New Wood Group Shares to be issued
in connection with the Combination, including any
supplementary prospectus;
“Wood Group
Resolutions”
means the ordinary resolutions of the shareholders of Wood
Group necessary to implement the Combination, including to
approve, effect and implement the Combination and to grant
authority to the Wood Group Directors to allot the New Wood
Group Shares (and any amendment(s) thereof); and
“Working Hours” has the meaning given in Clause 15.5.
1.2 In this Agreement, except where the context otherwise requires:
(A) the expressions “subsidiary” and “subsidiary undertaking” shall have the
meanings given in the Act;
(B) the expression “group”, in relation to a party, means that party together with its
subsidiaries and subsidiary undertakings from time to time;
(C) the expressions “offer” and “acting in concert” shall have the meaning given in
the Code and the expression “takeover offer” shall have the meaning given in
section 974 of the Act;
(D) a reference to an enactment or statutory provision shall include a reference to
any subordinate legislation made under the relevant enactment or statutory
provision and is a reference to that enactment, statutory provision or subordinate
legislation as from time to time amended, consolidated, modified, re-enacted or
replaced;
(E) references to one gender include other genders;
(F) words in the singular shall include the plural and vice versa;
(G) a reference to a “person” shall include a reference to an individual, an individual's
executors or administrators, a partnership, a firm, a body corporate, an
unincorporated association, government, state or agency of a state, local or
municipal authority or government body, a joint venture or association (in any
case, whether or not having separate legal personality);
(H) a reference to a Recital, Clause or Schedule (other than to a schedule to a
statutory provision) shall be a reference to a recital, clause or schedule to (as the
case may be) this Agreement;
(I) references to times are to London time;
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(J) any reference to a “day” (including within the phrase “Business Day”) shall mean
a period of 24 hours running from midnight to midnight and any reference to a
“month” shall mean a calendar month;
(K) references to any English legal term for any action, remedy, method of judicial
proceeding, legal document, legal status, court, official or any legal concept or
thing shall in respect of any jurisdiction other than England be deemed to include
what most nearly approximates the English legal term in that jurisdiction;
(L) references to “writing” shall include any modes of reproducing words in any
legible form and shall include email except where otherwise expressly stated;
(M) a reference to “includes” or “including” shall mean “includes without limitation”
or “including without limitation” respectively;
(N) references to “£” and “pounds sterling” are to the lawful currency of England;
(O) the rule known as the ejusdem generis rule shall not apply and accordingly
general words introduced by the word “other” shall not be given a restrictive
meaning by reason of the fact that they are preceded by words indicating a
particular class of acts, matters or things;
(P) general words shall not be given a restrictive meaning by reason of the fact that
they are followed by particular examples intended to be embraced by the general
words;
(Q) a reference to any other document referred to in this Agreement is a reference to
that other document as amended, varied, novated or supplemented at any time;
and
(R) references to this Agreement include this Agreement as amended or
supplemented in accordance with its terms.
1.3 The headings in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
1.4 The Schedules form part of this Agreement and shall have the same force and effect as
if set out in the body of this Agreement and any reference to this Agreement shall include
the Schedules.
2. Publication of the Announcement and terms of the Combination
2.1 The obligations of the parties under this Agreement, other than this Clause 2.1 and
Clauses 14 to 26 shall be conditional on the release of the Announcement via a
Regulatory Information Service at or before 8:00 a.m. on the date of this Agreement, or
such other time and date as the parties may agree (and, where required by the Code,
approved by the Panel). This Clause 2.1 and Clauses 14 to 26 shall take effect upon
execution of this Agreement.
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2.2 The principal terms of the Combination shall be as set out in the Announcement, together
with such other terms as may be agreed by the parties in writing (save in the case of an
improvement to the terms of the Combination, which will be at the absolute discretion of
Wood Group) and, where required by the Code, approved by the Panel. The terms of the
Combination at the date of posting of the Scheme Document shall be set out in the
Scheme Document. Should Wood Group elect to implement the Combination by way of
an Offer, the terms of the Combination shall be set out in the Offer Document.
3. Undertakings in relation to satisfaction of the Merger Conditions
3.1 The obligation of Wood Group to complete the Combination is subject to satisfaction (or,
where permitted, waiver) of the Merger Conditions.
3.2 Wood Group shall use reasonable endeavours to ensure the satisfaction of the Merger
Conditions as soon as possible and in any event in sufficient time so as to enable the
Effective Date to occur by the Long Stop Date. In particular, Wood Group shall:
(A) submit to the Relevant Antitrust Authorities (in draft or in final form, as the case
may be) any filings, notifications or submissions as are necessary (or the parties
agree (acting in good faith) are advisable) in connection with the Clearances
which it has a responsibility to make under the relevant national laws, as soon as
is reasonably practicable after the signing of this Agreement and within any
applicable mandatory time periods where it is necessary or expedient to do so to
obtain the Clearances, and in any event unless otherwise agreed between the
parties (acting in good faith):
(i) as regards the US and Canada, submit any such filings, notifications or
submissions within 10 Business Days of the date of this Agreement; and
(ii) as regards any other jurisdiction, submit any such filings, notifications or
submissions (in draft or in final form, as the case may be) within 4 weeks
of the date of this Agreement;
(B) use reasonable endeavours to avoid (i) any declaration of incompleteness by any
Relevant Antitrust Authority and (ii) any suspension of review period by a
Relevant Antitrust Authority;
(C) take all reasonable steps in order to obtain the Clearances promptly and in any
event within, wherever applicable, a first phase of review (or relevant equivalent)
by each Relevant Antitrust Authority, and/or enter into any hold separate
arrangement with a Relevant Antitrust Authority in order to facilitate the
completion of the transactions contemplated by this Agreement;
(D) use its reasonable endeavours to procure that no Relevant Antitrust Authority
seeks to issue, or issues any measure that prevents, or purports to prevent,
completion of the Combination;
(E) with the exception of the UK and Australian merger control filings, unless agreed
to by AMEC (acting in good faith), not make any filings, notifications or
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submissions to a Relevant Antitrust Authority that are not required in order to
complete the transactions contemplated by this Agreement;
(F) to the extent any CMA interim enforcement order becomes relevant to the
Combination, use reasonable endeavours, in negotiating the scope of such CMA
interim enforcement order and/or derogations thereto, to procure that such an
order does not materially prejudice the intended integration of Wood Group’s and
AMEC’s businesses outside the UK following completion of the Combination,
including offering post-completion arrangements satisfactory to the CMA to hold
separate Wood Group’s and AMEC’s respective UK businesses.
3.3 AMEC shall submit to the Relevant Antitrust Authorities in the US, Canada and any other
jurisdictions any filings, notifications or submissions in connection with the Clearances
which it has a responsibility to make under the relevant national laws or contracts, as
soon as is reasonably practicable after the signing of this Agreement and within any
applicable mandatory time periods where it is necessary or expedient to do so to obtain
the Clearances, and in any event within 10 Business Days of the date of this Agreement.
3.4 Wood Group and AMEC shall:
(A) use reasonable endeavours to ensure that all information necessary or desirable
for the making of (or responding to any requests for further information
consequent upon) any such filings, notifications or submissions (and that is in the
possession of, or reasonably obtainable by such party) is supplied accurately and
promptly to the other party, provided that the co-operation will be conducted in a
manner reasonably designed to preserve applicable lawyer/client and lawyer
work product privileges and to limit the exchange of any competitively sensitive
information to outside counsel or pursuant to an appropriately established clean
team arrangement. Neither party shall take or permit to be taken, any action that
could reasonably be expected to adversely affect the satisfaction of any of the
Merger Conditions;
(B) jointly determine the strategy for obtaining the Clearances; and
(C) except where otherwise required by law or a Relevant Antitrust Authority, jointly
contact and correspond with the Relevant Antitrust Authorities in relation to such
Clearances.
3.5 Subject to Clause 3.4, without prejudice to the generality of Clause 3.2, and except to the
extent that to do so is prohibited by law:
(A) each party shall bear its own legal costs in relation to all filings, notifications or
submissions, and Wood Group alone shall bear all other costs and expenses in
relation to such filings, notifications or submissions with the exception of any
filings required pursuant to the US Hart-Scott-Rodino Antitrust Improvements Act
1976 and the Canadian Competition Act 1985, which shall be borne jointly by the
parties;
(B) Wood Group and AMEC shall co-operate in the preparation of all such filings,
notifications or submissions referred to in this Clause 3 and in relation to the
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preparation of any other submissions, material correspondence or material
communications to any Relevant Antitrust Authority in connection with the
Clearances (including at pre-notification stage);
(C) each party shall provide, or procure the provision of, draft copies of all filings,
submissions, material correspondence and material communications intended to
be sent to any Relevant Antitrust Authority in relation to obtaining any Clearances
(including at pre-notification stage) to the other party and its legal advisers at such
time as will allow the receiving party a reasonable opportunity to provide
comments on such filings, submissions, correspondence and communications
before they are submitted or sent and each party shall provide the other party
with copies of all such filings, submissions, material correspondence and material
communications in the form finally submitted or sent (including, in the case of
non-written communications, reasonably detailed summaries of material non-
written communications);
(D) each party shall have regard in good faith to comments made in a timely manner
by the other party on draft copies of filings, submissions, material correspondence
and material communications provided pursuant to Clause 3.5(C) and shall
provide such supporting documentation as the other party reasonably requires;
(E) Wood Group and AMEC shall notify each other, and provide copies (including, in
the case of non-written communications, reasonably detailed summaries of
material non-written communications), in a timely fashion of any material
communication or material correspondence from any Relevant Antitrust Authority
in relation to obtaining any Clearance. Each of Wood Group and AMEC further
agrees to keep the other reasonably informed as to the progress of any
notification, filing and submission submitted, and shall give the other reasonable
prior notice of any meetings or material calls with any Relevant Antitrust Authority
or other persons or bodies relating to any Clearance (including at pre-notification
stage) and shall allow advisers nominated by the other: (i) to attend any such
meetings or calls (unless prohibited by the Relevant Antitrust Authority, applicable
law or other person or body); and (ii) to make reasonable oral submissions at
such meetings or calls (provided that such oral submissions have been discussed
in advance); and
(F) where reasonably requested by a party, and insofar as permitted by the Relevant
Antitrust Authority, the other party shall make available appropriate
representatives for meetings and telephone calls with any Relevant Antitrust
Authority in connection with the obtaining of any Clearances (including at pre-
notification stage),
provided that the requirements of this Clause 3.5 shall be subject always to the provisions
of Clause 3.4 and that in respect of any information the circulation of which would
adversely affect the relevant party’s legitimate business interests, this Clause 3 shall only
require the disclosing party to provide, or procure the provision of, non-confidential
versions of such information to the other party and in respect of any competitively
sensitive information, such information shall be exchanged on an outside counsel basis
only or pursuant to an appropriately established clean team arrangement.
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3.6 Each party undertakes to keep the other party informed promptly of (i) developments
which are material or reasonably likely to be material to the obtaining of a Clearance and
(ii) the satisfaction of the Merger Conditions.
4. Undertakings in relation to satisfaction of the Regulatory Conditions
4.1 The obligation of Wood Group to complete the Combination is subject to satisfaction (or,
where permitted, waiver) of the Regulatory Conditions.
4.2 Wood Group shall use reasonable endeavours to ensure the satisfaction of the
Regulatory Conditions as soon as possible and in any event in sufficient time so as to
enable the Effective Date to occur by the Long Stop Date. In particular, Wood Group shall:
(A) submit to the Relevant Regulatory Authorities (in draft or in final form, as the case
may be) any filings, notifications or submissions as are necessary (or the parties
agree (acting in good faith) are advisable) in connection with the Clearances
which it has a responsibility to make under the relevant national laws, as soon as
is reasonably practicable after the signing of this Agreement and within any
applicable mandatory time periods where it is necessary or expedient to do so to
obtain the Clearances and in any event, as regards the filings, notifications or
submissions as are necessary to satisfy the Regulatory Condition set out in
paragraph 8 of Part A of Appendix 1 to the Announcement, unless otherwise
agreed between the parties (acting in good faith), within 4 weeks of the date of
this Agreement;
(B) use reasonable endeavours to avoid (i) any declaration of incompleteness by any
Relevant Regulatory Authority and (ii) any suspension of review period by a
Relevant Regulatory Authority;
(C) take all reasonable steps in order to obtain the Clearances promptly and in any
event within, wherever possible, a first phase of review (or relevant equivalent)
by each Relevant Regulatory Authority;
(D) use reasonable endeavours to procure that no Relevant Regulatory Authority
seeks to issue, or issues, any measure that prevents, or purports to prevent,
completion of the Combination;
4.3 AMEC shall submit to the Relevant Regulatory Authorities any filings, notifications or
submissions as are necessary (or the parties agree (acting in good faith) are advisable)
in connection with the Clearances which it has a responsibility to make under the relevant
national laws or contracts, as soon as is reasonably practicable after the signing of this
Agreement and within any applicable mandatory time periods where it is necessary or
expedient to do so to obtain the Clearances and in any event, as regards the filings,
notifications or submissions as are necessary to satisfy the Regulatory Conditions set out
in paragraphs 8 and 11 of Part A of Appendix 1 to the Announcement, unless otherwise
agreed between the parties (acting in good faith), within 4 weeks of the date of this
Agreement.
4.4 Wood Group and AMEC shall use reasonable endeavours to ensure that all information
necessary for the identification and making of (or responding to any requests for further
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information consequent upon) any such filings, notifications or submissions (and that is
in the possession of, or reasonably obtainable by such party) is supplied accurately and
promptly to the other party, provided that the co-operation will be conducted in a manner
reasonably designed to preserve applicable lawyer/client and lawyer work product
privileges and to limit the exchange of any competitively sensitive information to outside
counsel or pursuant to an appropriately established clean team arrangement. Neither
party shall take or permit to be taken, any action that could reasonably be expected to
adversely affect the satisfaction of any of the Regulatory Conditions.
4.5 Except where otherwise required by law or a Relevant Regulatory Authority, Wood Group
and AMEC shall, whenever reasonably possible, jointly contact and correspond with the
Relevant Regulatory Authorities in relation to the Clearances.
4.6 Subject to Clause 4.4, without prejudice to the generality of Clause 4.2,
(A) each party shall bear its own legal costs in relation to all filings, notifications or
submissions, and Wood Group shall alone bear all other costs and expenses in
relation to such filings, notifications or submissions;
(B) Wood Group and AMEC shall co-operate in the preparation of all such filings,
notifications or submissions referred to in this Clause 4 and in relation to the
preparation of any other submissions, material correspondence or material
communications to any Relevant Regulatory Authority in connection with the
Clearances (including at pre-notification stage);
(C) each party shall provide, or procure the provision of, draft copies of all filings,
submissions, material correspondence and material communications intended to
be sent to any Relevant Regulatory Authority in relation to obtaining any
Clearances (including at pre-notification stage) to the other party and its legal
advisers at such time as will allow the receiving party a reasonable opportunity to
provide comments on such filings, submissions, correspondence and
communications before they are submitted or sent and each party shall provide
the other party with copies of all such filings, submissions, material
correspondence and material communications in the form finally submitted or
sent (including, in the case of non-written communications, reasonably detailed
summaries of material non-written communications);
(D) each party shall have regard in good faith to comments made in a timely manner
by the other party on draft copies of filings, submissions, material correspondence
and material communications provided pursuant to Clause 4.6(C) and shall
provide such supporting documentation as the other party reasonably requires;
(E) Wood Group and AMEC shall notify each other, and provide copies (including, in
the case of non-written communications, reasonably detailed summaries of
material non-written communications), in a timely fashion of any material
communication or material correspondence from any Relevant Regulatory
Authority in relation to obtaining any Clearance. Each of Wood Group and AMEC
further agrees to keep the other reasonably informed as to the progress of any
notification, filing and submission submitted, and shall give the other reasonable
prior notice of any meetings or material calls with any Relevant Regulatory
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Authority or other persons or bodies relating to any Clearance (including at pre-
notification stage) and shall allow advisers nominated by the other: (i) to attend
any such meetings or calls (unless prohibited by the Relevant Regulatory
Authority, applicable law or other person or body); and (ii) to make reasonable
oral submissions at such meetings or calls (provided that such oral submissions
have been discussed in advance); and
(F) where reasonably requested by a party, and insofar as permitted by the Relevant
Regulatory Authority, the other party shall make available appropriate
representatives for meetings and telephone calls with any Relevant Regulatory
Authority in connection with the obtaining of any Clearances (including at pre-
notification stage),
provided that the requirements of this Clause 4.6 shall be subject always to the provisions
of Clause 4.4 and that in respect of any information the circulation of which would
adversely affect the relevant party’s legitimate business interests, this Clause 4 shall only
require the disclosing party to provide, or procure the provision of, non-confidential
versions of such information to the other party and in respect of any competitively
sensitive information, such information shall be exchanged on an outside counsel basis
only or pursuant to an appropriately established clean team arrangement.
4.7 Unless agreed to by AMEC (acting in good faith and not to unreasonably withhold
consent), Wood Group shall not make any filings, notifications or submissions to the
Canadian government that are not required in order to complete the transactions
contemplated by this Agreement.
4.8 Wood Group and AMEC agree that any additional terms or requirements imposed by (i)
the Committee on Foreign Investment in the United States (including, but not limited to,
a mitigation agreement pursuant to Section 721(l)(1)(A) of the Defense Production Act of
1950 (as amended)) or (ii) the Defence Security Service that are required in order to
obtain a Clearance will be agreed to by Wood Group, unless Wood Group (acting
reasonably) determines that such additional terms or requirements would materially
impact the business of the post-Combination combined entity.
4.9 Each party undertakes to keep the other party informed promptly of (i) developments
which are material or reasonably likely to be material to the obtaining of a Clearance and
(ii) the satisfaction of the Regulatory Conditions.
5. Scheme Document
5.1 Wood Group agrees to provide promptly to AMEC all such information about itself, the
Wood Group Directors and the Wood Group Group as may be reasonably requested and
which is required for the purpose of inclusion in the Scheme Document and to provide all
other assistance and access which may be reasonably required for the preparation of the
Scheme Document and any other document required by applicable law or under the Code
to be published in connection with the Scheme, including access to, and ensuring that
reasonable assistance is provided by, its professional advisers.
5.2 Wood Group shall procure that its directors accept responsibility, in the terms required in
the Code, in the Scheme Document and any other document required by applicable law
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or under the Code to be published in connection with the Scheme (but only where
required to so by the Code) for all of the information relating to themselves (and members
of their immediate families, related trusts and persons connected with them), the Wood
Group Group and any statements of the opinion, belief or expectation of the Wood Group
Directors in relation to the Combination or the enlarged group of Wood Group following
the completion of the Combination and any other information in the Scheme Document
for which they are, under the Code, required to accept responsibility.
6. Wood Group public documents and shareholder approval
6.1 The parties intend that the Wood Group Circular and the Wood Group Prospectus will be
published on the same date as the Scheme Document. The parties acknowledge that the
Panel has consented, under paragraph 3 of Appendix 7 to the Code, to an extension of
the date (the “Extended Date”, being 10 weeks after the date hereof) by which the
Scheme Document must be sent to those persons entitled to receive it. It is further
acknowledged that, notwithstanding the foregoing provision in this Clause 6.1, there is no
intention that Wood Group shall publish the Wood Group Circular and the Wood Group
Prospectus on the same date as the Scheme Document if that Scheme Document is
posted before the Extended Date, and Wood Group shall be under no obligation to do so.
6.2 Wood Group shall:
(A) use reasonable endeavours to prepare and submit drafts of the Wood Group
Circular and the Wood Group Prospectus for review and comment by the UK
Listing Authority in accordance with the timetable agreed between the parties in
writing from time to time; and
(B) provide, or procure the provision of, draft copies of the Wood Group Circular and
the Wood Group Prospectus to AMEC (and/or its advisers) at such time as will
allow AMEC (and/or its advisers) reasonable notice of and reasonable
opportunity to review and comment on such drafts and Wood Group (and/or its
advisers) shall in good faith consider all comments reasonably and promptly
proposed by AMEC (and/or its advisers) before such drafts are submitted or sent
to the UK Listing Authority or any other Relevant Authority or published in final
form and, where practicable, Wood Group shall promptly notify AMEC (and/or its
advisers) of any material comments received from the UK Listing Authority or any
other Relevant Authority in relation to the Wood Group Circular and/or the Wood
Group Prospectus.
6.3 The Wood Group Circular shall contain a unanimous and unconditional recommendation
from the board of Wood Group Directors that the shareholders of Wood Group vote in
favour of the Wood Group Resolutions (the “Wood Group Board Recommendation”),
unless the Wood Group Directors have determined, following consultation with external
legal counsel and a financial adviser, that including the Wood Group Board
Recommendation would be inconsistent with any of the respective fiduciary duties of the
Wood Group Directors.
6.4 Wood Group shall not:
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(A) cause or permit the Wood Group Board Recommendation to be withdrawn,
qualified or modified in any adverse manner up to the time all the Wood Group
Resolutions have been duly passed;
(B) cause or permit any announcement to be made, whether before or after the Wood
Group Circular is dispatched, that the Wood Group Directors are no longer
unanimously and unconditionally recommending (or are no longer intending
unanimously and unconditionally to recommend) that the shareholders of Wood
Group vote in favour of the Wood Group Resolutions; or
(C) fail to publicly reaffirm or re-issue a statement of the intention of the Wood Group
Directors to make the Wood Group Board Recommendation on an unmodified
and unqualified basis before 5:30 p.m. on the 10th Business Day following
AMEC’s reasonable request to do so (each such event within (A) to (C) being, a
“Wood Group Board Recommendation Change”),
in each case unless the Wood Group Directors have determined, following consultation
with external legal counsel and a financial adviser, that failing to make the Wood Group
Board Recommendation Change would be inconsistent with any of the respective
fiduciary duties of the Wood Group Directors.
6.5 AMEC agrees to provide promptly to Wood Group, to the standard that is required for
Wood Group to meet its obligations in relation to the Listing Rules and the Prospectus
Rules (and in the case of an Agreed Switch, the Securities Act and the Exchange Act), all
such information about itself, the AMEC Directors and the AMEC Group as may be
reasonably requested and/or which is required for the purpose of inclusion in the Wood
Group Circular and/or the Wood Group Prospectus and to provide all other assistance
and access which may be reasonably required for the preparation of the Wood Group
Circular and/or the Wood Group Prospectus, including access to, and ensuring that
reasonable assistance is provided by, its professional advisers.
6.6 Wood Group shall use reasonable endeavours to ensure that the Wood Group Circular
and the Wood Group Prospectus are dispatched and published, respectively, in
accordance with the timetable agreed between the parties in writing from time to time and
shall convene the Wood Group General Meeting for the same time on the same date as
the Court Meeting and/or the AMEC General Meeting, being not later than the
Shareholder Approval Long Stop Date, provided there is no obligation on Wood Group to
convene the Wood Group General Meeting for the same date as the Court Meeting and/or
the AMEC General Meeting where the Scheme Document is posted before the Extended
Date.
6.7 In the period between the posting of the Wood Group Circular and the Wood Group
General Meeting, Wood Group shall keep AMEC informed, on a regular basis or as soon
as reasonably practicable following a request by AMEC, of the number and content of
proxy votes received in respect of the Wood Group Resolutions.
6.8 Wood Group shall permit up to four representatives of AMEC and its advisers to attend
the Wood Group General Meeting.
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6.9 Subject to the approval of the Wood Group Resolutions at the Wood Group General
Meeting, Wood Group shall use all reasonable endeavours to cause all New Wood Group
Shares to be issued to AMEC shareholders pursuant to the Combination to be approved
for admission to the Official List of the Financial Conduct Authority and admission to
trading on the London Stock Exchange (and in the case of a Switch, such approvals shall
also include the declaration of effectiveness of the Registration Statement by the U.S.
Securities and Exchange Commission).
6.10 For so long as the Combination is being implemented by way of the Scheme, Wood Group
shall use reasonable endeavours to cause all New Wood Group Shares which are issued
to AMEC shareholders upon the Scheme becoming effective to be issued in reliance on
the exemption from the registration requirements of the Securities Act provided by
section 3(a)(10) of the Securities Act and in reliance on exemptions from registration
under state “blue sky” or securities laws.
7. Implementation of the Scheme and switching to an Offer
7.1 Where the Combination is being implemented by way of the Scheme, Wood Group
undertakes that, before the Sanction Hearing, it shall deliver a notice in writing to AMEC
either:
(A) confirming the satisfaction or waiver of all Conditions (other than the Scheme
Condition); or
(B) confirming its intention to invoke a Condition (if permitted by the Panel) and
providing reasonable details of the event which has occurred, or circumstances
which have arisen, which Wood Group reasonably considers entitles it to invoke
the Condition,
provided that the date set for the Sanction Hearing must have been agreed to by Wood
Group in writing (acting reasonably) or otherwise set for a date no earlier than the earlier
in time to occur of (i) the date on which all the Conditions (other than the Scheme
Condition) have been satisfied; and (ii) the date that is 10 Business Days prior to the Long
Stop Date. If, on the Business Day prior to the date set for the Sanction Hearing, Wood
Group is aware of any fact, matter or circumstance that would allow any of the Conditions
to be invoked, Wood Group shall inform AMEC as soon as reasonably practicable, and
Wood Group and AMEC shall use their reasonable endeavours to procure that the
Sanction Hearing is postponed for a period of up to three Business Days (or such further
period as the parties may agree) to allow for the investigation of such fact, matter or
circumstance. Following the conclusion of such investigation, Wood Group shall either
confirm that the relevant Condition has been satisfied or waived or, if permitted by the
Panel invoke the relevant Condition.
7.2 If the Combination is being implemented by way of the Scheme, Wood Group shall
instruct counsel to appear on its behalf at the Sanction Hearing and undertake to the
Court to be bound by the terms of the Scheme in so far as it relates to Wood Group to
the extent that all the Conditions (other than paragraph 1(C) of the Scheme Condition)
have been satisfied or waived prior to or on the date of the Sanction Hearing.
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7.3 Wood Group shall be entitled, with the consent of the Panel, to implement the
Combination by way of the Offer rather than the Scheme, whether before or after the
posting of the Scheme Document (such election being a “Switch”) if:
(A) AMEC provides its prior written consent (an “Agreed Switch”), in which case
Clause 7.4 shall apply;
(B) a third party announces a firm intention to make an offer for the issued and to be
issued ordinary share capital of AMEC (whether including or excluding any AMEC
Shares held in treasury) which is recommended in whole or in part by the AMEC
Directors; or
(C) the AMEC Directors (i) do not include the AMEC Board Recommendation in the
Scheme Document (or, if different, the document convening the AMEC General
Meeting or the Court Meeting), (ii) withdraw, qualify or adversely modify the
AMEC Board Recommendation or (iii) prior to publication of the Scheme
Document (and/or the document convening the AMEC General Meeting or the
Court Meeting, if different), withdraw, qualify or adversely modify their intention to
give the AMEC Board Recommendation in any such document, including making
any public statement to such effect, or fail to publicly reaffirm or re-issue a
statement of their intention to make the AMEC Board Recommendation on an
unmodified and unqualified basis before 5:30 p.m. on the 10th Business Day
following Wood Group’s reasonable request to do so.
7.4 In the event of an Agreed Switch:
(A) the Acceptance Condition shall be set at 90 per cent. of the AMEC Shares to
which the offer relates (or such lesser percentage as may be agreed between the
parties in writing after, to the extent necessary, consultation with the Panel, being
in any case more than 50 per cent. of the AMEC Shares);
(B) Wood Group shall not take any action which would cause the Offer not to
proceed, to lapse or to be withdrawn in each case for the non-fulfilment of the
Acceptance Condition prior to the 60th day after publication of the Offer Document
(unless otherwise agreed with AMEC and the Panel) and Wood Group shall
ensure that the Offer remains open for acceptances until such time;
(C) Wood Group shall ensure that the only conditions of the Offer shall be the
Conditions (subject to replacing the Scheme Condition with the Acceptance
Condition referred to in Clause 7.4(A)) (unless the parties agree otherwise in
writing); and
(D) Wood Group shall keep AMEC informed, on a confidential and regular basis and
in any event within three Business Days following receipt of a written request from
AMEC of the number of holders of AMEC Shares that have validly returned their
acceptance or withdrawal forms or incorrectly completed their withdrawal or
acceptance forms and the identity of such shareholders.
7.5 In the event of any Switch in connection with which the Offer is to be registered under the
Securities Act (absent an applicable exemption from the registration requirements of the
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Securities Act), Wood Group, with AMEC’s assistance, shall prepare a registration
statement on Form F-4 (or any other applicable form) with respect to the Consideration
Shares to be issued in the Acquisition (the “Registration Statement”) and, in the event
of an Agreed Switch, the obligations of Wood Group and AMEC in Clauses 6.2(B), 6.5
and 6.9 shall apply to the process for preparation of such Registration Statement mutatis
mutandis.
7.6 In the event of any Agreed Switch:
(A) the parties agree that all provisions of this Agreement relating to the Scheme and
its implementation shall apply to the Offer or its implementation mutatis mutandis;
and
(B) Wood Group’s obligations under Clause 6.2(B) shall apply to the Offer Document
as if references in such clause to the Wood Group Circular and the Wood Group
Prospectus were to the Wood Group Circular, the Wood Group Prospectus and
the Offer Document.
8. Conduct of business
8.1 Pending the Effective Date, except (i) with AMEC's prior written consent (such consent
not to be unreasonably withheld or delayed), (ii) where required by law or regulation or
(iii) to the extent the relevant matter is expressly permitted or contemplated by or in this
Agreement or the Announcement, Wood Group shall not and shall procure that no
member of the Wood Group Group shall agree, resolve, commit or announce publicly any
agreement or intention to:
(A) other than in the ordinary course of business and consistent with past practice
(including, without limitation, the granting of options or awards in respect of
shares in the normal and ordinary course and in accordance with the Wood Group
Group's incentive plans and the issuance of shares necessary to satisfy such
options or awards vesting or due to be settled under such plans):
(i) allot or issue any Wood Group shares or any securities convertible into
Wood Group shares; or
(ii) grant any option over or right to subscribe for any such shares or any
such securities referred to in (i) above,
in each case that are allotted, issued or granted at less than the fair market value
of the relevant share, security, option or right on the date of allotment, issuance
or grant;
(B) split, combine or reclassify any of its shares or amend its memorandum or articles
of association, in each case, in any manner that would have an adverse impact
on the value of the New Wood Group Shares;
(C) subject to Clause 8.2, authorise, declare or pay any dividend or other distribution
on or with respect to its shares (whether in cash, assets, shares or other
securities); or
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(D) enter into any transaction or arrangement that would constitute a class 1
transaction in relation to Wood Group for the purpose of the Listing Rules, other
than the Scheme or Offer or any transaction or arrangement entered into in order
to enable or assist satisfaction of any of the Regulatory Conditions or the Merger
Conditions.
8.2 Notwithstanding Clause 8.1(C), Wood Group may:
(A) continue to authorise, declare and pay dividends and distributions in the ordinary
course and consistent with past practice over the previous two years and/or Wood
Group’s stated dividend policy or proposals (including as stated in the
Announcement), and provided that Wood Group shall be entitled to make
arrangements so that its 2017 interim dividend is paid prior to, or by reference to
a record date that is before, the Effective Date such that it is payable to holders
of existing Wood Group shares and not to holders of New Wood Group Shares;
and/or
(B) authorise, declare and pay dividends and distributions with reference to a record
date after the Effective Date (so that, if the Combination is completed, the New
Wood Group Shares rank for participation in such dividends or distributions
rateably and equally with all other shares of Wood Group then issued).
9. Employees and share plans
9.1 The parties agree that the provisions of Schedule 1 (Employee-related Matters) with
respect to certain employee-related matters shall be implemented in accordance with that
Schedule.
9.2 AMEC agrees that it will not process, and shall not issue any AMEC Shares to satisfy, the
exercise of any options granted under the AMEC Share Plans during the period starting
with the Scheme Record Time and ending on the Effective Date.
9.3 The parties agree that if the Acquisition is implemented by way of the Scheme, the
timetable for its implementation shall be fixed so as to enable options and awards under
the relevant AMEC Share Plans which provide for exercise and/or vesting upon the
sanction of the Scheme by the Court to be exercised or vest in sufficient time to enable
the resulting AMEC Shares to be bound by the Scheme on the same terms as AMEC
Shares held by AMEC shareholders.
10. Directors’ and officers’ insurance
10.1 If and to the extent such obligations are permitted by law, for six years after the Effective
Date, Wood Group shall procure that the members of the AMEC Group honour and fulfil
their respective obligations (if any) existing as at the date of this Agreement to indemnify
their respective directors and officers and to advance reasonable expenses, in each case
with respect to matters existing or occurring at or prior to the Effective Date.
10.2 Wood Group acknowledges that AMEC may purchase directors' and officers' liability
insurance cover with reputable insurers for both current and former directors and officers
of AMEC, including directors and officers who retire or whose employment is terminated
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as a result of the Combination, for acts and omissions up to and including the Effective
Date, in the form of runoff cover for a period of six years following the Effective Date, in
terms of amount and breadth substantially equal to that provided under the AMEC
directors' and officers' liability insurance as at the date of this Agreement.
11. Break Fee
11.1 By way of compensation for any loss or damage (including, but not limited to, incurring
substantial costs and expenses, lost opportunity costs, business dislocation, reputational
harm or adverse reaction) that may be suffered by AMEC on the occurrence of a Break
Fee Event, subject to Clauses 11.2 and 11.3, Wood Group shall pay, or shall procure the
payment by a member of the Wood Group Group of, the Break Fee to AMEC in the event
that, following the publication of the Announcement in accordance with Clause 2.1:
(A) with a vote having been held on the Wood Group Resolutions, such resolutions
are not passed by the Wood Group shareholders at the Wood Group General
Meeting;
(B) as at 5:00 p.m. on the Shareholder Approval Long Stop Date, no vote has been
held on the Wood Group Resolutions;
(C) Wood Group does not include the Wood Group Board Recommendation in the
Wood Group Circular when it is sent to the Wood Group shareholders;
(D) at, or prior to the start of, the Wood Group General Meeting (including any
adjournment thereof) a Wood Group Board Recommendation Change occurs;
(E) on or prior to the Long Stop Date, Wood Group invokes (and is permitted by the
Panel to invoke) any Merger Condition or Regulatory Condition so as to cause
the Combination not to proceed, to lapse or be withdrawn;
(F) the CMA refers the Combination to a second phase review with the effect that the
Combination lapses or terminates in accordance with Rule 12 of the Code; or
(G) a Merger Condition or Regulatory Condition has not been satisfied or waived by
Wood Group by 11.59 p.m. (London time) on the Long Stop Date resulting in the
Combination lapsing, terminating or being withdrawn,
(any such event being a “Break Fee Event”).
11.2 No Break Fee shall be payable if:
(A) before the time the Break Fee Event occurs or crystallises, any of the events
which gives Wood Group the right to serve notice to terminate and/or a
termination pursuant to Clauses 13.1(A), (B), (C), (D), (F) or (G) occurs, save
where:
(i) this Agreement has terminated pursuant to Clause 13.1(D) as a result of
any Merger Condition or Regulatory Condition: (a) being invoked by Wood
Group; (b) becoming incapable of satisfaction by the Long Stop Date and
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Wood Group stating that it will not be waived; or (c) not being capable of
being waived and becoming incapable of satisfaction by the Long Stop
Date; or
(ii) this Agreement has terminated pursuant to Clause 13.1(G) and the
Scheme (or the Offer as the case may be) has been withdrawn or lapsed
as a result of a Merger Condition or Regulatory Condition being: (a)
invoked by Wood Group; (b) becoming incapable of satisfaction by the
Long Stop Date and Wood Group stating that it will not be waived; or (c)
not being capable of being waived and becoming incapable of satisfaction
by the Long Stop Date;
(B) the Break Fee Event was caused to a material extent by AMEC’s failure to comply
with any of its obligations under Clause 3 and/or Clause 4, provided that, if such
failure is capable of remedy, Wood Group shall have notified AMEC in writing
promptly upon becoming aware of any such failure and AMEC shall not have
remedied any such failure within five Business Days of receipt of such notice or,
if earlier, in sufficient time for Wood Group to reasonably meet any regulatory or
legal deadline;
(C) the Break Fee Event was caused to a material extent by AMEC’s failure to provide
information, documentation, co-operation or access that it is required to provide
under Clause 6.5 or as otherwise may be required (in respect of AMEC) by reason
of applicable law or regulation (or by any regulator), including where such failure
has caused Wood Group to be unable to obtain the approval of the Financial
Conduct Authority for the Wood Group Circular and/or the Wood Group
Prospectus and post and/or publish the same in time to enable such vote to take
place prior to 5:00 p.m. on the Shareholder Approval Long Stop Date), provided
that, if such failure is capable of remedy, Wood Group shall have notified AMEC
in writing promptly upon becoming aware of any such failure and AMEC shall not
have remedied any such failure within five Business Days of receipt of such notice
or, if earlier, in sufficient time for Wood Group to reasonably meet any regulatory
or legal deadline;
(D) before the time that the Break Fee Event occurs or crystallises, Wood Group has
effected a Switch in accordance with Clauses 7.3(B) or 7.3(C);
(E) prior to publication of the Scheme Document (or the Offer Document, as the case
may be) or (if different) the document convening the AMEC General Meeting or
the Court Meeting, the AMEC Directors withdraw, qualify or adversely modify their
intention to give the AMEC Board Recommendation in any such document,
including making any public statement to such effect, or fail to publicly reaffirm or
re-issue a statement of their intention to make the AMEC Board Recommendation
on an unmodified and unqualified basis before 5:30 p.m. on the 10th Business
Day following Wood Group’s reasonable request to do so;
(F) the Scheme Document (or the Offer Document, as the case may be) or (if
different) the document convening the AMEC General Meeting or the Court
Meeting does not include the AMEC Board Recommendation; or
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(G) before the time that the Break Fee Event occurs or crystallises, the AMEC Board
Recommendation ceases to be unconditional or unanimous or is withdrawn,
qualified or adversely modified at any time.
11.3 No Break Fee shall be due in respect of a Break Fee Event under Clauses 11.1(B), (C)
or (D) if, after the time the Break Fee Event occurs or crystallises but before the
Combination lapses or is terminated, the Wood Group Resolutions are passed by the
Wood Group shareholders at the Wood Group General Meeting (and accordingly any
amount that has been previously paid by Wood Group in respect of Clauses 11.1(B), (C)
or (D) shall be repaid promptly by AMEC in such circumstances). This Clause 11.3 shall
survive termination of the Agreement.
11.4 Subject to Clause 11.5, Wood Group shall pay or procure the payment of the Break Fee
to AMEC within 10 Business Days of the occurrence of the Break Fee Event. Payment
shall be made in immediately available funds (without any deduction or withholding, save
only as required by law, and without regard to any lien, right of set-off, counterclaim or
otherwise) to such bank account as may be notified to Wood Group by AMEC for such
purpose.
11.5 The parties anticipate that the Break Fee should be outside the scope of VAT as a
compensation payment and the parties intend that, and shall use all reasonable
endeavours to ensure that, the Break Fee should not be treated for VAT purposes as the
consideration for a taxable supply. If, however, the Break Fee is treated by any tax
authority in whole or in part as the consideration for a taxable supply in respect of which
AMEC (or the representative member of the VAT group of which AMEC is a member) is
liable to account for VAT, then, subject to Clause 12.2(C), (i) AMEC shall provide Wood
Group with a valid VAT invoice in respect of that supply; and (ii) Wood Group shall, subject
to the receipt of a valid VAT invoice, no later than five Business Days before the date on
which AMEC (or the representative member of the VAT group of which AMEC is a
member) is liable to account for such VAT (the “Due Date”) or, if later, the date falling five
Business Days after AMEC has notified Wood Group in writing of the Due Date, pay to
AMEC an additional amount equal to the VAT for which AMEC (or such representative
member) is so liable.
11.6 In the event that the Break Fee has been paid in accordance with this Clause 11, and this
Agreement has been terminated in accordance with Clause 13.1(E), then, except with
respect to fraud, AMEC’s right to receive the Break Fee shall be the sole and exclusive
remedy of AMEC against Wood Group for any and all losses and damages suffered in
connection with this Agreement and the transactions contemplated by this Agreement. In
no event shall Wood Group be required to pay the Break Fee more than once or pay more
than one Break Fee.
12. Code and the Listing Rules
12.1 Nothing in this Agreement shall in any way limit the parties’ obligations under the Code,
and any uncontested rulings of the Panel as to the application of the Code in conflict with
the terms of this Agreement shall take precedence over such terms.
12.2 Nothing in this Agreement shall oblige:
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(A) AMEC to take any action which the Panel determines would not be permitted by
Rule 21.2 of the Code;
(B) AMEC or the AMEC Directors to recommend an Offer or a Scheme proposed by
Wood Group or any member of the Wood Group Group; or
(C) Wood Group to pay any amount over that which is permitted to be paid without
the prior approval of its shareholders pursuant to LR 10.2.7R of the Listing Rules.
13. Termination
13.1 Subject to Clauses 13.2 and 13.3, this Agreement shall terminate with immediate effect
and all rights and obligations of the parties under the Agreement shall cease forthwith, as
follows:
(A) if:
(i) agreed in writing between the parties; or
(ii) the Announcement is not released at or before the time specified in
Clause 2.1 (unless prior to that time the parties have agreed another time
and date in accordance with that clause);
(B) upon service of written notice by Wood Group to AMEC if one or more of the
following occurs:
(i) the Scheme Document (or Offer Document, as the case may be) or (if
different) the document convening the AMEC General Meeting or the
Court Meeting does not include the AMEC Board Recommendation, or
AMEC makes an announcement prior to the publication of such
document(s) that: (a) the AMEC Directors no longer intend to make such
recommendation or intend to qualify or adversely modify such
recommendation; (b) it will not convene the Court Meeting or the AMEC
General Meeting; or (c) it does not intend to post the Scheme Document
or (if different) the document convening the AMEC General Meeting; or
(ii) at any time after the date of this Agreement up to the time all the AMEC
Resolutions have been duly passed, the AMEC Directors withdraw,
qualify or adversely modify the AMEC Board Recommendation or fail to
publicly reaffirm or re-issue such unanimous and unqualified
recommendation (or, in the period prior to publication of the Scheme
Document (or the Offer Document, as the case may be) or (if different)
the document convening the AMEC General Meeting or the Court
Meeting, withdraw, qualify or adversely modify their intention to give the
AMEC Board Recommendation in any such document, including making
any public statement to such effect, or fail to publicly reaffirm or re-issue
a statement of their intention to make the AMEC Board Recommendation
on an unmodified and unqualified basis) before the earlier of (a) 5:30 p.m.
on the 10th Business Day following Wood Group’s reasonable request to
do so, or (b) the time of the start of the AMEC General Meeting (it being
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understood that the issue of any holding statement(s) issued to AMEC
shareholders following a change of circumstances (so long as any such
holding statement contains an express statement that such
recommendation is not withdrawn, qualified or modified and does not
contain a statement that the AMEC Directors intend to withdraw, qualify
or adversely modify such recommendation) shall not constitute a
withdrawal, qualification or modification of such recommendation for
purposes of this Clause);
(C) upon service of written notice by Wood Group to AMEC, if the Combination is
being implemented by way of the Scheme and:
(i) the Scheme Document is not posted by the Extended Date (other than in
circumstances where the same is caused by a breach by Wood Group of
Clause 5);
(ii) the Court Meeting or the AMEC General Meeting is not held on or before
the later of (i) the 22nd day after the expected date of such meetings as
set out in the Scheme Document; and (ii) the Shareholder Approval Long
Stop Date (or such later date as may be agreed between the parties with
the consent of the Panel and the approval of the Court (if such approval
is required));
(iii) the Sanction Hearing is not held on or before the later of (i) the 22nd day
after the expected date of such hearing as set out in the Scheme
Document; and (ii) thirty days after all the Conditions (other than the
Scheme Condition) have been satisfied or waived (or such later date as
may be agreed between the parties with the consent of the Panel and the
approval of the Court (if such approval is required));
(iv) the Scheme is not approved by the requisite majority of the AMEC
shareholders at the Court Meeting or the relevant resolutions are not
passed by the requisite majority of the AMEC shareholders at the AMEC
General Meeting; or
(v) the Court refuses to sanction the Scheme or grant the Scheme Order;
(D) upon service of written notice by Wood Group to AMEC stating that any Condition
which has not been waived is (or has become) incapable of satisfaction by the
Long Stop Date and, notwithstanding that it has the right to waive such Condition,
Wood Group will not do so, or if any Condition which is incapable of waiver
becomes incapable of satisfaction by the Long Stop Date, in each case in
circumstances where the invocation of the relevant Condition (or confirmation
that the Condition is incapable of satisfaction, as appropriate) is permitted by the
Panel;
(E) upon service of written notice by either party following a Break Fee Event;
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(F) upon service of written notice by Wood Group to AMEC, if a Competing Proposal:
(i) completes, becomes effective, or is declared or becomes unconditional in all
respects; or (ii) is recommended in whole or in part by the AMEC Directors;
(G) if the Scheme (or the Offer as the case may be) is withdrawn or lapses prior to
the Long Stop Date (other than where such lapse or withdrawal: (i) is as a result
of the exercise of Wood Group’s right to effect a Switch or (ii) is otherwise to be
followed within five Business Days by an announcement under Rule 2.7 of the
Code made by Wood Group or a person acting in concert with Wood Group to
implement the Combination by a different offer or scheme on substantially the
same or improved terms); or
(H) the Scheme has not become effective (or, if Wood Group implements the
Combination by way of the Offer, the Offer has not become unconditional) by the
Long Stop Date.
13.2 Termination of this Agreement shall be without prejudice to the rights of any of the parties
which have arisen before termination. For the avoidance of doubt, if the Agreement is
terminated pursuant to Clause 13.1, Wood Group will remain obliged to pay the Break
Fee to the extent that it had become due and payable at or prior to any such termination
(subject to the provisions of the Agreement then in force) on the occurrence of the Break
Fee Event.
13.3 The whole of this Clause 13, Clause 9 and Schedule 1 (but only in circumstances where
this Agreement is terminated on or after the Effective Date), Clause 10 (but only in
circumstances where this Agreement is terminated on or after the Effective Date),
Clauses 11.3 and 11.6 and Clauses 14 to 26 shall survive termination of this Agreement.
14. Representations and Warranties
14.1 Each party represents to the other party on the date of this Agreement that:
(A) it has the requisite power and authority to enter into and perform its obligations
under this Agreement;
(B) this Agreement constitutes its binding obligations in accordance with its terms;
and
(C) the execution and delivery of, and performance of its obligations under, this
Agreement will not:
(i) result in any breach of any provision of its constitutional documents;
(ii) result in a breach of, or constitute a default under, any instrument to which
it is a party or by which it is bound; or
(iii) result in a breach of any order, judgment, or decree of any court or
governmental agency to which it is a party or by which it is bound.
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14.2 Wood Group represents to AMEC that as at the date of this Agreement, that the only
Wood Group shareholder resolutions that are required to implement the Combination are
ordinary resolutions and no special resolutions are required.
15. Notices
15.1 A notice under this Agreement shall only be effective if it is in writing.
15.2 Notices under this Agreement shall be sent to a party by hand delivery or reputable
international courier or by facsimile or by email at its physical address or facsimile number
or email address respectively, and shall be marked for the attention of the individual set
out below:
(A) Wood Group:
Attention: Martin McIntyre
Physical address: 15 Justice Mill Lane
Aberdeen
AB11 6EQ
Email address: [email protected]
with a copy to:
Attention: William Setter
Physical address: 15 Justice Mill Lane
Aberdeen
AB11 6EQ
Email address: [email protected]
(B) AMEC:
Attention: Alison Yapp (General Counsel and Company Secretary)
Physical address: Booths Park
Chelford Road
Knutsford Road
Cheshire WA16 8QZ
United Kingdom
Fax number: +44 (0) 1565 683 200
Email address: [email protected]
with a copy to:
Attention: Aedamar Comiskey and James Inglis
Physical address: Linklaters LLP
One Silk Street
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London EC2Y 8HQ
United Kingdom
Fax number: +44 (0)20 7456 2222
Email address: [email protected]
15.3 A party may change its notice details on giving notice to the other party of the change in
accordance with Clauses 15.1 and 15.2. That notice shall only be effective on the date
falling one Business Day after the notification has been received or such later date as
may be specified in the notice.
15.4 Any notice given under this Agreement shall, in the absence of earlier receipt, be deemed
to have been duly given:
(A) if delivered by hand, on delivery;
(B) if sent by reputable international courier, on signature of a delivery receipt;
(C) if sent by facsimile, when the sender’s facsimile system generates a message
confirming successful transmission of the notice; or
(D) if sent by email, when sent.
15.5 Any notice given under this Agreement outside the period between 9:00 a.m. and 5:00
p.m. (“Working Hours”) shall be deemed not to have been given until the start of the next
period of Working Hours.
15.6 Each party shall, where it sends a notice by facsimile or email to the other party, within
two Business Days send a hard copy of the relevant notice via hand delivery or reputable
international courier to the physical address of the other party.
15.7 The provisions of this Clause 15 shall not apply in relation to the service of any claim
form, application notice, order, judgment or other document relating to any proceedings,
suit or action arising out of or in connection with this Agreement, whether contractual or
non-contractual.
16. Remedies and waivers
16.1 No delay or omission by any party to this Agreement in exercising any right, power or
remedy provided by law or under this Agreement shall:
(A) affect that right, power or remedy; or
(B) operate as a waiver of it.
16.2 The single or partial exercise of any right, power or remedy provided by law or under this
Agreement shall not preclude any other or further exercise of it or the exercise of any
other right, power or remedy.
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16.3 The rights, powers and remedies provided in this Agreement are cumulative and not
exclusive of any rights, powers and remedies provided by law.
16.4 Without prejudice to Clause 11.6 and to any other rights and remedies which either party
may have, each party acknowledges and agrees that damages alone may not be an
adequate remedy for any breach by either party of the provisions of this Agreement and
either party shall be entitled to seek the remedies of injunction, specific performance and
other equitable remedies, for any threatened or actual breach of any such provision of
this Agreement by either party and no proof of special damages shall be necessary for
the enforcement by either party of the rights under this Agreement.
17. Variation
No variation of this Agreement shall be valid unless it is in writing (which, for this purpose,
does not include email) and signed by or on behalf of each of the parties.
18. Invalidity
18.1 The parties agree that, if the Panel determines that any provision of this Agreement that
requires AMEC to take or not take action, whether as a direct obligation or as a condition
to any other person’s obligation (howsoever expressed), is not permitted by Rule 21.2 of
the Code, that provision shall have no effect and shall be disregarded.
18.2 If at any time any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, that shall not affect or
impair:
(A) the legality, validity or enforceability in that jurisdiction of any other provision of
this Agreement; or
(B) the legality, validity or enforceability under the law of any other jurisdiction of that
or any other provision of this Agreement.
19. Entire Agreement
19.1 Save for the non-disclosure agreement between Wood Group and AMEC dated 3 March
2017, the clean team agreement dated 5 March 2017 and the joint defence agreement
dated 6 March 2017 (each of which remains in force), this Agreement constitutes the
whole and only agreement between the parties relating to the Combination and
supersedes any previous agreement whether written or oral between the parties in
relation to the Combination.
19.2 Except in the case of fraud, each party acknowledges that it is entering into this
Agreement in reliance upon only this Agreement and that it is not relying upon any pre-
contractual statement that is not set out in this Agreement.
19.3 Except in the case of fraud, no party shall have any right of action against the other party
arising out of or in connection with any pre-contractual statement except to the extent that
it is repeated in this Agreement.
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19.4 For the purposes of this Clause 19, “pre-contractual statement” means any draft,
agreement, undertaking, representation, warranty, promise, assurance or arrangement of
any nature whatsoever, whether or not in writing, relating to the subject matter of this
Agreement made or given by any person at any time before the date of this Agreement.
20. Language
Each notice or other communication under or in connection with this Agreement shall be
in English.
21. Contracts (Rights of Third Parties) Act 1999
Save for Clause 10.1, which is intended to be enforceable by the third parties named
therein, the parties do not intend that any term of this Agreement should be enforceable,
by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a
party to this Agreement.
22. Assignment
No party shall be entitled to assign (whether absolutely or by way of security and whether
in whole or in part), transfer, mortgage, charge, declare itself a trustee for a third party of,
or otherwise dispose of (in any manner whatsoever) the benefit of this Agreement (or any
part of it) or sub-contract in any manner whatsoever its performance under this Agreement
without the prior written consent of the other party.
23. Costs and expenses
Each party shall pay its own costs and expenses in relation to the negotiation,
preparation, execution and carrying into effect of this Agreement and any matter
contemplated by it.
24. Further assurance
Each party shall, at its own cost, use reasonable endeavours to, or procure the doing of
all acts that any relevant third party shall, do and execute and perform all such further
deeds, documents, assurances, acts and things as may reasonably be required to give
effect to this Agreement.
25. Counterparts
25.1 This Agreement may be executed in any number of counterparts, and by the parties on
separate counterparts, but shall not be effective until each party has executed at least
one counterpart.
25.2 Each counterpart shall constitute an original of this Agreement, but all the counterparts
shall together constitute but one and the same instrument.
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26. Governing law and jurisdiction
26.1 This Agreement is to be governed by and construed in accordance with English law. Any
matter, claim or dispute arising out of or in connection with this Agreement, whether
contractual or non-contractual, is to be governed by and determined in accordance with
English law.
26.2 The parties irrevocably submit to the exclusive jurisdiction of the courts of England and
Wales in respect of any matter, claim or dispute arising out of or in connection with this
Agreement, whether contractual or non-contractual.
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IN WITNESS WHEREOF the parties have executed this Agreement on the date first set out
above:
EXECUTED BY
acting for and on behalf of
John Wood Group PLC
)
)
)
)
)
)
David Kemp
EXECUTED BY
acting for and on behalf of
AMEC Foster Wheeler plc
)
)
)
)
)
)
John Connolly
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SCHEDULE 1
Employee-related Matters
1 Share plans
1.1 Operation of AMEC Share Plans prior to the Effective Date
1.1.1 Wood Group acknowledges and agrees that, prior to the Effective Date, the
directors of AMEC (and, where appropriate, the AMEC Remuneration Committee
or its delegate(s)) may operate the AMEC Share Plans as they consider
appropriate in accordance with the rules of the relevant AMEC Share Plan and
AMEC’ normal practice which may be modified as the AMEC Remuneration
Committee reasonably considers appropriate to take account of the Combination
or any change in regulation, and always subject to Rule 21.1 of the Code. For the
avoidance of doubt, operate includes (without limitation):
(i) determining the terms of and granting new awards and/or making cash
awards in lieu of granting new share-based awards;
(ii) making an invitation and granting new awards under the Sharesave Plans;
(iii) satisfying the vesting, exercise and release of awards (and any related
dividend equivalent entitlements) by issuing new shares, transferring (or
directing the transfer of) market purchase or treasury shares or paying
cash of equivalent value;
(iv) determining the treatment of awards for leavers; and
(v) making any amendments to the plan rules which under the plan rules
would not have required the approval of AMEC’ shareholders.
1.2 Treatment of awards in connection with the Combination
1.2.1 AMEC confirms that the following options and awards are outstanding under the
AMEC Share Plans or other employee incentive arrangements as at 9 March
2017:
AMEC Share Plan Number of AMEC Shares subject to
outstanding options / awards
Long-Term Incentive Plan
2015
6,090,270
Performance Share Plan 862,565
Restricted Share Plan 256,889
Sharesave Plans 6,652,731
Recruitment award to AMEC
Chief Executive
68,681
One-off awards below board 59,000
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Omnibus Plan 18,609 (vested option)
1.2.2 Wood Group acknowledges and agrees that the AMEC Remuneration Committee
may determine the treatment of outstanding awards under the AMEC Share Plans
prior to the Effective Date in accordance with the rules of the applicable plan and,
where relevant, AMEC’ directors’ remuneration policy. Wood Group further
acknowledges and agrees that in accordance with the rules of the relevant AMEC
Share Plan and, where relevant, AMEC’ directors’ remuneration policy,
outstanding awards which are unvested or not exercisable immediately before the
Sanction Hearing will vest, be released or become exercisable at the time of the
Sanction Hearing as determined by the AMEC Remuneration Committee, subject
to the following agreed principles:
(i) the vesting of awards granted under or on terms similar to the AMEC Long-
Term Incentive Plan 2015 prior to the date of this Agreement will not be
subject to time pro-rating;
(ii) the vesting of awards granted under the AMEC Long-Term Incentive Plan
2015 after the date of this Agreement will be subject to time pro-rating,
and such time pro-rating will be calculated on a whole year basis, rounding
up to the next anniversary of the grant date; and
(iii) where applicable, the vesting of awards granted under or on similar terms
to the AMEC Long-Term Incentive Plan 2015 will be subject to the
satisfaction of performance condition(s) as determined by the AMEC
Remuneration Committee in its discretion, which may include determining
performance based on a single performance condition.
1.2.3 To the extent the vesting of an award granted under the AMEC Long-Term
Incentive Plan 2015 after the date of this Agreement is reduced due to time pro-
rating in accordance with paragraph 1.2.2(ii) above (before, for the avoidance of
doubt, the assessment of any applicable performance condition(s)), AMEC and
Wood Group agree that as soon as practicable after the Effective Date participants
will receive an award of equivalent value over Wood Group shares (“Transition
Awards”). AMEC and Wood Group will co-operate with each other in good faith
to agree, prior to the Effective Date, the mechanics for making (which may include
agreeing a mandatory rollover under the AMEC Long-Term Incentive Plan 2015)
and the terms of the Transition Awards, provided always:
(i) the vesting schedule applicable to the Transition Awards will mirror the
vesting schedule applicable to the original awards granted under the
AMEC Long-Term Incentive Plan 2015; and
(ii) where original awards granted under the AMEC Long-Term Incentive Plan
2015 were subject to performance conditions, the related Transition
Awards will be subject to such performance conditions as agreed between
the parties prior to the Effective Date.
1.2.4 Wood Group agrees it shall offer each holder of an outstanding option or SAR
under the Sharesave Plans the opportunity to exchange his/her option/SAR over
AMEC Shares for an equivalent option/SAR over Wood Group Shares, such
options/SARs to be subject to the terms and conditions of the AMEC Sharesave
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Plans. Wood Group agrees to take all reasonable steps to ensure the exchange
will be structured in such a way as to ensure that, wherever relevant, the tax-
favourable status of any options/SAR is preserved.
1.2.5 AMEC and Wood Group agree that the Scheme Record Time shall take place
after the day of the Sanction Hearing to allow those participants in AMEC Share
Plans who acquire AMEC Shares on or before the day of the Sanction Hearing to
have those AMEC Shares acquired by Wood Group through the Scheme.
1.2.6 Vesting, exercise and settlement under the AMEC Share Plans as described
herein will be subject to the usual deductions for applicable taxes and national
insurance and similar social security deductions or contributions.
1.3 The Trust
The AMEC employee benefit trust (the “Trust”) currently holds 791,482 unallocated AMEC
Shares. Subject always to AMEC’ ability to make recommendations to the trustee of the
Trust to use the unallocated AMEC Shares held in the Trust to satisfy awards vesting or
options being exercised in the normal course, the parties agree that the trustee of the
Trust will be requested to agree to satisfy any awards or options vesting or being exercised
prior to the Effective Date using any unallocated AMEC Shares in priority to AMEC issuing
AMEC Shares to satisfy such awards and options.
1.4 Employee communications and participation in the Combination
1.4.1 AMEC agrees it shall:
(i) prepare, in a form to be agreed between AMEC and Wood Group, letters
(which may be in electronic form) to be sent jointly from AMEC and Wood
Group to participants in the AMEC Share Plans; and
(ii) arrange the delivery of such letters at the same time as, or as soon as
reasonably practicable after, the posting of the Scheme Document (or
such later time as the parties and the Takeover Panel may agree).
The letters will explain to participants the impact of the Combination on rights held
under the relevant AMEC Share Plans and any AMEC Shares they may receive
in respect of such rights, explain Wood Group’s “rule 15 proposals” and highlight
any action they may wish to take in anticipation of or in connection with the
Combination / Wood Group’s “rule 15 proposals”.
1.4.2 AMEC and Wood Group agree the AMEC Resolutions shall include a resolution
proposing an amendment to the AMEC articles of association by the adoption and
inclusion of a new article under which any AMEC Shares issued after the AMEC
General Meeting shall either be subject to the Scheme or (after the Effective Date)
shall be immediately transferred to Wood Group (or as it may direct) in exchange
for the same consideration to be paid by Wood Group as is due under the Scheme.
2 Employment and retention matters
2.1 Ordinary course of business arrangements
Wood Group acknowledges and agrees that prior to the Effective Date the AMEC Group
will carry out annual (or other periodic) pay reviews and appraisals, promotion rounds,
and bonus determinations in the ordinary course of business.
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2.2 Annual bonus
2.2.1 Bonus determinations for any financial year completed before the Effective Date
will be undertaken by the AMEC Group and determined (i) for executive directors
of AMEC, in accordance with its directors’ remuneration policy; and (ii) for all other
employees, in accordance with the AMEC Group’s normal practice. Any such
bonuses which are due and payable but which have not been paid at the Effective
Date will be paid on or immediately following the Effective Date.
2.2.2 Without prejudice to (i) any bonus arrangements in place at the date of this
Agreement which are more favourable to the participant(s) than the arrangements
set out in this paragraph 2.2.2 and paragraph 2.2.3 and (ii) to any project-specific
bonus arrangements which are payable in addition to any annual bonus
arrangements, bonus determinations for the financial year in which the Effective
Date occurs will be undertaken by the AMEC Group, determined:
(i) for the executive directors of AMEC, in accordance with its directors’
remuneration policy; and
(ii) for all other employees of the AMEC Group, on its reasonable assessment
of actual bonus outcomes for the period in question having regard to
applicable targets and the financial information available to it at the time,
in each case, on a pro rata basis to the Effective Date, save that where the
Effective Date occurs in the last quarter of the financial year no pro-rating will be
applied to any such bonus. Any such bonuses will be paid on, or immediately
following, the Effective Date and will not be subject to any deferral requirements
or clawback provisions.
2.2.3 Notwithstanding paragraph 2.2.2 above, AMEC will, after the end of the financial
year in which the Effective Date occurs, calculate bonus outcomes for all
employees for that year based on actual performance under the applicable AMEC
plan in accordance with its normal practice and having regard to any applicable
targets unless the employee moves to a Wood Group plan for the balance of the
financial year in which case bonus outcomes for that “stub” period will be
determined in accordance with the Wood Group plan in question. Where the
actual bonus outcome for (i) any employee who remains in the employment of the
Combined Group as at 31 December of the year in which the Effective Date
occurred; or (ii) any person who left after the Effective Date but before 31
December by reason of a Qualifying Termination, exceeds the amount paid
pursuant to paragraph 2.2.2 above, that person will receive a “top-up” payment
representing the difference between the amount paid on the Effective Date and
the actual outcome (save that for any person who left after the Effective Date but
before the start of the last quarter of the financial year by reason of a Qualifying
Termination, the “top-up” will be pro-rated to reflect the period of the financial year
served). In the event that any amount paid pursuant to paragraph 2.2.2 exceeds
any amount payable under this paragraph 2.2.3, the employee will not be required
to make any repayment.
2.3 Retention arrangements
2.3.1 The AMEC Group intends to put in place for the benefit of certain employees of
the AMEC Group, other than executive directors of AMEC, cash retention
payments payable in September 2018 or, if earlier, six months after the Effective
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Date, the total budget for which will be an amount up to but not exceeding £10
million. Subject to paragraph 2.3.2, each payment is conditional only on: (i) the
employee's satisfactory performance to the relevant payment date; (ii) the
employee not having resigned prior to the date of payment (other than by reason
of a Qualifying Termination); and (iii) the employee not having been dismissed "for
cause" or other serious misconduct (or not being under notice of termination "for
cause" or other serious misconduct from the relevant employing entity in the
AMEC Group) before the date of payment.
2.3.2 In the event of a Qualifying Termination of an employee in receipt of a retention
arrangement described in paragraph 2.3.1 after the Effective Date, any retention
payment which would otherwise have been payable after the termination date will
be paid on termination.
2.3.3 Wood Group confirms that it will not object to the arrangement outlined in this
paragraph 2.3. Without prejudice to this arrangement, Wood Group and AMEC
may put in place such additional retention and/or Combination and/or integration
bonus arrangements as may be agreed between them from time to time.
2.4 Integration planning
2.4.1 Wood Group and AMEC recognise that completion of the Combination may result
in an integration and restructuring process for the Combined Group (together the
“Restructuring”) with consequent redundancies and other terminations. Wood
Group and AMEC will work together in good faith to agree remuneration principles
which are equitable for employees from each of the Wood Group Group and the
AMEC Group (including but not limited to severance arrangements, any further
retention arrangements and integration and/or transaction bonuses).
2.5 Continuing employment
2.5.1 Wood Group will, on and following the Effective Date, fully observe the existing
contractual and statutory employment rights, including in relation to pensions, of
the AMEC Group’s management and employees in accordance with applicable
law.
2.5.2 For at least 12 months following the Effective Date Wood Group agrees that in
respect of each AMEC employee immediately prior to the Effective Date who
remains in employment within the Combined Group it will maintain base pay, total
variable compensation opportunity (including but not limited to annual bonus
targets, maximum bonus opportunity and long term incentive opportunity),
benefits and allowances, redundancy and severance arrangements (provided
they are either contractual or an established long-term practice of AMEC) or any
terms relating to pension accrual or contributions, and it will not amend any
material terms of any employee’s contract of employment (whether or not in
writing) to the detriment of that employee (other than with the agreement of the
employee).
2.5.3 If any AMEC Group benefit plans in place immediately before the Effective Date
are terminated after the Effective Date, Wood Group will ensure that employees
of the AMEC Group are eligible to participate in Wood Group’s benefit
arrangements on at least the same basis as similarly situated employees of Wood
Group. In respect of such new arrangements, Wood Group will also ensure that
(i) any accrued service with the AMEC Group is recognised; (ii) applicable waiting
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periods are waived; (iii) any pre-existing condition limitations are waived; and (iv)
where dependants of employees are provided with coverage under schemes
operated by the AMEC Group, such dependants are provided with cover under
Wood Group schemes. Where, as at the date of this Agreement, members of
AMEC Group are providing benefits to former employees or have obligations to
provide such benefits to current employees following the termination of their
employment, Wood Group will honour such arrangements.
2.6 Financial year
In this schedule, references to a financial year are to any period of 12 months commencing
on 1 January.
3 General
3.1.1 Wood Group shall, for a period of not less than 12 months post-the Effective Date,
maintain the corporate-sponsored nominee shareholding and share dealing
service (or provide a service of an equivalent level) that AMEC provides to its
employees and former employees as at the date of this Agreement.
3.1.2 If the Combination is to be effected by way of an Offer rather than a Scheme, all
arrangements set out in this Schedule shall continue to apply, save for any
modifications necessary to reflect the mechanics of the Offer or the requirements
of the AMEC directors’ remuneration policy. AMEC and Wood Group shall co-
operate in good faith to determine what modifications are required in order to give
effect to the intentions of parties as set out in this Schedule.
3.1.3 The provisions of this Schedule will apply to all employees of the AMEC Group
whilst they remain in the employment of a member of the combined AMEC Group
and Wood Group Group including but not limited to those who will cease to be
employed by members of the AMEC Group as a consequence of any agreement
reached by AMEC prior to the Effective Date to dispose of the business in which
they work and where completion of the transaction to effect that agreement does
not occur until after the Effective Date of this Combination.
3.1.4 A “Qualifying Termination” is any termination of employment by the applicable
employer by reason of redundancy, restructuring or reorganisation (and for the
avoidance of doubt excluding a termination “for cause” or other serious
misconduct), and a termination by reason of the employee’s resignation where he
is found by a court of competent jurisdiction to have been, or his employer agrees
that he has been, dismissed in circumstances amounting to constructive
dismissal.
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SCHEDULE 2
Form of Announcement