EQT CORPORATION
UNAUDITED PRO FORMA STATEMENT OF COMBINED OPERATIONS
SIX MONTHS ENDED JUNE 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT
Historical
|
|
Rice Energy
Historical
|
|
Pro Forma
Adjustments
|
|
|
|
EQT Pro Forma
Combined
|
|
|
|
(Thousands, except per unit amounts)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of natural gas, oil and NGLs
|
|
$
|
1,250,179
|
|
$
|
705,726
|
|
$
|
|
|
|
|
$
|
1,955,905
|
|
Pipeline and net marketing services
|
|
|
151,169
|
|
|
|
|
|
(19,881
|
)
|
(b)
|
|
|
217,675
|
|
|
|
|
|
|
|
|
|
|
86,387
|
|
(j)
|
|
|
|
|
Gain (loss) on derivatives not designated as hedges
|
|
|
187,068
|
|
|
|
|
|
88,779
|
|
(j)
|
|
|
275,847
|
|
Gathering, compression and water distribution
|
|
|
|
|
|
68,408
|
|
|
(68,408
|
)
|
(j)
|
|
|
|
|
Other revenue
|
|
|
|
|
|
17,979
|
|
|
(17,979
|
)
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
1,588,416
|
|
|
792,113
|
|
|
68,898
|
|
|
|
|
2,449,427
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation and processing
|
|
|
268,524
|
|
|
78,557
|
|
|
(19,881
|
)
|
(b)
|
|
|
327,200
|
|
Operation and maintenance
|
|
|
40,867
|
|
|
14,998
|
|
|
|
|
|
|
|
55,865
|
|
Production
|
|
|
90,182
|
|
|
12,832
|
|
|
40,294
|
|
(j)
|
|
|
143,308
|
|
Exploration
|
|
|
6,603
|
|
|
11,118
|
|
|
|
|
|
|
|
17,721
|
|
Selling, general and administrative
|
|
|
129,067
|
|
|
73,050
|
|
|
10,298
|
|
(j)
|
|
|
207,177
|
|
|
|
|
|
|
|
|
|
|
(5,238
|
)
|
(d)
|
|
|
|
|
Depreciation, depletion, and amortization
|
|
|
472,735
|
|
|
282,782
|
|
|
39,001
|
|
(f)
|
|
|
794,518
|
|
Impairment of long-lived assets
|
|
|
|
|
|
92,355
|
|
|
|
|
|
|
|
92,355
|
|
Lease operating
|
|
|
|
|
|
40,294
|
|
|
(40,294
|
)
|
(j)
|
|
|
|
|
Incentive unit expense
|
|
|
|
|
|
7,683
|
|
|
(7,683
|
)
|
(j)
|
|
|
|
|
Acquisition expense
|
|
|
|
|
|
2,615
|
|
|
(2,615
|
)
|
(j)
|
|
|
|
|
Other expense
|
|
|
|
|
|
19,365
|
|
|
|
|
|
|
|
19,365
|
|
Amortization of intangible assets
|
|
|
|
|
|
808
|
|
|
17,775
|
|
(g)
|
|
|
18,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
1,007,978
|
|
|
636,457
|
|
|
31,657
|
|
|
|
|
1,676,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
580,438
|
|
|
155,656
|
|
|
37,241
|
|
|
|
|
773,335
|
|
Other income
|
|
|
10,019
|
|
|
453
|
|
|
|
|
|
|
|
10,472
|
|
Interest expense
|
|
|
86,733
|
|
|
54,292
|
|
|
(878
|
)
|
(c)
|
|
|
141,429
|
|
|
|
|
|
|
|
|
|
|
(817
|
)
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,099
|
|
(j)
|
|
|
|
|
Gain on derivative instruments
|
|
|
|
|
|
88,779
|
|
|
(88,779
|
)
|
(j)
|
|
|
|
|
Loss on embedded derivatives
|
|
|
|
|
|
15,417
|
|
|
(15,417
|
)
|
(h)
|
|
|
|
|
Amortization of deferred financing costs
|
|
|
|
|
|
6,078
|
|
|
(3,979
|
)
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,099
|
)
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
503,724
|
|
|
169,101
|
|
|
(30,447
|
)
|
|
|
|
642,378
|
|
Income tax expense (benefit)
|
|
|
130,374
|
|
|
33,341
|
|
|
(1,538
|
)
|
(i)
|
|
|
162,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
373,350
|
|
|
135,760
|
|
|
(28,909
|
)
|
|
|
|
480,201
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(168,232
|
)
|
|
(78,533
|
)
|
|
16,841
|
|
(e)
|
|
|
(220,193
|
)
|
|
|
|
|
|
|
|
|
|
5,316
|
|
(f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,415
|
|
(g)
|
|
|
|
|
Less: Preferred dividends and accretion of redeemable noncontrolling interests
|
|
|
|
|
|
(28,988
|
)
|
|
28,988
|
|
(h)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to EQT Corporation
|
|
$
|
205,118
|
|
$
|
28,239
|
|
$
|
26,651
|
|
|
|
$
|
260,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock attributable to EQT Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
173,320
|
|
|
|
|
|
92,198
|
|
(a)
|
|
|
265,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.18
|
|
|
|
|
$
|
|
|
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
173,525
|
|
|
|
|
|
92,198
|
|
(a)
|
|
|
265,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.18
|
|
|
|
|
$
|
|
|
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.06
|
|
$
|
|
|
$
|
|
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to unaudited pro forma condensed combined financial statements.
168
Table of Contents
EQT CORPORATION
UNAUDITED PRO FORMA STATEMENT OF COMBINED OPERATIONS
YEAR ENDED DECEMBER 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT
Historical
|
|
Rice Energy
Pro Forma
(Note 3)
|
|
Pro Forma
Adjustments
|
|
|
|
EQT Pro Forma
Combined
|
|
|
|
(Thousands, except per unit amounts)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of natural gas, oil and NGLs
|
|
$
|
1,594,997
|
|
$
|
796,735
|
|
$
|
|
|
|
|
$
|
2,391,732
|
|
Pipeline and net marketing services
|
|
|
262,342
|
|
|
|
|
|
(41,493
|
)
|
(b)
|
|
|
359,753
|
|
|
|
|
|
|
|
|
|
|
138,904
|
|
(j)
|
|
|
|
|
(Loss) on derivatives not designated as hedges
|
|
|
(248,991
|
)
|
|
|
|
|
(213,889
|
)
|
(j)
|
|
|
(462,880
|
)
|
Gathering, compression and water services
|
|
|
|
|
|
114,496
|
|
|
(114,496
|
)
|
(j)
|
|
|
|
|
Other revenue
|
|
|
|
|
|
24,408
|
|
|
(24,408
|
)
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
1,608,348
|
|
|
935,639
|
|
|
(255,382
|
)
|
|
|
|
2,288,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation and processing
|
|
|
365,817
|
|
|
144,576
|
|
|
(41,493
|
)
|
(b)
|
|
|
468,900
|
|
Operation and maintenance
|
|
|
73,266
|
|
|
28,898
|
|
|
|
|
|
|
|
102,164
|
|
Production
|
|
|
174,826
|
|
|
21,173
|
|
|
63,578
|
|
(j)
|
|
|
259,577
|
|
Exploration
|
|
|
13,410
|
|
|
21,434
|
|
|
|
|
|
|
|
34,844
|
|
Selling, general and administrative
|
|
|
272,747
|
|
|
131,489
|
|
|
57,870
|
|
(j)
|
|
|
462,106
|
|
Depreciation, depletion, and amortization
|
|
|
927,920
|
|
|
469,837
|
|
|
194,607
|
|
(f)
|
|
|
1,592,364
|
|
Impairment of long-lived assets
|
|
|
66,687
|
|
|
23,057
|
|
|
20,853
|
|
(j)
|
|
|
110,597
|
|
Lease operating
|
|
|
|
|
|
63,578
|
|
|
(63,578
|
)
|
(j)
|
|
|
|
|
Incentive unit expense
|
|
|
|
|
|
51,761
|
|
|
(51,761
|
)
|
(j)
|
|
|
|
|
Acquisition expense
|
|
|
|
|
|
6,109
|
|
|
(6,109
|
)
|
(j)
|
|
|
|
|
Other expense
|
|
|
|
|
|
28,039
|
|
|
|
|
|
|
|
28,039
|
|
Amortization of intangible assets
|
|
|
|
|
|
1,634
|
|
|
35,533
|
|
(g)
|
|
|
37,167
|
|
Impairment of gas properties
|
|
|
|
|
|
20,853
|
|
|
(20,853
|
)
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
1,894,673
|
|
|
1,012,438
|
|
|
188,647
|
|
|
|
|
3,095,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale / exchange of assets
|
|
|
8,025
|
|
|
|
|
|
|
|
|
|
|
8,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
|
|
|
(278,300
|
)
|
|
(76,799
|
)
|
|
(444,029
|
)
|
|
|
|
(799,128
|
)
|
Other income
|
|
|
31,693
|
|
|
1,268
|
|
|
|
|
|
|
|
32,961
|
|
Interest expense
|
|
|
147,920
|
|
|
133,879
|
|
|
(31,909
|
)
|
(c)
|
|
|
251,369
|
|
|
|
|
|
|
|
|
|
|
1,479
|
|
(j)
|
|
|
|
|
Loss on derivative instruments
|
|
|
|
|
|
213,889
|
|
|
(213,889
|
)
|
(j)
|
|
|
|
|
Amortization of deferred financing costs
|
|
|
|
|
|
7,545
|
|
|
(6,066
|
)
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,479
|
)
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) before income taxes
|
|
|
(394,527
|
)
|
|
(430,844
|
)
|
|
(192,165
|
)
|
|
|
|
(1,017,536
|
)
|
Income tax (benefit)
|
|
|
(263,464
|
)
|
|
(162,136
|
)
|
|
(94,114
|
)
|
(i)
|
|
|
(519,714
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
|
(131,063
|
)
|
|
(268,708
|
)
|
|
(98,051
|
)
|
|
|
|
(497,822
|
)
|
Less Net income attributable to noncontrolling interests
|
|
|
(321,920
|
)
|
|
(31,419
|
)
|
|
(64,415
|
)
|
(e)
|
|
|
(398,297
|
)
|
|
|
|
|
|
|
|
|
|
10,631
|
|
(f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,826
|
|
(g)
|
|
|
|
|
Less: Preferred dividends and accretion of redeemable noncontrolling assets
|
|
|
|
|
|
(28,450
|
)
|
|
28,450
|
|
(h)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) attributable to EQT Corporation
|
|
$
|
(452,983
|
)
|
$
|
(328,577
|
)
|
$
|
(114,559
|
)
|
|
|
$
|
(896,119
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock attributable to EQT corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
166,978
|
|
|
|
|
|
92,198
|
|
(a)
|
|
|
259,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
$
|
(2.71
|
)
|
|
|
|
$
|
|
|
|
|
$
|
(3.46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
166,978
|
|
|
|
|
|
92,198
|
|
(a)
|
|
|
259,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
$
|
(2.71
|
)
|
|
|
|
$
|
|
|
|
|
$
|
(3.46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.12
|
|
$
|
|
|
$
|
|
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to unaudited pro forma condensed combined financial statements.
169
Table of Contents
EQT CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
The pro forma financial statements have been prepared to reflect the effects of the merger on the financial statements of EQT. The pro forma balance sheet is
presented as if the merger had occurred on June 30, 2017. The pro forma statements of operations for the year ended December 31, 2016, and the six months ended June 30, 2017, are
presented as if the merger had occurred on January 1, 2016. The historical consolidated financial information has been adjusted to reflect factually supportable
items that are directly attributable to the merger and, with respect to the statements of operations only, are expected to have a continuing impact on the combined results.
The
pro forma financial statements have been prepared using the acquisition method of accounting using the accounting guidance in ASC 805, with EQT treated as the acquirer. The
acquisition method of accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measure.
Accordingly, the pro forma adjustments are preliminary, have been made solely for the purpose of providing pro forma financial statements, and are subject to revision based on a final determination of
fair value as of the date of acquisition. Differences between these preliminary estimates and the final acquisition accounting may have a material impact on the accompanying pro forma financial
statements and the combined company's future results of operations and financial position.
The
pro forma financial statements are provided for informational purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated
financial position of EQT would have been had the merger occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial
position.
2. Pro Forma Adjustments and Assumptions
The adjustments are based on currently available information and certain assumptions that EQT believes are reasonable. The actual effects of these transactions
will differ from the pro forma adjustments. A general description of these transactions and adjustments are provided as follows:
(a) These
adjustments reflect the estimated value of net consideration to be paid by EQT in the merger and the adjustment of the historical book values of Rice assets and
liabilities as of June 30, 2017 to their estimated fair values. The following table represents the preliminary purchase price allocation to the assets acquired and liabilities assumed from
Rice. This preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma balance sheet and the pro forma statements of operations. The final purchase price
allocation will be determined when EQT has completed the detailed valuations and necessary calculations subsequent to closing the merger. The final purchase price allocation will differ from these
estimates and could differ materially from the preliminary allocation used in the pro forma adjustments. EQT expects to finalize its allocation of the merger consideration as soon as practicable after
completion of the merger.
The
preliminary purchase price allocation is subject to change as a result of several factors, including but not limited to:
-
-
changes in the estimated fair value of the shares of EQT common stock issued as consideration to the Rice stockholders, based on EQT's share
price at the effective time of the merger;
-
-
finalization of assumed and retired Rice indebtedness;
-
-
changes in the estimated fair value of the Rice assets acquired and liabilities assumed as of the date of the merger, which could result from
changes in future commodity prices, reserve estimates, inclusion of drilling synergies, other changes in cost assumptions, interest rates and
170
Table of Contents
|
|
|
|
|
|
|
Preliminary
Purchase Price
Allocation
(in thousands)
|
|
Consideration:
|
|
|
|
|
Fair value of EQT common stock to be issued
|
|
$
|
5,988,000
|
|
Cash consideration
|
|
|
1,751,000
|
|
|
|
|
|
|
Total consideration
|
|
|
7,739,000
|
|
Fair value of liabilities assumed:
|
|
|
|
|
Current liabilities
|
|
|
448,611
|
|
Interest bearing debt
|
|
|
1,695,500
|
|
Leasehold payables
|
|
|
31,817
|
|
Deferred income taxes
|
|
|
1,447,610
|
|
Other long term liabilities
|
|
|
114,795
|
|
|
|
|
|
|
Amount attributable to liabilities assumed
|
|
|
3,738,333
|
|
Fair value of assets acquired:
|
|
|
|
|
Cash
|
|
|
161,540
|
|
Current assets
|
|
|
361,390
|
|
Natural gas and oil properties
|
|
|
7,938,260
|
|
Other property, plant, and equipment
|
|
|
1,931,885
|
|
Intangible assets
|
|
|
1,115,001
|
|
Other long term assets
|
|
|
80,360
|
|
Mezzanine equity
|
|
|
(125,000
|
)
|
Noncontrolling interests
|
|
|
(1,612,949
|
)
|
|
|
|
|
|
Amount attributable to assets acquired
|
|
|
9,850,487
|
|
|
|
|
|
|
Goodwill as of June 30, 2017
|
|
$
|
1,626,846
|
|
As
part of the preliminary price allocation, EQT identified an intangible asset for customer contracts and the related customer relationships in Rice's midstream business. The fair value
of the identified intangible asset was determined using the income approach which requires a forecast of the expected future cash flows generated by these customer relationships. Goodwill is
recognized to offset net deferred tax liabilities arising from differences between the purchase price allocated to Rice's assets and liabilities based on fair value and the tax basis of these assets
and liabilities. The merger and the post-closing merger, taken together, are intended to be treated for U.S. federal income tax purposes as a "reorganization" within the meaning of
Section 368(a) of the Code; therefore, Rice's tax basis in its
assets and liabilities will carry over to EQT and EQT must recognize a deferred tax liability for the net increase in the book value. The goodwill is also attributable to EQT's qualitative assumptions
of long-term value that the merger creates for EQT shareholders, including additional capital efficiencies from longer laterals and lower development costs on the expanded and concentrated acreage
position created by the merger, and substantial operating and administrative synergies. Differences between the
171
Table of Contents
preliminary
purchase price allocation and the final purchase price allocation may change the amount of intangible asset and goodwill, if any, actually recognized at the effective time of the merger.
Pursuant
to the merger agreement, EQT will pay $5.30 in cash and issue 0.37 of a share of EQT common stock for each share of Rice common stock outstanding at the effective time of the
merger, which would result in the issuance by EQT of approximately 92,198,000 shares of EQT common stock valued at $5,988 million (based on the closing price as of September 26, 2017 of
$64.95) and payment of $1,321 million in cash. This includes the conversion of common units in Rice Energy Operating LLC into the right to receive the merger consideration received by
holders of Rice common stock in the merger. In addition, Rice will exercise its call right with respect to the Series B preferred equity interest in Rice Midstream Holdings, and EQT will pay
approximately $430 million in cash at closing to redeem this interest.
From
June 16, 2017, the last trading date prior to the transaction's initial announcement, to September 26, 2017, the preliminary value of EQT's merger consideration to be
transferred had increased by approximately $569.8 million, as a result of the increase in the share price for EQT's common stock from $58.77 to $64.95. The final value of total merger
consideration paid by EQT will be determined based on the actual number of EQT shares issued and the market price of EQT's common stock at the effective time of the merger. A ten percent increase or
decrease in the closing price of EQT common stock, as compared to the September 26, 2017 closing price of $64.95, would increase or decrease the total consideration by approximately
$598.8 million, assuming all other factors are held constant.
The
pro forma fair value of natural gas and oil properties to be acquired includes the following (in thousands):
|
|
|
|
|
Proved properties
|
|
$
|
4,324,140
|
|
Unproved properties
|
|
|
3,614,120
|
|
|
|
|
|
|
Pro forma fair value of natural gas and oil properties acquired
|
|
$
|
7,938,260
|
|
NYMEX
strip pricing as of June 30, 2017 was utilized in determining the pro forma fair value of proved producing reserves at a discount rate of 8.0%, after adjustment for expenses
and basis differential. An increase or decrease in commodity price as of the closing date will result in a corresponding increase or decrease in the fair value of proved producing properties.
(b) The
following pro forma adjustments eliminate historical transactions between Rice and EQT that would be treated as intercompany transactions after the
merger:
-
1.
-
Elimination
of $9.7 million of receivables and corresponding payables, consisting of $6.7 million for gathering transactions, $2.5 million for
gas sales transactions, and $0.5 million for transmission transactions in the pro forma balance sheet as of June 30, 2017.
-
2.
-
Elimination
of $19.9 million in revenue and corresponding expenses related to the elimination of $17.1 million of gathering transactions and
$2.8 million of transmission transactions in the pro forma statement of operations for the period ended June 30, 2017.
-
3.
-
Elimination
of $41.5 million in revenue and corresponding expenses related to the elimination of $38.1 million of gathering transactions and
$3.4 million of transmission transactions in the pro forma statement of operations for the year ended December 31, 2016.
(c) Certain
adjustments that are directly related to the merger were made to debt and debt related accounts. These adjustments include the planned extinguishment of the Rice
notes and the Rice credit facilities at or near closing. The issuance of $3.0 billion of EQT notes and the planned upsize of EQT's revolving credit facility were to fund the cash portion of the
merger consideration and to
172
Table of Contents
support
ongoing operations with better interest rates and terms available to EQT as a result of the Company's investment grade credit rating. The adjustments are as follows:
-
1.
-
A
$1,464.5 million increase to cash reflecting the issuance of $3.0 billion of EQT notes, net of $25.7 million of issuance costs and discounts,
repayment of the Rice notes, including call premium, of $1,377.0 million, $14.2 million of accrued interest on the Rice notes, repayment of $112.5 million of outstanding amounts
on the Rice Midstream Holdings credit facility and $6.1 million of estimated debt issuance costs for fees related to increasing EQT's revolving credit facility to support the merger.
-
2.
-
A
$6.1 million increase to deferred financing costs of estimated debt issuance costs for fees related to increasing EQT's revolving credit facility to support
the merger.
-
3.
-
A
$1,484.8 million increase to long term debt reflecting the anticipated issuance of $3.0 billion of EQT notes, net of $25.7 million of issuance
costs offset by the repayment of the Rice notes recorded at fair value of $1,377.0 million and the repayment of $112.5 million of outstanding amounts on the Rice Midstream Holdings
credit facility.
-
4.
-
A
$0.9 million decrease in interest expense for the period ended June 30, 2017 consisting of the elimination of $49.9 million of Rice historical
interest expense and an increase to interest expense of $49 million relating to the issuance of the EQT notes at a weighted average interest rate of 3.14% per annum and amortization of
associated deferred financing costs and discounts.
-
5.
-
A
$4.0 million pro forma adjustment was made to eliminate the amortization of deferred financing costs related to the Rice notes and the Rice credit facilities
for the period ended June 30, 2017.
-
6.
-
A
$31.9 million decrease in interest expense for the year ended December 31, 2016 consisting of the elimination of $129.9 million of Rice pro
forma interest expense, including $34.3 million of pro forma Vantage interest expense, and an increase to interest expense of $98.0 million relating to the issuance of the EQT notes at a
weighted average interest rate of 3.14% per annum and amortization of associated deferred financing costs and discounts.
-
7.
-
A
$6.1 million pro forma adjustment was made to eliminate the amortization of deferred financing costs related to the Rice notes and the Rice credit facilities
for the year ended December 31, 2016.
A
one percent change in the assumed interest rate of the EQT notes would increase or decrease the interest expense by $15.0 million and $30.0 million for the six months
ended June 30, 2017 and for the year ended December 31, 2016, respectively.
(d) To
accrue for estimated remaining transaction costs of $82.4 million related to the merger, including underwriting, banking, legal and accounting fees that are
not capitalized as part of the merger. The estimated remaining costs are not reflected in the historical June 30, 2017 balance sheets of EQT and Rice, but are reflected in the pro forma balance
sheet as an increase to liabilities as they will be expensed by EQT and Rice as incurred. Transaction expenses recognized in the six months ended June 30, 2017 and their corresponding tax
effect have been eliminated in the pro forma statements of operations due to their nonrecurring nature.
(e) Pro
forma adjustment to show the impact of the elimination of the Rice equity on the pro forma balance sheet and the elimination of the noncontrolling interest in Rice
Energy Operating, LLC on the pro forma statement of operations for the six months ended June 30, 2017 and the year ended December 31, 2016.
173
Table of Contents
(f) Pro
forma adjustment of historical depreciation, depletion and amortization expense (DD&A) related to the step up of property, plant and equipment to estimated fair
value. In addition, this adjustment includes a pro forma adjustment for DD&A to adjust the depreciation on certain Rice midstream assets to EQT's policy to depreciate gathering pipelines over a
50 year useful life and to depreciate compression and measurement assets over a 25 year useful life.
(g) As
part of the preliminary price allocation, EQT identified intangible assets related to Rice's Midstream business. This pro forma adjustment reflects the amortization
of the fair value of the intangible assets acquired using a 30 year estimated life and a straight line method of amortization.
(h) Pro
forma adjustment for elimination of preferred dividends and accretion of redeemable noncontrolling interests related to EQT's redemption of the Series B
preferred interest in Rice Midstream Holdings for $430 million. A pro forma adjustment of $15.4 million for the six months ended June 30, 2017 was also made to eliminate the loss
on embedded derivatives as it relates to the option on the Series B preferred interest which will be redeemed at the merger as reflected in pro forma adjustment (a).
(i) The
pro forma income tax adjustments included in the pro forma statement of operations for the periods ended June 30, 2017 and December 31, 2016 reflect
the income tax effects of the pro forma adjustments presented. The tax rate applied to the pro forma adjustments was the statutory federal and apportioned statutory state tax rate, net of the federal
benefit of state taxes, applied to pre-tax income, excluding income allocated to noncontrolling interests as taxes attributable to noncontrolling interests and not borne by EQT. No adjustment
has been included in the pro forma statement of operations for potential adjustments to EQT's valuation allowance on deferred tax assets due to the nonrecurring nature of any such adjustment.
(j) The
following reclassifications were made as a result of the transaction to conform to EQT's presentation:
-
1.
-
Reclassification
of $45.7 million of long term derivative assets, $24.6 million of long term derivative liabilities, to current and an increase of
$168.6 million to current derivative assets and liabilities to conform to EQT's presentation of derivatives.
-
2.
-
Reclassification
of $5.3 million of Rice's gas collateral account to other assets.
-
3.
-
Reclassification
of $104.1 million of Rice's royalties payable to accounts payable.
-
4.
-
Reclassification
of $176.6 million of Rice's accrued capital expenditures to accounts payable.
-
5.
-
Reclassification
of $19.5 million of Rice's current leasehold payable to other current liabilities.
-
6.
-
Reclassification
of $0.3 million of Rice's accrued interest to other current liabilities.
-
7.
-
Reclassification
of $12.3 million of Rice's long-term leasehold payable to other long term liabilities.
-
8.
-
Reclassification
on the June 30, 2017 pro forma statement of operations of $68.4 million of Rice's gathering, compression and water services to pipeline
and net market services.
-
9.
-
Reclassification
on the June 30, 2017 pro forma statement of operations of $18.0 million of Rice's other revenue to pipeline and net marketing services.
174
Table of Contents
-
10.
-
Reclassification
on the June 30, 2017 pro forma statement of operations of $88.8 million of Rice's loss (gain) on derivative instruments to (loss) gain
on derivatives not designated as hedges.
-
11.
-
Reclassification
on the June 30, 2017 pro forma statement of operations of $40.3 million of Rice's lease operating expenses to production expense.
-
12.
-
Reclassification
on the June 30, 2017 pro forma statement of operations of $7.7 million of Rice's incentive unit expense to selling, general and
administrative expense.
-
13.
-
Reclassification
on the June 30, 2017 pro forma statement of operations of $2.6 million of Rice's acquisition expense to selling, general and
administrative expense.
-
14.
-
Reclassification
on the June 30, 2017 pro forma statement of operations of $2.1 million of Rice's amortization of deferred finance costs to interest
expense.
-
15.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $114.5 million of Rice's gathering, compression and water services to
pipeline and net marketing services.
-
16.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $24.4 million of Rice's other revenue to pipeline and net marketing
services.
-
17.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $213.9 million of Rice's loss on derivative instruments to (loss) on
derivatives not designated as hedges.
-
18.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $63.6 million of Rice's lease operating expenses to production expenses.
-
19.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $20.9 million of Rice's impairment of gas properties to impairment of
long lived assets.
-
20.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $51.7 million of Rice's incentive unit expense to selling, general and
administrative expense.
-
21.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $6.1 million of Rice's acquisition expense to selling, general and
administrative expense.
-
22.
-
Reclassification
on the December 31, 2016 pro forma statement of operations of $1.5 million of Rice's amortization of deferred financing costs to
interest expense.
The
pro forma financial statements do not reflect any compensation related adjustments as certain personnel matters are evolving and any recurring impact from compensation adjustments
would not be factually supportable. In addition, the combined pro forma financial statements do not reflect the realization of any expected cost savings or other synergies from the merger as a result
of restructuring activities and other cost savings initiatives. Although EQT believes cost savings and other synergies will be realized following the business combination, there can be no assurance
that cost savings or any other synergies will be achieved in full or at all. In addition, the pro forma financial statements do not reflect the planned restructuring charges associated with these cost
savings, which are expected to be expensed in EQT's statement of operations.
3. Rice's Unaudited Pro Forma Condensed Combined Statements of Operations
Rice's
unaudited pro forma statement of operations for the year ended December 31, 2016 included in the unaudited pro forma condensed combined statement of operations gives effect to Rice's
acquisition of Vantage and their subsidiaries pursuant to the terms of the Purchase and Sale Agreement dated
175
Table of Contents
September 26,
2016 between Rice and Vantage. Rice's unaudited pro forma combined statement of operations is presented as if Rice had acquired Vantage on January 1, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rice
Energy
Historical(1)
|
|
Vantage
Historical(2)
|
|
Pro Forma
Adjustments
|
|
Rice
Energy
Pro Forma
Combined
|
|
|
|
(Thousands, except per unit amounts)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of natural gas, oil and NGLs
|
|
$
|
653,441
|
|
$
|
143,294
|
|
$
|
|
|
$
|
796,735
|
|
Gathering, compression and water services
|
|
|
101,057
|
|
|
13,439
|
|
|
|
|
|
114,496
|
|
Other revenue
|
|
|
24,408
|
|
|
|
|
|
|
|
|
24,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
778,906
|
|
|
156,733
|
|
|
|
|
|
935,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation and processing
|
|
|
123,852
|
|
|
20,724
|
|
|
|
|
|
144,576
|
|
Operation and maintenance
|
|
|
23,215
|
|
|
5,683
|
|
|
|
|
|
28,898
|
|
Production
|
|
|
13,866
|
|
|
7,307
|
|
|
|
|
|
21,173
|
|
Exploration
|
|
|
15,159
|
|
|
|
|
|
6,275
|
(a)
|
|
21,434
|
|
Selling, general and administrative
|
|
|
118,093
|
|
|
13,396
|
|
|
|
|
|
131,489
|
|
Depreciation, depletion, and amortization
|
|
|
368,455
|
|
|
64,314
|
|
|
37,068
|
(b)
|
|
469,837
|
|
Impairment of long-lived assets
|
|
|
23,057
|
|
|
|
|
|
|
|
|
23,057
|
|
Lease operating
|
|
|
50,574
|
|
|
13,004
|
|
|
|
|
|
63,578
|
|
Incentive unit expense
|
|
|
51,761
|
|
|
|
|
|
|
|
|
51,761
|
|
Acquisition expense
|
|
|
6,109
|
|
|
|
|
|
|
|
|
6,109
|
|
Other expense
|
|
|
27,308
|
|
|
731
|
|
|
|
|
|
28,039
|
|
Amortization of intangible assets
|
|
|
1,634
|
|
|
|
|
|
|
|
|
1,634
|
|
Impairment of gas properties
|
|
|
20,853
|
|
|
237,668
|
|
|
(237,668)
|
(c)
|
|
20,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
843,936
|
|
|
362,827
|
|
|
(194,325
|
)
|
|
1,012,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(65,030
|
)
|
|
(206,094
|
)
|
|
194,325
|
|
|
(76,799
|
)
|
Other income (loss):
|
|
|
1,406
|
|
|
(138
|
)
|
|
|
|
|
1,268
|
|
Interest expense
|
|
|
99,627
|
|
|
34,252
|
|
|
|
|
|
133,879
|
|
Loss (gain) on derivative instruments
|
|
|
220,236
|
|
|
(6,347
|
)
|
|
|
|
|
213,889
|
|
Amortization of deferred financing costs
|
|
|
7,545
|
|
|
|
|
|
|
|
|
7,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(391,032
|
)
|
|
(234,137
|
)
|
|
194,325
|
|
|
(430,844
|
)
|
Income tax (benefit) expense
|
|
|
(142,212
|
)
|
|
|
|
|
(19,924
|
)(d)
|
|
(162,136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
|
(248,820
|
)
|
|
(234,137
|
)
|
|
214,249
|
|
|
(268,708
|
)
|
Less: Net income attributable to noncontrolling interests
|
|
|
(20,931
|
)
|
|
|
|
|
(20,420)
|
(e)
|
|
(31,419
|
)
|
|
|
|
|
|
|
|
|
|
9,932
|
(f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) attributable to Rice
|
|
|
(269,751
|
)
|
|
(234,137
|
)
|
|
203,761
|
|
|
(300,127
|
)
|
Less: Preferred dividends and accretion of redeemable noncontrolling assets
|
|
|
(28,450
|
)
|
|
|
|
|
|
|
|
(28,450
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) attributable to Rice common stockholders
|
|
$
|
(298,201
|
)
|
$
|
(234,137
|
)
|
$
|
203,761
|
|
$
|
(328,577
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock attributable to Rice corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding
|
|
|
162,226
|
|
|
|
|
|
|
|
|
162,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
$
|
(1.84
|
)
|
|
|
|
|
|
|
$
|
(2.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Includes
Vantage amounts from October 19, 2016 through December 31, 2016.
-
(2)
-
Represents
the amounts on the Vantage Statement of Operations for January 1, 2016 through October 18, 2016.
176
Table of Contents
-
(a)
-
Reflects
exploratory costs capitalized by Vantage under the full cost method that would have been charged to exploration expense under the successful efforts method
of accounting for oil and gas properties.
-
(b)
-
Adjustment
of historical depreciation, depletion and amortization of Vantage to adjust to Rice's policy to deprecate midstream assets over a 60 year useful
life and to include pro forma provisions for DD&A related to the step up of property, plant and equipment to estimated fair value and application of the successful efforts method of accounting in the
determination of the depletion rate.
-
(c)
-
To
eliminate the historical natural gas and oil properties impairment charges recorded under the ceiling test of the full cost method of accounting to conform to
Rice's successful efforts method of accounting in the determination of the depletion rate.
-
(d)
-
To
reflect tax impact of Vantage results of operations under Rice's corporate tax structure. The tax rate applied to the pro forma adjustments and Vantage's untaxed
preacquisition net loss was the statutory federal and apportioned statutory state tax rate, net of the federal benefit of state taxes, applied to pre-tax income, excluding income allocated to non
controlling interests as taxes attributable to non controlling interests not borne by Rice.
-
(e)
-
To
adjust for historical estimated impact of Vantage on Rice Midstream Holdings noncontrolling interest.
-
(f)
-
To
adjust for historical estimated impact of Vantage on Rice Energy Operating noncontrolling interest.
4. Supplemental Pro Forma Natural Gas, NGLs and Crude Oil Reserves Information
The following tables present the estimated pro forma combined net proved developed and undeveloped, natural gas, NGLs and crude oil reserves as of
December 31, 2016, along with a summary of changes in quantities of net remaining proved reserves during the year ended December 31, 2016. The pro forma reserve information set forth
below gives effect to the merger as if the transaction had occurred on January 1, 2016.
The
following estimated pro forma reserve information is not necessarily indicative of the results that might have occurred had the merger taken place on January 1, 2016 and is
not intended to be a
177
Table of Contents
projection
of future results. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled "Risk Factors."
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (Bcfe)Natural Gas, Oil, and NGLs(1)
|
|
|
|
EQT
Historical
|
|
Rice Energy
Historical
|
|
Pro Forma
Adjustments
|
|
EQT Pro
Forma
Combined
|
|
BalanceDecember 31, 2015
|
|
|
9,976.6
|
|
|
1,700.0
|
|
|
|
|
|
11,676.6
|
|
Revisions of previous estimates
|
|
|
(472.3
|
)
|
|
17.2
|
|
|
|
|
|
(455.1
|
)
|
Extensions, discoveries and other additions
|
|
|
2,384.7
|
|
|
1,667.8
|
|
|
|
|
|
4,052.5
|
|
Purchase of hydrocarbons in place
|
|
|
2,395.8
|
|
|
|
|
|
924.7
|
(a)
|
|
3,320.5
|
|
Acquisitions
|
|
|
|
|
|
924.7
|
|
|
(924.7
|
)(a)
|
|
|
|
Production
|
|
|
(776.4
|
)
|
|
(304.4
|
)
|
|
|
|
|
(1,080.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BalanceDecember 31, 2016
|
|
|
13,508.4
|
|
|
4,005.3
|
|
|
|
|
|
17,513.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
6,279.6
|
|
|
1,014.9
|
|
|
|
|
|
7,294.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
6,843.0
|
|
|
2,178.8
|
|
|
|
|
|
9,021.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved undeveloped reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
3,697.0
|
|
|
685.1
|
|
|
|
|
|
4,382.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
6,665.4
|
|
|
1,826.5
|
|
|
|
|
|
8,491.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Reclassification
of hydrocarbons to purchase of hydrocarbons in place.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas (Bcf)(1)
|
|
|
|
EQT
Historical
|
|
Rice Energy
Historical(1)
|
|
Pro Forma
Adjustments
|
|
EQT
Pro Forma
Combined
|
|
BalanceDecember 31, 2015
|
|
|
9,110.3
|
|
|
1,694.3
|
|
|
|
|
|
10,804.6
|
|
Revisions of previous estimates
|
|
|
(607.1
|
)
|
|
17.5
|
|
|
|
|
|
(589.6
|
)
|
Extensions, discoveries and other additions
|
|
|
2,241.5
|
|
|
1,657.5
|
|
|
|
|
|
3,899.0
|
|
Purchase of natural gas in place
|
|
|
2,288.2
|
|
|
|
|
|
886.9
|
(a)
|
|
3,175.1
|
|
Acquisitions
|
|
|
|
|
|
886.9
|
|
|
(886.9
|
)(a)
|
|
|
|
Production
|
|
|
(701.0
|
)
|
|
(302.3
|
)
|
|
|
|
|
(1,003.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BalanceDecember 31, 2016
|
|
|
12,331.9
|
|
|
3,953.9
|
|
|
|
|
|
16,285.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
5,653.0
|
|
|
1,010.4
|
|
|
|
|
|
6,663.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
6,075.0
|
|
|
2,136.1
|
|
|
|
|
|
8,211.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved undeveloped reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
3,457.3
|
|
|
683.9
|
|
|
|
|
|
4,141.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
6,256.9
|
|
|
1,817.8
|
|
|
|
|
|
8,074.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Reclassification
of natural gas acquisitions to purchase of natural gas in place.
178
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGLs (Thousands of Bbls)(1)
|
|
|
|
EQT
Historical
|
|
Rice Energy
Historical
|
|
Pro Forma
Adjustments
|
|
EQT Pro
Forma
Combined
|
|
BalanceDecember 31, 2015
|
|
|
138,481
|
|
|
883
|
|
|
|
|
|
139,364
|
|
Revisions of previous estimates
|
|
|
21,322
|
|
|
(137
|
)
|
|
|
|
|
21,185
|
|
Extensions, discoveries and other additions
|
|
|
23,797
|
|
|
1,706
|
|
|
|
|
|
25,503
|
|
Purchase of NGLs in place
|
|
|
17,932
|
|
|
|
|
|
6,125
|
(a)
|
|
24,057
|
|
Acquisitions
|
|
|
|
|
|
6,125
|
|
|
(6,125
|
)(a)
|
|
|
|
Production
|
|
|
(11,837
|
)
|
|
(281
|
)
|
|
|
|
|
(12,118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BalanceDecember 31, 2016
|
|
|
189,695
|
|
|
8,296
|
|
|
|
|
|
197,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
98,528
|
|
|
678
|
|
|
|
|
|
99,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
121,605
|
|
|
6,844
|
|
|
|
|
|
128,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved undeveloped reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
39,953
|
|
|
205
|
|
|
|
|
|
40,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
68,090
|
|
|
1,452
|
|
|
|
|
|
69,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Reclassification
of NGL acquisitions to purchase of NGLs in place.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Thousands of Bbls)(1)
|
|
|
|
EQT
Historical
|
|
Rice Energy
Historical
|
|
Pro Forma
Adjustments
|
|
EQT Pro
Forma
Combined
|
|
BalanceDecember 31, 2015
|
|
|
5,900
|
|
|
71
|
|
|
|
|
|
5,971
|
|
Revisions of previous estimates
|
|
|
1,159
|
|
|
98
|
|
|
|
|
|
1,257
|
|
Extensions, discoveries and other additions
|
|
|
62
|
|
|
8
|
|
|
|
|
|
70
|
|
Purchase of oil in place
|
|
|
3
|
|
|
|
|
|
172
|
(a)
|
|
175
|
|
Acquisitions
|
|
|
|
|
|
172
|
|
|
(172
|
)(a)
|
|
|
|
Production
|
|
|
(729
|
)
|
|
(72
|
)
|
|
|
|
|
(801
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BalanceDecember 31, 2016
|
|
|
6,395
|
|
|
277
|
|
|
|
|
|
6,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
5,900
|
|
|
71
|
|
|
|
|
|
5,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
6,395
|
|
|
273
|
|
|
|
|
|
6,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved undeveloped reserves as of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Reclassification
of oil acquisitions to purchase of oil in place
-
(1)
-
One
thousand BBl equals approximately 6 million cubic feet (MMcf)
179
Table of Contents
The
pro forma standardized measure of discounted future net cash flows relating to proved natural gas, NGLs and crude oil reserves as of December 31, 2016 is as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT
Historical
|
|
Rice
Energy
Historical
|
|
EQT
Pro Forma
Combined
|
|
Future cash flows
|
|
$
|
24,011,281
|
|
$
|
7,174,765
|
|
$
|
31,186,046
|
|
Future production costs
|
|
|
(14,864,126
|
)
|
|
(3,103,526
|
)
|
|
(17,967,652
|
)
|
Future development costs
|
|
|
(3,778,698
|
)
|
|
(1,124,478
|
)
|
|
(4,903,176
|
)
|
Future income tax expense
|
|
|
(1,753,067
|
)
|
|
(41,135
|
)
|
|
(1,794,202
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Future net cash flows
|
|
|
3,615,390
|
|
|
2,905,626
|
|
|
6,521,016
|
|
10% annual discount for estimated timing of cash flows
|
|
|
(2,626,636
|
)
|
|
(1,357,411
|
)
|
|
(3,984,047
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Standardized measure of discounted future net cash flows
|
|
$
|
988,754
|
|
$
|
1,548,215
|
|
$
|
2,536,969
|
|
|
|
|
|
|
|
|
|
|
|
|
The
changes in the pro forma standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGL reserves for the year ended December 31, 2016 are as follows
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQT
Historical
|
|
Rice
Energy
Historical
|
|
Pro Forma
Adjustments
|
|
EQT
Pro Forma
Combined
|
|
Net changes in prices, production and development costs
|
|
$
|
(1,129,026
|
)
|
$
|
(18,656
|
)
|
$
|
|
|
$
|
(1,147,682
|
)
|
Revisions of previous quantity estimates
|
|
|
(60,959
|
)
|
|
46,894
|
|
|
|
|
|
(14,065
|
)
|
Sales and transfers of natural gas and oil producednet
|
|
|
(539,980
|
)
|
|
(510,868
|
)
|
|
|
|
|
(1,050,848
|
)
|
Net change in income taxes
|
|
|
(91,823
|
)
|
|
(20,191
|
)
|
|
|
|
|
(112,014
|
)
|
Accretion of discount
|
|
|
122,674
|
|
|
88,627
|
|
|
|
|
|
211,301
|
|
Purchases of minerals in placenet
|
|
|
592,078
|
|
|
|
|
|
407,690
|
(a)
|
|
999,768
|
|
Extensions, discoveries and improved recovery, less related costs
|
|
|
590,885
|
|
|
516,370
|
|
|
|
|
|
1,107,255
|
|
Acquisitions
|
|
|
|
|
|
407,690
|
|
|
(407,690)
|
(a)
|
|
|
|
Development costs incurred during the period
|
|
|
402,891
|
|
|
|
|
|
111,276
|
(b)
|
|
514,167
|
|
Previously estimated development costs incurred
|
|
|
|
|
|
111,276
|
|
|
(111,276)
|
(b)
|
|
|
|
Sales of minerals in placenet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timing and other
|
|
|
124,460
|
|
|
40,800
|
|
|
|
|
|
165,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change for the year
|
|
|
11,200
|
|
|
661,942
|
|
|
|
|
|
673,142
|
|
Beginning of year
|
|
|
977,554
|
|
|
886,273
|
|
|
|
|
|
1,863,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of year
|
|
$
|
988,754
|
|
$
|
1,548,215
|
|
$
|
|
|
$
|
2,536,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
Reclassification
of $407.7 million of natural gas acquisitions to purchase of minerals in placenet
-
(b)
-
Reclassification
of $111.3 million of previously estimated development costs incurred to development costs incurred during the period.
180
Table of Contents
DESCRIPTION OF EQT CAPITAL STOCK
The following description of the material terms of the EQT capital stock is a summary only and is not a complete
description of such terms. Following completion of the transactions, the rights of the holders of EQT common stock will be governed by the PBCL, the EQT articles and the Amended and Restated Bylaws of
EQT (the "EQT bylaws"). Copies of the EQT articles and the EQT bylaws have been filed as Exhibits to EQT's Annual Report on Form 10-K for the year ended December 31, 2016 and are
incorporated by reference into this joint proxy statement/prospectus. See also "Where You Can Find More Information." EQT and Rice urge you to read the EQT articles and the EQT bylaws carefully and in
their entirety.
General
Under the EQT articles, EQT is authorized to issue 320,000,000 shares of common stock, no par value, and 3,000,000 shares of preferred stock, no
par value. As of the close of business on the record date for the EQT special meeting, there were approximately 173,832,392 shares of EQT common stock and no shares of EQT preferred stock issued and
outstanding. In this joint proxy statement/prospectus, EQT common stock and EQT preferred stock are collectively referred to as "EQT stock."
EQT Common Stock
Voting Rights
Each share of EQT common stock is entitled to one vote on all matters requiring a vote of shareholders. Shareholders do not have cumulative
voting rights in elections of directors. A director nominee is elected to the board of directors at a meeting of shareholders if the votes cast "for" such nominee exceed the votes cast "against" such
nominee (excluding abstentions), unless the number of nominees exceeds the number of directors to be elected, in which case the nominees receiving the highest number of votes up to the number of
directors to be elected are elected.
Dividend Rights
Subject to the rights of the holders of any outstanding shares of preferred stock, each share of EQT common stock is entitled to receive any
dividends, in cash, securities or property, as
the EQT board may declare. Pennsylvania law prohibits the payment of dividends if EQT is insolvent or if EQT would become insolvent after the dividend or repurchase.
Liquidation and Other Rights
In the event of the liquidation, dissolution or winding up, either voluntarily or involuntarily, of EQT, subject to the rights of the holders of
any outstanding shares of preferred stock, holders of common stock are entitled to share pro-rata in all of EQT's remaining assets available for distribution.
Exchange Listing
EQT common stock is listed on the NYSE and traded under the symbol "EQT."
Transfer Agent and Registrar
The transfer agent and registrar for EQT common stock is Computershare.
181
Table of Contents
Miscellaneous
The holders of EQT common stock do not have preemptive rights or conversion rights, and there are no redemption or sinking fund provisions
applicable to EQT's common stock. Holders of fully paid shares of EQT's common stock are not subject to any liability for further calls or assessments.
Description of Preferred Stock
Under Pennsylvania law and the EQT articles, the EQT board is authorized to issue shares of preferred stock from time to time in one or more
series without shareholder approval. Subject to limitations prescribed by Pennsylvania law, the EQT articles and the EQT bylaws, the EQT board can determine the number of shares constituting each
series of preferred stock and the designation, preferences, qualifications, limitations, restrictions, and special or relative rights or privileges of that series.
Holders
of EQT preferred stock have no voting rights for the election of directors and have no other voting rights except as the EQT board may determine pursuant to its authority under
the EQT articles with respect to any particular series of EQT preferred stock and except as provided by law.
The
particular terms of any series of EQT preferred stock will be set by the EQT board for that series of preferred stock. Those terms may
include:
-
-
the distinctive serial designation of such series;
-
-
the annual dividend rate for such series, if any, and the date or dates from which dividends shall commence to accrue;
-
-
the redemption price or prices, if any, for shares of such series and the terms and conditions on which such shares may be redeemed;
-
-
the provisions for a sinking, purchase or similar fund, if any, for the redemption or purchase of shares of such series;
-
-
the preferential amount or amounts payable upon shares of such series in the event of EQT's voluntary or involuntary liquidation;
-
-
the voting rights, if any, of such series;
-
-
the terms and conditions, if any, upon which shares of such series may be converted and the class or classes or series of EQT's securities into
which such shares may be converted;
-
-
the relative seniority, parity or junior rank of such series with respect to other series of preferred stock then or thereafter to be issued;
and
-
-
any other specific terms, preferences, rights, privileges, limitations or restrictions of such series.
While
the terms summarized above may generally apply to any shares of preferred stock that EQT may offer, the EQT board will include the specific terms of each series of preferred stock
in a statement with respect to preferred stock that will be filed with the Pennsylvania Department of State.
Anti-Takeover Effect of EQT's Governing Documents and Pennsylvania Business Corporation Law
The EQT articles and the EQT bylaws contain a number of provisions relating to corporate governance and to the rights of EQT shareholders.
Certain of these provisions may have a potential "anti-takeover" effect by delaying, deferring or preventing a change of control of EQT. In addition, certain provisions of Pennsylvania law may have a
similar effect.
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Table of Contents
Required Vote for Authorization of Certain Actions
The EQT articles require the vote of the holders of not less than 80% of the combined voting power of the then outstanding shares of capital
stock of all classes and series entitled to vote generally in the annual election of directors, voting together as a single class, for approval of certain business combinations, including certain
mergers, asset sales, security issuances, recapitalizations, reorganizations, reclassification of securities, liquidation or dissolution, or any agreement, plan, contract or other arrangement
providing for such a transaction, involving EQT or its subsidiaries and certain acquiring persons (namely a person, entity or specified group which beneficially owns more than 10% of the then
outstanding shares of EQT's capital stock entitled to vote generally in an annual election of directors), unless such business combination has been approved by two-thirds of the continuing directors,
or the aggregate amount of cash, together with the "fair market value" of other consideration, is not less than the "highest equivalent price" threshold and other procedural requirements specified in
the EQT articles are met.
Required Vote for Amendment of the EQT Articles and the EQT Bylaws
Except as may be specifically provided to the contrary in any provision in the EQT articles with respect to amendment or repeal of such
provision, the EQT articles cannot be amended and no provision may be repealed by its shareholders without a vote of the holders of not less than 80% of the voting power of the then outstanding shares
of EQT's capital stock entitled to vote in an annual election of directors of EQT, voting together as a single class, unless such amendment has been approved by two-thirds of EQT's whole board of
directors, in which event (unless otherwise expressly provided in the EQT articles) the EQT articles may be amended and any provision repealed by such shareholder approval as may be specified by law.
The EQT board may make, amend and repeal the EQT bylaws with respect to those matters which are not, by statute, reserved exclusively to EQT's shareholders, subject to the power of EQT's shareholders
to change such action. No bylaw may be made, amended or repealed by EQT's shareholders unless such action is approved by the affirmative vote of the holders of not less than 80% of the voting power of
the then outstanding shares of EQT's capital stock entitled to vote in an annual election of directors, voting together as a single class, unless such amendment has been approved by two-thirds of
EQT's whole board of directors, in which event (unless otherwise expressly provided in the EQT articles or the EQT bylaws) the EQT bylaws may be amended and any provision may be repealed by such
shareholder approval as may be specified by law.
Preferred Stock
The purpose of authorizing the EQT board to issue preferred stock and determine its rights and preferences is to eliminate delays associated
with a shareholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have
the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of EQT's outstanding voting stock. The existence of the
authorized but undesignated preferred stock may have a depressive effect on the market price of EQT's common stock.
Anti-Takeover Law Provisions under the Pennsylvania Business Corporation Law
EQT is subject to certain provisions of Chapter 25 of the PBCL, which may have the effect of discouraging or rendering more difficult a
hostile takeover attempt against EQT, including Section 2524, Section 2538, Subchapter 25E and Subchapter 25F of the PBCL.
Under
Section 2524 of the PBCL, shareholders of EQT cannot act by partial written consent except as permitted under the EQT articles.
183
Table of Contents
Section 2538
of the PBCL requires enhanced shareholder approval for certain transactions between EQT and an "interested shareholder" (defined as a shareholder who is a party to
the transaction or is treated differently from other shareholders). Section 2538 applies if an interested shareholder (together with his, her or its affiliates) is to (i) be a party to a
merger or consolidation, a share exchange or certain sales of assets involving EQT or one of EQT's subsidiaries; (ii) receive a disproportionate amount of any securities of any corporation
which survives or results from a division; (iii) be treated differently from others holding shares of the same class in a voluntary dissolution of such corporation; or (iv) have his or
her percentage of voting or economic share interest in such corporation materially increased relative to substantially all other shareholders in a reclassification. Under these circumstances, the
proposed transaction must be approved by the affirmative vote of the holders of shares representing at least a majority of the votes that all disinterested shareholders are entitled to cast with
respect to such transaction. However, this special voting requirement will not apply where the proposed transaction has been approved in a prescribed manner by the EQT board or if certain other
conditions, including the amount of consideration to be paid to certain shareholders, are satisfied or the transaction involves certain subsidiaries. This voting requirement is in addition to any
other voting requirement under the PBCL, the EQT articles or the EQT bylaws.
Under
Subchapter 25E of the PBCL, if any person or group acting in concert acquires voting power over shares representing 20% or more of the votes which all of EQT's shareholders
would be entitled to cast in an election of directors, any other shareholder may demand that such person or group purchase such shareholder's shares at a price determined in an appraisal proceeding.
Under
Subchapter 25F of the PBCL, EQT may not engage in a merger, consolidation, share exchange, division, asset sale, disposition (in one transaction or a series of transactions)
or a variety of other "business combination" transactions with a person which becomes the "beneficial owner" of shares representing 20% or more of the voting power in an election of EQT's directors
unless: (1) the business combination or the acquisition of the 20% interest is approved by the EQT board prior to the date the 20% interest is acquired; (2) the person beneficially owns
at least 80% of EQT's outstanding shares and the business combination (a) is approved by a majority vote of the disinterested shareholders and (b) satisfies certain minimum price and
other conditions prescribed in Subchapter 25F; (3) the business combination is approved by a majority vote of the disinterested shareholders at a meeting called no earlier than five
years after the date the 20% interest is acquired; or (4) the business combination (a) is approved by shareholder vote at a meeting called no earlier than five years after the date the
20% interest is acquired and (b) satisfies certain minimum price and other conditions prescribed in Subchapter 25F.
EQT
has elected to opt out of Subchapter 25G of the PBCL (which would have required a shareholder vote to accord voting rights to control shares acquired by a 20% shareholder in a
control-share acquisition) and Subchapter 25H of the PBCL (which would have required a person or group to disgorge to EQT any profits received from a sale of EQT's equity securities under
certain circumstances).
Advance Notice Requirements
The EQT bylaws require EQT shareholders to provide advance notice if they wish to submit a proposal or nominate candidates for director at EQT's
annual meeting of shareholders. These procedures provide that notice of shareholder proposals and shareholder nominations for the election of directors at EQT's annual meeting must be in writing and
received by EQT's secretary at its principal executive offices at least 90, but not more than 120, days prior to the anniversary of the date of the prior year's annual meeting of shareholders. In the
case of a shareholder nomination, the notice submitted to the secretary must set forth information about the nominee and be accompanied by an original irrevocable conditional resignation in the event
that such director, in an uncontested election, receives more votes "against" than "for" the director's election.
184
Table of Contents
Special Meetings of Shareholders
The EQT bylaws provide that a special meeting of shareholders may be called by the board of directors or by EQT's chief executive officer. EQT
shareholders do not have a right to call a special meeting under the current EQT bylaws or under the PBCL.
Special Treatment for Specified Groups of Nonconsenting Shareholders
Additionally, the PBCL permits an amendment of a corporation's articles of incorporation or other corporate action, if approved by shareholders
generally, to provide mandatory special treatment for specified groups of nonconsenting shareholders of the same class by providing, for example, that shares of common stock held only by designated
shareholders of record, and no other shares of common stock, shall be cashed out at a price determined by the corporation, subject to applicable dissenters' rights.
Exercise of Director Powers Generally
The PBCL also provides that the directors of a corporation are not required to regard the interests of the shareholders as being dominant or
controlling in making decisions concerning takeovers or any other matters. The directors may consider, to the extent they deem appropriate, among other things, (1) the effects of any proposed
action upon any or all groups affected by the action, including, among others, shareholders, employees, creditors, customers and suppliers, (2) the short-term and long-term interests of the
corporation, (3) the resources, intent and conduct of any person or group seeking to acquire control of the corporation and (4) all other pertinent factors. The PBCL expressly provides
that directors do not violate their fiduciary duties solely by relying on "poison pills" or the anti-takeover provisions of the PBCL. EQT does not currently have a "poison pill."
185
Table of Contents
COMPARISON OF RIGHTS OF COMMON SHAREHOLDERS OF EQT AND COMMON
STOCKHOLDERS OF RICE
EQT is incorporated in Pennsylvania and Rice is incorporated in Delaware. Your rights as a Rice stockholder are governed
by the DGCL, the Rice amended and restated certificate of incorporation, as amended (the "Rice certificate of incorporation"), and the Rice amended and restated bylaws (the "Rice bylaws"). Upon
completion of the merger, as an EQT shareholder your rights will be governed by the PBCL, the EQT articles and the EQT bylaws. The following is a summary of the material differences between the rights
of holders of EQT common stock or preferred stock and the rights of holders of Rice common stock or Rice preferred stock, but does not purport to be a complete description of those differences. These
differences may be determined in full by reference to the PBCL, the DGCL, the EQT articles, the Rice certificate of incorporation, the EQT bylaws and the Rice bylaws. The EQT articles, the Rice
certificate of incorporation, the EQT bylaws, and the Rice bylaws are subject to amendment in accordance with their terms. Copies of the governing corporate instruments are available, without charge,
to any person, including any beneficial owner to whom this document is delivered, by following the instructions listed under "Where You Can Find More Information."
|
|
|
Rice
|
|
EQT
|
AUTHORIZED CAPITAL STOCK
|
Authorized Shares.
Rice is authorized under the Rice certificate of incorporation to issue 650,000,000 shares of common stock, par value $0.01 per share, and
50,000,000 shares of preferred stock, par value $0.01 per share.
|
|
Authorized Shares.
EQT is authorized under the EQT articles to issue 320,000,000 shares of common stock, no par value, and 3,000,000 shares of preferred stock, no par
value.
|
Preferred Stock.
The Rice board has designated 40,000 shares of its authorized preferred stock as Class A Preferred Stock. As of September 21, 2017, 15,217
shares of its preferred stock were issued and outstanding. In addition, the Rice certificate of incorporation authorizes the Rice board to, without stockholder approval, authorize the issuance of preferred stock from time to time in one or more
classes or series, and with respect to each series of preferred stock, to fix and state by resolution the designation and the powers, preferences, rights, qualifications, limitations and restrictions relating to each series of preferred
stock.
|
|
Preferred Stock.
Under the EQT articles, the EQT board may, from time to time and without shareholder approval, establish and cause EQT to issue one or more classes
or series of preferred stock and set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, or terms or conditions of redemption of such classes or
series.
|
DIVIDENDS
|
Under the Rice bylaws and in accordance with the DGCL, the Rice board may declare and pay dividends upon the shares of its capital stock either out of its surplus or, if there is no such surplus, out of its net
profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. However, the Rice board cannot declare and pay dividends out of net profits if the capital of the corporation is less than the aggregate amount of capital
represented by the issued and outstanding stock of all classes of stock having a preference on the distribution of assets.
Under the Certificate of Designation of Class A Preferred Stock of Rice, dated October 19, 2016, dividends shall not be declared or paid on such shares.
|
|
Under the PBCL, subject to restrictions in the bylaws of a corporation, if any, the board of directors of the corporation may authorize, and the corporation may make, distributions on the shares of its capital stock.
However, no distribution may be made if it would result in the corporation becoming unable to pay its debts as they become due in the usual course of business or if the corporation's total assets would be less than the sum of its total liabilities
plus (unless the articles of incorporation provide otherwise) the amount that would be needed, if the corporation were dissolved, to satisfy the shareholders whose preferential rights are superior to those receiving the distribution.
|
186
Table of Contents
|
|
|
Rice
|
|
EQT
|
VOTING RIGHTS IN AN EXTRAORDINARY TRANSACTION
|
Under the DGCL and the Rice certificate of incorporation, an amendment to the Rice certificate of incorporation requires (1) the approval of the Rice board and (2) the affirmative vote of the holders of at
least 66
2
/
3
% in voting power of the outstanding shares of stock of Rice entitled to vote thereon, voting together as a single class.
|
|
Under Section 321(c) of the PBCL, a plan of merger or consolidation may be adopted if, among other conditions, it receives the affirmative vote of a majority of the votes cast by all shareholders entitled to vote
thereon. Under Section 321(d) of the PBCL, no shareholder vote is required for a merger where the articles of incorporation of the surviving corporation are identical to those of the corporation being merged, or for a merger of an 80%-owned
subsidiary into the parent.
|
|
|
The EQT articles require that 80% of the voting power of the then outstanding shares of capital stock of EQT entitled to vote in an annual election of directors, voting together as a single class, is required for the
approval or authorization of any Business Combination (as defined in the EQT articles) involving a Related Person (as defined in the EQT articles).
|
AMENDMENT TO THE CERTIFICATE/ARTICLES OF INCORPORATION
|
Under the DGCL and the Rice certificate of incorporation, an amendment to the Rice certificate of incorporation requires (1) the approval of the Rice board and (2) the affirmative vote of the holders of at
least 66
2
/
3
% in voting power of the outstanding shares of stock of Rice entitled to vote thereon, voting together as a single class.
|
|
Under the PBCL, an amendment to the articles of incorporation can be proposed by adoption of a resolution by the EQT board. An amendment must be submitted to a vote and approved by a majority of the shareholders
entitled to vote thereon and, if any class or series of shares is entitled to vote thereon as a class, the affirmative vote of a majority of the votes cast in each such class vote, except for amendments on matters specified in Section 1914(c) of
the PBCL that do not require shareholder approval and for those matters specified to require a higher vote under the EQT articles.
|
|
|
Except as may be specifically provided to the contrary in any provision in the EQT articles with respect to amendment or repeal of such provision, the EQT articles cannot be amended and no provision may be repealed by
its shareholders without a vote of the holders of not less than 80% of the voting power of the then outstanding shares of EQT's capital stock entitled to vote in an annual election of directors of EQT, voting together as a single class, unless such
amendment has been approved by two-thirds of EQT's whole board of directors, in which event (unless otherwise expressly provided in the EQT articles) the EQT articles may be amended and any provision repealed by such shareholder approval as may be
specified by law.
|
187
Table of Contents
|
|
|
Rice
|
|
EQT
|
AMENDMENT TO THE BYLAWS
|
Under the Rice certificate of incorporation, the Rice bylaws may be amended, altered or repealed (1) by resolution adopted by a majority of the directors present at any special or regular meeting of the Rice
board at which a quorum is present or (2) at any regular or special meeting of the stockholders upon the affirmative vote of at least 66
2
/
3
% in voting power of the then-outstanding shares of stock entitled to vote
thereon, voting together as a single class.
The Rice board may adopt, amend or repeal the Rice bylaws without any action on the part of the Rice stockholders, provided that any bylaw adopted or amended by the Rice board, and any powers thereby conferred, may be amended, altered or repealed by
the Rice stockholders.
The Rice bylaws may be adopted, altered, amended or repealed by Rice stockholders holding not less than 66
2
/
3
% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single
class.
|
|
The EQT board may make, amend and repeal the EQT bylaws with respect to those matters which are not, by statute, reserved exclusively to EQT's shareholders, subject to the power of EQT's shareholders to change such
action. No bylaw may be made, amended or repealed by EQT's shareholders unless such action is approved by the affirmative vote of the holders of not less than 80% of the voting power of the then outstanding shares of EQT's capital stock entitled to
vote in an annual election of directors, voting together as a single class, unless such amendment has been approved by two-thirds of EQT's whole board of directors, in which event (unless otherwise expressly provided in the EQT articles or the EQT
bylaws) the EQT bylaws may be amended and any provision may be repealed by such shareholder approval as may be specified by law.
However, the EQT board may not adopt or change a bylaw on certain subjects committed expressly to the shareholders by Section 1504(b) of the PBCL.
|
APPRAISAL/DISSENTERS' RIGHTS
|
Under the DGCL, a stockholder of a Delaware corporation such as Rice who has not voted in favor of, nor consented in writing to, a merger or consolidation in which the corporation is participating generally has the
right to an appraisal of the fair value of the stockholder's shares of stock, subject to specified procedural requirements. The DGCL does not confer appraisal rights, however, if the corporation's stock is either (1) listed on a national
securities exchange or (2) held of record by more than 2,000 holders.
|
|
Under Section 1571(b) of the PBCL, dissenters' rights are not generally conferred to shareholders in a merger if their shares are (i) listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.; or (ii) held beneficially or of record by more than 2,000 persons. Because EQT's shares are registered on the NYSE, a
national securities exchange, EQT shareholders would not have dissenters' rights in such a transaction.
|
In such circumstances, appraisal rights can be restored if the stockholder is required to accept as consideration in an applicable transaction anything other than (1) stock of the surviving corporation or
resulting from the transaction or depository receipts representing shares of the surviving or resulting corporation, or those shares or depository receipts plus cash in lieu of fractional interests, (2) stock of any other corporation, or
depository receipts representing shares of the other corporation, or those shares or depository receipts plus cash in lieu of fractional interests, which shares or depository receipts is or will be listed on a national securities exchange or held by
more than 2,000 stockholders, or (3) any combination thereof.
|
|
Under Sections 317 and 1517(c) of the PBCL, the bylaws or a resolution of the board of directors may direct that all or part of the shareholders shall have dissenters' rights in connection with any corporation
action or transaction that would not otherwise entitle such shareholders to dissenters' rights. The EQT bylaws do not provide for any additional dissenters' rights and EQT has not adopted any resolution providing for additional dissenters'
rights.
|
188
Table of Contents
|
|
|
Rice
|
|
EQT
|
SPECIAL MEETINGS OF SHAREHOLDERS
|
Under the DGCL, special stockholder meetings of a corporation may be called by the corporation's board of directors, or by any person or persons authorized to do so by the corporation's certificate of incorporation
or bylaws. Under the Rice certificate of incorporation, subject to the rights of holders of any series of preferred stock, special meetings of Rice stockholders may be called only by the Chief Executive Officer, the Chairman of the Rice board or the
Rice board, pursuant to a resolution adopted by the majority of the total number of directors that Rice would have if there were no vacancies on the Rice board.
|
|
Under Section 2521 of the PBCL, shareholders can call special meetings if a registered corporation has adopted, after July 1, 2015, a provision permitting 25% or more of the outstanding shares entitled to
vote at a special meeting to call a special meeting. The EQT articles do not contain a provision permitting shareholders to call a special meeting.
Under the EQT bylaws, only the board of directors or the chief executive officer may call special shareholder meetings.
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SHAREHOLDER ACTION BY WRITTEN CONSENT
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Under the DGCL, any action that can be taken at any annual or special meeting of stockholders of a corporation may also be taken by stockholders without a meeting, without prior notice and without a vote unless the
certificate of incorporation provides otherwise. Under the Rice certificate of incorporation, subject to the rights of holders of any series of preferred stock, action required or permitted to be taken by the Rice stockholders may not be taken by any
consent in writing of such stockholders.
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Section 1766 of the PBCL provides that, unless otherwise restricted by a corporation's bylaws, any action required or permitted to be taken at a meeting of the shareholders of the corporation may be taken without
a meeting by unanimous written consent of the shareholders.
Section 2524 of the PBCL provides that an action may be authorized by the shareholders of a registered corporation without a meeting by less than unanimous consent only if permitted by its articles.
Neither the EQT articles nor the EQT bylaws contain any provisions altering action by written consent.
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SHAREHOLDER PROPOSALS AND NOMINATIONS
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The Rice bylaws generally permit stockholders to bring a proposal or nomination before an annual or special meeting if the nominating or proposing stockholder was a stockholder of record at the time of giving of the
notice required by the bylaws, is entitled to vote at the meeting and has given to Rice's corporate secretary timely written notice, in proper form, of the stockholder's intention to bring that proposal or nomination before the meeting.
Annual Meeting
To be timely delivered for an annual meeting, a stockholder's notice must be delivered to Rice's corporate secretary at Rice's principal executive offices not less than 90 days nor more than 120 days prior to the one-year anniversary of the
date of the preceding year's annual meeting. However, if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be delivered not earlier than
120 days prior to the date of such annual meeting and not later than the date that is later than (1) 90 days prior to the 2018 annual meeting or, (2) if the first public announcement of the date of such annual meeting is less than
100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by Rice.
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The EQT bylaws require EQT shareholders to provide advance notice if they wish to submit a proposal or nominate candidates for director at EQT's annual meeting of shareholders. These procedures provide that notice of
shareholder proposals and shareholder nominations for the election of directors at EQT's annual meeting must be in writing and received by EQT's secretary at its principal executive offices at least 90, but not more than 120, days prior to the
anniversary of the date of the prior year's annual meeting of shareholders. In the case of a shareholder nomination, the notice submitted to the secretary must set forth information about the nominee and be accompanied by an original irrevocable
conditional resignation in the event that such director, in an uncontested election, receives more votes "against" than "for" the director's election.
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To be in proper form, a stockholder's notice must set forth certain information:
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(1) As to the Rice stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made: (A) the name and address of such
stockholder, (B) (i) the class or series and number of shares of Rice owned by such stockholder and beneficial owner, (ii) any derivative instrument owned beneficially by such stockholder, (iii) a description of any understanding or
relationship pursuant to which such stockholder has a right to vote any security of Rice, (iv) any short interest in any security of Rice, (v) any rights to dividends on the shares of Rice, (vi) any proportionate interest in shares of
Rice or derivative instruments held by a partnership in which such stockholder is a general partner or beneficially owns an interest in a general partner and (vii) any performance-related fees that such stockholder is entitled to based on any
increase or decrease in the value of shares of Rice or derivative instruments, (C) any other information relating to such stockholder and beneficial owner required to be disclosed in a proxy statement filed in connection with solicitations of
proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act, (D) a representation that the stockholder is a holder of record of stock of Rice entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to bring such nomination or other business before the meeting, and (E) a representation as to whether such stockholder or beneficial owner intends or is part of a group that intends to solicit proxies
from stockholders in support of such proposal or nomination;
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(2) If the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting: (A) a brief description
of the business, the reasons for conducting such business at the meeting and any material interest of such stockholder and beneficial owner, if any, in such business and (B) a description of all agreements and understandings between such
stockholder and beneficial owner and any other person in connection with the proposal of such business;
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(3) As to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Rice board: (A) all information relating to such person that would
be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act (including such
person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and (B) a description of compensation and other material monetary agreements and arrangements between such stockholder and
beneficial owner and each proposed nominee; and
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(4) With respect to each nominee for election or reelection to the Rice board: a completed and signed questionnaire, representation and agreement provided by Rice.
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The Rice bylaws provide that this is the exclusive means for a stockholder to make nominations or propose business at an annual meeting of stockholders, other than business included in Rice's proxy
materials pursuant to Rule 14a-8 under the Exchange Act.
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Special Meeting
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Nominations of persons for election to the Rice board may be made at a special meeting of stockholders at which directors are to be elected pursuant to a notice of meeting, by any stockholder of Rice who
is a stockholder of record at the time of giving of notice, at the time of the special meeting is entitled to vote at the meeting, and complies with the advance procedures required under the Rice bylaws.
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If a special meeting of stockholders is called for the purpose of electing one or more directors to the Rice board, any such stockholder may nominate one or more persons for election as director to such
position(s) as specified in Rice's notice of meeting. Such stockholder's notice must comply with the notice requirements summarized above under "Annual Meeting" with respect to any nomination and be delivered to Rice's corporate secretary not
earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or, if the first public announcement of the date of such
special meeting is less than 100 days prior to the date of such special meeting, the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Rice board to
be elected at such meeting.
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Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to Rice's notice of meeting.
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PROXY ACCESS FOR DIRECTOR NOMINATIONS
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Neither the Rice certificate of incorporation nor the Rice bylaws contain proxy access provisions.
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The EQT bylaws provide that when EQT solicits proxies with respect to the election of directors at an annual meeting of shareholders, subject to certain limitations, EQT shall include in its proxy statement and proxy
card for such annual meeting, in addition to any persons nominated for election by the EQT board or any committee thereof, the name and certain required information of any person nominated for election to the EQT board by a shareholder or group of no
more than 20 shareholders that satisfies certain requirements, and who expressly elects to have its nominee included in EQT's proxy materials.
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The limitations and requirements include, among other things, a maximum number of shareholder nominees that can be included on the proxy statement (the greater of (x) two and (y) the largest whole number that
does not exceed 20% of the number of directors in office as of the last day on which a valid proxy access notice may be delivered to EQT), the nominating shareholder or group of shareholders must have continually owned 3% or more of the aggregate
voting power of the EQT common stock for at least 3 years, and the nominating shareholder or group of shareholders must deliver a notice to EQT satisfying certain timeliness and substantive criteria. To be timely, the notice must be delivered to
the principal executive offices of EQT not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the date that EQT mailed its proxy statement for the
preceding year's annual meeting of shareholders.
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BOARD OF DIRECTORS
Number of Directors
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Under the DGCL, the board of directors of a corporation must consist of one or more members, each of whom must be a natural person. The bylaws provide that the number of directors shall be fixed from time to time
exclusively pursuant to a resolution adopted by a majority of the Rice board. Presently, the number of directors is fixed at seven.
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The EQT board has eleven directors. The EQT articles provide that the number of directors on the EQT board shall not be less than five nor more than twelve. The EQT bylaws provide that the number of directors is fixed
only by resolution of the EQT board.
If the charter amendment proposal is not approved by EQT's shareholders, it is expected that following the merger the EQT board will have twelve directors. If the charter amendment proposal is approved by the shareholders of EQT, the EQT articles
will provide that the number of directors on the EQT board shall be not less than five nor more than thirteen and it is expected that the EQT board will have thirteen directors.
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Classified Board
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The DGCL permits classified boards and the Rice certificate of incorporation provides that directors of Rice, other than those who may be elected by the holders of any series of preferred stock, will be divided, with
respect to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible, with each class serving three-year staggered terms.
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The PBCL permits classified boards but EQT does not have a classified board of directors.
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Removal
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The DGCL provides that directors serving on a classified board may be removed only for cause by the holders of a majority of the shares then entitled to vote in an election of directors. Under the Rice certificate of
incorporation, subject to the rights of the holders of any preferred stock, any director may be removed only for cause, upon the affirmative vote of the holders of at least 66
2
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3
% of the outstanding shares of Rice's stock
entitled to vote generally for the election of directors, acting at a meeting of the stockholders.
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Under the EQT articles, a director may be removed with or without cause by the affirmative vote of 80% of the votes which all shareholders would be entitled to cast at an annual election of directors.
In addition, under Section 1726(c) of the PBCL, a court may remove a director upon application in a derivative suit in cases of fraudulent or dishonest acts, gross abuse of authority or discretion, or for any other proper cause.
Section 1726(a)(4) of the PBCL also provides that the board of directors may be removed at any time with or without cause by the unanimous vote or written consents of shareholders entitle to vote thereon.
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Vacancies
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Under the Rice certificate of incorporation, subject to the rights of holders of preferred stock, any vacancies on the Rice board for any reason and any newly created directorships resulting from an increase in the
number of directors may be filled only by the Rice board, upon the affirmative vote of a majority of the total number of directors then in office. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall
hold office for the remaining term of his or her predecessor.
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Vacancies in the board, including vacancies resulting from an increase in the number of directors, may be filled by a majority of the remaining directors though less than a quorum except that vacancies resulting from
removal from office by a vote of the shareholders may be filled by the shareholders at the same meeting at which such removal occurs. Any directors elected in these circumstances will hold office for a term expiring at the next annual meeting of
shareholders held immediately following such person being elected to fill the vacancy.
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Special Meetings of the Board
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Under the Rice bylaws, special meetings of the Rice board may be called at the request of the Chairman of the Board, the Chief Executive Officer or a majority of the Rice board then in office.
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Special meetings of the board of directors may be called by the chief executive officer of EQT or by the EQT board.
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Directors Liability and Indemnification
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The DGCL provides that a corporation may indemnify a director or officer against expenses actually and reasonably incurred by such individual in association with any action, suit or proceeding in which he or she is involved by reason of his or her
service to the corporation, if the director or officer acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to a criminal proceeding, the director or
officer had no reason to believe that the act was unlawful.
Under the Rice bylaws, Rice must indemnify any person who is a defendant or made a defendant in any threatened,
pending or completed action, suit or proceeding, whether civil or criminal, administrative or investigative, if the person, or a person for whom he or she is the legal representative, is or was a director or officer of Rice or, while a director or
officer of Rice, is or was serving at the request of Rice as a director, officer, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an
employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, trustee, employee or agent, or in any other capacity while serving as a director, officer, trustee, employee or agent,
against all expenses, liability and loss (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection with such
proceeding.
The Rice bylaws provide that Rice will be required to indemnify and advance expenses (including attorneys' fees) to such indemnified persons to the fullest
extent permitted by law. To the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding are made only upon receipt of an undertaking by the covered person to repay all amounts advanced if it
should be ultimately determined that the covered person is not entitled to indemnification under the Rice certificate of incorporation or the Rice bylaws.
The DGCL permits
a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of a corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such.
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The PBCL permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation), by reason of the fact that he is or was a representative of the corporation, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with the action or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, and with respect to any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful. In an action by or in the right of the corporation, indemnification will not be made in respect of any claim, issue, or matter as to which the person has been adjudged to be liable to the corporation.
Unless ordered by a court, the determination of whether indemnification is proper in a specific case will be determined by (1) the board of directors by a majority
vote of a quorum consisting of directors who were not parties to the action or proceeding; (2) if such a quorum is not obtainable or if obtainable and a majority vote of a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion; or (3) by the shareholders.
To the extent that a representative of a business corporation has been successful on the merits or otherwise
in defense of a third-party action, derivative action, or corporate action, he must be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such individual in connection therewith.
Pennsylvania law permits a corporation to purchase and maintain insurance for a director or officer against any liability asserted against such individual, and incurred in his or her capacity as
a director or officer or arising out of his or her position, whether or not the corporation would have the power to indemnify such individual against such liability under Pennsylvania law.
The EQT articles and bylaws provide that a director shall to the maximum extent permitted by Pennsylvania law, have no personal liability or monetary damages for any action taken, or any failure
to take any action as a director. The EQT articles and bylaws also provide for indemnification for current and former directors, officers, employees, or agents serving at the request of the corporation to the fullest extent permitted by Pennsylvania
law. The EQT bylaws also permit the advancement of expenses.
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The DGCL permits corporations to include provisions in their certificate of incorporation eliminating monetary damages for a director for any breach of fiduciary duty. A corporation may not eliminate
liability for a director's breach of the duty of loyalty to the corporation or its stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, for unlawful dividends, stock purchases or
redemptions, or for any transaction from which the director derived an improper personal benefit. Under the Rice certificate of incorporation, no director of Rice will be liable to Rice or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL.
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RIGHTS PLAN
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The DGCL does not include a statutory provision expressly validating shareholder rights plans; however, such plans have generally been upheld by decision of courts applying Delaware law. Rice does not have a
shareholder rights plan currently in effect.
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While the PBCL authorizes a corporation to adopt a shareholder rights plan, EQT does not have a shareholder rights plan currently in effect.
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STATE ANTI-TAKEOVER STATUTES
Business Combinations
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The DGCL generally prohibits a corporation from engaging in a "business combination" with an "interested stockholder" (generally, one who beneficially owns 15% or more of the voting power) for a period of three years following the date that the
stockholder became an "interested stockholder" unless:
prior to that time the
corporation's board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an "interested stockholder";
upon completion of the
transaction that resulted in the stockholder becoming an "interested stockholder," the "interested stockholder" owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, subject to specified
adjustments; or
at or subsequent to that time, the business combination is approved by the corporation's board of directors and authorized at an annual or special meeting of stockholders by the
affirmative vote of at least 66
2
/
3
% of the outstanding voting stock that is not owned by the "interested stockholder."
The three-year prohibition
on business combinations with an "interested stockholder" does not apply under certain circumstances, including business combinations with a corporation that does not have a class of voting stock that is:
listed on a national security exchange; or
held of record by more than 2,000 stockholders;
unless, in each case, this result was directly or indirectly caused by the "interested stockholder" or from a transaction in which a person became an "interested stockholder."
The term "business combination" is defined to include a wide variety of transactions, including mergers, consolidations, sales or other dispositions of 10% or more of a corporation's
assets and various other transactions that may benefit an "interested stockholder."
Under the Rice certificate of incorporation, Rice has opted out of this section of the
DGCL.
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Section 2538 of Subchapter 25D of the PBCL requires certain transactions with an "interested shareholder" to be approved by a
majority of disinterested shareholders. "Interested shareholder" is defined broadly to include any shareholder who is a party to the transaction or who is treated differently than other shareholders and affiliates of the corporation.
Subchapter 25E of the PBCL requires a person or group of persons acting in concert which acquires 20% or more of the voting shares of the corporation to offer to purchase the shares of any other shareholder at "fair value." "Fair value" means
the value not less than the highest price paid by the controlling person or group during the 90-day period prior to the control transaction, plus a control premium. Among other exceptions, shares acquired directly from the corporation in a
transaction exempt from the registration requirements of the Securities Act, are not counted towards the determination of whether the 20% share ownership threshold has been met for purposes of Subchapter 25E.
Subchapter 25F of the PBCL generally establishes a 5-year moratorium on a "business combination" with an "interested shareholder." "Interested shareholder" is defined generally to be any beneficial owner of 20% or more of the corporation's
voting stock. "Business combination" is defined broadly to include mergers, consolidations, asset sales and certain self-dealing transactions. Certain restrictions apply to business combination following the 5-year period. Among other exceptions,
Subchapter 25F will be rendered inapplicable if the board of directors approves the proposed business combination, or approves the interested shareholder's acquisition of 20% of the voting shares, in either case prior to the date on which the
shareholder first becomes an interested shareholder.
Subchapter 25G of the PBCL provides that "control shares" lose voting rights unless such rights are restored by the affirmative vote of a majority of (i) the disinterested shares (generally, shares held by persons other than the acquiror,
executive officers of the corporation and certain employee stock plans) and (ii) the outstanding voting shares of the corporation. "Control shares" are defined as shares which, upon acquisition, will result in a person or group acquiring for the
first time voting control over (a) 20%, (b) 331/3% or (c) 50% or more of the outstanding shares, together with shares acquired within 180 days of attaining the applicable threshold and shares purchased with the intention of
attaining such threshold. A corporation may redeem control shares if the acquiring person does not request restoration of voting rights as permitted by Subchapter 25G. Among other exceptions, Subchapter 25G does not apply to a merger,
consolidation or a share exchange if the corporation is a party to the transaction agreement.
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Subchapter 25H of the PBCL provides that if any person or group publicly discloses that the person or group may acquire control of the corporation, or a person or group acquires, or publicly discloses an offer or
intent to acquire, 20% or more of the voting power of the corporation and, in either case, sells shares in the following 18 months, then the profits from such sale must be disgorged to the corporation if the securities that were sold were
acquired during the 18-month period or within the preceding 24 months.
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If shareholders approve a control share acquisition under Subchapter 25G, the corporation is also subject to Subchapters 25I and 25J of the PBCL. Subchapter 25I provides for a minimum severance payment
to certain employees terminated within two years of the approval. Subchapter 25J prohibits the abrogation of certain labor contracts prior to their stated date of expiration.
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EQT has elected to opt out of Subchapter 25G and Subchapter 25H of the PBCL.
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DUTIES OF DIRECTORS
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Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors of Delaware corporations are subject to a duty of loyalty and a duty of care. The duty
of loyalty requires directors to refrain from self-dealing and the duty of care requires directors in managing the corporate affairs to use that level of care which ordinarily careful and prudent persons would use in similar circumstances. When
directors act consistently with their duties of loyalty and care, their decisions generally are presumed to be valid under the business judgment rule.
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Under the PBCL, the standard of conduct for directors is governed by statute. The PBCL requires that a director of a Pennsylvania corporation perform his or her duties: (1) in good faith, (2) in a manner he
or she reasonably believes to be in the best interests of the corporation, and (3) with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances.
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APPRAISAL RIGHTS AND DISSENTERS' RIGHTS
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Rice stockholders are entitled to appraisal rights under Section 262 of the DGCL, provided they satisfy the special criteria and conditions set forth in Section 262 of the DGCL. Rice common stock held by stockholders that do not vote for
approval of the merger and make a demand for appraisal in accordance with Delaware law will not be converted into EQT common stock, but will be converted into the right to receive from the combined company consideration determined in accordance with
Delaware law.
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Under the PBCL, as well as the governing documents of EQT, the EQT shareholders are not entitled to dissenters' rights in connection with the merger or the transactions contemplated by the merger.
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See "The MergerAppraisal Rights and Dissenters' Rights"
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LEGAL MATTERS
The legality of the shares of EQT common stock issuable in the merger will be passed upon for EQT by Reed Smith LLP, Pittsburgh,
Pennsylvania. Certain U.S. federal income tax consequences relating to the transactions will be passed upon for EQT by Wachtell, Lipton, Rosen & Katz and for Rice by Vinson &
Elkins LLP.
EXPERTS
EQT
The consolidated financial statements of EQT Corporation and Subsidiaries appearing in EQT Corporation's Annual Report (Form 10-K) for
the year ended December 31, 2016 (including the schedule appearing therein), and the effectiveness of EQT Corporation and Subsidiaries' internal control over financial reporting as of
December 31, 2016 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated
herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and
auditing.
The
information incorporated by reference into this joint proxy statement/prospectus as of December 31, 2016 relating to EQT's estimated quantities of its proved natural gas and
oil reserves is derived from an audit report prepared by Ryder Scott Company, L.P., independent petroleum engineers, as stated in its audit report with respect thereto. This information is
incorporated by reference into this joint proxy statement/prospectus in reliance upon the authority of such firm as experts with respect to the matters covered by their report and the giving of their
report.
Rice
The consolidated financial statements Rice Energy Inc. appearing in Rice Energy's Annual Report (Form 10-K) for the year ended
December 31, 2016, and the effectiveness of Rice Energy Inc.'s internal control over financial reporting as of December 31, 2016 have been audited by Ernst &
Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference in reliance upon such reports given on
the authority of such firm as experts in auditing and accounting.
Estimates
of Rice's oil and natural gas reserves, related future net cash flows and the present values thereof related to Rice's properties as of December 31, 2016 incorporated in
this joint proxy statement by reference from Rice's Annual Report on Form 10-K filed with the SEC on March 1, 2017, were based upon reserve reports prepared by independent petroleum
engineers, Netherland, Sewell & Associates, Inc. Rice has incorporated these estimates by reference upon the authority of such firm as an expert in such matters.
Vantage
The audited consolidated financial statements of Vantage Energy, LLC as of December 31, 2015 and 2014 and for each of the years in the
three-year period ended December 31, 2015, have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing.
The
audited consolidated financial statements of Vantage Energy II, LLC as of December 31, 2015 and 2014 and for each of the years in the three-year period ended December 31, 2015, have
been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
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SHAREHOLDER AND STOCKHOLDER PROPOSALS
EQT
EQT will hold a regular annual meeting in 2018 regardless of whether the merger is completed.
For
inclusion in EQT's proxy statement and form of proxy relating to EQT's 2018 annual meeting of shareholders, shareholder proposals submitted pursuant to Rule 14a-8 under the
Exchange Act must be received at EQT's principal executive offices no later than October 30, 2017. Shareholders proposals submitted pursuant to Rule 14a-8 should be addressed to EQT
Corporation, 625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania 15222, Attention: Corporate Secretary.
In
accordance with the EQT bylaws, for a proposal of a shareholder to be raised from the floor and presented at EQT's 2018 annual meeting of shareholders (other than a shareholder
proposal intended to be included in EQT's proxy statement and submitted pursuant to Rule 14a-8 promulgated under the Exchange Act), a shareholder's notice must be hand-delivered or mailed by
certified or registered mail, return receipt requested, to EQT's principal executive offices, together with all supporting documentation required by the EQT bylaws, not prior to December 20,
2017 nor later than January 19, 2018. Shareholder proposals should be addressed to EQT Corporation, 625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania 15222, Attention: Corporate
Secretary.
Under
the EQT bylaws, a shareholder, or group of twenty or fewer shareholders, owning continuously for at least three years shares of EQT representing an aggregate of at least 3% of the
voting power entitled to vote in the election of directors, may nominate and include in EQT's 2018 proxy statement director nominees constituting the greater of (i) two and (ii) 20% of
the EQT board, provided that such nominations are submitted in writing and received by EQT's Corporate Secretary not earlier than September 30, 2017, and not later than the close of business on
October 30, 2017, and contain the required information set forth in the EQT bylaws.
Rice
If the merger agreement is approved by the requisite vote of the Rice stockholders and the merger is completed, Rice will become an indirect
wholly owned subsidiary of EQT and, consequently, will not hold an annual meeting of its stockholders in 2018. Rice stockholders will be entitled to participate, as shareholders of EQT following the
merger, in the 2018 annual meeting of shareholders of EQT.
If
the merger agreement is not adopted by the requisite vote of the Rice stockholders or if the transactions are not completed for any reason, Rice intends to hold an annual meeting of
its stockholders in 2018.
Pursuant
to Rule 14a-8 under the Exchange Act, stockholder proposals submitted for inclusion in Rice's proxy statement and proxy card for the next annual meeting would have to be
received by Rice's corporate secretary no later than December 18, 2017 if the next annual meeting were held within 30 days of May 31, 2018. In the event that Rice elects to hold
its next annual meeting more than 30 days before
or after May 31, 2018, such stockholder proposals would have to be received by Rice a reasonable time before Rice begins to print and send its proxy materials. Stockholder nominations of
directors are not stockholder proposals within the meaning of Rule 14a-8 and are not eligible for inclusion in Rice's proxy statement.
Rice
stockholders of record may present proposals that are proper subjects for consideration at an annual meeting and/or nominate persons to serve on the Rice board at an annual meeting
or special meeting of Rice stockholders at which directors are to be elected. The Rice bylaws require all stockholders who intend to make proposals or nominations at an annual stockholders' meeting or
special stockholders' meeting to provide a written notice, including the information specified in the Rice bylaws (which information is summarized in "Comparison of Rights of Common Shareholders of
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EQT
and Common Stockholders of Rice"), to Rice's corporate secretary at Rice's principal executive offices located at 2200 Rice Drive, Canonsburg, PA 15317, not earlier than the close of business on
the 120
th
day and not later than the 90
th
day prior to the first anniversary of the preceding year's annual meeting of Rice stockholders. To be eligible for
consideration at the 2018 annual meeting of Rice stockholders, notices must be received by Rice between January 31, 2018 and March 2, 2018. In the event that the date of the 2018 annual
meeting of Rice stockholders is more than 60 days after the one-year anniversary of the 2017 Annual Meeting of Rice stockholders, as set forth in this joint proxy statement/prospectus,
stockholder notice must be received no earlier than the close of business on the 120
th
day prior to the 2018 annual meeting of Rice stockholders and not later than the close of
business on the date that is the later of the (i) 90
th
day prior to the 2018 annual meeting of Rice stockholders or (ii) if the first public announcement of the 2018
annual meeting of Rice stockholders is less than 100 days prior to such meeting, the 10
th
day following the day on which public announcement of the date of the 2018 annual
meeting of Rice stockholders is first made. In the event that the number of directors to be elected to the board is increased and there is no public announcement by Rice naming all of the nominees for
director or specifying the size of the increased board at least 100 days prior to the first anniversary of the 2017 annual meeting of Rice stockholders, a stockholder's notice required by the
Rice bylaws will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to Rice's corporate secretary at Rice's principal
executive offices not later than the close of business on the 10
th
day following the day on which such public announcement is first made by Rice.
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Table of Contents
HOUSEHOLDING OF JOINT PROXY STATEMENT/PROSPECTUS
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and
annual reports with respect to two or more stockholders/shareholders sharing the same address by delivering a single proxy statement or annual report, as applicable, addressed to those
stockholders/shareholders. As permitted by the Exchange Act, only one copy of this joint proxy statement/prospectus is being delivered to stockholders/shareholders residing at the same address, unless
the stockholders/shareholders have notified the company whose shares they hold of their desire to receive multiple copies of the joint proxy statement/prospectus. This process, which is commonly
referred to in this joint proxy statement/prospectus as "householding," potentially provides extra convenience for stockholders/shareholders and cost savings for companies.
If,
at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of this joint proxy statement/prospectus, or if you are receiving multiple
copies of this joint proxy statement/prospectus and wish to receive only one, please contact the company whose shares you hold at its address identified in this paragraph below. Each of EQT and Rice
will promptly deliver, upon oral or written request, a separate copy of this joint proxy statement/prospectus to any stockholder/shareholder residing at an address to which only one copy was mailed.
Requests for additional copies should be directed to: EQT Corporation, 625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania 15222, Attention: Corporate Secretary, Phone:
(412) 553-5700 or to Rice Energy Inc., 2200 Rice Drive, Canonsburg, Pennsylvania 15317, Attention: Investor Relations, Phone: (724) 271-7200.
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Table of Contents
WHERE YOU CAN FIND MORE INFORMATION
EQT and Rice each file annual, quarterly and current reports, proxy statements and other information with the SEC under the Exchange Act. You
may read and copy any of this information at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
Public Reference Room. The SEC also maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including EQT and Rice, who file
electronically with the SEC. The address of that site is www.sec.gov.
Investors
may also consult EQT's or Rice's website for more information about EQT or Rice, respectively. EQT's website is http://ir.eqt.com. Rice's website is
www.investors.riceenergy.com/. Information included on these websites is not incorporated by reference into this joint proxy statement/prospectus.
EQT
has filed with the SEC a registration statement of which this joint proxy statement/prospectus forms a part. The registration statement registers the shares of EQT common
stock to be issued to Rice stockholders in the merger. The registration statement, including the attached exhibits, contains additional relevant information about EQT and EQT common stock. The rules
and regulations of the SEC allow EQT and Rice to omit certain information included in the registration statement from this joint proxy statement/prospectus.
In
addition, the SEC allows EQT and Rice to disclose important information to you by referring you to other documents filed separately with the SEC. This information is considered to be
a part of this joint proxy statement/prospectus, except for any information that is superseded by information included directly in this joint proxy statement/prospectus or incorporated by reference
subsequent to the date of this joint proxy statement/prospectus as described below. This joint proxy statement/prospectus also contains summaries of certain provisions contained in some of the EQT or
Rice documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by reference to the actual documents. Some
documents or information, such as that called for by Item 2.02 and 7.01 of Form 8-K, or the exhibits related thereto under Item 9.01 of Form 8-K, are deemed furnished and
not filed in accordance with SEC rules. None of those documents and none of that information is incorporated by reference into this joint proxy statement/prospectus.
This
joint proxy statement/prospectus incorporates by reference the documents listed below that EQT and Rice have previously filed with the SEC. These documents contain important
information about the companies, their respective financial condition and other matters.
|
|
|
EQT SEC Filings (File No. 001-03551)
|
|
Period or File Date
|
Annual Report on Form 10-K
|
|
Year ended December 31, 2016
|
Quarterly Reports on Form 10-Q
|
|
Quarterly periods ended March 31, 2017 and June 30, 2017
|
Current Reports on Form 8-K and 8-K/A
|
|
Filed on January 9, 2017 (as amended on January 10, 2017), April 20, 2017, June 19, 2017, August 3, 2017, September 27, 2017, October 3, 2017 and October 4, 2017
|
Proxy for 2017 Annual Meeting of Shareholders on Schedule 14A
|
|
Filed on February 17, 2017
|
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Table of Contents
|
|
|
Rice SEC Filings (File No. 001-36273)
|
|
Period or File Date
|
Annual Report on Form 10-K
|
|
Year ended December 31, 2016
|
Quarterly Reports on Form 10-Q
|
|
Quarterly periods ended March 31, 2017 and June 30, 2017
|
Current Reports on Form 8-K
|
|
Filed on February 2, 2017, February 23, 2017 (Item 5.03 only), March 21, 2017, April 6, 2017 (Items 1.01 and 5.02 only), June 1, 2017, June 19, 2017 (Items 1.01, 5.01 and 5.02
only), June 20, 2017 and September 19, 2017
|
Proxy for 2017 Annual Meeting of Stockholders on Schedule 14A
|
|
Filed on April 17, 2017
|
The description of Rice common stock contained in Rice's registration statement on Form 8-A filed under Section 12 of the Exchange Act on January 23, 2014, including any subsequently filed
amendments and reports updating such description.
|
|
|
In
addition, EQT and Rice incorporate by reference any future filings they make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) after the date
of the initial filing and prior to the effectiveness of the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part and (ii) after the date
of this joint proxy statement/prospectus and prior to the date of the EQT special meeting and the Rice special meeting (other than information furnished pursuant to Item 2.02 or
Item 7.01 of any Current Report on Form 8-K, unless expressly stated otherwise therein). Such documents are considered to be a part of this joint proxy statement/prospectus, effective as
of the date such documents are filed.
You
can obtain any of these documents from the SEC, through the SEC's website at the address described above, or EQT or Rice, as applicable, will provide you with copies of these
documents, without charge, upon written or oral request to:
|
|
|
EQT Corporation
625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania 15222
(412) 553-5700
Attn: Corporate Secretary
|
|
Rice Energy Inc.
2200 Rice Drive
Canonsburg, Pennsylvania 15317
(724) 271-7200
Attn: Investor Relations
|
In
the event of conflicting information in this joint proxy statement/prospectus in comparison to any document incorporated by reference into this joint proxy statement/prospectus, or
among documents incorporated by reference, the information in the latest filed document controls.
You
should rely only on the information contained or incorporated by reference into this joint proxy statement/prospectus. No one has been authorized to provide you with information that
is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated October 12, 2017. You should not
assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than that date. You should not assume that the information incorporated by reference
into this joint proxy statement/prospectus is accurate as of any date other than the date of such incorporated document. Neither EQT's mailing of this joint proxy statement/prospectus to EQT
shareholders or Rice stockholders nor the issuance by EQT of common stock in the merger will create any implication to the contrary.
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Table of Contents
This
document contains a description of the representations and warranties that each of Rice and EQT made to the other in the merger agreement. Representations and warranties made by
Rice, EQT and other applicable parties are also set forth in contracts and other documents that are attached or filed as exhibits to this document or are incorporated by reference into this document.
These materials are included or incorporated by reference to provide you with information regarding the terms and conditions of the agreements. Accordingly, the representations and warranties and
other provisions of the merger agreement and the contracts and other documents that are attached to or filed as exhibits to this document or are incorporated by reference into this document should not
be read alone, but instead should be read only in conjunction with the other information provided elsewhere in this document or incorporated by reference into this document.
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Table of Contents
ANNEX A
AGREEMENT AND PLAN OF MERGER
among
EQT CORPORATION,
EAGLE MERGER SUB I, INC.
and
RICE
ENERGY INC.
Dated as of June 19, 2017
Table of Contents
TABLE OF CONTENTS
A-i
Table of Contents
A-ii
Table of Contents
A-iii
Table of Contents
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 19, 2017 (this "
Agreement
"), by and among
EQT Corporation, a Pennsylvania corporation ("
Parent
"), Eagle Merger Sub I, Inc., a Delaware corporation and an indirect wholly-owned subsidiary
of Parent ("
Merger Sub
"), and Rice Energy Inc., a Delaware corporation (the "
Company
").
WHEREAS,
the Board of Directors of the Company (the "
Company Board
"), at a meeting duly called and held by unanimous vote,
(a) determined that this Agreement and the transactions contemplated hereby, including the merger of Merger Sub with and into the Company (the
"
Merger
"), are fair to, and in the best interests of, the Company's stockholders, (b) approved and declared advisable this Agreement and the
transactions contemplated hereby, including the Merger, (c) directed that this Agreement be submitted to the holders of Company Common Stock for adoption and (d) recommended
that the holders of Company Common Stock approve and adopt this Agreement and the transactions contemplated hereby, including the Merger;
WHEREAS,
the Board of Directors of Parent (the "
Parent Board
"), at a meeting duly called and held by unanimous vote, (a) determined
that this Agreement and the transactions contemplated hereby, including the issuance of the shares of common stock of Parent, no par value per share ("
Parent Common
Stock
"), pursuant to this Agreement (the "
Parent Stock Issuance
"), are fair to, and in the best interests of, Parent and
Parent's shareholders, (b) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Parent Stock Issuance and (c) recommended that the
holders of Parent Common Stock approve the Parent Stock Issuance;
WHEREAS,
the Board of Directors of Merger Sub (the "
Merger Sub Board
") has by unanimous vote (i) determined that this Agreement and
the transactions contemplated hereby, including the Merger, are fair to, and in the best interests of, Merger Sub's sole stockholder and (ii) approved and declared advisable this Agreement and
the transactions contemplated hereby, including the Merger;
WHEREAS,
EQT Investments Holdings, LLC, a direct, wholly owned subsidiary of Parent and an entity disregarded as separate from Parent for U.S. federal income Tax purposes
("
EIH
"), as the sole stockholder of Merger Sub, has executed and delivered a consent to adopt this Agreement, which consent shall become effective
promptly following the execution of this Agreement pursuant to Section 228(c) of the DGCL;
WHEREAS,
Parent desires to acquire 100% of the issued and outstanding shares of capital stock of the Company on the terms and subject to the conditions set forth herein;
WHEREAS,
immediately after the effectiveness of the Merger, the Surviving Corporation shall be merged with and into an indirect wholly owned limited liability company subsidiary of
Parent organized under the laws of the State of Delaware ("
LLC Sub
"), with LLC Sub continuing as the surviving entity in the LLC Sub
Merger as an indirect wholly owned subsidiary of Parent;
WHEREAS,
for U.S. federal income Tax purposes, it is intended that the Merger and the LLC Sub Merger (together, the "
Integrated
Mergers
"), taken together, qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"
Code
"), and that this Agreement and the LLC Sub Merger Agreement, taken together, constitute and be adopted as a "plan of reorganization" within
the meaning of Treasury Regulations §§ 1.368-2(g) and 1.368-3(a);
WHEREAS,
concurrently with the execution and delivery of this Agreement, Rice Energy 2016 Irrevocable Trust, Rice Energy Holdings LLC, Daniel J. Rice III, Daniel J. Rice IV, Derek
A. Rice and Toby Z. Rice, (collectively, the "
Company Stockholders
") and Parent have entered into a voting
agreement (the "
Voting Agreement
"), which provides, among other things, that the Company Stockholders will vote all of their shares of Company Common
Stock in favor of the transactions contemplated by this Agreement; and
A-1
Table of Contents
WHEREAS,
as a condition and inducement to Parent's willingness to enter into this Agreement, certain stockholders and employees of the Company have simultaneously herewith entered into
non-competition agreements with Parent (the "
Non-Competition Agreements
").
NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained in this Agreement, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Parent, Merger Sub and the Company agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1
Certain Definitions.
As used in this Agreement, the capitalized terms have the meanings ascribed to such
terms in
Annex A
or as
otherwise defined elsewhere in this Agreement.
1.2
Terms Defined Elsewhere.
As used in this Agreement, the following capitalized terms are defined in
this Agreement as referenced in the following table:
|
|
|
Definition
|
|
Section
|
2017 Period
|
|
6.1(b)(xiv)
|
2018 Period
|
|
6.1(b)(xiv)
|
Agreement
|
|
Preamble
|
Action
|
|
9.7(d))
|
Annual Period
|
|
6.1(b)(xiv)
|
Antitrust Authority
|
|
6.8(b)
|
Antitrust Laws
|
|
6.8(b)
|
Appraisal Shares
|
|
3.4
|
Book-Entry Shares
|
|
3.3(b)(i)(B)
|
Cancelled Shares
|
|
3.1(b)(iii)
|
Cap Amount
|
|
6.10(d)
|
Cash Consideration
|
|
3.1(b)(i)
|
Certificate of Merger
|
|
2.2(b)
|
Certificates
|
|
3.3(b)(i)(A)
|
Closing
|
|
2.2(a)
|
Closing Date
|
|
2.2(a)
|
Code
|
|
Recitals
|
Company
|
|
Preamble
|
Company Board
|
|
Recitals
|
Company Board Recommendation
|
|
4.3(a)
|
Company Capital Stock
|
|
4.2(a)
|
Company CEO
|
|
6.23(a)
|
Company Chairman
|
|
6.23(a)
|
Company Change of Recommendation
|
|
6.3(c)
|
Company Class A Preferred Stock
|
|
4.2(a)
|
Company Common Stock
|
|
3.1(b)(i)
|
Company Contracts
|
|
4.19(b)
|
Company Disclosure Letter
|
|
Article IV
|
Company Employee
|
|
6.9(a)
|
Company Independent Petroleum Engineers
|
|
4.17(a)(i)
|
Company Intellectual Property
|
|
4.14
|
Company Material Adverse Effect
|
|
4.1
|
Company Material Leased Real Property
|
|
4.15(a)
|
A-2
Table of Contents
|
|
|
Definition
|
|
Section
|
Company Material Real Property Lease
|
|
4.15(b)
|
Company Oil and Gas Leases
|
|
4.17(c)(i)
|
Company Oil and Gas Properties
|
|
4.17(a)(ii)
|
Company Owned Real Property
|
|
4.15(a)
|
Company Permits
|
|
4.9
|
Company Plans
|
|
4.10(a)
|
Company Preferred Stock
|
|
4.2(a)
|
Company PSU Award
|
|
3.2(b)
|
Company Qualified DC Plan
|
|
6.9(f)
|
Company Reserve Report
|
|
4.17(a)(i)
|
Company RSU Award
|
|
3.2(a)
|
Company SEC Documents
|
|
4.5(a)
|
Company Stockholders
|
|
Recitals
|
Company Stockholders Meeting
|
|
4.4(b)(i)
|
Company Stock Plan
|
|
3.2(a)
|
Company Tax Certificate
|
|
6.18
|
Confidentiality Agreement
|
|
6.7(b)
|
Continuation Period
|
|
6.9(a)
|
Converted Shares
|
|
3.1(b)(iii)
|
Creditors' Rights
|
|
4.3(a)
|
Debt Transaction
|
|
6.21(b)
|
Debt Transaction Documents
|
|
6.21(b)
|
DGCL
|
|
2.1
|
Discharge
|
|
6.21(d)
|
EQT MLP Common Units
|
|
5.2(d)
|
EQT MLP General Partner Interest
|
|
5.2(d)
|
EQT MLP IDRs
|
|
5.2(d)
|
e-mail
|
|
9.3(c)
|
EIH
|
|
Recitals
|
Effective Time
|
|
2.2(b)
|
End Date
|
|
8.1(b)(ii)
|
End Date Extension
|
|
8.1(b)(ii)
|
EPC
|
|
2.7
|
Exchange Agent
|
|
3.3(a)
|
Exchange Fund
|
|
3.3(a)
|
Exchange Ratio
|
|
3.1(b)(i)
|
GAAP
|
|
4.5(b)
|
GP Holdings
|
|
4.2(d)
|
HSR Act
|
|
4.4(a)
|
Indemnified Liabilities
|
|
6.10(a)
|
Indemnified Persons
|
|
6.10(a)
|
Integrated Mergers
|
|
Recitals
|
Joint Proxy Statement
|
|
4.4(b)(i)
|
Letter of Transmittal
|
|
3.3(b)(i)(B)
|
LLC Sub
|
|
Recitals
|
LLC Sub Merger
|
|
2.7
|
LLC Sub Merger Agreement
|
|
2.7
|
Merger
|
|
Recitals
|
Merger Consideration
|
|
3.1(b)(i)
|
Merger Sub
|
|
Preamble
|
A-3
Table of Contents
|
|
|
Definition
|
|
Section
|
Merger Sub Board
|
|
Recitals
|
New Director
|
|
6.23(a)
|
Non-Company Operating Company Member
|
|
3.2(e)
|
Non-Competition Agreements
|
|
Recitals
|
Offering Documents
|
|
6.21(a)
|
Parent
|
|
Preamble
|
Parent Board
|
|
Recitals
|
Parent Board Recommendation
|
|
5.3(a)
|
Parent Change of Recommendation
|
|
6.4(c)
|
Parent Charter Amendment Recommendation
|
|
5.3(a)
|
Parent Common Stock
|
|
Recitals
|
Parent Contracts
|
|
5.19
|
Parent Disclosure Letter
|
|
Article V
|
Parent Intellectual Property
|
|
5.14
|
Parent Independent Petroleum Engineers
|
|
5.17(a)(i)
|
Parent Material Adverse Effect
|
|
5.1
|
Parent Material Leased Real Property
|
|
5.15
|
Parent Material Real Property Lease
|
|
5.15
|
Parent Owned Real Property
|
|
5.15
|
Parent Permits
|
|
5.9
|
Parent Plan
|
|
5.10(a)(i)
|
Parent Preferred Stock
|
|
5.2(a)(ii)
|
Parent Reserve Report
|
|
5.17(a)(i)
|
Parent RSU Award
|
|
3.2(a)
|
Parent SEC Documents
|
|
5.5(a)
|
Parent Stock Issuance
|
|
Recitals
|
Parent Tax Certificate
|
|
6.18
|
Payoff Letters
|
|
6.21(c)
|
Post-Closing Annual Meeting
|
|
6.23(a)
|
Post-Closing Charter Amendment Proposal
|
|
6.23(b)
|
Post-Closing Proxy Statement
|
|
6.23(b)
|
Redemption
|
|
3.2(e)
|
Registration Statement
|
|
4.8(a)
|
Rice MLP Common Units
|
|
4.2(d)
|
Rice MLP General Partner Interest
|
|
4.2(d)
|
Rice MLP IDRs
|
|
4.2(d)
|
Rice MLP Subordinated Units
|
|
4.2(d)
|
Rights-of-Way
|
|
4.16
|
Sarbanes-Oxley Act
|
|
4.5(a)
|
Series B Units
|
|
4.2(f)
|
Share Consideration
|
|
3.1(b)(i)
|
Surviving Corporation
|
|
2.1
|
Terminable Breach
|
|
8.1(b)(iii)
|
Voting Agreement
|
|
Recitals
|
ARTICLE II
THE MERGER
2.1
The Merger.
Upon the terms and subject to the conditions of this Agreement, at the Effective Time,
Merger Sub will be merged with and into the Company in accordance with the
A-4
Table of Contents
provisions
of the General Corporation Law of the State of Delaware (the "
DGCL
"). As a result of the Merger, the separate existence of Merger Sub shall
cease and the Company shall continue its existence under the laws of the State of Delaware as the surviving corporation (in such capacity, the Company is sometimes referred to herein as the
"
Surviving Corporation
"). At the Effective Time, EIH shall own all of the stock and other equity, if any, in Merger Sub and shall be the sole
stockholder of Merger Sub, and Merger Sub shall be treated as a direct corporate subsidiary of Parent for U.S. federal income Tax purposes.
2.2
Closing.
(a) The
closing of the Merger (the "
Closing
"), shall take place at 10:00 a.m., Eastern time, on a date that is three
(3) Business Days following the satisfaction or (to the extent permitted by applicable Law) waiver in accordance with this Agreement of all of the conditions set forth in
Article VII
(other
than any such conditions which by their nature cannot be satisfied until the Closing Date, which shall be required to be so
satisfied or (to the extent permitted by applicable Law) waived in accordance with this Agreement on the Closing Date) at the offices of Wachtell, Lipton, Rosen & Katz in New York, New York, or
such other place as Parent and the Company may agree in writing. For purposes of this Agreement "
Closing Date
" shall mean the date on which the Closing
occurs.
(b) As
soon as practicable on the Closing Date after the Closing, a certificate of merger prepared and executed in accordance with the relevant provisions of the DGCL (the
"
Certificate of Merger
") shall be filed with the Office of the Secretary of State of the State of Delaware. The Merger shall become effective upon the
filing of the Certificate of Merger with the Office of the Secretary of State of the State of Delaware, or at such later time as shall be agreed upon in writing by Parent and the Company and specified
in the Certificate of Merger (the "
Effective Time
").
2.3
Effect of the Merger.
At the Effective Time, the Merger shall have the effects set forth in this
Agreement and the applicable provisions of the DGCL. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of each of the Company and Merger Sub shall vest in the Surviving Corporation,
and all debts, liabilities, obligations, restrictions, disabilities and duties of each of the Company and Merger Sub shall become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation.
2.4
Organizational Documents of the Surviving Corporation.
At the Effective Time, the certificate of
incorporation and the bylaws of the Surviving Corporation shall be amended and restated to be in the form of the
certificate of incorporation and bylaws of Merger Sub as of the date of this Agreement, except that the name of the Surviving Corporation shall be changed, until such certificate of incorporation and
bylaws are thereafter amended and restated, subject to
Section 6.10(b)
, in accordance with their respective terms and applicable Law.
2.5
Directors and Officers of the Surviving Corporation.
The parties shall take all necessary action
such that from and after the Effective Time, the directors and officers of Merger Sub immediately prior to the
Effective Time shall be the directors and officers of the Surviving Corporation, and such directors and officers shall serve until their successors have been duly elected or appointed and qualified or
until their death, resignation or removal in accordance with the Organizational Documents of the Surviving Corporation.
2.6
Organizational Documents of Parent.
(a) Subject
to the approval by Parent's shareholders of the Parent Charter Amendment prior to the Effective Time, Parent shall take all necessary actions to cause the Parent
Charter Amendment to become effective at or immediately following the Effective Time, and Parent's
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restated
articles of incorporation, as amended by the Parent Charter Amendment, shall be the articles of incorporation of Parent until thereafter amended in accordance with the provisions thereof and
applicable Law.
(b) Subject
to the approval by Parent's shareholders of the Parent Charter Amendment prior to the Effective Time, Parent shall take all necessary actions to cause the
amended and restated bylaws of Parent to be amended as of the Effective Time so that such bylaws shall provide that the size of the Parent Board shall be no more than thirteen (13) members.
2.7
Post-Closing Merger.
Immediately following the Effective Time, the Surviving Corporation shall
merge with and into LLC Sub (the "
LLC Sub
Merger
"), with LLC Sub continuing as the surviving entity in such merger as an indirect wholly owned subsidiary of Parent, pursuant to a merger agreement substantially
in the form attached hereto as Exhibit A (the "
LLC Sub Merger Agreement
"). At the time of and immediately after the LLC Sub Merger, EQT
Production Company, a direct wholly owned subsidiary of EIH ("
EPC
") shall own all of the membership interests and other equity, if any, in LLC
Sub and shall be the sole member of LLC Sub, and LLC Sub shall be treated as an entity disregarded as separate from EPC for U.S. federal income Tax purposes.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY AND MERGER SUB;
EXCHANGE
3.1
Effect of the Merger on Capital Stock.
At the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub, the Company or any holder of any securities of Parent,
Merger Sub or the Company:
(a)
Capital Stock of Merger Sub.
Each share of capital stock of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and shall become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.
(b)
Capital Stock of the Company.
(i) Subject
to the other provisions of this
Article III
, each share of common stock, par value $0.01 per share, of
the Company ("
Company Common Stock
"), issued and outstanding immediately prior to the Effective Time (excluding any Cancelled Shares, any Converted
Shares and any Appraisal Shares), including for the avoidance of doubt any shares of Company Common Stock outstanding immediately prior to the Effective Time whose prior restrictions have lapsed
pursuant to
Section 3.2
or that were issued in connection with the Redemption pursuant to
Section 3.2(e)
, shall be converted into the right to
receive from Parent: (A) that number of validly issued, fully-paid and nonassessable
shares of Parent Common Stock equal to the Exchange Ratio (the "
Share Consideration
") and (B) $5.30 in cash, without interest (the
"
Cash Consideration
", and together with the Share Consideration, the "
Merger Consideration
"). As used in
this Agreement, "
Exchange Ratio
" means 0.37.
(ii) All
such shares of Company Common Stock, when so converted pursuant to
Section 3.1(b)(i)
, shall automatically be
canceled and cease to exist. Each holder of a share of Company Common Stock that was outstanding immediately prior to the Effective Time (other than shares of Company Common Stock described in
Section 3.1(b)(iii)
) shall cease to have any rights with respect thereto, except the right to receive (A) the Merger Consideration,
(B) any dividends or other distributions in accordance with
Section 3.3(g)
and (C) any cash to be paid in lieu of any fractional
shares of Parent Common Stock in accordance with
Section 3.3(h)
, in each case to be issued or paid in consideration therefor upon the surrender
of any Certificates or Book-Entry Shares, as applicable, in accordance with
Section 3.3
.
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(iii) All
shares of Company Common Stock held by the Company as treasury shares or by Parent, EIH or Merger Sub immediately prior to the Effective Time (the
"
Cancelled Shares
") shall automatically be canceled and cease to exist as of the Effective Time, and no consideration shall be delivered in exchange
therefor. All shares of Company Common Stock held by any wholly owned Subsidiary of Parent (other than EIH or Merger Sub) or any wholly owned Subsidiary of the Company immediately prior to the
Effective Time (the "
Converted Shares
") shall automatically be converted into such number of shares of Parent Common Stock equal to the sum of
(A) such number of shares of Parent Common Stock equal to the quotient of the Cash Consideration divided by the Closing Parent Common Stock Price and (B) the Share Consideration.
(c)
Impact of Stock Splits, Etc.
Without limiting the parties' respective obligations
under
Section 6.1
and
Section 6.2
, in the event of any change in (i) the number of
shares of Company Common Stock, or securities convertible or exchangeable into or exercisable for shares of Company Common Stock or (ii) the number of shares of Parent Common Stock, or
securities convertible or exchangeable into or exercisable for shares of Parent Common Stock (including options to purchase Parent Common Stock), in each case issued and outstanding after the date of
this Agreement and prior to the Effective Time by reason of any stock split, reverse stock split, stock dividend, subdivision, reclassification, recapitalization, combination, exchange of shares or
the like, the Exchange Ratio shall be equitably adjusted to reflect the effect of such change and, as so adjusted, shall from and after the date of such event, be used to calculate the Merger
Consideration, subject to further adjustment in accordance with this
Section 3.1(c)
.
3.2
Treatment of Equity Compensation Awards; Common Units.
(a)
Restricted Stock Units.
Except as set forth on
Schedule 6.9
of the Company Disclosure Letter, as of the Effective
Time, any outstanding award of restricted stock units of Company Common Stock
(each, a "
Company RSU Award
") granted pursuant to the Company's 2014 Long-Term Incentive Plan, as
amended from time to time (the "
Company Stock Plan
") shall be assumed by Parent and shall be converted into an award of restricted stock units of Parent
Common Stock (each, a "
Parent RSU Award
") with respect to a number of whole shares of Parent Common Stock (rounded to the nearest whole share) equal to
the product obtained by multiplying (i) the number of shares of Company Common Stock subject to such Company RSU Award as of immediately prior to the Effective Time by (ii) the Stock
Award Exchange Ratio. Except as otherwise provided in this
Section 3.2(a)
, each Company RSU Award assumed and converted into a Parent RSU Award
pursuant to this
Section 3.2(a)
shall continue to have, and shall be subject to, the same terms and conditions (including with respect to
vesting) as applied to the corresponding Company RSU Award as of immediately prior to the Effective Time.
(b)
Performance Stock Units.
Except as set forth on
Schedule 6.9
of the Company Disclosure Letter, as of the Effective
Time, any outstanding award of performance stock units of Company Common Stock
(each, a "
Company PSU Award
") granted pursuant to the Company Stock Plan shall be assumed by Parent and shall be converted into a Parent RSU Award with
respect to a number of whole shares of Parent Common Stock (rounded to the nearest whole share) equal to the product obtained by multiplying (i) the number of shares of Company Common Stock
subject to such Company PSU Award as of immediately prior to the Effective Time by (ii) the Stock Award Exchange Ratio. Except as otherwise provided in this
Section 3.2(b)
, each Company PSU
Award assumed and converted into a Parent RSU Award pursuant to this
Section 3.2(b)
shall continue to have, and shall be subject to, the same terms and conditions (including with respect to
vesting) as applied to
the corresponding Company PSU Award as of immediately prior to the Effective Time;
provided
that any performance conditions applicable to such converted
Company PSU Awards in respect of performance periods that are incomplete as of the Effective Time shall be fixed at the Effective Time based on the maximum performance level specified in the
applicable
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Company
PSU Award and such Company PSU Awards thereafter shall be subject only to continued service-based vesting.
(c)
Company Actions.
Prior to the Effective Time, the Company Board and/or the Compensation Committee of the
Company Board shall take such action and adopt such resolutions as are required to effectuate the treatment of the Company RSU Awards and Company PSU Awards pursuant to the terms of this
Section 3.2
, and to take all actions reasonably required to effectuate any provision of this
Section 3.2
(including with respect to
Schedule 6.9
of
the Company Disclosure Letter).
(d)
Plans and Awards Assumed by Parent; Parent Actions.
At the Effective Time, Parent shall assume all
obligations in respect of the Company Stock Plan, including the Company RSU Awards and Company PSU Awards. Parent shall take all corporate action necessary to reserve for issuance a number of
authorized but unissued shares of Parent Common Stock for delivery upon settlement of the Parent RSU Awards in accordance with this
Section 3.2
.
If registration of any plan interests in the Company Stock Plan or the shares of Company Common Stock issuable thereunder is required under the Securities Act, on the Closing Date or as promptly as
reasonably practicable thereafter, Parent shall file a registration statement on Form S-8 (or any successor or other appropriate form) with respect to the shares of Parent Common Stock
subject to such awards.
(e)
Common Units of the Operating Company.
The Company shall, within five (5) Business Days of the date
hereof, provide written notice of an expected Manager Change of Control (as defined in the Operating Company LLC Agreement) to all members of the Operating Company other than the Company in
accordance with Section 11.01(g) of the Operating Company LLC Agreement. The Company shall exercise its right pursuant to Section 11.01(g) of the Operating Company LLC
Agreement to cause any Person other than the Company (a "
Non-Company Operating Company Member
") to effect a redemption of any and all Common Units (as
defined in the Operating Company LLC Agreement) (along with 1/1000th of a share of Company Class A Preferred Stock in respect of each such Common Unit) outstanding held by each
such Person as of immediately prior to the Effective Time in exchange for an equal number of shares of Company Common Stock (the "
Redemption
"). Such
shares of Company Common Stock issued in the Redemption shall be treated as an outstanding share of Company Common Stock for purposes of
Section 3.1(b)
. All Common Units and shares of Company
Class A Preferred Stock (or fractions thereof) subject to the Redemption shall be
deemed transferred to the Company as of immediately prior to the Effective Time and such Non-Company Operating Company Member shall cease to have any rights with respect to such Common Units and
shares of Company Class A Preferred Stock (or fractions thereof) (other than the right to receive shares of Company Common Stock pursuant to such Redemption and the right to receive the Merger
Consideration in exchange therefor pursuant to
Section 3.1(b)(i)
).
(f)
Series B Units of Midstream Holdings.
Unless Midstream Holdings has received a valid Change in
Control Put Notice (as defined in the Midstream Holdings LLC Agreement) with respect to all issued and outstanding Series B Units within five (5) Business Days prior to the
expected Closing Date, then the Company shall, unless Parent otherwise requests in writing, cause Midstream Holdings to (i) issue a Change in Control Call Notice (as defined in the Midstream
Holdings LLC Agreement) pursuant to and in compliance with Section 7.2(c) of the Midstream Holdings LLC Agreement to each Person that holds Series B Units and that did not
deliver a valid Change in Control Put Notice with respect to all Series B Units held by such Person, and (ii) acquire all remaining Series B Units on the Closing Date pursuant to
such Change in Control Call Notice and in compliance with Section 7.2(g) of the Midstream Holdings LLC Agreement.
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3.3
Payment for Securities; Exchange.
(a)
Exchange Agent; Exchange Fund.
No later than substantially concurrently with the Effective Time, Parent
shall enter into an agreement with the Company's transfer agent, or another firm reasonably acceptable to the Company, to act as agent for the holders of Company Common Stock in connection with the
Merger (the "
Exchange Agent
") and to receive the Merger Consideration and cash sufficient to pay cash in lieu of fractional shares, pursuant to
Section 3.3(h)
to which such holders shall become entitled pursuant to this
Article III
.
No later than substantially concurrently with the Effective Time, Parent shall deposit, or cause to be deposited, with the Exchange Agent, for the benefit of the former holders of shares of Company
Common Stock, for issuance in accordance with this
Article III
through the Exchange Agent, the number of shares of Parent Common Stock issuable
to the holders of Company Common Stock outstanding immediately prior to the Effective Time pursuant to
Section 3.1
. Parent agrees to make
available to the Exchange Agent, from time to time as needed, cash sufficient to pay any dividends and other distributions pursuant to
Section 3.3(g)
and to make payments in lieu of fractional
shares pursuant to
Section 3.3(h)
. The Exchange Agent shall, pursuant to irrevocable instructions, deliver the Merger Consideration contemplated to be issued in
exchange for shares of Company Common Stock pursuant to this Agreement out of the Exchange Fund. Except as contemplated by this
Section 3.3(a)
and
Sections 3.3(g)
and
3.3(h)
, the Exchange Fund shall not be used for any other purpose. Any
cash and shares of Parent Common Stock deposited with the Exchange Agent (including as payment for fractional shares in accordance with
Section 3.3(h)
and any dividends or other distributions in
accordance with
Section 3.3(g)
)
shall hereinafter be referred to as the "
Exchange Fund
." The Surviving Corporation shall pay all charges and expenses, including those of the Exchange
Agent, in connection with the exchange of shares for the Merger Consideration. Any interest or other income resulting from investment of the cash portion of the Exchange Fund shall become part of the
Exchange Fund.
(b)
Payment Procedures.
(i) As
soon as practicable after the Effective Time, but in no event more than two Business Days after the Closing Date, Parent shall cause the Exchange Agent to deliver to
each record holder, as of immediately prior to the Effective Time, of (A) shares represented by a certificate or certificates that immediately prior to the Effective Time represented shares of
Company Common Stock (the "
Certificates
") or (B) shares of Company Common Stock represented by book-entry ("
Book-Entry
Shares
"), in each case, which shares were converted into the right to receive the Merger Consideration at the Effective Time, a letter of transmittal
("
Letter of Transmittal
") (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon
proper delivery of the Certificates to the Exchange Agent or, in the case of Book-Entry Shares, upon adherence to the procedures set forth in the Letter of Transmittal, and which shall be in a
customary form and agreed to by Parent and the Company prior to the Closing) and instructions for use in effecting the surrender of the Certificates or, in the case of Book-Entry Shares, the surrender
of such shares, for payment of the Merger Consideration set forth in
Section 3.1(b)(i)
.
(ii) Upon
surrender to the Exchange Agent of a Certificate or Book-Entry Shares, together with the Letter of Transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other customary documents as may be reasonably required by the Exchange Agent, the holder of such Certificate or Book-Entry Shares shall be entitled to receive
in exchange therefor (A) one or more shares of Parent Common Stock (which shall be in uncertificated book-entry form unless a physical certificate is requested by such holder) representing, in
the aggregate, the whole number of shares of Parent Common Stock, if any, that such holder has the right to receive pursuant to
Section 3.1
(after taking into account all shares of Company Common Stock then held by such holder) and (B) a check
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in
the amount equal to the cash payable in lieu of any fractional shares of Parent Common Stock pursuant to
Section 3.3(h)
and dividends and
other distributions pursuant to
Section 3.3(g)
. No interest shall be paid or accrued for the benefit of holders of the Certificates or Book-Entry
Shares on the Merger Consideration payable in respect of the Certificates or Book-Entry Shares. If payment of the Merger Consideration is to be made to a Person other than the record holder of such
shares of Company Common Stock, it shall be a condition of payment that shares so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the Person
requesting such payment shall have paid any transfer and other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of such shares
surrendered or shall have established to the satisfaction of Parent that such Taxes either have been paid or are not applicable. Until surrendered as contemplated by this
Section 3.3(b)(ii)
, each
Certificate and each Book-Entry Share shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender the Merger Consideration payable in respect of such shares of Company Common Stock, cash in lieu of any fractional shares of Parent Common Stock to which such holder is
entitled pursuant to
Section 3.3(h)
and any dividends or other distributions to which such holder is entitled pursuant to
Section 3.3(g)
.
(c)
Termination of Rights.
All Merger Consideration (including any dividends or other distributions with respect
to Parent Common Stock pursuant to
Section 3.3(g)
and any cash in lieu of fractional shares of Parent Common Stock pursuant to
Section 3.3(h)
)
paid upon the surrender of and in exchange for shares of Company Common Stock in accordance with the terms hereof shall be deemed
to have been paid in full satisfaction of all rights pertaining to such Company Common Stock. At the Effective Time, the stock transfer books of the Surviving Corporation shall be closed immediately,
and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged for the Merger
Consideration payable in respect of the shares of Company Common Stock previously represented by such Certificates or Book-Entry Shares (other than Certificates or Book-Entry Shares evidencing shares
of Company Common Stock described in
Section 3.1(b)(iii)
), any cash in lieu of fractional shares of Parent Common Stock to which
the holders thereof are entitled pursuant to
Section 3.3(h)
and any dividends or other distributions to which the holders thereof are entitled
pursuant to
Section 3.3(g)
, without any interest thereon.
(d)
Termination of Exchange Fund.
Any portion of the Exchange Fund that remains undistributed to the former
stockholders of the Company on the three hundred and sixty fifth (365th) day after the Closing Date shall be delivered to Parent, upon demand, and any former common stockholders of the Company who
have not theretofore received the Merger Consideration, any cash in lieu of fractional shares of Parent Common Stock to which they are entitled pursuant to
Section 3.3(h)
and any dividends or other
distributions with respect to Parent Common Stock to which they are entitled pursuant to
Section 3.3(g)
, in each case without interest thereon, to which they are entitled under this
Article III
shall thereafter look only to Parent for
payment of their claim for such amounts.
(e)
No Liability.
None of the Surviving Corporation, Parent, Merger Sub or the Exchange Agent shall be liable to
any holder of Company Common Stock for any amount of Merger Consideration properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. If any
Certificate or Book-Entry Share has not been surrendered prior to the time that is immediately prior to the time at which Merger Consideration in respect of such Certificate or Book-Entry Share would
otherwise escheat to or become the property of any Governmental Entity, any such shares, cash, dividends or distributions in respect of such Certificate or Book-Entry Share shall, to the extent
permitted by applicable Law, become the property of Parent, free and clear of all claims or interest of any Person previously entitled thereto.
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(f)
Lost, Stolen, or Destroyed Certificates.
If any Certificate (other than a
Certificate evidencing shares of Company Common Stock described in
Section 3.1(b)(iii)
) shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by the Surviving Corporation, the posting by such Person of a
bond in such reasonable amount as the Surviving Corporation may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration payable in respect of the shares of Company Common Stock formerly represented by such Certificate, any cash in lieu of
fractional shares of Parent Common Stock to which the holders thereof are entitled pursuant to
Section 3.3(h)
and any dividends or other
distributions to which the holders thereof are entitled pursuant to
Section 3.3(g)
.
(g)
Distributions with Respect to Unexchanged Shares of Parent Common Stock.
No dividends or other distributions
declared or made with respect to shares of Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate or Book-Entry Shares with
respect to the whole shares of Parent Common Stock that such holder would be entitled to receive upon surrender of such Certificate or Book-Entry Shares and no cash payment in lieu of fractional
shares of Parent Common Stock shall be paid to any such holder, in each case until such holder shall
surrender such Certificate or Book-Entry Shares in accordance with this
Section 3.3
. Following surrender of any such Certificate or Book-Entry
Shares, there shall be paid to such holder of whole shares of Parent Common Stock issuable in exchange therefor, without interest, (i) promptly after the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Parent Common Stock, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the Effective Time but with a subsequent payment date with respect to such whole shares of Parent Common Stock. For purposes of
dividends or other distributions in respect of shares of Parent Common Stock, all whole shares of Parent Common Stock to be issued pursuant to the Merger shall be entitled to dividends pursuant to the
immediately preceding sentence as if such whole shares of Parent Common Stock were issued and outstanding as of the Effective Time.
(h)
No Fractional Shares of Parent Common Stock.
No certificates or scrip or shares representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange of Certificates or Book-Entry Shares and such fractional share interests will not entitle the owner thereof to vote or to
have any rights of a shareholder of Parent or a holder of shares of Parent Common Stock. Notwithstanding any other provision of this Agreement, each holder of shares of Company Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of Parent Common Stock (after taking into account all Certificates and Book-Entry Shares delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to the product of (i) such fractional part of a share of Parent Common Stock multiplied by
(ii) the volume weighted average price of Parent Common Stock for the five consecutive trading days immediately prior to the Closing Date as reported by Bloomberg, L.P. As promptly as
practicable after the determination of the amount of cash, if any, to be paid to holders of shares of Company Common Stock exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Parent Common Stock (after taking into account all Certificates and Book-Entry Shares delivered by such holder), the Exchange Agent shall so notify Parent, and Parent
shall cause the Exchange Agent to forward payments to such holders of fractional interests subject to and in accordance with the terms hereof.
(i)
Withholding Taxes.
Notwithstanding anything in this Agreement to the contrary, Parent, the Company, Merger
Sub, the Surviving Corporation, LLC Sub and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this
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Agreement
any amount required to be deducted and withheld with respect to the making of such payment under applicable Tax Laws. To the extent that any amounts are so deducted or withheld and paid over
to the relevant Taxing Authority, such deducted or withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the Person in respect of which such deduction or withholding was made.
3.4
Appraisal Rights.
Notwithstanding anything in this Agreement to the contrary, shares of Company
Common Stock issued and outstanding immediately prior to the Effective Time that are
held by any record holder who is entitled to demand and properly demands appraisal of such shares pursuant to, and who complies in all respects with, the provisions of Section 262 of the DGCL
(the "
Appraisal Shares
") shall not be converted into the right to receive the Merger Consideration payable pursuant to
Section 3.1(b)(i)
, but instead
at the Effective Time shall become the right to payment of the fair value of such shares in accordance with the
provisions of Section 262 of the DGCL, and at the Effective Time all Appraisal Shares shall no longer be outstanding and shall automatically be canceled and cease to exist. Notwithstanding the
foregoing, if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to appraisal under Section 262 of the DGCL or a court of competent jurisdiction shall
determine that such holder is not entitled to the relief provided by Section 262 of the DGCL, then (i) such shares of Company Common Stock shall thereupon cease to constitute Appraisal
Shares and (ii) the right of such holder to be paid the fair value of such holder's Appraisal Shares under Section 262 of the DGCL shall be forfeited and cease and if such forfeiture
shall occur following the Effective Time, each such Appraisal Share shall thereafter be deemed to have been converted into and to have become, as of the Effective Time, the right to receive, without
interest thereon, the Merger Consideration. The Company shall deliver prompt notice to Parent of any demands for appraisal of any shares of Company Common Stock and the Company shall provide Parent
with the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal under the DGCL. Prior to the Effective Time, the Company shall not, without the prior
written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter dated as of the date of this Agreement and delivered by the Company to Parent and Merger Sub on or
prior to the date of this Agreement (the "
Company Disclosure Letter
") and except as disclosed in the Company SEC Documents (excluding any disclosures
set forth in any such Company SEC Documents in any risk factor section, any forward-looking disclosure or any other statements that are non-specific, predictive or primarily cautionary in nature other
than historical facts included therein), where the relevance of the information as an exception to (or disclosure for purposes of) a particular representation is reasonably apparent on the face of
such disclosure, the Company represents and warrants to Parent and Merger Sub as follows:
4.1
Organization, Standing and Power.
Each of the Company and its Subsidiaries is a corporation,
partnership or limited liability company duly organized, as the case may be, validly existing and in
good standing under the Laws of its jurisdiction of incorporation or organization, with all requisite entity power and authority to own, lease and operate its properties and to carry on its business
as now being conducted, other than where the failure to be so organized or to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company (a "
Company Material Adverse Effect
"). Each of the Company and its Subsidiaries is duly qualified and in good
standing to do business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification necessary, other than where the
failure to so qualify or be in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material
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Adverse
Effect. The Company has heretofore made available to Parent complete and correct copies of its Organizational Documents, as well as the equivalent Organizational Documents of each Subsidiary,
in each case as of the date hereof.
4.2
Capital Structure.
(a) As
of the date of this Agreement, the authorized capital stock of the Company consists of (i) 650,000,000 shares of Company Common Stock and
(ii) 50,000,000 shares of preferred stock, par value $0.01 per share ("
Company Preferred Stock
" and, together with the Company Common Stock, the
"
Company Capital Stock
"). At the close of business on June 15, 2017: (A) 206,465,466 shares of Company Common Stock were issued and
outstanding; (B) 36,700 shares of Class A Preferred Stock of the Company, par value $0.01 per share (the "
Company Class A Preferred
Stock
") were issued and outstanding; (C) 36,700,000 shares of Company Common Stock remained available for issuance upon redemption of the Common Units in the Operating
Company; and (D) 17,500,000 shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Plan, of which (1) 1,871,366 shares of Company Common Stock were
issuable in respect of outstanding Company RSU Awards and (2) 2,073,512 shares (assuming satisfaction of performance conditions at the target level) or 4,147,023 shares (assuming satisfaction
of performance conditions at the maximum level) of Company Common Stock were issuable in respect of outstanding Company PSU Awards.
(b) All
outstanding shares of Company Common Stock are validly issued, fully paid and non-assessable and are not subject to preemptive rights. All outstanding shares of
Company Common Stock have been issued and granted in compliance in all material respects with (1) applicable securities Laws and other
applicable Law and (2) all requirements set forth in applicable contracts. As of the close of business on June 15, 2017, except as set forth in this
Section 4.2
and except for the Common
Units in the Operating Company, which are exchangeable for shares of Company Common Stock, there are no
outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Company or any of its Subsidiaries any capital stock of the Company or securities convertible into or
exchangeable or exercisable for capital stock of the Company (and the exercise, conversion, purchase, exchange or other similar price thereof). All outstanding shares of capital stock of the
Subsidiaries of the Company that are owned by the Company, or a direct or indirect owned Subsidiary of the Company, are free and clear of all Encumbrances, other than Permitted Encumbrances and
restrictions on transfer set forth in the Operating Company LLC Agreement, the Rice MLP LP Agreement and the Strike Force Midstream LLC Agreement. Except as set forth in this
Section 4.2
, and except for changes since June 15, 2017 resulting from the redemption of Common Units in the Operating Company in exchange
for shares of Company Common Stock or the exercise of stock options or settlement of equity awards, in each case, outstanding as of such date, there are outstanding as of the date hereof:
(a) no shares of Company Capital Stock, (b) no Voting Debt, (c) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for
shares of Company Capital Stock or Voting Debt, and (d) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which the Company or any Subsidiary of
the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued,
delivered, sold, purchased, redeemed or acquired, additional shares of Company Capital Stock or any Voting Debt or other voting securities of the Company, or obligating the Company or any Subsidiary
of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Other than the Stockholders' Agreement, there are not any stockholder agreements, voting
trusts or other agreements to which the Company is a party or by which it is bound relating to the voting of any shares of the Company Capital Stock. As of the date of this Agreement, the Company has
no (i) material joint venture or other similar material equity
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interests
in any Person other than its Subsidiaries and its joint ventures listed on
Schedule 4.2
of the Company Disclosure Letter or
(ii) obligations, whether contingent or otherwise, to consummate any material additional investment in any Person other than a wholly owned direct or indirect Subsidiary of the Company. No
Subsidiary of the Company owns any shares of capital stock of the Company.
(c)
Schedule 4.2(c)
of the Company Disclosure Letter sets forth a true and complete list, as of the date of this
Agreement, of (i) each Company Stock Award, (ii) the name of each Company Stock Award holder, (iii) the number of shares of Company Common Stock underlying each Company Stock
Award (assuming satisfaction of performance conditions at both the target and maximum levels), (iv) the date on which each Company Stock Award was granted, (v) the exercise price of each
Company Stock Award, if applicable, (vi) the expiration date of each Company Stock Award, if applicable and (vii) the vesting schedule applicable to each Company Stock Award. All Company
Stock Awards were (x) granted in accordance with the terms of the Company Stock Plan, the Exchange Act, all other applicable Laws
and rules of the NYSE and (y) properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and disclosed in the Company SEC Documents
in accordance with the Exchange Act and all other applicable Laws.
(d) The
authorized equity interests of Rice MLP consist of common units representing limited partner interests in Rice MLP ("
Rice MLP Common
Units
"), subordinated units representing limited partner interests in Rice MLP ("
Rice MLP Subordinated Units
"), incentive
distribution rights of Rice MLP (the "
Rice MLP IDRs
"), and a non-economic general partner interest in Rice MLP (the "
Rice MLP
General Partner Interest
"). As of June 15, 2017, the issued and outstanding limited partner interests and general partner interests of Rice MLP consisted of
(i) 73,519,133 Rice MLP Common Units, of which 3,623 are held by Rice Midstream GP Holdings LP ("
GP Holdings
"),
(ii) 28,753,623 Rice MLP Subordinated Units, all of which are held by GP Holdings, (iii) the Rice MLP General Partner Interest, all of which is held by Midstream Holdings,
(iv) the Rice MLP IDRs, all of which are held by GP Holdings and (v) 5,000,000 Rice MLP Common Units reserved for issuance pursuant to the Rice Midstream Partners LP 2014
Long-Term Incentive Plan, of which 301,304 Rice MLP Common Units were issuable in respect of outstanding phantom units. Except as set forth in the preceding sentence, no limited partner interests of
Rice MLP are authorized, issued or outstanding, as of June 15, 2017. All outstanding equity interests of Rice MLP are duly authorized, validly issued, fully-paid and nonassessable and free of
preemptive rights (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act). The outstanding general
partner interests of Rice MLP are duly authorized and validly issued and free of preemptive rights.
(e) The
authorized equity interests of GP Holdings consist of (i) 10,000,000 common units representing limited partner interest in GP Holdings and
(ii) a non-economic general partner interest, all of which is held by Midstream Holdings. As of June 15, 2017, 9,175,000 of such common units are held by Midstream Holdings and 825,000
of such common units are held by Third Party Security Holders. Except as set forth in the preceding sentence, no equity interests of GP Holdings are authorized, issued or outstanding, as of
June 15, 2017. All outstanding equity interests of GP Holdings are duly authorized, validly issued, fully-paid and nonassessable and free of preemptive rights (except as such
nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act).
(f) The
authorized equity interests of Midstream Holdings consist of (i) 1,000 Series A Units, all of which are held by the Operating Company and
(ii) 375,000 Series B Units (the "
Series B Units
"), all of which, as of the date hereof, are held by Third Party Security Holders.
Except as set forth in the preceding sentence, no equity interests of Midstream Holdings are authorized, issued
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or
outstanding, as of June 15, 2017. All outstanding equity interests of Midstream Holdings are duly authorized, validly issued, fully-paid and nonassessable and free of preemptive rights
(except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act).
(g) The
authorized equity interests of the Operating Company consist solely of common units, of which, as of June 15, 2017, 206,465,466 are held by the Company and
36,700,000 are held by Third Party Security Holders. Except as set forth in the preceding sentence, no equity interests of the Operating Company are authorized, issued or outstanding, as of
June 15, 2017. All outstanding equity interests of the Operating Company are duly authorized, validly issued, fully-paid and nonassessable and free of preemptive rights (except as such
nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act).
(h) The
authorized equity interests of Strike Force Midstream LLC consist solely of a single class of membership interests, of which, as of June 15, 2017, 75%
are held by a direct wholly-owned Subsidiary of the Operating Company and, as of the date hereof, 25% are held by Gulfport Energy Corporation or one of its subsidiaries. Except as set forth in the
preceding sentence, no equity interests of Strike Force Midstream LLC are authorized, issued or outstanding. All outstanding equity interests of Strike Force Midstream LLC are duly
authorized, validly issued, fully-paid and nonassessable and free of preemptive rights (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited
Liability Company Act).
4.3
Authority; No Violations; Consents and Approvals.
(a) The
Company has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the Transactions have been duly authorized by all necessary corporate action on the part of the Company, subject, with respect to
consummation of the Merger, to the Company Stockholder Approval. This Agreement has been duly executed and delivered by the Company and, assuming the due and valid execution of this Agreement by
Parent and Merger Sub, constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium and other Laws of general applicability relating to or affecting creditors' rights and to general principles of equity regardless of whether such enforceability is
considered in a Proceeding in equity or at law (collectively, "
Creditors' Rights
"). The Company Board, at a meeting duly called and
held, (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, are fair to, and in the best interests of, the Company's stockholders,
(ii) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Merger, (iii) took all appropriate and necessary actions to render any and all
limitations on mergers, business combinations and ownership of shares of Company Common Stock as set forth in the Company's Organizational Documents or in any state takeover statute (including,
without limitation, Section 203 of the DGCL) to be inapplicable to the transactions contemplated by this Agreement (including the Integrated Merger) and the Voting Agreement
(iv) directed that this Agreement be submitted to the holders of Company Common Stock for its adoption and (v) recommended that the holders of Company Common Stock approve and adopt this
Agreement and the transactions contemplated hereby, including the Merger (such recommendation described in
clause (v)
, the
"
Company Board Recommendation
"). The Company Stockholder Approval is the only vote of the holders of any class or series of the Company's capital stock
necessary to approve and adopt this Agreement and the Merger.
(b) The
execution and delivery of this Agreement does not, and the consummation of the Transactions will not (with or without notice or lapse of time, or both)
(i) contravene, conflict with
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or
result in a violation of any provision of the Organizational Documents of the Company (assuming that the Company Stockholder Approval is obtained), (ii) result in a violation of, or default
under, or acceleration of any material obligation or the loss of a material benefit under, or result in the creation of any Encumbrance upon any of the properties or assets of the Company or any of
its Subsidiaries under, any provision of any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, permit, franchise or license to which the Company or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries or its or their respective properties or assets are bound, or (iii) assuming the Consents referred to in
Section 4.4
are duly
and timely obtained or made and the Company Stockholder Approval has been obtained, contravene, conflict with or result in a
violation of any Law applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, other than, in the case of
clauses (ii)
and
(iii)
, any such contraventions, conflicts, violations, defaults, acceleration,
losses, or Encumbrances that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
4.4
Consents.
No Consent from any Governmental Entity is required to be obtained or made by the
Company or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or the consummation by the Company of the Transactions, except for: (a) the filing of a premerger notification report under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the "
HSR Act
"), and the expiration or termination of the
applicable waiting period with respect thereto; (b) the filing with the SEC of (i) a Joint proxy statement in preliminary and definitive form (the "
Joint Proxy
Statement
") relating to the meeting of the stockholders of the Company to consider the adoption of this Agreement (including any postponement, adjournment or recess thereof,
the "
Company Stockholders Meeting
") and the Parent Shareholders Meeting and (ii) such reports under Section 13(a) of the Exchange Act, and
such other compliance with the Exchange Act and the rules and regulations thereunder, as may be required in connection with this Agreement and the Transactions; (c) the filing of the
Certificate of Merger with the Office of the Secretary of State of the State of Delaware; (d) filings with the NYSE; (e) such filings and approvals as may be required by any applicable
state securities or "blue sky" laws or Takeover Laws; and (f) any such consent that the failure to obtain or make would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.5
SEC Documents; Financial Statements.
(a) Since
January 1, 2016, each of the Company and Rice MLP has filed or furnished with the SEC all forms, reports, schedules and statements required to be filed or
furnished under the Securities Act or the Exchange Act, respectively (such forms, reports, schedules and statements, collectively, the "
Company SEC
Documents
"). As of their respective dates, each of the Company SEC Documents, as amended, complied as to form in all material respects with the applicable requirements of the
Securities Act, or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Company SEC Documents, and none of the Company SEC Documents contained,
when filed or, if amended prior to the date of this Agreement, as of the date of such amendment with respect to those disclosures that are amended, any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company and Rice MLP,
respectively, have made all certifications and statements required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the "
Sarbanes-Oxley
Act
") and the related rules and regulations promulgated thereunder with respect to the Company SEC Documents. As of the date hereof, neither the Company nor Rice MLP nor any of
their respective officers has received notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications. As of the date
hereof, there are no outstanding or unresolved comments received by the Company from the
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SEC
with respect to any of the Company SEC Documents. As of the date hereof, to the knowledge of the Company, none of the Company SEC Documents is the subject of ongoing SEC review or investigation.
(b) The
financial statements of the Company and Rice MLP included in the Company SEC Documents, including all notes and schedules thereto, complied in all material respects,
when filed or if amended prior to the date of this Agreement, as of the date of such amendment, with the rules and regulations of the SEC with respect thereto, were prepared in accordance with
generally accepted accounting principles in the United States ("
GAAP
") applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in
accordance with applicable requirements of GAAP (subject, in the case of the unaudited statements, to normal year-end audit adjustments) the financial position of the Company and its consolidated
Subsidiaries and of Rice MLP and its consolidated Subsidiaries, as applicable, as of their respective dates and the results of operations and the cash flows of the Company and its consolidated
Subsidiaries and of Rice MLP and its consolidated Subsidiaries, as applicable, for the periods presented therein.
4.6
Absence of Certain Changes or Events.
(a) Since
December 31, 2016, there has not been any event, change, effect or development that, individually or in the aggregate, had or would reasonably be expected
to have a Company Material Adverse Effect.
(b) From
December 31, 2016 through the date of this Agreement, (i) the Company and its Subsidiaries have conducted their business in the ordinary course of
business in all material respects and (ii) neither the Company nor any of its Subsidiaries has undertaken any action that would be prohibited by
Section 6.1(b)(iv)
,
(v)
,
(vii)
,
(viii)
,
(ix), (x)
or
(xiv)
if such provision were
in effect at all times since December 31, 2016 (or, in the case of
clause (x)
, since March 31, 2017).
4.7
No Undisclosed Liabilities.
There are no liabilities of the Company or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than: (a) liabilities adequately provided for on the balance sheet of the Company dated as of March 31, 2017 (including the notes thereto) contained in the Company's
Quarterly Report on Form 10-Q for the three (3)-months ended March 31, 2017, (b) liabilities adequately provided for on the balance sheet of Rice MLP dated as of March 31,
2017 (including the notes thereto) contained in Rice MLP's Quarterly Report on Form 10-Q for the three (3)-months ended March 31, 2017, (c) liabilities incurred in the ordinary
course of business consistent with past practice subsequent to March 31, 2017; (d) liabilities incurred in connection with the Transactions; (e) liabilities not required to be
presented on the face of or in the notes to an unaudited interim balance sheet prepared in accordance with GAAP; (f) liabilities incurred as permitted under
Section 6.1(b)(x)
; and
(g) liabilities that have not had and would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
4.8
Information Supplied.
None of the information supplied or to be supplied by the Company for
inclusion or incorporation by reference in (a) the registration statement on
Form S-4 to be filed with the SEC by Parent pursuant to which shares of Parent Common Stock issuable in the Merger will be registered with the SEC (including any amendments or supplements, the
"
Registration Statement
") shall, at the time the Registration Statement becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not
misleading or (b) the Joint Proxy Statement will, at the date it is first mailed to stockholders of the Company and to shareholders of Parent and at the time of the Company Stockholders Meeting
and the Parent Shareholders Meeting, contain any untrue statement of a material fact or omit to state
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any
material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Joint Proxy Statement
will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder;
provided
,
however
, that
no representation is made by the Company with respect to statements made therein based on information supplied by Parent or Merger Sub
specifically for inclusion or incorporation by reference therein.
4.9
Company Permits; Compliance with Applicable Law.
The Company and its Subsidiaries hold all permits,
licenses, variances, exemptions, orders, franchises and approvals of all Governmental Entities necessary for
the lawful conduct of their respective businesses (the "
Company Permits
"), except where the failure to so hold has not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company and its Subsidiaries are in compliance with the terms of the Company Permits, except where the
failure to so comply has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The businesses of the Company and its Subsidiaries
are not currently being conducted, and at no time since January 1, 2016 have been conducted, in violation of any applicable Law, except for violations that have not had and would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect. As of the date of this Agreement, to the knowledge of the Company, no investigation or review by any
Governmental Entity with respect to the Company or any of its Subsidiaries is pending or threatened, other than those the outcome of which have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
4.10
Compensation; Benefits.
(a) Set
forth on
Schedule 4.10(a)
of the Company Disclosure Letter is a list, as of the date hereof, of all of the
material Employee Benefit Plans sponsored, maintained, or contributed to by the Company or any of its Subsidiaries, to which the Company or any of its Subsidiaries is obligated to sponsor, maintain or
contribute, or to which the Company or any of its Subsidiaries otherwise has any liability (the "
Company Plans
"). No Company Plan is established or
maintained outside of the United States or for the benefit of current or former employees of the Company or any of its Subsidiaries residing outside of the United States. The Company has furnished or
made available to Parent or its Representatives true, correct and complete copies of each of the Company Plans (or, in the case of any unwritten plan, a summary of the terms thereof) and, with respect
thereto, if applicable, (i) related trust (or other funding vehicle) documents, (ii) favorable determination letters, (iii) the reports filed on Form 5500 (including, where
applicable, all schedules and actuarial and accountants' reports) for the two most recent plan years and the most recent actuarial report or other financial statement and summary plan description and
(iv) any material correspondence with a Governmental Entity regarding any Company Plan.
(b) (i)
Each Company Plan has been maintained and administered in compliance with its terms and all applicable Laws, including, but not limited to, ERISA and the Code and in
each case the regulations thereunder, (ii) neither the Company nor any of its Subsidiaries has engaged in a transaction that has resulted in, or could result in, the assessment of a civil
penalty upon the Company or any of its Subsidiaries pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code, and (iii) there does
not now exist, nor do any circumstances exist that would reasonably be expected to result in, any Controlled Group Liability that would be a liability of the Company or any member of its Aggregated
Group, in each case, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) Each
Company Plan intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter as to its qualification from
the Internal
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Revenue
Service or is entitled to rely on an advisory or opinion letter as to its qualification issued with respect to an Internal Revenue Service approved master and prototype or volume submitter
plan, and there are no existing circumstances or any events that have occurred that would reasonably be expected to adversely affect the qualified status of any such plan.
(d) There
are no Proceedings pending (other than routine claims for benefits) or, to the knowledge of the Company, threatened against, or with respect to, any of the Company
Plans or any trusts related thereto, except for such Proceedings that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(e) Except
as would not reasonably be expected to be, individually or in the aggregate, material to the Company or any of its Subsidiaries, taken as a whole, all
contributions or other payments (including insurance premiums or intercompany charges) required to be made by or with respect to the Company Plans pursuant to their terms or applicable Law have been
timely made.
(f) There
are no material unfunded benefit obligations that have not been properly accrued for in the Company's financial statements or, where required, disclosed in the
notes thereto in accordance with GAAP.
(g) None
of the Company or any member of its Aggregated Group maintains, contributes to or has an obligation to contribute to, or participates in, or during the six
(6) years preceding the date of this Agreement has maintained, contributed to, or participated in, or otherwise has any obligation or liability in connection with (i) a plan subject to
Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (ii) a "multiple employer welfare arrangement" (as defined in Section 3(40) of ERISA), a "multiple
employer plan" (as defined in Section 413(c) of the Code) or a "multiemployer plan" (within the meaning of Section 3(37) of ERISA) or (iii) any plan or arrangement which provides
for post-employment or post-retirement medical or welfare benefits for retired or former employees or beneficiaries or dependents thereof, except as required by Section 4980B of the Code.
(h) Except
as would not reasonably be expected to be, individually or in the aggregate, material to the Company or its Subsidiaries, taken as a whole, each Company Plan that
is or was a nonqualified deferred compensation plan subject to Section 409A of the Code has been operated between January 1, 2005 and December 31, 2008 in good faith compliance
with Section 409A of the Code and applicable guidance thereunder and since January 1, 2009 has been in documentary and operational compliance with Section 409A of the Code.
(i) Except
as set forth on
Schedule 4.10(i)(i)-(v)
of the Company Disclosure Letter, neither the execution and
delivery of this Agreement nor the consummation of the Transactions (either alone or in conjunction with any other event) will (i) result in any payment (including severance, forgiveness of
Indebtedness or otherwise) or benefit becoming due to any current or former director, employee or other service provider of the Company or any of its Subsidiaries under any Company Plan or otherwise,
(ii) increase any benefits otherwise payable or trigger any other obligation under any Company Plan, (iii) result in any acceleration of the time of payment, funding or vesting of any
such benefits, (iv) result in any limitation on the right of the Company or any of its Subsidiaries to administer, amend, merge or terminate or receive a reversion of assets from any Company
Plan or related trust or (v) result in any payment (whether in cash or property or the vesting of property) to any "disqualified individual" (as such term is defined in Treasury Regulation
Section 1.280G-1) that could, individually or in combination with any other such payment, constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of the Code).
(j) No
Company Plan provides for the gross-up or reimbursement of Taxes under Section 409A or 4999 of the Code or otherwise.
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4.11
Labor Matters
.
(a) As
of the date of this Agreement and in the preceding three (3) years, (i) neither the Company nor any of its Subsidiaries is or has been a party to any
collective bargaining agreement or other agreement or work rules or practices with any labor union or similar representatives of employees, (ii) there is and has been no pending or, to the
knowledge of the Company, threatened, union representation petition involving employees of the Company or any of its Subsidiaries, and (iii) the Company does not have knowledge of any activity
or proceeding of any labor organization (or representative thereof) or employee group (or representative thereof) to organize any such employees.
(b) As
of the date of this Agreement and in the preceding three (3) years, there is and has been no unfair labor practice, charge or grievance arising out of a
collective bargaining agreement, other agreement with any labor union, or other labor-related grievance proceeding against the Company or any of its Subsidiaries pending, or, to the knowledge of the
Company, threatened, other than such
matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) As
of the date of this Agreement and in the preceding three (3) years, there is and has been no strike, dispute, slowdown, work stoppage or lockout pending, or,
to the knowledge of the Company, threatened, against or involving the Company or any of its Subsidiaries, other than such matters that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
(d) The
Company and its Subsidiaries are, and since January 1, 2015 have been, in compliance in all material respects with all applicable Laws respecting employment
and employment or labor practices (including all applicable Laws relating to wages, hours, child labor, collective bargaining, employment discrimination, disability rights or benefits, equal
opportunity, plant closures and layoffs, civil rights, classification of employees, classification of service providers as employees and/or independent contractors, affirmative action, safety and
health, workers' compensation, immigration, pay equity and the collection and payment of withholding or social security), and there are no Proceedings pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, by or on behalf of any applicant for employment, any current or former employee, current or former independent contractor or any class of the
foregoing, relating to any of the foregoing applicable Laws, or alleging breach of any express or implied contract of employment or service, wrongful termination of employment or service, or alleging
any other discriminatory, wrongful or tortious conduct in connection with the employment or service relationship, other than any such matters described in this sentence that have not had and would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Since January 1, 2016, neither the Company nor any of its Subsidiaries has received any
written notice of the intent of the Equal Employment Opportunity Commission, the National Labor Relations Board, the Department of Labor or any other Governmental Entity responsible for the
enforcement of labor or employment Laws to conduct investigation or been subject to such an investigation, in each case, with respect to the Company or any of its Subsidiaries which has had or would
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
4.12
Taxes
. Except as would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect:
(a) All
Tax Returns required to be filed (taking into account extensions of time for filing) by the Company or any of its Subsidiaries have been timely filed with the
appropriate Taxing Authority and all such Tax Returns are true, correct and complete, and all Taxes that are due and payable by the Company or any of its Subsidiaries (including Taxes required to be
withheld from
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payments
to employees, creditors, shareholders or other Persons) have been paid in full, in each case, except to the extent adequate reserves have been established in accordance with GAAP in the
financial statements included in the Company SEC Documents.
(b) There
is not in force any waiver or agreement for any extension of time for the assessment or payment of any Tax by the Company or any of its Subsidiaries.
(c) There
is no outstanding claim, assessment or deficiency against the Company or any of its Subsidiaries for any Taxes that has been asserted or threatened in writing by
any Governmental Entity except for any such claim, assessment or deficiency for which adequate reserves have been established in accordance with GAAP in the financial statements included in the
Company SEC Documents. There are no disputes, audits, examinations, investigations or proceedings pending or threatened in writing in respect of any Taxes or Tax Returns of the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries is a party to any litigation or administrative proceeding relating to Taxes.
(d) There
are no Liens for Taxes upon any property or assets of the Company or any of its Subsidiaries except for statutory Liens for Taxes not yet due and payable.
(e) In
the last three (3) years, neither the Company nor any of its Subsidiaries has received a written claim by any Governmental Entity in a jurisdiction where it
does not file income or franchise Tax Returns that it is or may be subject to income or franchise taxation by that jurisdiction.
(f) Neither
the Company nor any of its Subsidiaries is a party to any Tax allocation, sharing or indemnity contract or arrangement (not including, for the avoidance of doubt
(i) any contract or arrangement solely among the Company and/or any of its Subsidiaries, or (ii) any customary Tax sharing or indemnification provisions contained in any agreement
entered into in the ordinary course of business (e.g., leases, credit agreements or other commercial agreements)). Neither the Company nor any of its Subsidiaries has (i) been a member
of an affiliated group filing a consolidated U.S. federal income Tax Return (other than a group the common parent of which is or was the Company or any of its Subsidiaries) or (ii) any
liability for Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulations § 1.1502-6 (or any similar provision of state, local or foreign Law)
or as a transferee or successor.
(g) Neither
the Company nor any of its Subsidiaries has requested, has received or is subject to any written ruling of a Taxing Authority that will be binding on it for any
taxable period beginning on or after the Closing Date or has entered into any "closing agreement" as described in Section 7121 of the Code (or any similar provision of state, local or foreign
Law).
(h) Neither
the Company nor any of its Subsidiaries has participated, or is currently participating, in a "listed transaction," as defined in Treasury Regulations
§ 1.6011-4(b)(2) (or any similar provision of state, local or foreign Law).
(i) Neither
the Company nor any of its Subsidiaries has constituted a "distributing corporation" or a "controlled corporation" in a distribution of stock intended to qualify
for tax-free treatment under Section 355(a) of the Code in the two (2) years prior to the date of this Agreement.
(j) After
reasonable diligence, neither the Company nor any of its Subsidiaries is aware of the existence of any fact, or has taken or agreed to take any action, that could
reasonably be expected to prevent the Integrated Mergers, taken together, from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code.
(k) Rice
MLP is properly classified as a partnership for U.S. federal income tax purposes, and not as an association or a publicly traded partnership taxable as a
corporation under
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Section 7704
of the Code, and has properly been treated as such at all times since its formation. At least 90% of the gross income of Rice MLP for each taxable year since its formation has been
"qualifying income" within the meaning of Section 7704(d) of the Code.
(l) The
Company is not an "investment company" within the meaning of Section 368(a)(2)(F) of the Code.
4.13
Litigation
. Except for such matters as have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, there is no (a) Proceeding pending, or, to the knowledge of the Company, threatened against the Company or any of its
Subsidiaries or (b) judgment, decree, injunction, ruling or order of any Governmental Entity or arbitrator outstanding against the Company or any of its Subsidiaries. To the knowledge of the
Company, as of the date of this Agreement, no officer or director of the Company or any Subsidiary of the Company is a defendant in any material Proceeding in connection with his or her status as an
officer or director of the Company or any Subsidiary of the Company.
4.14
Intellectual Property
.
The Company and its Subsidiaries own or have the right to use all Intellectual Property necessary for the operation of the businesses of each of the Company and its Subsidiaries as
presently conducted (collectively, the "
Company Intellectual Property
") free and clear of all Encumbrances except for Permitted Encumbrances, except
where the failure to own or have the right to use such properties has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the
knowledge of the Company, the use of the Company Intellectual Property by the Company and its Subsidiaries in the operation of the business of each of the Company and its Subsidiaries as presently
conducted does not infringe upon or misappropriate any Intellectual Property of any other Person, except for such matters that have not had would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect. The Company and its Subsidiaries have taken reasonable measures to protect the confidentiality of trade secrets used in the businesses of each of the
Company and its Subsidiaries as presently conducted, except where failure to do so has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
4.15
Real Property
.
Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and with respect to
clauses (a)
and
(b), except with respect to any of the Company's Oil and Gas Properties, (a) the Company and its Subsidiaries have good,
valid and defensible title to all material real property owned by the Company or any of its Subsidiaries (collectively, the "
Company Owned Real
Property
") and valid leasehold estates in all material real property leased, subleased, licensed or otherwise occupied (whether as tenant, subtenant or pursuant to other
occupancy arrangements) by the Company or any Subsidiary of the Company (collectively, including the improvements thereon, the "
Company Material Leased Real
Property
") free and clear of all Encumbrances, except Permitted Encumbrances, (b) each agreement under which the Company or any Subsidiary of the Company is the
landlord, sublandlord, tenant, subtenant, or occupant with respect to the Company Material Leased Real Property (each, a "
Company Material Real Property
Lease
") to the knowledge of the Company is in full force and effect and is valid and enforceable against the parties thereto in accordance with its terms, subject, as to
enforceability, to Creditors' Rights, and neither the Company nor any of its Subsidiaries, or to the knowledge of the Company, any other party thereto, has received written notice of any default under
any Company Material Real Property Lease, and (c) there does not exist any pending or, to the knowledge of the Company, threatened, condemnation or eminent domain proceedings that affect any of
the Company's Oil and Gas Properties, Company Owned Real Property or Company Material Leased Real Property.
4.16
Rights-of-Way
. Each of the Company and its Subsidiaries has such consents, easements, rights-of-way, fee
assets, permits and licenses from each Person (collectively "
Rights-of-Way
") as are sufficient to conduct its business in the manner described, and
subject to the limitations, qualifications,
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reservations
and encumbrances contained in any Company SEC Document, except for such Rights-of-Way the absence of which has not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Each of the Company and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights-of-Way and conduct their
business in a manner that does not violate any of the Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would
result in any impairment of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect. All Systems operated by the Company and its Subsidiaries are subject to Rights-of-Way, and there are no gaps (including any
gap arising as a result of any breach by the Company or any of its Subsidiaries of the terms of any Rights-of-Way) in the Rights-of-Way other than gaps that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
4.17
Oil and Gas Matters
.
(a) Except
as has not had and would not reasonably be expected to have a Company Material Adverse Effect and except for property (i) sold or otherwise disposed of in
the ordinary course of business since the dates of the reserve report prepared by Netherland, Sewell & Associates, Inc. (the "
Company Independent Petroleum
Engineers
") relating to the Company interests referred to therein as of December 31, 2016 (the "
Company Reserve Report
")
or (ii) reflected in the Company Reserve Report or in the Company SEC Documents as having been sold or otherwise disposed of, as of the date hereof, the Company and its Subsidiaries have good
and defensible title to all Oil and Gas Properties forming the basis for the reserves reflected in the Company Reserve Report (the "
Company Oil and Gas
Properties
") and in each case as attributable to interests owned by the Company and its Subsidiaries, free and clear of any Encumbrances, except for Permitted Encumbrances. For
purposes of the foregoing sentence, "good and defensible title" means that the Company's or one or more of its Subsidiaries', as applicable, title (as of the date hereof and as of the Closing) to each
of the Oil and Gas Properties held or owned by them (or purported to be held or owned by them) (1) entitles the Company (or one or more of its Subsidiaries, as applicable) to receive (after
satisfaction of all Production Burdens applicable thereto), not less than the net revenue interest share shown in the Company Reserve Report of all Hydrocarbons produced from such Oil and Gas
Properties throughout the life of such Oil and Gas Properties, (2) obligates the Company (or one or more of its Subsidiaries, as applicable) to bear a percentage of the costs and expenses for
the maintenance and development of, and operations relating to, such Oil and Gas Properties, of not greater than the working interest shown
on the Company Reserve Report for such Oil and Gas Properties (other than any positive differences in such percentage) and the applicable working interest shown on the Company Reserve Report for such
Oil and Gas Properties that are accompanied by a proportionate (or greater) net revenue interest in such Oil and Gas Properties and (3) is free and clear of all Encumbrances (other than
Permitted Encumbrances).
(b) Except
for any such matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect, the
factual, non-interpretive data supplied by the Company to the Company Independent Petroleum Engineers relating to the Company interests referred to in the Company Reserve Report, by or on behalf of
the Company and its Subsidiaries that was material to such firm's estimates of proved oil and gas reserves attributable to the Oil and Gas Properties of the Company and its Subsidiaries in connection
with the preparation of the Company Reserve Report was, as of the time provided, accurate in all respects. Except for any such matters that, individually or in the aggregate, have not had and would
not reasonably be expected to have a Company Material Adverse Effect, the oil and gas reserve estimates of the Company set forth in the Company Reserve Report are derived
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from
reports that have been prepared by the Company Independent Petroleum Engineers, and such reserve estimates fairly reflect, in all respects, the oil and gas reserves of the Company at the dates
indicated therein and are in accordance with SEC guidelines applicable thereto applied on a consistent basis throughout the periods involved. Except for changes generally affecting the oil and gas
exploration, development and production industry (including changes in commodity prices) and normal depletion by production, there has been no change in respect of the matters addressed in the Company
Reserve Report that would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) Except
as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) all rentals, shut-ins
and similar payments owed to any Person or individual under (or otherwise with respect to) any Oil and Gas Leases that are a part of the Company Oil and Gas Properties
("
Company Oil and Gas Leases
") have been properly and timely paid, (ii) all royalties, minimum royalties, overriding royalties and other
Production Burdens with respect to any Company Oil and Gas Properties owned or held by the Company or any of its Subsidiaries have been timely and properly paid, (iii) none of the Company or
any of its Subsidiaries (and, to the Company's knowledge, no third party operator) has violated any provision of, or taken or failed to take any act that, with or without notice, lapse of time, or
both, would constitute a default under the provisions of any Company Oil and Gas Lease (or entitle the lessor thereunder to cancel or terminate such Company Oil and Gas Lease) included in the Company
Oil and Gas Properties owned or held by the Company or any of its Subsidiaries.
(d) All
proceeds from the sale of Hydrocarbons produced from the Company Oil and Gas Properties are being received by such selling entities in a timely manner and no
material proceeds from the sale of Hydrocarbons produced from any such Company Oil and Gas Properties are being held in suspense (by the Company, any of its Subsidiaries, any third party operator
thereof or any other Person or individual) for any reason except as reported in the Company SEC Documents.
4.18
Environmental Matters
.
Except for those matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(a) the
Company and its Subsidiaries and their respective operations and assets are in compliance with Environmental Laws;
(b) as
of the date of this Agreement, the Company and its Subsidiaries are not subject to any pending or, to the Company's knowledge, threatened Proceeding under
Environmental Laws;
(c) there
have been no Releases of Hazardous Substances at any property currently or, to the knowledge of the Company, formerly owned, operated or otherwise used by the
Company or any of its Subsidiaries, or, to the knowledge of the Company, by any predecessors of the Company or any Subsidiary of the Company, which Releases are reasonably likely to result in material
liability to the Company under Environmental Law, and, as of the date of this Agreement, neither the Company nor any of its Subsidiaries has received any written notice asserting a liability or
obligation under any Environmental Laws with respect to the investigation, remediation, removal, or monitoring of the Release of any Hazardous Substances at or from any property currently or formerly
owned, operated, or otherwise used by the Company, or at or from any off-site location where Hazardous Substances from the Company's operations have been sent for treatment, disposal storage or
handling; and
(d) there
have been no environmental investigations, studies, audits, or other analyses conducted during the past three (3) years by or on behalf of, or that are in
the possession of, the Company or its Subsidiaries addressing potentially material environmental matters with respect to
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any
property owned, operated or otherwise used by any of them that have not been delivered or otherwise made available to Parent prior to the date hereof.
4.19
Material Contracts
.
(a)
Schedule 4.19
of the Company Disclosure Letter, together with the lists of exhibits contained in the Company SEC
Documents, sets forth a true and complete list, as of the date of this Agreement, of each of the following agreements to which or by which the Company or any Subsidiary of the Company is a party or is
otherwise bound:
(i) each
"material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K under the Exchange Act)
(
provided
,
however
, that the Company shall not be required to list any such agreements in
clause (i)(i)
of Schedule 4.19 of the Company Disclosure Letter);
(ii) each
contract that provides for the acquisition, disposition, license, use, distribution or outsourcing of assets, services, rights or properties (other than Oil and
Gas Properties) with respect to which the Company reasonably expects that the Company and its Subsidiaries will make annual payments in excess of $15,000,000;
(iii) each
contract that constitutes a commitment relating to Indebtedness for borrowed money or the deferred purchase price of property by the Company or any of its
Subsidiaries (whether incurred, assumed, guaranteed or secured by any asset) in excess of $15,000,000, other than agreements solely between or among the Company and its Subsidiaries;
(iv) each
contract for lease of personal property or real property (other than Oil and Gas Properties) involving aggregate payments in excess of $15,000,000 in any calendar
year that are not terminable without penalty within sixty (60) days, other than contracts related to drilling rigs;
(v) each
contract containing any area of mutual interest, joint bidding area, joint acquisition area, or non-compete or similar type of provision that, following the
Effective Time, by virtue of Parent
becoming an Affiliate of the Company as a result of the Transactions, would by its terms materially restrict the ability of Parent or any of its Subsidiaries to compete in any line of business or
geographic area or with any Person during any period of time after the Effective Time;
(vi) each
contract involving the pending acquisition or sale of (or option to purchase or sell) any material amount of the assets or properties of the Company or its
Subsidiaries, taken as a whole, other than contracts involving the acquisition or sale of (or option to purchase or sell) Hydrocarbons in the ordinary course of business;
(vii) each
contract for any Derivative Transaction in excess of $5,000,000, and each International Swaps and Derivatives Association Master Agreement;
(viii) each
material partnership, joint venture or limited liability company agreement, other than any customary joint operating agreements, unit agreements or participation
agreements affecting the Oil and Gas Properties of the Company;
(ix) each
joint development agreement, exploration agreement, participation, farmout, farmin or program agreement or similar contract requiring the Company or any of its
Subsidiaries to make expenditures that would reasonably be expected to be in excess of $15,000,000 in the aggregate during the twelve (12)-month period following the date of this Agreement, other than
customary joint operating agreements and continuous development obligations under Oil and Gas Leases;
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(x) each
collective bargaining agreement to which the Company or any of its Subsidiaries is a party or is subject;
(xi) each
agreement under which the Company or any of its Subsidiaries has advanced or loaned any amount of money to any of the following: (x) an executive officer or
director of the Company or any Subsidiary of the Company; (y) a beneficial owner (within the meaning of Section 13(d) of the Exchange Act) of 5% or more of the Company Common Stock; or
(z) an Affiliate, "associate" or member of the "immediate family" (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of the Persons described in
the foregoing
clauses (x)
or (y);
(xii) any
contract that provides for a "take-or-pay" clause or any similar prepayment obligation, acreage dedication, minimum volume commitments or capacity reservation fees
to a gathering, transportation or other arrangement downstream of the wellhead, that cover, guaranty or commit volumes in excess of 50 million cubic feet ("MMcf") (or, in the case of liquids,
in excess of 8,333 barrels of oil equivalent) of Hydrocarbons per day over a period of one (1) month (calculated on a yearly average basis) or for a term greater than ten (10) years or
that dedicate acreage in excess of 1,000 net acres, committed by or to the Company or any of its Subsidiaries;
(xiii) each
agreement that contains any "most favored nation" or most favored customer provision, preferential right or rights of first or last offer, negotiation or
refusal, in each case other than those contained in (A) any agreement in which such provision is solely for the benefit of the Company or any of its wholly owned Subsidiaries,
(B) customary royalty pricing provisions in Oil and Gas Leases or (C) customary preferential rights in joint operating agreements, unit agreements or participation agreements affecting
the business or the Oil and Gas Properties of the Company or any of its Subsidiaries, to which the Company or any of its Subsidiaries or any of their respective Affiliates is subject, and is material
to the business of the Company and its Subsidiaries, taken as a whole;
(xiv) each
agreement or Organizational Document of the Company or any of its Subsidiaries that would, on or after the Closing Date, prohibit or restrict the ability of the
Company or any of its Subsidiaries to declare and pay dividends or distributions with respect to their capital stock, pay any indebtedness, obligations or liabilities from time to time owed to Parent
or any of its Subsidiaries (including the Company and its Subsidiaries), make loans or advances to Parent or any of its Subsidiaries (including the Company and its Subsidiaries), or transfer any of
its properties or assets to Parent or any of its Subsidiaries (including the Company and its Subsidiaries);
(xv) any
contract between the Company or any of its Subsidiaries, on the one hand, and any of their respective officers or directors, or any holder of 5% or more of the
outstanding shares of Company Common Stock (or any such Person's Affiliates) on the other hand;
(xvi) any
contract that, upon the consummation of the Merger, would (either alone or upon the occurrence of any additional acts or events, including the passage of time)
result in any payment or benefit (whether of severance pay or otherwise) becoming due, or the acceleration or vesting of any right to any payment or benefits, from Parent, Merger Sub, the Company or
any of their respective Subsidiaries to any officer, director, consultant or employee of any of the foregoing; and
(xvii) any
contract that would or would reasonably be expected to prevent, materially delay or materially impede the consummation of any of the Transactions.
(b) Collectively,
the contracts set forth in
Section 4.19(a)
are herein referred to as the
"
Company Contracts
." Except as has not had and would not reasonably be expected to have,
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individually
or in the aggregate, a Company Material Adverse Effect, each Company Contract is legal, valid, binding and enforceable in accordance with its terms on the Company and each of its
Subsidiaries that is a party thereto and, to the knowledge of the Company, each other party thereto, and is in full force and effect, subject, as to enforceability, to Creditors' Rights. Except as has
not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries is in breach or default under
any Company Contract nor, to the knowledge of the Company, is any other party to any such Company Contract in breach or default thereunder. The Company has heretofore made available to Parent complete
and correct copies of the Company Contracts as of the date hereof.
4.20
Derivative Transactions
.
Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(a) All
Derivative Transactions entered into by the Company or any of its Subsidiaries or for the account of any of its customers as of the date of this Agreement were
entered into in accordance with applicable Laws, and in accordance with the investment, securities, commodities, risk management and other policies, practices and procedures employed by the Company
and its Subsidiaries, and were entered into with counterparties believed at the time to be financially responsible and able to understand (either alone or in consultation with their advisers) and to
bear the risks of such Derivative Transactions.
(b) The
Company and each of its Subsidiaries have duly performed in all respects all of their respective obligations under the Derivative Transactions to the extent that
such obligations to perform have accrued, and there are be no breaches, violations, collateral deficiencies, requests for collateral or demands for payment, or defaults or allegations or assertions of
such by any party thereunder.
4.21
Insurance
. The Company and its Subsidiaries have obtained and maintained in full force and effect
insurance, underwritten by financially reputable insurance companies, in such amounts, on such terms and covering such risks as is reasonably adequate and customary for their business and operations.
Schedule 4.21
of the Company Disclosure Letter sets forth a complete and correct list of all insurance
policies maintained by the Company and each of its Subsidiaries for the last three (3) years. The Company or the applicable Subsidiary of the Company has paid, or caused to be paid, all
premiums due under such policies and is not in default with respect to any obligations under such policies in any material respect, including, but not limited to, reporting of claims or incidents that
may give rise to a claim. All such policies are valid, outstanding and enforceable and neither the Company nor any of its Subsidiaries has agreed to modify or cancel any of such insurance policies nor
has the Company or any of its Subsidiaries received any notice of any actual or threatened modification, non-renewal or cancellation of such insurance other than in the ordinary course of business
consistent with past practice or such as is normal and customary in the Company's industry. As of the date hereof, none of the limits for any such policy currently in force have been exhausted or
materially reduced.
4.22
Opinion of Financial Advisor
.
The Company Board has received the opinion of Barclays Capital Inc. addressed to the Company Board to the effect that, based upon and subject to the limitations, qualifications
and assumptions set forth therein, as of the date of the opinion, from a financial point of view, the Merger Consideration to be offered to the holders of the Company Common Stock in the Transactions
(other than the holders of shares of Company Common Stock described in
Section 3.1(b)(iii)
of this Agreement and any Appraisal Shares) is fair to
such stockholders.
4.23
Brokers
. Except for the fees and expenses payable to Barclays Capital Inc., no broker, investment
banker, or other Person is entitled to any broker's, finder's or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company.
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4.24
Regulatory Matters
.
(a) Neither
the Company nor any Subsidiary of the Company is, or on the Closing Date will be, required to be registered as an investment company under the Investment Company
Act of 1940, as amended.
(b) All
natural gas pipeline Systems and related facilities owned by the Company or any of its Subsidiaries are (A) "gathering facilities" that are exempt from
regulation by the U.S. Federal Energy Regulatory Commission under the Natural Gas Act of 1938 and (B) not subject to rate regulation or
comprehensive nondiscriminatory access regulation under the laws of any state or other local jurisdiction.
4.25
Corporate Governance
.
(a) As
of the date of this Agreement, each of the Company and Rice MLP, as applicable, has disclosed to the Company's or Rice MLP's auditors and audit committees
(A) all known significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect in any
material respect the Company's or Rice MLP's ability to record, process, summarize and report its consolidated financial information and (B) any known fraud, whether or not material, that
involves management or other employees who have a significant role in the Company's or Rice MLP's internal controls over financial reporting. Since January 1, 2015, neither the Company nor any
of its Subsidiaries has made or permitted to remain outstanding any "extensions of credit" (within the meaning of Section 402 of the Sarbanes-Oxley Act) or prohibited loans to any executive
officer of the Company or Rice MLP (as defined in Rule 3b-7 under the Exchange Act) or director of the Company, Rice MLP or any of their respective Subsidiaries.
(b) The
Company and Rice MLP have established and maintain "disclosure controls and procedures" (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act). To the knowledge of the Company, such disclosure controls and procedures are designed to ensure that material information relating to the Company and Rice MLP, including their
respective Subsidiaries, required to be disclosed by the Company and Rice MLP, including their respective Subsidiaries, in the reports that they file or submit under the Exchange Act is accumulated
and communicated to the Company's and Rice MLP's respective principal executive officers and principal financial officers to allow timely decisions regarding required disclosure; and such disclosure
controls and procedures are effective to ensure that information required to be disclosed by the Company and Rice MLP in the reports that they file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in SEC rules and forms.
4.26
No Additional Representations
.
(a) Except
for the representations and warranties made in this
Article IV
, neither the Company nor any other Person
makes any express or implied representation or warranty with respect to the Company or its Subsidiaries or their respective businesses, operations, assets, liabilities or conditions (financial or
otherwise) in connection with this Agreement or the Transactions, and the Company hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing
disclaimer, neither the Company nor any other Person makes or has made any representation or warranty to Parent, Merger Sub, or any of their respective Affiliates or Representatives with respect to
(i) any financial projection, forecast, estimate, budget or prospect information relating to the Company or any of its Subsidiaries or their respective businesses; or (ii) except for the
representations and warranties made by the Company in this
Article IV
, any oral or written information presented to Parent or Merger
Sub or any of their respective Affiliates or Representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement or in the course of the Transactions.
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(b) Notwithstanding
anything contained in this Agreement to the contrary, the Company acknowledges and agrees that none of Parent, Merger Sub or any other Person has made or
is making, and the Company expressly disclaims reliance upon, any representations, warranties or statements relating to Parent or its Subsidiaries (including Merger Sub) whatsoever, express or
implied, beyond those expressly given by Parent and Merger Sub in
Article V
, including any implied representation or warranty as to the accuracy
or completeness of any information regarding Parent furnished or made available to the Company, or any of its Representatives. Without limiting the generality of the foregoing, the Company
acknowledges that no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospect information that may have been made available to the Company or
any of its Representatives (including in certain "data rooms," "virtual data rooms," management presentations or in any other form in expectation of, or in connection with, the Merger or the other
Transactions).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the disclosure letter dated as of the date of this Agreement and delivered by Parent and Merger Sub to the Company on or
prior to the date of this Agreement (the "
Parent Disclosure Letter
"), and except as disclosed in the Parent SEC Documents (excluding any disclosures set
forth in any such Parent SEC Documents in any risk factor section, any forward-looking disclosure or any other statements that are non-specific, predictive or primarily cautionary in nature other than
historical facts included therein), where the relevance of the information as an exception to (or disclosure for purposes of) a particular representation is reasonably apparent on the face of such
disclosure, Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:
5.1
Organization, Standing and Power
.
Each of Parent and its Subsidiaries (including Merger Sub) is a corporation, partnership or limited liability company duly organized, as the case may be, validly existing and in good
standing under the Laws of its jurisdiction of incorporation or organization, with all requisite entity power and authority to own, lease and operate its properties and to carry on its business as now
being conducted, other than where the failure to be so organized or to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent (a "
Parent Material Adverse Effect
"). Each of Parent and its Subsidiaries is duly qualified and in good standing to do
business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification necessary, other than where the failure to so
qualify or be in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Parent and Merger Sub each has heretofore
made available to the Company complete and correct copies of its Organizational Documents.
5.2
Capital Structure
.
(a) As
of the date of this Agreement, the authorized capital stock of Parent consists of (i) 320,000,000 shares of Parent Common Stock and (ii) 3,000,000
shares of preferred stock, no par value ("
Parent Preferred Stock
"). At the close of business on June 16, 2017:
(A) 173,800,724.6384 shares of Parent Common Stock were issued and outstanding, including 223,044.661024 shares of restricted Parent Common Stock issued pursuant to the Parent Stock
Plans; (B) no shares of Parent Preferred Stock were issued and outstanding; and (C) 6,136,560 shares of Parent Common Stock remained available for issuance pursuant to the Parent Stock
Plans, of which (I) 1,307,600 shares of Parent Common Stock were subject to issuance upon exercise of outstanding options to purchase Parent Common Stock, (II) 840,969 shares of
Parent Common Stock were issuable in respect of outstanding Parent RSU Awards and (III) 1,325,707 shares (assuming satisfaction of performance conditions at the target level) or 3,977,121
shares
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(assuming
satisfaction of performance conditions at the maximum level) of Parent Common Stock were issuable in respect of outstanding performance stock units in respect of Parent Common Stock.
(b) All
outstanding shares of Parent Common Stock are validly issued, fully paid and non-assessable and are not subject to preemptive rights. All outstanding shares of
Parent Common Stock have been issued and granted in compliance in all material respects with (1) applicable securities Laws and other applicable Law and (2) all requirements set forth in
applicable contracts. The Parent Common Stock to be issued pursuant to this Agreement, when issued, will be (a) validly issued, fully paid and nonassessable and not subject to preemptive rights
and (b) issued in compliance in all material respects with (i) applicable securities Laws and other applicable Law and (ii) all requirements set forth in applicable contracts. As
of the close of business on June 16, 2017, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from Parent or any of its Subsidiaries any capital
stock of Parent or securities convertible into or exchangeable or exercisable for capital stock of Parent (and the exercise, conversion, purchase, exchange or other similar price thereof). All
outstanding shares of capital stock of the Subsidiaries of Parent that are owned by Parent, or a direct or indirect wholly-owned Subsidiary of Parent, are free and clear of all Encumbrances other than
Permitted Encumbrances. Except as set forth in this
Section 5.2
, and except for changes since June 16, 2017 resulting from the exercise of
stock options or settlement of equity awards, in each case, outstanding as of such date, there are outstanding as of the date hereof: (A) no shares of capital stock, Voting Debt or other voting
securities of Parent; (B) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt or other voting securities
of Parent, and (C) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in
any case obligating Parent or any Subsidiary of Parent to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares
of capital stock or any Voting Debt or other voting securities of Parent, or obligating Parent or any Subsidiary of Parent to grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. There are not any shareholder agreements, voting trusts or other agreements to which Parent is a party or by which it is bound relating to the voting of any shares of the
capital stock of Parent. As of the date of this Agreement, Parent has no (1) material joint venture or other similar material equity interests in any Person other than its Subsidiaries and its
joint ventures listed on
Schedule 5.2
of the Parent Disclosure Letter or (2) obligations, whether contingent or otherwise, to consummate
any material additional investment in any Person other than a wholly owned direct or indirect Subsidiary of Parent. As of the date of this Agreement, the authorized capital stock of Merger Sub
consists of 100 shares of common stock, par value $0.01 per share, all of which shares are validly issued, fully paid and nonassessable and are owned by EIH.
(c) As
of June 16, 2017, the authorized equity interests of EQT GP consist of (i) 266,165,000 common units issued and outstanding representing the
entire limited partner interest in EQT GP, of which 239,715,000 common units were held by Subsidiaries of Parent and (ii) a non-economic general partner interest of EQT GP, all of
which is held by a Subsidiary of Parent. Except as set forth in the preceding sentence, no equity interests of EQT GP are authorized, issued or outstanding as of June 16, 2017. All
outstanding limited partner interests of EQT GP are duly authorized, validly issued, fully-paid and nonassessable and free of preemptive rights (except as such nonassessability may be affected
by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act). The outstanding general partner interests of EQT GP are duly authorized and validly issued
and free of preemptive rights.
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(d) As
of June 16, 2017, the authorized equity interests of EQT MLP consist of common units representing limited partner interests in EQT MLP
("
EQT MLP Common Units
"), incentive distribution rights of EQT MLP (the "
EQT MLP IDRs
"), and a 1.8%
general partner interest in EQT MLP (the "
EQT MLP General Partner Interest
"). As of June 16, 2017, the issued and outstanding limited partner
interests and general partner interests of EQT MLP consisted of (i) 80,581,758 EQT MLP Common Units, of which 21,811,643 are held by EQT GP and its Subsidiaries, (ii) the EQT MLP
General Partner Interest, all of which is held by EQT GP and its Subsidiaries and (iii) the EQT MLP IDRs, all of which are held by EQT GP and its Subsidiaries. Except as set forth
in the preceding sentence, no equity interests of EQT MLP are authorized, issued or outstanding as of June 16, 2017. All outstanding limited partner interests of EQT MLP are duly authorized,
validly issued, fully-paid and nonassessable and free of preemptive rights (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform
Limited Partnership Act). The outstanding general partner interests of EQT MLP are duly authorized and validly issued and free of preemptive rights.
(e) As
of June 16, 2017, the authorized equity interests of Mountain Valley Pipeline, LLC consist solely of a single class of membership interests, of which,
as of the date hereof, 45.5% are held by a Subsidiary of Parent and 55.5% are held by third parties. Except as set forth in the preceding sentence, no equity interests of Mountain Valley
Pipeline, LLC are authorized, issued or outstanding as of June 16, 2017. All outstanding equity interests of Mountain Valley Pipeline, LLC are duly authorized, validly issued,
fully-paid and nonassessable and free of preemptive rights (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act).
5.3
Authority; No Violations, Consents and Approvals
.
(a) Each
of Parent and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of this
Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the Transactions have been duly authorized by all necessary corporate action on the part of each of Parent (subject
to obtaining Parent Shareholder Approval) and Merger Sub (other than the adoption of this Agreement by EIH as sole stockholder of Merger Sub, which shall be effective immediately after the execution
and delivery of this Agreement). This Agreement has been duly executed and delivered by each of Parent and Merger Sub, and, assuming the due and valid execution of this Agreement by the Company,
constitutes a valid and binding obligation of each of Parent and Merger Sub enforceable against Parent and Merger Sub in accordance with its terms, subject as to enforceability to Creditors' Rights.
The Parent Board, at a meeting duly called and held, (i) determined that this Agreement and the transactions contemplated hereby, including the Parent Stock Issuance, are fair to, and in the
best interests of, Parent's shareholders, (ii) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Parent Stock Issuance,
(iii) approved and declared advisable the Parent Charter Amendment, (iv) resolved to recommend that the holders of Parent Common Stock approve the Parent Stock Issuance (such
recommendation described in
clause (iv)
, the "
Parent Board Recommendation
") and
(v) resolved to recommend that the holders of Parent Common Stock approve the Parent Charter Amendment (such recommendation described in
clause (v)
, the "
Parent Charter
Amendment Recommendation
"). The Merger Sub Board has by unanimous
vote (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, are fair to, and in the best interests of, the sole stockholder of Merger Sub and
(ii) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Merger. EIH, as the owner of all of the outstanding shares of capital stock of Merger
Sub, has executed a written consent that will become effective immediately after the execution and delivery of this Agreement pursuant to Section 228(c) of the DGCL to adopt this Agreement in
its
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capacity
as sole stockholder of Merger Sub. The Parent Shareholder Approval is the only vote of the holders of any class or series of Parent's capital stock necessary to approve the Parent Stock
Issuance and the Merger. Approval of the Parent Charter Amendment by the affirmative vote of a majority of the votes cast by all holders of Parent Common Stock entitled to vote thereon in person and
represented by proxy at the Parent Shareholders Meeting in accordance with the Organizational Documents of Parent and applicable Law is the only vote of the holders of any class or series of Parent's
capital stock necessary to approve the Parent Charter Amendment.
(b) The
execution and delivery of this Agreement does not, and the consummation of the Transactions will not (with or without notice or lapse of time, or both)
(i) contravene, conflict with or result in a violation of any provision of the Organizational Documents of either Parent or Merger Sub (assuming the Parent Shareholder Approval is obtained),
(ii) result in a violation of, or default under, or acceleration of any material obligation or the loss of a material benefit under, or result in the creation of any Encumbrance upon any of the
properties or assets of the Parent or any of its Subsidiaries under, any provision of any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, permit, franchise or
license to which Parent or any of its Subsidiaries is a party or by which
Parent or Merger Sub or any of their respective Subsidiaries or their respective properties or assets are bound or (iii) assuming the Consents, approvals, orders, authorizations, registrations,
filings, or permits referred to in
Section 5.4
are duly and timely obtained or made and the Parent Shareholder Approval has been obtained,
contravene, conflict with or result in a violation of any Law applicable to Parent or any of its Subsidiaries or any of their respective properties or assets, other than any such contraventions,
conflicts, violations, defaults, acceleration, losses or Encumbrances that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
5.4
Consents
. No Consent, approval, order or authorization of, or registration, declaration or filing with, or
permit from, any Governmental Entity is to be obtained or made by Parent or any of its Subsidiaries in connection with the execution and delivery of this Agreement by Parent and Merger Sub or the
consummation by Parent and Merger Sub of the Transactions except for: (i) the filing of a competition law notification report under the HSR Act and the expiration or termination of the
applicable waiting period with respect thereto; (ii) the filing with the SEC of (A) the Joint Proxy Statement and the Registration Statement and (B) such reports under
Section 13(a) of the Exchange Act and such other compliance with the Exchange Act and the rules and regulations thereunder as may be required in connection with this Agreement and the
Transactions; (iii) the filing of the Certificate of Merger with the Office of the Secretary of State of the State of Delaware; (iv) filings with the NYSE; (v) such filings and
approvals as may be required by any applicable state securities or "blue sky" Laws or Takeover Laws; and (vi) any such consent, approval, order, authorization, registration, filing, or permit
that the failure to obtain or make would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
5.5
SEC Documents
.
(a) Since
January 1, 2016, each of Parent and EQT MLP has filed or furnished with the SEC all forms, reports, schedules and statements required to be filed or
furnished under the Securities Act or the Exchange Act (such forms, reports, schedules and statements, collectively, the "
Parent SEC Documents
"). As of
their respective dates, each of the Parent SEC Documents, as amended, complied as to form in all material respects with the applicable requirements of the Securities Act, or the Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder applicable to such Parent SEC Documents, and none of the Parent SEC Documents contained, when filed or, if amended prior to the date of
this Agreement, as of the date of such amendment with respect to those disclosures that are amended, any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Parent and
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EQT
MLP respectively, have made all certifications and statements required by Sections 302 and 906 of the Sarbanes-Oxley Act and the related rules and regulations promulgated thereunder with
respect to the Parent SEC Documents. As of the date hereof, neither Parent nor EQT MLP nor any of their respective officers has received notice from any Governmental Entity challenging or questioning
the accuracy, completeness, form or manner of filing of such certifications. As of the date hereof, there are no outstanding or unresolved comments received by Parent from the SEC with respect to any
of the Parent SEC Documents. As of the date hereof, to the knowledge of Parent, none of the Parent SEC Documents is the subject of ongoing SEC review or investigation.
(b) The
financial statements of Parent included in the Parent SEC Documents, including all notes and schedules thereto, complied in all material respects, when filed or if
amended prior to the date of this Agreement, as of the date of such amendment, with the rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X of
the SEC) and fairly present in all material respects in accordance with applicable requirements of GAAP (subject, in the case of the unaudited statements, to normal year-end audit adjustments) the
financial position of Parent and its consolidated Subsidiaries as of their respective dates and the results of operations and the cash flows of Parent and its consolidated Subsidiaries for the periods
presented therein.
5.6
Absence of Certain Changes or Events
.
(a) Since
December 31, 2016, there has not been any Parent Material Adverse Effect or any event, change, effect or development that, individually or in the aggregate,
would reasonably be expected to have a Parent Material Adverse Effect.
(b) From
December 31, 2016 through the date of this Agreement, Parent and its Subsidiaries have conducted their business in the ordinary course of business in all
material respects.
5.7
Information Supplied
.
None of the information supplied or to be supplied by Parent for inclusion or incorporation by reference in (a) the Registration Statement shall, at the time the Registration
Statement becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not misleading or (b) the Joint Proxy Statement will, at the date it is first mailed to stockholders of the Company
and to shareholders of Parent and at the time of the Company Stockholders Meeting and the Parent Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Joint Proxy Statement and the
Registration Statement will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder;
provided
,
however
, that no representation is made by Parent with respect to statements made therein
based on information supplied by the Company specifically for inclusion or incorporation by reference therein.
5.8
No Undisclosed Liabilities
.
There are no liabilities of Parent or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than:
(a) liabilities adequately provided for on the balance sheet of Parent dated as of March 31, 2017 (including the notes thereto) contained in Parent's Quarterly Report on Form 10-Q
for the three (3)-months ended March 31, 2017; (b) liabilities adequately provided for on the balance sheet of EQT GP dated as of March 31, 2017 (including the notes
thereto) contained in EQT GP's Quarterly Report on Form 10-Q for the three (3)-months ended March 31, 2017; (c) liabilities adequately provided for on the balance sheet of
EQT MLP dated as of March 31, 2017 (including the notes thereto) contained in EQT MLP's Quarterly Report on Form 10-Q for the three (3)-months ended March 31, 2017;
(d) liabilities incurred in the ordinary course of business consistent with past practice
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subsequent
to March 31, 2017; (e) liabilities incurred in connection with the Transactions; (f) liabilities not required to be presented on the face of or in the notes to an
unaudited interim balance sheet prepared in accordance with GAAP; and (g) liabilities that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
5.9
Parent Permits; Compliance with Applicable Laws
.
Parent and its Subsidiaries hold all permits, licenses, variances, exemptions, orders, franchises, and approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "
Parent Permits
"), except where the failure to so hold would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect. Parent and its Subsidiaries are in compliance with the terms of the Parent Permits, except where the failure so to comply would not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect. The businesses of Parent and its Subsidiaries are not currently being conducted, and at no time since January 1,
2016 have been conducted, in violation of any applicable Law, except for violations that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
As of the date of this Agreement, to the knowledge of Parent no investigation or review by any Governmental Entity with respect to Parent or any of its Subsidiaries is pending or threatened, other
than those the outcome of which would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
5.10
Compensation; Benefits
.
(a) (i)
Each Employee Benefit Plan sponsored, maintained or contributed by Parent or any of its Subsidiaries, to which Parent or any of its Subsidiaries is obligated to
sponsor, maintain or contribute, or to which the Parent or any of its Subsidiaries otherwise has any liability (a "
Parent Plan
") has been maintained and
administered in compliance with its terms and all applicable Laws, including, but not limited to, ERISA and the Code and in each case the regulations thereunder, (ii) neither Parent nor any of
its Subsidiaries has engaged in a transaction that has resulted in, or could result in, the assessment of a civil penalty upon Parent or any of its Subsidiaries pursuant to Section 409 or
502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code, and (iii) there does not now exist, nor do any circumstances exist that would reasonably be expected to
result in, any Controlled Group Liability that would be a liability of Parent or any member of its Aggregated Group, in each case, except as would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect.
(b) Each
Parent Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter as to its
qualification from the Internal Revenue Service or is entitled to rely on an advisory or opinion letter as to its qualification issued with respect to an Internal Revenue Service approved master and
prototype or volume submitter plan, and there are no existing circumstances or any events that have occurred that would reasonably be expected to adversely affect the qualified status of any such
plan.
(c) There
are no Proceedings pending (other than routine claims for benefits) or, to the knowledge of Parent, threatened against, or with respect to, any of the Parent Plans
or any trusts related thereto, except for such Proceedings that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(d) Except
as would not reasonably be expected to be, individually or in the aggregate, material to Parent or any of its Subsidiaries, taken as a whole, all material
contributions or other payments (including insurance premiums or intercompany charges) required to be made by or with respect to the Parent Plans pursuant to their terms or applicable Law have been
timely made.
(e) There
are no material unfunded benefit obligations that have not been properly accrued for in Parent's financial statements or, where required, disclosed in the notes
thereto in accordance with GAAP.
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(f) None
of Parent or any member of its Aggregated Group contributes to or has an obligation to contribute to, and no Parent Plan is, a plan subject to Title IV of ERISA
(including a multiemployer plan within the meaning of Section 3(37) of ERISA), Section 302 of ERISA, or Section 412 of the Code, except as would not reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect.
5.11
Labor Matters
.
(a) As
of the date of this Agreement and in the preceding three (3) years, (i) neither Parent nor any of its Subsidiaries is or has been a party to any
collective bargaining agreement or other agreement or work rules or practices with any labor union or similar representatives of employees, (ii) there is and has been no pending or, to the
knowledge of Parent, threatened union representation petition involving employees of Parent or any of its Subsidiaries, and (iii) Parent does not have knowledge of any activity or proceeding of
any labor organization (or representative thereof) or employee group (or representative thereof) to organize any such employees.
(b) As
of the date of this Agreement and in the preceding three (3) years, there is and has been no unfair labor practice, charge or grievance arising out of a
collective bargaining agreement, other agreement with any labor union, or other labor-related grievance proceeding against Parent or any of its Subsidiaries pending, or, to the knowledge of Parent,
threatened, other than such matters that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) As
of the date of this Agreement and in the preceding three (3) years, there is and has been no strike, dispute, slowdown, work stoppage or lockout pending, or,
to the knowledge of Parent,
threatened, against or involving Parent or any of its Subsidiaries, other than such matters that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse
Effect.
(d) Parent
and each of its Subsidiaries are, and since January 1, 2015 have been, in compliance in all material respects with all applicable Laws respecting
employment and employment or labor practices (including all applicable Laws relating to wages, hours, child labor, collective bargaining, employment discrimination, disability rights or benefits,
equal opportunity, plant closures and layoffs, civil rights, classification of employees, classification of service providers as employees and/or independent contractors, affirmative action, safety
and health, workers' compensation, immigration, pay equity and the collection and payment of withholding or social security), and there are no Proceedings pending or, to the knowledge of Parent,
threatened against Parent or any of its Subsidiaries, by or on behalf of any applicant for employment, any current or former employee, current or former independent contractor or any class of the
foregoing, relating to any of the foregoing applicable Laws, or alleging breach of any express or implied contract of employment or service, wrongful termination of employment or service, or alleging
any other discriminatory, wrongful or tortious conduct in connection with the employment or service relationship, other than any such matters described in this sentence that would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Since January 1, 2015, neither Parent nor any of its Subsidiaries has received any written notice of the
intent of the Equal Employment Opportunity Commission, the National Labor Relations Board, the Department of Labor or any other Governmental Entity responsible for the enforcement of labor or
employment Laws to conduct an investigation or been subject to such an investigation, in each case, with respect to Parent or any of its Subsidiaries which would reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
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5.12
Taxes
. Except as would not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect:
(a) All
Tax Returns required to be filed (taking into account extension of time for filing) by Parent or any of its Subsidiaries have been timely filed with the appropriate
Taxing Authority and all such Tax Returns are true, correct and complete, and all Taxes that are due and payable by Parent or any of its Subsidiaries (including Taxes required to be withheld from
payments to employees, creditors, shareholders or other Persons) have been paid in full, in each case, except to the extent adequate reserves have been established in accordance with GAAP in the
Parent SEC Documents.
(b) There
is not in force any waiver or agreement for any extension of time for the assessment or payment of any Tax by Parent or any of its Subsidiaries.
(c) There
is no outstanding claim, assessment or deficiency against Parent or any of its Subsidiaries for any Taxes that has been asserted or threatened in writing by any
Governmental Entity except for any such claim, assessment or deficiency for which adequate reserves have been established in accordance with GAAP in the Parent SEC Documents. There are no disputes,
audits, examinations, investigations or proceedings pending or threatened in writing in respect of any Taxes or Tax Returns of Parent or any of its Subsidiaries, and neither Parent nor any of its
Subsidiaries is a party to any litigation or administrative proceeding relating to Taxes.
(d) There
are no Liens for Taxes upon any property or assets of Parent or any of its Subsidiaries except for statutory Liens for Taxes not yet due and payable.
(e) In
the last three (3) years, neither Parent nor any of its Subsidiaries has received a written claim by any Governmental Entity in a jurisdiction where it does
not file income or franchise Tax Returns that it is or may be subject to income or franchise taxation by that jurisdiction.
(f) Neither
Parent nor any of its Subsidiaries is a party to any Tax allocation, sharing or indemnity contract or arrangement (not including, for the avoidance of doubt
(i) any contract or arrangement solely among Parent and/or any of its Subsidiaries, or (ii) any customary Tax sharing or indemnification provisions contained in any agreement entered
into in the ordinary course of business (e.g., leases, credit agreements or other commercial agreements)). Neither Parent nor any of its Subsidiaries has (i) been a member of an
affiliated group filing a consolidated U.S. federal income Tax Return (other than a group the common parent of which is or was Parent or any of its Subsidiaries) or (ii) any material liability
for Taxes of any Person (other than Parent or any of its Subsidiaries) under Treasury Regulations § 1.1502-6 (or any similar provision of state, local or foreign Law) or as a
transferee or successor.
(g) Neither
Parent nor any of its Subsidiaries has requested, has received or is subject to any written ruling of a Taxing Authority that will be binding on it for any
taxable period beginning on or after the Closing Date or has entered into any "closing agreement" as described in Section 7121 of the Code (or any similar provision of state, local or foreign
Law).
(h) Neither
Parent nor any of its Subsidiaries has participated, or is currently participating, in a "listed transaction" as defined in Treasury Regulations
§ 1.6011-4(b)(2) (or any similar provision of state, local or foreign Law).
(i) Neither
Parent nor any of its Subsidiaries has constituted a "distributing corporation" or a "controlled corporation" in a distribution of stock intended to qualify for
tax-free treatment under Section 355(a) of the Code in the two (2) years prior to the date of this Agreement.
(j) After
reasonable diligence, neither Parent nor any of its Subsidiaries is aware of the existence of any fact, or has taken or agreed to take any action, that could
reasonably be expected
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to
prevent the Integrated Mergers, taken together, from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code.
(k) Each
of EQT GP and EQT MLP is properly classified as a partnership for U.S. federal income tax purposes, and not as an association or a publicly traded
partnership taxable as a corporation under Section 7704 of the Code, and has properly been treated as such at all times since its formation. At least 90% of the gross income of each of
EQT GP and EQT MLP for each taxable year since its formation has been "qualifying income" within the meaning of Section 7704(d) of the Code.
(l) Parent
is not an "investment company" within the meaning of Section 368(a)(2)(F) of the Code.
5.13
Litigation
. Except for such matters as have not had and would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect, there is no (a) Proceeding pending, or to the knowledge of Parent, threatened against Parent or any of its Subsidiaries, or
(b) judgment, decree, injunction, ruling or order of any Governmental Entity or arbitrator outstanding against Parent or any of its Subsidiaries.
5.14
Intellectual Property
.
Parent and its Subsidiaries own or have the right to use all Intellectual Property necessary for the operation of the businesses of each of Parent and its Subsidiaries as presently
conducted (collectively, the "
Parent Intellectual Property
") free and clear of all Encumbrances except for Permitted Encumbrances, except where the
failure to own or have the right to use such properties would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. To the knowledge of Parent, the
use of the Parent Intellectual Property by Parent and its Subsidiaries in the operation of the business of each of Parent and its Subsidiaries as presently conducted does not infringe upon or
misappropriate any Intellectual Property of any other Person, except for such matters that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Parent and its Subsidiaries have taken reasonable measures to protect the confidentiality of trade secrets used in the businesses of each of Parent and its Subsidiaries as presently conducted, except
where failure to do so would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
5.15
Real Property
.
Except as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, and with respect to
clauses (a)
and
(b)
, except with respect to any of Parent's Oil and Gas Properties,
(a) Parent and its Subsidiaries have good, valid and defensible title to all material real property owned by Parent or any of its Subsidiaries (collectively, the "
Parent
Owned Real Property
") and valid leasehold estates in all material real property leased, subleased, licensed or otherwise occupied (whether as tenant, subtenant or pursuant to
other occupancy arrangements) by Parent or any Subsidiary of Parent (collectively, including the improvements thereon, the "
Parent Material Leased Real
Property
") free and clear of all Encumbrances, except Permitted Encumbrances, (b) each agreement under which Parent or any Subsidiary of Parent is the landlord,
sublandlord, tenant, subtenant, or occupant with respect to the Parent Material Leased Real Property (each, a "
Parent Material Real Property Lease
") to
the knowledge of Parent is in full force and effect and is valid and enforceable against the parties thereto in accordance with its terms, subject, as to enforceability, to Creditors' Rights, and
neither Parent nor any of its Subsidiaries, or to the knowledge of Parent, any other party thereto, has received written notice of any default under any Parent Material Real Property Lease, and
(c) as of the date of this Agreement, there does not exist any pending or, to the knowledge of Parent, threatened, condemnation or eminent domain proceedings that affect any of Parent's Oil and
Gas Properties, Parent Owned Real Property or Parent Material Leased Real Property.
5.16
Rights-of-Way
. Each of Parent and its Subsidiaries has such Rights-of-Way as are sufficient to conduct its
business in the manner described, and subject to the limitations, qualifications,
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reservations
and encumbrances contained in any Parent SEC Document, except for such Rights-of-Way the absence of which has not had and would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect. Each of Parent and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights-of-Way and conduct their business
in a manner that does not violate any of the Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any
impairment of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect. All pipelines operated by Parent and its Subsidiaries are subject to Rights-of-Way, and there are no gaps (including any gap arising as a result
of any breach by Parent or any of its Subsidiaries of the terms of any Rights-of-Way) in the Rights-of-Way other than gaps that have not had and would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
5.17
Oil and Gas Matters
.
(a) Except
as has not had and would not reasonably be expected to have a Parent Material Adverse Effect and except for property (i) sold or otherwise disposed of in
the ordinary course of business since the dates of the reserve report prepared by Ryder Scott Company, L.P. (the "
Parent Independent Petroleum
Engineers
") relating to the Parent interests referred to therein as of December 31, 2016 (the "
Parent Reserve Report
") or
(ii) reflected in the Parent Reserve Report or in the Parent SEC Documents as having been sold or otherwise disposed of, as of the date hereof, Parent and its Subsidiaries have good and
defensible title to all Oil and Gas Properties forming the basis for the reserves reflected in the Parent Reserve Report and in each case as attributable to interests owned by Parent and its
Subsidiaries, free and clear of any Encumbrances, except for Permitted Encumbrances. For purposes of the foregoing sentence, "good and defensible title" means that Parent's or one or more of its
Subsidiaries', as applicable, title (as of the date hereof and as of the Closing) to each of the Oil and Gas Properties held or owned by them (or purported to be held or owned by them)
(1) entitles Parent (or one or more of its Subsidiaries, as applicable) to receive (after satisfaction of all Production Burdens applicable thereto), not less than the net revenue interest
share shown in the Parent Reserve Report of all Hydrocarbons produced from such Oil and Gas Properties throughout the life of such Oil and Gas Properties, (2) obligates Parent (or one or more
of its Subsidiaries, as applicable) to bear a percentage of the costs and expenses for the maintenance and development of, and operations relating to, such Oil and Gas Properties, of not greater than
the working interest shown on the Parent Reserve Report for such Oil and Gas Properties (other than any positive differences in such percentage) and the applicable working interest shown on the Parent
Reserve Report for such Oil and Gas Properties that are accompanied by a proportionate (or greater) net revenue interest in such Oil and Gas Properties and (3) is free and clear of all
Encumbrances (other than Permitted Encumbrances).
(b) Except
for any such matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect, the
factual, non-interpretive data supplied by Parent to the Parent Independent Petroleum Engineers relating to the Parent interests
referred to in the Parent Reserve Report, by or on behalf of Parent and its Subsidiaries that was material to such firm's estimates of proved oil and gas reserves attributable to the Oil and Gas
Properties of Parent and its Subsidiaries in connection with the preparation of the Parent Reserve Report was, as of the time provided, accurate in all respects. Except for any such matters that,
individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect, the oil and gas reserve estimates of Parent set forth in the Parent
Reserve Report are derived from reports that have been prepared by the Parent Independent Petroleum Engineers, and such reserve estimates fairly reflect, in all respects, the oil and gas reserves of
Parent at the dates indicated therein and are in accordance with SEC
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guidelines
applicable thereto applied on a consistent basis throughout the periods involved. Except for changes generally affecting the oil and gas exploration, development and production industry
(including changes in commodity prices) and normal depletion by production, there has been no change in respect of the matters addressed in the Parent Reserve Report that would reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) Except
as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, (i) all rentals, shut-ins
and similar payments owed to any Person or individual under (or otherwise with respect to) any such Oil and Gas Leases have been properly and timely paid, (ii) all royalties, minimum royalties,
overriding royalties and other Production Burdens with respect to any Oil and Gas Properties owned or held by Parent or any of its Subsidiaries have been timely and properly paid, (iii) none of
Parent or any of its Subsidiaries (and, to the Parent's knowledge, no third party operator) has violated any provision of, or taken or failed to take any act that, with or without notice, lapse of
time, or both, would constitute a default under the provisions of any Oil and Gas Lease (or entitle the lessor thereunder to cancel or terminate such Oil and Gas Lease) included in the Oil and Gas
Properties owned or held by Parent or any of its Subsidiaries.
5.18
Environmental Matters
.
Except for those matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect:
(a) Parent
and its Subsidiaries and their respective operations and assets are in compliance with Environmental Laws;
(b) as
of the date of this Agreement, Parent and its Subsidiaries are not subject to any pending or, to Parent's knowledge, threatened Proceedings under Environmental Laws;
(c) there
have been no Releases of Hazardous Substances at any property currently or, to the knowledge of Parent, formerly owned, operated or otherwise used by Parent or any
of its Subsidiaries, or, to the knowledge of Parent, by any predecessors of Parent or any Subsidiary of Parent, which Releases are reasonably likely to result in material liability to Parent under
Environmental Law, and, as of the date of this Agreement, neither Parent nor any of its Subsidiaries has received any written notice asserting a liability or obligation under any Environmental Laws
with respect to the investigation, remediation, removal, or monitoring of the Release of any Hazardous Substances at or from any property currently or formerly owned, operated, or otherwise used by
Parent, or at or from any off-site location where Hazardous Substances from Parent's operations have been sent for treatment, disposal storage or handling; and.
(d) there
have been no environmental investigations, studies, audits, or other analyses conducted during the past three (3) years by or on behalf of, or that are in
the possession of, Parent or its Subsidiaries addressing potentially material environmental matters with respect to any property owned, operated or otherwise used by any of them that have not been
delivered or otherwise made available to Parent prior to the date hereof.
5.19
Material Contracts
.
Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, each "material contract" (as such term is defined
in Item 601(b)(10) of Regulation S-K under the Exchange Act) to which or by which Parent or any Subsidiary of Parent is a party or is otherwise bound ("
Parent
Contracts
") is legal, valid, binding and enforceable in accordance with its terms on Parent and each of its Subsidiaries that is a party thereto and, to the knowledge of
Parent, each other party thereto, and is in full force and effect, subject, as to enforceability, to Creditors' Rights. Except as would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect, neither Parent nor any of its Subsidiaries is in breach or default under any Parent Contract nor, to the knowledge of Parent, is any other party to any
such Parent Contract in breach or default thereunder.
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5.20
Insurance
. Parent and its Subsidiaries have obtained and maintained in full force
and effect insurance, underwritten by financially reputable insurance companies, in such amounts, on such terms and covering such risks as is reasonably adequate and customary for their business and
operations.
Schedule 5.20
of the Parent Disclosure Letter sets forth a complete and correct list of all insurance policies maintained by Parent
and each of its Subsidiaries for the last three (3) years. Parent or the applicable Subsidiary of the Company has paid, or caused to be paid, all premiums due under such policies and is not in
default with respect to any obligations under such policies in any material respect, including, but not limited to, reporting of claims or incidents that may give rise to a claim. All such policies
are valid, outstanding and enforceable and neither Parent nor any of its Subsidiaries has agreed to modify or cancel any of such insurance policies nor has Parent or any of its Subsidiaries received
any notice of any actual or threatened modification, non-renewal or cancellation of such insurance other than in the ordinary course of business consistent with past practice or such as is normal and
customary in Parent's industry. As of the date hereof, none of the limits for any such policy currently in force have been exhausted or materially reduced.
5.21
Opinion of Financial Advisor
.
The Parent Board has received the opinion of Citigroup Global Markets Inc. addressed to the Parent Board to the effect that, as of the date of such opinion, and based on and
subject to the assumptions, limitations, qualifications and other matters set forth therein, the Merger Consideration is fair, from a financial point of view, to Parent.
5.22
Brokers
. Except for the fees and expenses payable to Citigroup Global Markets Inc., no broker,
investment banker, or other Person is entitled to any broker's, finder's or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent.
5.23
Ownership of Company Common Stock
.
Neither Parent nor any of its Subsidiaries own or have, within the last three (3) years, owned any shares of Company Common Stock (or other securities convertible into,
exchangeable for or exercisable for shares of Company Common Stock).
5.24
Business Conduct.
Merger Sub was incorporated on June 2, 2017. Since its inception, Merger
Sub has not engaged in any activity, other than such actions in connection with
(a) its organization and (b) the preparation, negotiation and execution of this Agreement and the Transactions. Merger Sub has no operations, has not generated any revenues and has no
liabilities other than those incurred in connection with the foregoing and in association with the Merger as provided in this Agreement.
5.25
Sufficient Funds.
Parent has as of the date of this Agreement or will have as of the Closing
sufficient cash on hand with which to pay the cash portion of the Merger Consideration
and consummate the transactions contemplated hereby. Parent expressly acknowledges that its ability to obtain financing is not a condition to its obligations under this Agreement.
5.26
Corporate Governance.
(a) As
of the date of this Agreement, each of Parent and EQT MLP, as applicable, has disclosed to Parent's or EQT MLP's auditors and audit committee (A) all known
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect in any material respect
Parent's or EQT MLP's ability to record, process, summarize and report its consolidated financial information and (B) any known fraud, whether or not material, that involves management or other
employees who have a significant role in Parent's or EQT MLP's internal controls over financial reporting. Since January 1, 2015, neither Parent nor any of its Subsidiaries has made or
permitted to remain outstanding any "extensions of credit" (within the meaning of Section 402 of the Sarbanes-Oxley Act) or prohibited loans to any executive officer of Parent or EQT MLP (as
defined in Rule 3b-7 under the Exchange Act) or director of Parent, EQT MLP or any of their respective Subsidiaries.
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(b) Parent
and EQT MLP have established and maintain "disclosure controls and procedures" (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act). To the knowledge of Parent, such disclosure controls and procedures are designed to ensure that material information relating to Parent and EQT MLP, including their respective Subsidiaries,
required to be disclosed by Parent and EQT MLP, including their respective Subsidiaries, in the reports that they file or submit under the Exchange Act is accumulated and communicated to Parent's and
EQT MLP's respective principal executive officers and principal financial officers to allow timely decisions regarding required disclosure; and such disclosure controls and procedures are effective to
ensure that information required to be disclosed by Parent and EQT MLP in the reports that they file or submit under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms.
5.27
No Additional Representations.
(a) Except
for the representations and warranties made in this
Article V
, neither Parent nor any other Person makes
any express or implied representation or warranty with respect to Parent or its Subsidiaries or their respective businesses, operations, assets, liabilities or conditions (financial or otherwise) in
connection with this Agreement or the Transactions, and Parent hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither Parent
nor any other Person makes or has made any representation or warranty to the Company or any of its Affiliates or Representatives with respect to (i) any financial projection, forecast,
estimate, budget or prospect information relating to Parent or any of its Subsidiaries or their respective businesses; or (ii) except for the representations and warranties made by Parent in
this
Article V
, any oral or written information presented to the Company or any of its Affiliates or Representatives in the course of their due
diligence investigation of Parent, the negotiation of this Agreement or in the course of the Transactions.
(b) Notwithstanding
anything contained in this Agreement to the contrary, Parent acknowledges and agrees that none of the Company or any other Person has made or is making,
and each of Parent and Merger Sub expressly disclaims reliance upon, any representations, warranties or statements relating to the Company or its Subsidiaries whatsoever, express or implied, beyond
those expressly given by the Company in
Article IV
, including any implied representation or warranty as to the accuracy or completeness of any
information regarding the Company furnished or made available to Parent, or any of its Representatives. Without limiting the generality of the foregoing, Parent acknowledges that no representations or
warranties are made with respect to any projections, forecasts, estimates, budgets or prospect information that may have been made available to Parent or any of its Representatives (including in
certain "data rooms," "virtual data rooms," management presentations or in any other form in expectation of, or in connection with, the Merger or the other Transactions).
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1
Conduct of Company Business Pending the Merger.
(a) Except
as set forth on
Schedule 6.1
of the Company Disclosure Letter, as expressly permitted or required by this
Agreement, as may be required by applicable Law or otherwise consented to in advance by Parent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the Company
covenants and agrees that, until the earlier of the Effective Time and the termination of this Agreement pursuant to
Article VIII
, it shall, and
shall cause each of its Subsidiaries to, use commercially reasonable efforts to conduct its businesses only in the ordinary course, including by using commercially reasonable efforts to preserve
substantially intact its present business organization and preserve its existing relationships with its key customers and suppliers;
provided
,
however
,
that no action by the Company or its Subsidiaries with respect to the
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matters
specifically addressed by any provision of
Section 6.1(b)
shall be deemed a breach of this sentence unless such action would constitute a
breach of such other provision of
Section 6.1(b)
.
(b) Except
as set forth on
Schedule 6.1
of the Company Disclosure Letter, as expressly permitted or required by this
Agreement, as may be required by applicable Law or otherwise consented to by Parent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), until the earlier of the
Effective Time and the termination of this Agreement pursuant to
Article VIII
the Company shall not, and shall not permit its Subsidiaries to:
(i) (A)
declare, set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests in, the Company
or its Subsidiaries, except for dividends or distributions (1) expressly required by the Organizational Documents of the Company or any of its Subsidiaries in the form made available to Parent
prior to the date of this Agreement, (2) paid in cash with respect to the Series B Units to the extent expressly required by the Organizational Documents of Midstream Holdings in the
form made available to Parent prior to the date of this Agreement, (3) that are regular quarterly distributions of Rice MLP, consistent with past practice with respect to timing of declaration
and payment and including increases to the extent consistent with financial guidance published prior to the date hereof and solely from Operating Surplus (as defined in the Rice MLP LP
Agreement) or (4) in the ordinary course of business consistent with past practice, by a direct or indirect Subsidiary of the Company to the Company, a direct or indirect Subsidiary of the
Company or any other equityholder in a direct or indirect Subsidiary of the Company (
provided
,
however
,
that any such dividends or distributions paid to such other equityholders are no greater on a pro rata basis than those paid to the Company or a direct or indirect Subsidiary of the Company, as the
case may be), it being understood that to the extent any subjective determinations by a Subsidiary's governing body are required for such Subsidiary to make distributions permitted by this
clause (4)
, such subjective determinations shall be made in the ordinary course of business consistent with past practice; (B) split,
combine or reclassify any capital stock of, or other equity interests in, the Company or any of its Subsidiaries; or (C) purchase, redeem or otherwise acquire, or offer to purchase, redeem or
otherwise acquire, any capital stock of, or other equity interests in, the Company or any of its Subsidiaries, except as expressly required by the terms of any capital stock or equity interest of a
Subsidiary or for acquisitions of shares of Company Common Stock tendered by holders of Company Stock Awards in accordance with the terms of the Company Stock Plan and the applicable award agreements
as in effect on the date of this Agreement to satisfy obligations to pay the exercise price and/or Tax withholding obligations with respect thereto;
(ii) except
as set forth on
Schedule 6.9
of the Company Disclosure Letter, offer, issue, deliver, grant or sell, or
authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, or other equity interests in, the Company or any of its Subsidiaries or any securities convertible into, or any
rights, warrants or options to acquire, any such capital stock or equity interests, other than: (A) the issuance of
Company Common Stock or MLP Common Units upon the vesting, settlement, exercise or lapse of any restrictions on any Company Stock Awards in accordance with the terms of the Company Stock Plan and the
applicable award agreements or phantom unit awards in Rice MLP in accordance with the terms of the applicable award agreements, in each case, as in effect on the date of this Agreement;
(B) issuances of Company Common Stock in connection with the Redemption or a redemption of Common Units in the Operating Company pursuant to the Operating Company LLC Agreement; and
(C) the shares of capital stock or other equity issued as a dividend made in accordance with
Section 6.1(b)(i)
.
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(iii) amend
the Company's Organizational Documents or amend or adopt (or permit to be adopted) any change in the Organizational Documents of any of the Company's
Subsidiaries;
(iv) (A)
merge, consolidate, combine or amalgamate with any Person other than another wholly owned Subsidiary of the Operating Company or Midstream Holdings,
(B) acquire or agree to acquire (including by merging or consolidating with, purchasing any equity interest in or a substantial portion of the assets of, exchanging, licensing, or by any other
manner), any business or any corporation, partnership, association or other business organization or division thereof, in each case other than (1) pursuant to an agreement of the Company or any
of its Subsidiaries in effect on the date of this Agreement or (2) acquisitions for which the consideration is $25,000,000 individually and $100,000,000 in the aggregate or (C) make any
loans, advances or capital contributions to, or investments in, any Person (other than the Company or any wholly owned Subsidiaries of the Operating Company or Midstream Holdings) other than
(1) loans, advances or capital contributions in the form of trade credit granted to customers in the ordinary course of business or (2) capital contributions to, or investments in, any
Person not in excess of $15,000,000 individually or $45,000,000 in the aggregate;
(v) sell,
lease, exchange or otherwise dispose of, or agree to sell, lease, exchange or otherwise dispose of, any (x) Company Retained Midstream (other than
uninstalled or out-of-service Company Midstream in an amount not to exceed $25,000,000 in the aggregate) or (y) any material portion of its assets or properties, other than, in the case of this
clause (y)
, (A) pursuant to an agreement of the Company or any of its Subsidiaries in effect on the date of this Agreement,
(B) sales, leases or dispositions (1) for which the consideration and fair value is $25,000,000 individually and $50,000,000 in the aggregate or less and (2) made in the ordinary
course of business (which, for avoidance of doubt, shall be deemed to exclude, without limitation, the sale, exchange or other disposition of any equity interests in any of the Company's Subsidiaries)
or (C) sales or dispositions of hydrocarbons in the ordinary course of business;
(vi) consummate,
authorize, recommend, propose or announce any intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of its
Subsidiaries;
(vii) change
in any material respect their material financial accounting principles, practices or methods except as required by GAAP or applicable Law;
(viii) (A)
make, change or rescind any material election relating to Taxes (including any election for any joint venture, partnership, limited liability company or other
investment where the Company has the authority to make such binding election in its discretion), (B) amend any material Tax Return, (C) settle or compromise any material Proceeding
relating to Taxes for an amount materially in excess of the amount accrued or reserved with respect thereto on the financial statements of the Company included in the Company SEC Documents, or
(D) change any material method of Tax accounting from those employed in the preparation of its Tax Returns that have been filed for prior taxable years;
(ix) take
any action which could reasonably be expected to cause Rice MLP to be treated as a corporation for U.S. federal income tax purposes;
(x) except
as set forth on
Schedule 6.9
of the Company Disclosure Letter, (A) grant any increases in the
compensation (including incentive, severance, change-in-control or retention compensation) or benefits payable, provided or to become payable or provided to, or grant any cash- or equity-based awards
(including Company Stock Awards or long-term cash awards) to, any current or former directors, officers, employees or other individual service providers of
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the
Company or its Subsidiaries, except as required by applicable Law or as required by a Company Plan in accordance with its terms as in effect as of the date hereof; (B) grant or provide any
change-in-control, severance or retention payments or benefits to any current or former directors, officers, employees or other individual service providers of the Company or any of its Subsidiaries;
(C) establish, adopt, enter into, amend or terminate any Company Plan or any other plan, policy, program, agreement or arrangement that would be a Company Plan if in effect on the date hereof;
(D) enter into, amend or terminate any collective bargaining agreement or similar agreement; (E) hire, promote or terminate the employment or service (other than for cause) of any
employee or other individual service provider of the Company or any of its Subsidiaries with a total annual compensation opportunity in excess of $150,000; or (F) take any action to accelerate
the vesting or payment, or fund or in any way secure the payment, of compensation or benefits under any Company Plan.
(xi) other
than in the ordinary course of business consistent with past practice, incur, create or assume any Indebtedness or guarantee any such Indebtedness of another
Person or create any material Encumbrances on any property or assets of the Company or any of its Subsidiaries in connection with any Indebtedness thereof, other than Permitted Encumbrances;
provided
,
however
, that the foregoing shall not restrict (A) the incurrence of Indebtedness
(1) under existing credit facilities (other than the Rice MLP Credit Agreement) in an amount not to exceed $750,000,000, (2) under the Rice MLP Credit Agreement, (3) for
extensions, renewals or refinancings of existing Indebtedness (including related premiums and expenses) other than the Company Notes, (4) additional borrowings that are prepayable without
premium or penalty at the Closing in an amount not to exceed $25,000,000 in the aggregate or (5) by the Company that is owed to any wholly-owned Subsidiary of the Operating Company or Midstream
Holdings or by any Subsidiary of the Company that is owed to the Company or a wholly-owned Subsidiary of the Operating Company or Midstream Holdings or (B) the creation of any Encumbrances
securing any Indebtedness permitted to be incurred by
clause (A)
above;
(xii) except
in the ordinary course of business, (A) enter into any contract that would be a Company Contract or (B) modify, amend, terminate or assign, or
waive or assign any material rights under, any Company Contract;
(xiii) settle
or offer or propose to settle, any Proceeding (excluding any audit, claim or other proceeding in respect of Taxes, which shall be governed exclusively by
clause (viii)
) involving the payment of
monetary damages by the Company or any of its Subsidiaries of any amount exceeding $10,000,000 in the
aggregate;
provided
,
however
, that neither the Company nor any of its Subsidiaries shall settle or
compromise any Proceeding if such settlement or compromise (A) involves a material conduct remedy or material injunctive or similar relief, (B) involves an admission of criminal
wrongdoing by the Company or any of its Subsidiaries or (C) has a restrictive impact on the business of the Company or any of its Subsidiaries in any material respect;
(xiv) authorize
or make capital expenditures (not including any capital expenditures funded by a non-wholly owned Subsidiary by or as a result of capital contributions from
a third Person) that are (A) with respect to the period from the date of this Agreement through December 31, 2017 (the "
2017 Period
"), in
the aggregate greater than 125% of the aggregate amount of capital expenditures scheduled to be made in the Company's capital expenditure budget for the 2017 Period as set forth in
Schedule 6.1(b)(xiv)
of the Company Disclosure Letter, (B) for the period from January 1, 2018 through June 30, 2018 (the
"
2018 Period
"), in the aggregate greater than 125% of the aggregate amount of capital expenditures scheduled to be made in the Company's capital
expenditure budget for the 2018 Period as set forth in
Schedule 6.1(b)(xiv)
of the Company Disclosure Letter, and (C) with respect to the
period
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from
the date of this Agreement through June 30, 2018 (the "
Annual Period
"), in the aggregate greater than 110% of the aggregate amount of
capital expenditures scheduled to be made in the Company's capital expenditure budget for the Annual Period, in each case as set forth in
Schedule 6.1(b)(xiv)
of the Company Disclosure Letter,
except, in each case, for capital expenditures to repair damage resulting from insured
casualty events where there is a reasonable basis for a claim of insurance or made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages or
otherwise;
(xv) fail
to use reasonable best efforts to maintain, with financially reputable insurance companies, insurance in such amounts and against such risks and losses as is
maintained by it at present;
(xvi) take
any action that would or would reasonably be expected to prevent, materially delay or materially impede the consummation of any of the Transactions;
(xvii) except
as provided for in
Section 3.2(e)
, exercise any right of the Company to redeem any Common Units of the
Operating Company;
(xviii) enter
into any agreements, arrangements or understandings with Third Party Security Holders relating to their securities of the Company or the Company's
Subsidiaries, or conduct any substantive discussions with Third Party Security Holder regarding the foregoing; or
(xix) agree
to take any action that is prohibited by this
Section 6.1(b)
.
(c) The
obligations of the Company and its Subsidiaries under
Section 6.1
to take an action or not to take an action
shall only apply (i) to the extent permitted by the Organizational Documents of Rice MLP and its Subsidiaries or Strike Force Midstream LLC and its Subsidiaries, as applicable,
(ii) to the extent the Company is authorized and empowered to bind Rice MLP and its Subsidiaries or Strike Force Midstream LLC and its Subsidiaries, as applicable and (iii) to the
extent such action or inaction would not breach any contractual or other duty to Rice MLP or any of its equity holders or Strike Force Midstream LLC or any of its equity holders, as applicable.
6.2
Conduct of Parent Business Pending the Merger.
(a) Except
as set forth on
Schedule 6.2
of the Parent Disclosure Letter, as expressly permitted or required by this
Agreement, as may be required by applicable Law or otherwise consented to in advance by the Company in writing (which consent shall not be unreasonably withheld, delayed or conditioned), Parent
covenants and agrees that, until the earlier of the Effective Time and the termination of this Agreement pursuant to
Article VIII
, it shall, and
shall cause each of its Subsidiaries to, use commercially reasonable efforts to conduct its businesses only in the ordinary course, including by using commercially reasonable efforts to preserve
substantially intact its present business organization and preserve its existing relationships with its key customers and suppliers;
provided
,
however
,
that no action by Parent or its Subsidiaries with respect to the matters specifically addressed by any provision of
Section 6.2(b)
shall be deemed a breach of this sentence unless such action would
constitute a breach of such other provision of
Section 6.2(b)
.
(b) Except
as set forth on
Schedule 6.2
of the Parent Disclosure Letter, as expressly permitted or required by this
Agreement, as may be required by applicable Law or otherwise consented to by Company in writing (which consent shall not be unreasonably withheld, delayed or conditioned), until the earlier of the
Effective Time and the termination of this Agreement pursuant to
Article VIII
, Parent shall not, and shall not permit its Subsidiaries to:
(i) (A)
declare, set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests in, Parent or
its Subsidiaries, except for (1) the declaration and payment by Parent, EQT GP and EQT MLP of ordinary quarterly dividends, consistent with past practice with respect to timing of
declaration and payment, in amounts not to exceed (x) $0.03 per share, in the case of Parent,
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and
the payment to holders of equity awards of Parent Common Stock of dividend equivalents that correspond to such dividends, (y) solely out of Operating Surplus (as defined in the EQT
MLP LP Agreement), in the case of EQT MLP and (z) including increases to the extent consistent with financial guidance published prior to the date hereof, in the case of EQT GP
and EQT MLP, (2) the declaration and payment of dividends or other distributions to Parent by any direct or indirect wholly owned Subsidiary of Parent, (3) the declaration and payment of
dividends or other distributions to EQT MLP by any of its direct or indirect wholly owned Subsidiaries, (4) the declaration and payment of dividends
or other distributions to EQT MLP by EQT Energy Supply, LLC and (5) in the ordinary course of business consistent with past practice, the declaration and payment of dividends and other
distributions to Parent, a direct or indirect wholly owned Subsidiary of Parent or any other equityholder in a direct or indirect Subsidiary of Parent
(
provided
,
however
, that any such dividends or distributions paid to such other equityholders are no
greater on a pro rata basis than those paid to Parent or a direct or indirect wholly owned Subsidiary of Parent, as the case may be), it being understood that to the extent any subjective
determinations by a Subsidiary's governing body are required for such Subsidiary to make distributions permitted by this
clause (5)
, such
subjective determinations shall be made in the ordinary course of business consistent with past practice; or (B) split, combine or reclassify any capital stock of, or other equity interests in,
Parent or any of its Subsidiaries;
(ii) offer,
issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, or other equity interests in, Parent or any
of its Subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests, other than: (A) the issuance of Parent Common
Stock upon the vesting, settlement, exercise or lapse of any restrictions on any awards granted under Parent Stock Plan and outstanding on the date hereof or issued in compliance with
clause (C)
below; (B) issuances by a wholly-owned Subsidiary of Parent of such Subsidiary's capital stock or other equity interests to
Parent or any other wholly-owned Subsidiary of Parent; (C) issuances of awards granted under Parent Stock Plans to employees and directors with grant date fair values generally consistent with
past practice; and (D) sales or issuances of shares of Parent Common Stock or convertible securities in an amount not exceeding 5% of the issued and outstanding shares of Parent Common Stock
(in the case of convertible securities, on an as-converted basis) as of the date of this Agreement;
provided
,
however
, that if the Transactions have not
been consummated by December 31, 2017, the reference in
clause (D)
to "5%" shall be deemed to be a reference to "7.5%."
(iii) except
as contemplated by
Section 2.6
or
Section 6.23
,
amend Parent's or Merger Sub's Organizational Documents, or amend the Organizational Documents or adopt any change in the Organizational Documents of any of Parent's Subsidiaries that would adversely
affect the consummation of the Transactions, in either case, including by merger, consolidation or otherwise;
(iv) take
any action that could reasonably be expected to cause each of EQT MLP and EQT GP to be treated as a corporation for U.S. federal income tax purposes;
(v) adopt
a plan of complete or partial liquidation or dissolution of Parent or any of its Subsidiaries, other than such transactions among the Parent and any wholly owned
Subsidiaries of Parent or among wholly owned Subsidiaries of Parent;
(vi) other
than acquisitions that would not reasonably be expected to materially delay, impede or prevent the consummation of the transactions contemplated by this Agreement
in the manner contemplated by this Agreement, acquire, by merging or consolidating with, by purchasing an equity interest in or assets of, by forming a partnership or joint venture with, or by any
other manner, any real property, any personal property, any business or any
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corporation,
partnership, association or other business organization or division thereof or otherwise acquire any assets;
(vii) take
any action that would or would reasonably be expected to materially delay, impede or prevent the consummation of any of the Transactions;
(viii) except
to facilitate the appointment of a New Director immediately following the Effective Time pursuant to
Section 6.23
, increase the size of the Parent Board to more than eleven (11) members; or
(ix) agree
to take any action that is prohibited by this
Section 6.2(b)
.
(c) The
obligations of Parent and its Subsidiaries under
Section 6.2
to take an action or not to take an action shall
only apply (i) to the extent permitted by the Organizational Documents of EQT MLP and its Subsidiaries or EQT GP and its Subsidiaries, as applicable, (ii) to the extent the
Company is authorized and empowered to bind EQT MLP and its Subsidiaries or EQT GP and its Subsidiaries, as applicable and (iii) to the extent such action or inaction would not breach
any contractual or other duty to EQT MLP or any of its equity holders or EQT GP or any of its equity holders, as applicable.
6.3
No Solicitation by the Company.
(a) From
and after the date of this Agreement until the Effective Time or if earlier the termination of this Agreement in accordance with
Article VIII
hereof, the Company will, and will cause its
Subsidiaries and will use reasonable best efforts to cause its Representatives to,
immediately cease, and cause to be terminated, any solicitation, encouragement, discussion or negotiations with any Person conducted heretofore by the Company or any of its Subsidiaries or any of its
or their respective Representatives with respect to a Company Competing Proposal.
(b) Except
as otherwise expressly permitted by this
Section 6.3
, from and after the date of this Agreement until the
Effective Time or if earlier the termination of this Agreement in accordance with
Article VIII
hereof, the Company will not, and will cause its
Subsidiaries and will use reasonable best efforts to cause its Representatives not to, directly or indirectly, (i) initiate, solicit or knowingly encourage or knowingly facilitate any
inquiries, proposals, or offers regarding, or the making of a Company Competing Proposal, (ii) engage in any discussions or negotiations with any Person with respect to a Company Competing
Proposal or any indication of interest that would reasonably be expected to lead to a Company Competing Proposal, (iii) furnish any non-public information regarding the Company or its
Subsidiaries, or access to the properties, assets or employees of the Company or its Subsidiaries, to any Person in connection with or in response to a Company Competing Proposal, (iv) enter
into any letter of intent or agreement in principle, or other agreement providing for a Company Competing Proposal (other than a confidentiality agreement as provided in
Section 6.3(e)(ii)
) or
(v) resolve, agree or publicly propose to, or permit the Company or any of its Subsidiaries or any of its or their
Representatives to agree or publicly propose to take any of the actions referred to in clauses (i) - (iv).
-
(c)
-
Unless
specifically permitted by
Section 6.3(d)
, the Company shall not (i) fail to include the Company
Board Recommendation in the Joint Proxy Statement, (ii) withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in a manner adverse to Parent, the Company Board
Recommendation, (iii) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Company Competing Proposal, (iv) in the event that any Company Competing
Proposal (other than a Company Competing Proposal subject to
clause (v)
) has been publicly announced or been delivered to the Company Board and
become publicly known (including through media reports and/or market rumors), fail to publicly reaffirm the Company Board Recommendation within ten (10) Business Days of Parent's request to do
so, or (v) fail to announce publicly within ten (10) Business Days after a tender or exchange offer relating to any Company Common Stock shall have been commenced that
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the
Company Board recommends rejection of such tender or exchange offer and reaffirms the Company Board Recommendation (the taking of any action described in this
Section 6.3(c)
being referred to as a
"
Company Change of Recommendation
").
(d) From
and after the date of this Agreement, the Company shall advise Parent of the receipt by the Company of any Company Competing Proposal made on or after the date of
this Agreement or any request for non-public information or data relating to the Company or any of its Subsidiaries made by any Person in connection with a Company Competing Proposal or any request
for discussions or negotiations with the Company or a Representative of the Company relating to a Company Competing
Proposal (in each case within 48 hours thereof), and the Company shall provide to Parent (within such 48 hour time frame) either (i) a copy of any such Company Competing Proposal
made in writing provided to the Company or any of its Subsidiaries or (ii) a written summary of the material terms of such Company Competing Proposal (including the identity of the Person
making such Company Competing Proposal). The Company shall keep Parent reasonably informed with respect to the status and material terms of any such Company Competing Proposal and any material changes
to the status of any such discussions or negotiations, and shall promptly (and in no event later than 24 hours after transmittal or receipt), provide Parent with copies of any material
correspondence and, with respect to material oral communications, a written summary of such correspondence or communications, between: (x) on the one hand, the Company or any of their
Representatives; and (y) on the other hand, the Person that made or submitted such Company Competing Proposal or any Representative of such Person.
(e) Notwithstanding
anything in this Agreement to the contrary, the Company, directly or indirectly through one or more of its Representatives, may:
(i) to
the extent applicable, comply with Rule 14e-2(a), Item 1012(a) of Regulation M-A and Rule 14d-9 promulgated under the Exchange Act;
provided
,
however
, that none of the Company, the Company Board or any committee thereof shall, except as
expressly permitted by
Section 6.3(e)(iii)
or
Section 6.3(f)
, effect a Company Change of
Recommendation including in any disclosure document or communication filed or publicly issued or made in conjunction with the compliance with such requirements;
(ii) prior
to the receipt of the Company Stockholder Approval, engage in the activities prohibited by
Sections 6.3(b)(i)
,
6.3(b)(ii)
or
6.3(b)(iii)
,
solely with and to any Person who has made a written,
bona fide
Company Competing Proposal that did not result from a breach of this
Section 6.3
;
provided
,
however
, that
(A) no non-public information that is prohibited from being furnished pursuant to
Section 6.3(b)
may be furnished until the Company
receives an executed confidentiality agreement from such Person containing limitations on the use and disclosure of nonpublic information furnished to such Person by or on behalf of the Company that
are no less favorable to the Company in the aggregate than the terms of the Confidentiality Agreement;
provided
,
further
, that such confidentiality
agreement does not contain provisions that prohibit the Company from complying with the provisions of this
Section 6.3
, and (B) prior to taking any such actions, the Company Board or any
committee thereof determines in good faith, after
consultation with its financial advisors and outside legal counsel, that such Company Competing Proposal is, or would reasonably be expected to lead to, a Company Superior Proposal and, after
consultation with its outside legal counsel, that the failure to engage in such activities would be inconsistent with the Company Board's duties under applicable Law;
(iii) prior
to the receipt of the Company Stockholder Approval, in response to a Company Competing Proposal that did not result from a breach of this
Section 6.3
, if the Company Board (or any committee
thereof) so chooses, cause the Company to effect a Company Change of Recommendation or to
terminate this Agreement pursuant to
Section 8.1(d)
, if prior to taking such action (A) the Company Board (or a committee thereof)
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determines
in good faith after consultation with its financial advisors and outside legal counsel that such Company Competing Proposal is a Company Superior Proposal (taking into account any
adjustment to the terms and conditions of the Merger proposed by Parent in response to such Company Competing Proposal), (B) the Company Board has determined in good faith (after consultation
with its outside legal counsel) that failure to do so would be inconsistent with the Company Board's duties under applicable Law, and (C) the Company shall have given notice to Parent that the
Company has received such proposal, specifying the material terms and conditions of such proposal, and, that the Company intends to take such action, and either (1) Parent shall not have
proposed revisions to the terms and conditions of this Agreement prior to the earlier to occur of the scheduled time for the Company Stockholders Meeting and the third Business Day after the date on
which such notice is given to Parent, or (2) if Parent within the period described in the foregoing
clause (1)
shall have proposed
revisions to the terms and conditions of this Agreement, the Company Board (or any committee thereof), after consultation with its financial advisors and outside legal counsel, shall have determined
in good faith that the Company Competing Proposal remains a Company Superior Proposal with respect to Parent's revised proposal;
provided
,
however
, that
each time material modifications to the financial terms of a Company Competing Proposal determined to be a Company Superior Proposal are
made the time period set forth in this
clause (C)
prior to which the Company may effect a Company Change of Recommendation or terminate this
Agreement shall be extended for 48 hours after notification of such change to Parent; and
(f) Notwithstanding
anything in this Agreement to the contrary, prior to receipt of the Company Stockholder Approval, in response to a Company Intervening Event that occurs
or arises after the date of this Agreement, the Company may, if the Company Board (or any committee thereof) so chooses, effect a Company Change of Recommendation if prior to taking such action
(A) the Company Board (or a committee thereof) determines in good faith after consultation with its outside legal counsel that the failure to take such action would be inconsistent with the
Company Board's duties under applicable Law, (B) the Company shall have given notice to Parent that the Company has determined that a Company Intervening Event has occurred or arisen (which
notice will reasonably describe such Company Intervening Event) and that the Company intends to effect a Company Change of Recommendation, and either (1) Parent shall not have proposed
revisions to the terms and conditions of this Agreement prior to the earlier to occur of the scheduled time for the Company Stockholders Meeting and the fourth Business Day after the date on which
such notice is given to Parent, or (2) if Parent within the period described in the foregoing
clause (1)
shall have proposed revisions to
the terms and conditions of this Agreement, the Company Board (or any committee thereof), after consultation with its outside legal counsel, shall have determined in good faith that such proposed
changes do not obviate the need for the Company Board to effect a Company Change of Recommendation and that the failure to make a Company Change of Recommendation would be inconsistent with the
Company Board's duties under applicable Law.
6.4
No Solicitation by Parent.
(a) From
and after the date of this Agreement until the Effective Time or if earlier the termination of this Agreement in accordance with
Article VIII
hereof, Parent will, and will cause its Subsidiaries
and will use reasonable best efforts to cause its Representatives to,
immediately cease, and cause to be terminated, any solicitation, encouragement, discussion or negotiations with any Person conducted heretofore by Parent or any of its Subsidiaries or any of its or
their respective Representatives with respect to a Parent Competing Proposal.
(b) Except
as otherwise expressly permitted by this
Section 6.4
, from and after the date of this Agreement until the
Effective Time or if earlier the termination of this Agreement in accordance
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with
Article VIII
hereof, Parent will not, and will cause its Subsidiaries and will use reasonable best efforts to cause its Representatives not
to, directly or indirectly, (i) initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, proposals, or offers regarding, or the making of a Parent Competing Proposal,
(ii) engage in any discussions or negotiations with any Person with respect to a Parent Competing Proposal or any indication of interest that would reasonably be expected to lead to a Parent
Competing Proposal, (iii) furnish any non-public information regarding Parent or its Subsidiaries, or access to the properties, assets or employees of Parent or its Subsidiaries, to any Person
in connection with or in response to a Parent Competing Proposal, (iv) enter into any letter of intent or agreement in principle, or other agreement providing for a Company Competing Proposal
(other than a confidentiality agreement as provided in
Section 6.4(e)(ii)
) or (v) resolve, agree or publicly propose to, or permit Parent
or any of its Subsidiaries or any of its or their Representatives to agree or publicly propose to take any of the actions referred to in
clauses (i)
-
(iv)
.
-
(c)
-
Unless
specifically permitted by
Section 6.4(d)
, Parent shall not (i) fail to include the Parent Board
Recommendation in the Joint Proxy Statement, (ii) withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in a manner adverse to Company, the Parent Board
Recommendation, (iii) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Parent Competing Proposal, (iv) in the event that any Parent Competing Proposal
(other than a Parent Competing Proposal subject to
clause (v)
) has been publicly announced or been delivered to the Parent Board and become
publicly known (including through media reports and/or market rumors), fail to publicly reaffirm the Parent Board Recommendation within ten (10) Business Days of the Company's request to do so,
or (v) fail to announce publicly within ten (10) Business Days after a tender or exchange offer relating to any Parent Common Stock shall have been commenced that the Parent Board
recommends rejection of such tender or exchange offer and reaffirms the Parent Board Recommendation (the taking of any action described in this
Section 6.4(c)
being referred to as a "
Parent Change of Recommendation
"). Parent shall not fail
to include the Parent Charter Amendment Recommendation in the Joint Proxy Statement, or withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, the Parent Charter Amendment
Recommendation.
(d) From
and after the date of this Agreement, Parent shall advise the Company of the receipt by Parent of any Parent Competing Proposal made on or after the date of this
Agreement or any request for non-public information or data relating to Parent or any of its Subsidiaries made by any Person in connection with a Parent Competing Proposal or any request for
discussions or negotiations with Parent or a Representative of Parent relating to a Parent Competing Proposal (in each case within 48 hours thereof), and Parent shall provide to the Company
(within such 48 hour time frame) either (i) a copy of any such Parent Competing Proposal made in writing provided to Parent or any of its Subsidiaries or (ii) a written summary of
the material terms of such Parent Competing Proposal (including the identity of the Person making such Parent Competing Proposal). Parent shall keep the Company reasonably informed with respect to the
status and material terms of any such Parent Competing Proposal and any material changes to the status of any such discussions or negotiations, and shall promptly (and in no event later than
24 hours after transmittal or receipt), provide the Company with copies of any material correspondence and, with respect to material oral communications, a written summary of such
correspondence or communications, between: (x) on the one hand, Parent or any of their Representatives; and (y) on the other hand, the Person that made or submitted such Parent Competing
Proposal or any Representative of such Person.
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(e) Notwithstanding
anything in this Agreement to the contrary, Parent, directly or indirectly through one or more of its Representatives, may:
(i) to
the extent applicable, comply with Rule 14e-2(a), Item 1012(a) of Regulation M-A and Rule 14d-9 promulgated under the Exchange Act;
provided
,
however
, that none of Parent, the Parent Board or any committee thereof shall, except as
expressly permitted by
Section 6.4(e)(iii)
or
Section 6.4(f)
, effect a
Parent Change of Recommendation including in any disclosure document or communication filed or publicly issued or made in conjunction with the compliance with such requirements;
(ii) prior
to the receipt of the Parent Shareholder Approval, engage in the activities prohibited by
Sections 6.4(b)(i)
,
6.4(b)(ii)
or
6.4(b)(iii)
,
solely with and to any Person who has made a written,
bona fide
Parent Competing Proposal that did not result from a breach of this
Section 6.4
;
provided
,
however
, that
(A) no non-public information that is prohibited from being furnished pursuant to
Section 6.4(b)
may be furnished until Parent receives an
executed confidentiality agreement from such Person containing limitations on the use and disclosure of nonpublic information furnished to such Person by or on behalf of Parent that are no less
favorable to Parent in the aggregate than the terms of the Confidentiality Agreement;
provided, further,
that such confidentiality agreement does not
contain provisions that prohibit Parent from complying with the provisions of this
Section 6.4
, and (B) prior to taking any such actions,
the Parent Board or any committee thereof determines in good faith, after consultation with its financial advisors and outside legal counsel, that such Parent Competing Proposal is, or would
reasonably be expected to lead to, a Parent Superior Proposal and, after consultation with its outside legal counsel, that the failure to engage in such activities would be inconsistent with the
Parent Board's duties under applicable Law;
(iii) prior
to the receipt of the Parent Shareholder Approval, in response to a Parent Competing Proposal that is conditioned upon the termination of this Agreement or the
failure of the Transactions to be consummated (including through the failure of any of the conditions set forth in Article VII) and that did not result from a breach of this
Section 6.4
, if
the Parent Board (or any committee thereof) so chooses, cause Parent to effect a Parent Change of Recommendation, if prior to
taking such action (A) the Parent Board (or a committee thereof) determines in good faith after consultation with its financial advisors and outside legal counsel that such Parent Competing
Proposal is a Parent Superior Proposal (taking into account any adjustment to the terms and conditions of the Merger proposed by the Company in response to such Parent Competing Proposal),
(B) the Parent Board has determined in good faith (after consultation with its outside legal counsel) that failure to do so would be inconsistent with the Parent Board's duties under applicable
Law, and (C) Parent shall have given notice to the Company that Parent has received such proposal, specifying the material terms and conditions of such proposal, and, that Parent intends to
take such action, and either (1) the Company shall not have proposed revisions to the terms and conditions of this Agreement prior to the earlier to occur of the scheduled time for the Parent
Shareholders Meeting and the third Business Day after the date on which such notice is given to the Company, or (2) if the Company within the period described in the foregoing
clause (1)
shall
have proposed revisions to the terms and conditions of this Agreement, the Parent Board (or any committee thereof), after
consultation with its financial advisors and outside legal counsel, shall have determined in good faith that the Parent Competing Proposal remains a Parent Superior Proposal with respect to the
Company's revised proposal;
provided
,
however
, that each time material modifications to the financial
terms of a Parent Competing Proposal determined to be a Parent Superior Proposal are made the time period set forth in this
clause (C)
prior to
which Parent may effect a Parent Change of Recommendation or terminate this Agreement shall be extended for 48 hours after notification of such change to the Company; and
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(f) Notwithstanding
anything in this Agreement to the contrary, prior to receipt of the Parent Shareholder Approval, in response to a Parent Intervening Event that occurs or
arises after the date of this Agreement, Parent may, if the Parent Board (or any committee thereof) so chooses, effect a Parent Change of Recommendation if prior to taking such action (A) the
Parent Board (or a committee thereof) determines in good faith after consultation with its outside legal counsel that the failure to take such action would be inconsistent with the Parent Board's its
fiduciary duties to Parent's shareholders under applicable Law, (B) Parent shall have given notice to the Company that Parent has determined that a Parent Intervening Event has occurred or
arisen (which notice will reasonably describe such Parent Intervening Event) and that Parent intends to effect a Parent Change of Recommendation, and either (1) the Company shall not have
proposed revisions to the terms and conditions of this Agreement prior to the earlier to occur of the scheduled time for the Parent Shareholders Meeting and the fourth Business Day after the date on
which such notice is given to the Company, or (2) if the Company within the period described in the foregoing
clause (1)
shall have
proposed revisions to the terms and conditions of this Agreement, the Parent Board (or any committee thereof), after consultation with its outside legal counsel, shall have determined in good faith
that such proposed changes do not obviate the need for the Parent Board to effect a Parent Change of Recommendation and that the failure to make a Parent Change of Recommendation would be inconsistent
with the Parent Board's duties to Parent's shareholders under applicable Law.
6.5
Preparation of Joint Proxy Statement and Registration Statement.
(a) Parent
will promptly furnish to the Company such data and information relating to it, its Subsidiaries (including Merger Sub) and the holders of its capital stock, as
the Company may reasonably request for the purpose of including such data and information in the Joint Proxy Statement and any amendments or supplements thereto used by the Company to obtain the
adoption by its stockholders of this Agreement. The Company will promptly furnish to Parent such data and information relating to it, its Subsidiaries and the holders of its capital stock, as Parent
may reasonably request for the purpose of including such data and information in the Registration Statement and any amendments or supplements thereto.
(b) Promptly
following the date hereof, the Company and Parent shall cooperate in preparing and shall cause to be filed with the SEC a mutually acceptable Joint Proxy
Statement relating to the matters to be submitted to the holders of Company Common Stock at the Company Stockholders Meeting and the holders of Parent Common Stock at the Parent Shareholders Meeting,
and Parent shall prepare and file with the SEC the Registration Statement (of which the Joint Proxy Statement will be a part). The Company and Parent shall each use reasonable best efforts to cause
the Registration Statement and the Joint Proxy Statement to comply with the rules and regulations promulgated by the SEC and to respond promptly to any comments of the SEC or its staff. Parent and the
Company shall each use its reasonable best efforts to cause the Registration Statement to become effective under the Securities Act as soon after such filing as practicable and Parent shall use
reasonable best efforts to keep the Registration Statement effective as long as is necessary to consummate the Merger. Each of the Company and Parent will advise the other promptly after it receives
any request by the SEC for amendment of the Joint Proxy Statement or the Registration Statement or comments thereon and responses thereto or any request by the SEC for additional information. Each of
the Company and Parent shall use reasonable best efforts to cause all documents that it is responsible for filing with the SEC in connection with the Transactions to comply as to form and substance in
all material respects with the applicable requirements of the Securities Act and the Exchange Act. Notwithstanding the foregoing, prior to filing the Registration Statement (or any amendment or
supplement thereto) or mailing the Joint Proxy Statement (or any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, each of the Company and Parent shall
(i) provide
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the
other with an opportunity to review and comment on such document or response (including the proposed final version of such document or response), (ii) include in such document or response
all comments reasonably proposed by the other and (iii) not file or mail such document or respond to the
SEC prior to receiving the approval of the other, which approval shall not be unreasonably withheld, conditioned or delayed.
(c) Parent
and the Company shall make all necessary filings with respect to the Merger and the Transactions under the Securities Act and the Exchange Act and applicable blue
sky laws and the rules and regulations thereunder. Each party will advise the other, promptly after it receives notice thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of the Parent Common Stock issuable in connection with the Merger for offering or sale in
any jurisdiction. Each of the Company and Parent will use reasonable best efforts to have any such stop order or suspension lifted, reversed or otherwise terminated.
(d) If
at any time prior to the Effective Time, any information relating to Parent or the Company, or any of their respective Affiliates, officers or directors, should be
discovered by Parent or the Company that should be set forth in an amendment or supplement to the Registration Statement or the Joint Proxy Statement, so that such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other party and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required
by applicable Law, disseminated to the stockholders of the Company and the shareholders of Parent.
6.6
Stockholder and Shareholder Meetings.
(a) The
Company shall take all action necessary in accordance with applicable Laws and the Organizational Documents of the Company to duly give notice of, convene and hold a
meeting of its stockholders for the purpose of obtaining the Company Stockholder Approval, to be held as promptly as reasonably practicable following the clearance of the Joint Proxy Statement by the
SEC. Except as expressly permitted by
Section 6.3
, the Company Board shall recommend that the stockholders of the Company vote in favor of the
adoption of this Agreement at the Company Stockholders Meeting and the Company Board shall solicit from stockholders of the Company proxies in favor of the adoption of this Agreement, and the Joint
Proxy Statement shall include a statement to the effect that the Company Board has made the Company Board Recommendation. The Company's obligations to call, give notice of, convene and hold the
Company Stockholders Meeting in accordance with this
Section 6.6(a)
shall not be limited or otherwise affected by the making, commencement,
disclosure, announcement or submission of any Company Superior Proposal or Company Competing Proposal, or by any Company Change of Recommendation. Notwithstanding anything to the contrary contained in
this Agreement, the Company (i) shall be required to adjourn or postpone the Company Stockholders Meeting (A) to the extent necessary to ensure that any required supplement or amendment
to the Joint Proxy Statement is provided to the Company's stockholders or (B) if, as of the time for which the Company Stockholders Meeting is scheduled, there are insufficient shares of
Company Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct business at such Company Stockholders Meeting and (ii) may, and at Parent's request
shall, adjourn or postpone the Company Stockholders Meeting if, as of the time for which the Company Stockholders Meeting is
scheduled, there are insufficient shares of Company Common Stock represented (either in person or by proxy) to obtain the Company Stockholder Approval;
provided
,
however
, that unless otherwise agreed to by the parties, the Company Stockholders Meeting
shall not be adjourned or postponed to a date that is more than thirty (30) days after the date for which the meeting was previously
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scheduled
(it being understood that such Company Stockholders Meeting shall be adjourned or postponed every time the circumstances described in the foregoing
clauses (i)(A)
and
(i)(B)
exist, and such Company Stockholders Meeting may be adjourned or
postponed every time the circumstances described in the foregoing
clause (ii)
exist); and
provided
further
that the Company Stockholders Meeting shall not be adjourned or postponed to a date on or after two Business Days prior to the End Date. Notwithstanding the foregoing,
the Company may adjourn or postpone the Company Stockholders Meeting to a date no later than the second Business Day after the expiration of any of the periods contemplated by
Section 6.3(e)(iii)(C)
. If requested by Parent, the Company shall promptly provide all voting tabulation reports relating to the Company
Stockholders Meeting that have been prepared by the Company or the Company's transfer agent, proxy solicitor or other Representative.
(b) Parent
shall take all action necessary in accordance with applicable Laws and the Organizational Documents of Parent to duly give notice of, convene and hold a meeting
of its stockholders for the purpose of obtaining the Parent Shareholder Approval, to be held as promptly as reasonably practicable following the clearance of the Joint Proxy Statement by the SEC.
Except as permitted by
Section 6.4
, the Parent Board shall recommend that the shareholders of Parent vote in favor of the issuance of Parent
Common Stock in the Merger and the Parent Board shall solicit from shareholders of Parent proxies in favor of such issuance of Parent Common Stock in the Merger, and the Joint Proxy Statement shall
include a statement to the effect that the Parent Board has made the Parent Board Recommendation. The Parent Board shall recommend that the shareholders of Parent vote in favor of the Parent Charter
Amendment and the Parent Board shall solicit from shareholders of Parent proxies in favor of the Parent Charter Amendment, and the Joint Proxy Statement shall include a statement to the effect that
the Parent Board has made the Parent Charter Amendment Recommendation. Parent's obligations to call, give notice of, convene and hold the Parent Shareholder Meeting in accordance with this
Section 6.6(b)
shall not be limited or otherwise affected by the making, commencement, disclosure, announcement or submission of any Parent
Superior Proposal or Parent Competing Proposal, or by any Parent Change of Recommendation. Notwithstanding anything to the contrary contained in this Agreement, Parent (i) shall be required to
adjourn or postpone the Parent Shareholders Meeting (A) to the extent necessary to ensure that any required supplement or amendment to the Joint Proxy Statement is provided to the Parent's
shareholders or (B) if, as of the time for which the Parent Shareholders Meeting is scheduled, there are insufficient shares of Parent Common Stock represented (either in person or by proxy) to
constitute a quorum necessary to conduct business at such Parent Shareholders Meeting or (ii) may, and at the Company's request shall, adjourn or postpone the Parent Shareholders Meeting if, as
of the time for which the Parent Shareholders Meeting is scheduled, there are insufficient shares of Parent Common Stock represented (either in person or by proxy) to obtain
the Parent Shareholder Approval;
provided
,
however
, that unless otherwise agreed to by the parties, the
Parent Shareholders Meeting shall not be adjourned or postponed to a date that is more than thirty (30) days after the date for which the meeting was previously scheduled (it being understood
that such Parent Shareholders Meeting shall be adjourned or postponed every time the circumstances described in the foregoing
clauses (i)(A)
and
(i)(B)
exist, and such Parent Shareholders Meeting may be adjourned or postponed every time the circumstances described in the foregoing
clause (ii)
exist); and
provided
further
that the Parent Shareholders Meeting shall not be
adjourned or postponed to a date on or after two Business Days prior to the End Date. Notwithstanding the foregoing, Parent may adjourn or postpone the Parent Shareholders Meeting to a date no later
than the second Business Day after the expiration of any of the periods contemplated by
Section 6.4(e)(iii)(C)
. If requested by the Company,
Parent shall promptly provide the Company with all voting tabulation reports relating to the Parent Shareholders Meeting that have been prepared by Parent or Parent's transfer agent, proxy solicitor
or other Representative.
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(c) The
parties shall use their reasonable best efforts to hold the Company Stockholders Meeting and the Parent Shareholders Meeting on the same day.
6.7
Access to Information.
(a) Each
party shall, and shall cause each of its Subsidiaries to, afford to the other party and its Representatives, during the period prior to the earlier of the Effective
Time and the termination of this Agreement pursuant to the terms of
Section 8.1
of this Agreement, reasonable access, at reasonable times upon
reasonable prior notice, to the officers, key employees, agents, properties, offices and other facilities of such party and its Subsidiaries and to their books, records, contracts and documents and
shall, and shall cause each of its Subsidiaries to, furnish reasonably promptly to the other party and its Representatives such information concerning its and its Subsidiaries' business, properties,
contracts, records and personnel as may be reasonably requested, from time to time, by or on behalf of the other party. Each party and its Representatives shall conduct any such activities in such a
manner as not to interfere unreasonably with the business or operations of the other party or its Subsidiaries or otherwise cause any unreasonable interference with the prompt and timely discharge by
the employees of the other party and its Subsidiaries of their normal duties. Notwithstanding the foregoing provisions of this
Section 6.7(a)
,
neither party shall be required to, or to cause any of its Subsidiaries to, grant access or furnish information to the other party or any of its Representatives to the extent that such information is
subject to an attorney/client privilege or the attorney work product doctrine or that such access or the furnishing of such information is prohibited by applicable Law or an existing contract or
agreement. Notwithstanding the foregoing, neither party shall have access to personnel records of the other party or any of its Subsidiaries relating to individual performance or evaluation records,
medical histories or other information that in the other party's good faith opinion the disclosure of which could subject the other party or any of its Subsidiaries to risk of liability.
Notwithstanding the foregoing,
neither party shall be permitted to conduct any sampling or analysis of any environmental media or building materials at any facility of the other party or its Subsidiaries without the prior written
consent of the other party, which may be granted or withheld in such other party's sole discretion. Each party agrees that it will not, and will cause its Representatives not to, use any information
obtained pursuant to this
Section 6.7(a)
for any purpose unrelated to the consummation of the Transactions.
(b) The
Confidentiality Agreement dated as of April 24, 2017 between Parent and the Company (as amended from time to time, the
"
Confidentiality Agreement
") shall survive the execution and delivery of this Agreement and shall apply to all information furnished thereunder or
hereunder. All information provided to any party or its Representatives pursuant to or in connection with this Agreement is deemed to be "Preliminary Discussions" as defined under the Confidentiality
Agreement.
6.8
HSR and Other Approvals.
(a) Except
for the filings and notifications made pursuant to Antitrust Laws to which
Sections 6.8(b)
and
(e)
, and not this
Section 6.8(a)
, shall apply, promptly following the execution of this
Agreement, the parties shall proceed to prepare and file with the appropriate Governmental Entities all authorizations, consents, notifications, certifications, registrations, declarations and filings
that are necessary in order to consummate the Transactions and shall diligently and expeditiously prosecute, and shall cooperate fully with each other in the prosecution of, such matters.
(b) As
promptly as reasonably practicable following the execution of this Agreement, but in no event later than ten (10) Business Days following the date of this
Agreement, the parties shall make any filings required under the HSR Act. Each of Parent and the Company shall cooperate fully with each other and shall furnish to the other such necessary information
and reasonable
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assistance
as the other may reasonably request in connection with its preparation of any filings under any applicable Antitrust Laws. Unless otherwise agreed, Parent and the Company shall each use its
reasonable best efforts to ensure the prompt expiration or termination of any applicable waiting period under the HSR Act. Parent and the Company shall each use its reasonable best efforts to respond
to and comply with any request for information or documentary material from any Governmental Entity charged with enforcing, applying, administering, or investigating the HSR Act or any other Law
designed to prohibit, restrict or regulate actions for the purpose or effect of mergers, monopolization, restraining trade or abusing a dominant position (collectively,
"
Antitrust Laws
"), including the Federal Trade Commission, the Antitrust Division of the U.S. Department of Justice, any attorney general of any state
of the United States, or any other competition authority of any jurisdiction ("
Antitrust Authority
").
(c) Each
of Parent and the Company shall, in connection with the efforts referenced in
Section 6.8(b)
, (i) use
its reasonable best efforts to cooperate in all respects with each other in connection with any investigation or other inquiry, including any proceeding initiated by a private party;
(ii) promptly notify the other Party of any communication concerning this Agreement or any of the transactions contemplated hereby to that Party from or with any Governmental Entity, or from
any other Person alleging that the consent of such person (or another Person) is or may be required in connection with the Transactions, and consider in good faith the views of the other Party and
keep the other Party reasonably informed of the status of matters related to the transactions contemplated by this Agreement, including furnishing the other Party with any written notices or other
communications received by such Party from, or given by such Party to, any Governmental Entity and of any communication received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby, except that any materials concerning one Party's valuation of the other Party may be redacted; and (iii) permit the other Party to
review in draft any proposed communication to be submitted by it to any Governmental Entity with reasonable time and opportunity to comment, and consult with each other in advance of any in-person or
telephonic meeting or conference with any Governmental Entity or, in connection with any proceeding by a private party, with any other Person, and, to the extent permitted by the applicable
Governmental Entity or Person, not agree to participate in any meeting or discussion with any Governmental Entity relating to any filings or investigations concerning this Agreement or any of the
transactions contemplated hereby unless it consults with the other Party and its Representatives in advance and invites the other Party's Representatives to attend in accordance with applicable Laws.
Parent shall be entitled to direct any Proceedings with any Antitrust Authority or other Person relating to any of the foregoing;
provided
,
however
, that
it shall afford the Company a reasonable opportunity to participate therein. The parties shall take reasonable efforts to share
information protected from disclosure under the attorney-client privilege, work product doctrine, joint defense privilege or any other privilege pursuant to this section so as to preserve any
applicable privilege.
(d) In
furtherance and not in limitation of the foregoing, each of Parent and the Company and each of their respective Subsidiaries shall use its reasonable best efforts to
resolve objections, if any, as may be asserted with respect to the transactions contemplated by this Agreement under any Laws, including any Antitrust Laws;
provided
,
however
, that if, in order to resolve any objections, the Company is asked to divest, sell,
dispose of, hold separate or otherwise take or commit to take any action that limits its freedom with respect to its or its Subsidiaries' ability to retain any of the businesses, product lines, or
assets of the Company or its Subsidiaries, such actions shall be conditioned upon the consummation of the Merger. In furtherance of the foregoing, each of Parent and the Company and each of their
respective Subsidiaries shall use reasonable best efforts to defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the
transactions contemplated
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hereby
(including seeking to have any stay, temporary restraining order or preliminary injunction entered by any court or other Governmental Entity vacated or reversed).
(e) Parent
and Merger Sub shall not take any action that could reasonably be expected to hinder or delay the obtaining of clearance or the expiration of the required waiting
period under the HSR Act or any other applicable Antitrust Law.
6.9
Employee Matters.
(a) For
a period of one year following the Closing Date (the "
Continuation Period
"), Parent shall cause each individual who
is employed as of the Closing Date by the Company or a Subsidiary thereof (a "
Company Employee
") and who remains employed by Parent or any of its
Subsidiaries (including the Surviving Corporation, LLC Sub or any of their respective Subsidiaries) to be provided with, for the portion of the Continuation Period during which such Company
Employee is employed, (i) base compensation (salary or wages, as applicable), and as applicable, an annual bonus opportunity that are no less favorable than those provided to similarly situated
employees of Parent or its Subsidiaries (provided that, with respect to each applicable Company Employee's annual bonus for 2017, the benefits contemplated by Item 1 of
Schedule 6.9
of the
Company Disclosure Letter shall be deemed to satisfy the incentive compensation opportunity requirements of this
clause (i)
) and (ii) employee benefits (other than severance) that are
substantially comparable in the aggregate to those that are
provided to similarly situated employees of Parent or its Subsidiaries;
provided
that, for purposes of this
clause (ii)
, the employee benefits (other
than severance) generally provided to employees of the Company and its Subsidiaries as of immediately
prior to the Closing Date shall be deemed to be substantially comparable in the aggregate to those provided to similarly situated employees of Parent or its Subsidiaries, it being understood that so
long as all Company Employees are continuously provided with the employee benefits required by this
clause (ii)
, the Company Employees may
commence participation in the "employee benefit plans," as defined in Section 3(3) of ERISA (whether or not subject to ERISA), maintained by Parent or any of its Subsidiaries (collectively, the
"
New Plans
") at such times as are determined by Parent.
(b) From
and after the Effective Time, as applicable, the Company Employees shall be given credit for purposes of eligibility to participate, vesting and, with respect to
severance, vacation or paid-time off benefits, for purposes of benefit accrual, in each case, in any New Plan (other than (x) for any purpose, with respect to any "defined benefit plan" as
defined in Section 3(35) of ERISA or plan that provides retiree medical benefits or disability benefits, or (y) to the extent it would result in a duplication of
benefits) in which the Company Employees participate, for such Company Employees' service with the Company and its Subsidiaries, to the same extent and for the same purposes that such service was
taken into account under a corresponding Company Plan immediately prior to the Closing Date.
(c) Parent
shall, or shall cause the Surviving Corporation or its Subsidiaries, to comply with
Schedule 6.9
.
(d) From
and after the Effective Time, as applicable, Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to
(i) waive any limitation on health and welfare coverage of any Company Employee and his or her eligible dependents due to pre-existing conditions and/or waiting periods, active employment
requirements and requirements to show evidence of good health under the applicable health and welfare New Plan to the extent (x) such Company Employee and his or her eligible dependents are
covered under a Company Plan immediately prior to the Closing Date that provides corresponding benefits and (y) such conditions, periods or requirements are satisfied by, or waived for, such
Company Employee and his or her eligible dependents under such Company Plan (ii) give each Company Employee credit for the plan year in which the Closing Date occurs for any payments made
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towards
applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made to the same extent that such credit was given
under the analogous Company Plan prior to the date that the Company Employee first participates in the New Plan, in each case, to the extent permitted by the applicable insurance plan provider.
(e) Except
as otherwise provided in this Agreement of the Company Disclosure Letter, from and after the Effective Time, Parent shall, or shall cause the Surviving
Corporation and its Subsidiaries, to assume and honor their respective obligations to individuals employed prior to the Closing Date by the Company or a Subsidiary thereof under all employment,
severance, change in control and other agreements or plans, if any, entered into or sponsored by the Company (or a Subsidiary thereof).
(f) If
requested by Parent not less than 10 Business Days before the Closing Date, the Company shall adopt resolutions and take such corporate action as is necessary to
terminate the Company Plans that are Tax-qualified defined contribution plans (collectively, the "
Company Qualified DC Plan
"), effective as of the day
prior to the Closing Date. The form and substance of such resolutions and any other actions taken in connection with the foregoing termination shall be subject to the review and approval of Parent.
Upon the distribution of the assets in the accounts under the Company Qualified DC Plan
to the participants, Parent shall permit such participants who are then actively employed by Parent or its Subsidiaries to make rollover contributions of "eligible rollover distributions" (within the
meaning of Section 401(a)(31) of the Code), in the form of cash or (in the case of loans) notes, from the Company Qualified DC Plan to the applicable Tax-qualified defined contribution plans of
Parent or its Subsidiaries.
(g) From
the date of this Agreement until the Closing, the Company shall provide Parent with a reasonable opportunity to review, comment on and approve all written or
broad-based oral communications to employees and other individual service providers of the Company and its Subsidiaries related to the transactions contemplated hereby, including in regard to
employment or compensation or benefits matters addressed in this Agreement or to be provided following the Closing.
(h) Nothing
in this Agreement generally, or this
Section 6.9
specifically, shall be deemed or construed to
(i) constitute an amendment to, or be construed as amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries,
(ii) limit Parent's or its Subsidiaries' right to amend any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries or other
compensation or benefit plan or arrangement for any purpose; (iii) require Parent or its Subsidiaries to maintain any particular Employee Benefit Plan; (iv) require Parent or its
Subsidiaries to continue to employ or retain the services of any particular employee or other service provider for any period after Closing; (v) create a right in any employee to employment
with Parent or its Subsidiaries; or (vi) limit the right of Parent or its Subsidiaries to terminate the employment of any employee following Closing. The provisions of this
Section 6.9
are for
the sole benefit of the parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or
give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company or any of their respective Affiliates), other than the parties and
their respective permitted successors and assigns, any legal or equitable or other rights or remedies (including with respect to the matters provided for in this
Section 6.9
) under or by reason of
any provision of this Agreement.
6.10
Indemnification; Directors' and Officers' Insurance.
(a) Without
limiting any other rights that any Indemnified Person may have pursuant to any employment agreement or indemnification agreement in effect on the date hereof or
otherwise,
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from
the Effective Time and until the six (6) year anniversary of the Effective Time, Parent and the Surviving Corporation shall, jointly and severally, indemnify, defend and hold harmless each
Person who is now, or has been at any time prior to the date of this Agreement or who becomes prior to the Effective Time, a director, officer or employee of the Company or any of its Subsidiaries or
who acts as a fiduciary under any Company Plan or any of its Subsidiaries or is or was serving at the request of the Company or any of its Subsidiaries as a director, officer, employee or agent of
another corporation, partnership, limited liability company, joint venture, Employee Benefit Plan, trust or other enterprise (the "
Indemnified Persons
")
against all losses, claims, damages, costs, fines, penalties, expenses (including attorneys' and other professionals' fees and expenses), liabilities or judgments or amounts that are paid in
settlement, of or incurred in connection with any threatened or actual Proceeding to which such Indemnified Person is a party or is otherwise involved (including as a witness) based, in whole or in
part, on or arising, in whole or in part, out of the fact that such Person is or was a director, officer or employee of the Company or any of its Subsidiaries, a fiduciary under any Company Plan or
any of its Subsidiaries or is or was serving at the request of the Company or any of its Subsidiaries as a director, officer, employee or agent of another corporation, partnership, limited liability
company, joint venture, Employee Benefit Plan, trust or other enterprise or by reason of anything done or not done by such Person in any such capacity, whether pertaining to any act or omission
occurring or existing prior to, at or after the Effective Time and whether asserted or claimed prior to, at or after the Effective Time ("
Indemnified
Liabilities
"), including all Indemnified Liabilities based in whole or in part on, or arising in whole or in part out of, or pertaining to, this Agreement or the Transactions,
in each case to the fullest extent permitted under applicable Law (and Parent and the Surviving Corporation shall, jointly and severally, pay expenses incurred in advance of the final disposition of
any such Proceeding to each Indemnified Person to the fullest extent permitted under applicable Law). Without limiting the foregoing, in the event any such Proceeding is brought or threatened to be
brought against any Indemnified Persons (whether arising before or after the Effective Time), (i) the Indemnified Persons may retain the Company's regularly engaged legal counsel or other
counsel satisfactory to such Indemnified Persons, and Parent and the Surviving Corporation shall pay all reasonable fees and expenses of such counsel for the Indemnified Persons as promptly as
statements therefor are received, and (ii) Parent and the Surviving Corporation shall use its best efforts to assist in the defense of any such matter. Any Indemnified Person wishing to claim
indemnification or advancement of expenses under this
Section 6.10(a)
, upon learning of any such Proceeding, shall notify the Surviving
Corporation (but the failure so to notify shall not relieve a party from any obligations that it may have under this
Section 6.10(a)
except to
the extent such failure materially prejudices such party's position with respect to such claims). With respect to any determination of whether any Indemnified Person is entitled to indemnification by
Parent or Surviving Corporation under this
Section 6.10(a)
, such Indemnified Person shall have the right to require that such determination be
made by special, independent legal counsel selected by the Indemnified Person and approved by Parent or Surviving Corporation, as applicable (which approval shall not be unreasonably withheld or
delayed), and who has not otherwise performed material services for Parent, Surviving Corporation or the Indemnified Person within the last three (3) years.
(b) Parent
and the Surviving Corporation shall not amend, repeal or otherwise modify any provision in the Organizational Documents of the Surviving Corporation or its
Subsidiaries in any manner that
would affect (or manage the Surviving Corporation or its Subsidiaries, with the intent to or in a manner that would) adversely the rights thereunder or under the Organizational Documents of the
Surviving Corporation or any of its Subsidiaries of any Indemnified Person to indemnification, exculpation and advancement except to the extent required by applicable Law. Parent shall, and shall
cause the Surviving Corporation and its Subsidiaries to, fulfill and honor any indemnification, expense advancement or exculpation agreements between the Company or any of
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its
Subsidiaries and any of its directors, officers or employees existing immediately prior to the Effective Time.
(c) To
the fullest extent permitted under applicable Law, Parent and the Surviving Corporation shall indemnify any Indemnified Person against all reasonable costs and
expenses (including reasonable attorneys' fees and expenses), such amounts to be payable in advance upon request as provided in
Section 6.10
,
relating to the enforcement of such Indemnified Person's rights under this
Section 6.10
or under any charter, bylaw or contract regardless of
whether such Indemnified Person is ultimately determined to be entitled to indemnification hereunder or thereunder.
(d) Parent
and the Surviving Corporation will cause to be put in place, and Parent shall fully prepay immediately prior to, and conditioned upon the occurrence of, the
Effective Time, "tail" insurance policies with a claims reporting or discovery period of at least six (6) years from the Effective Time placed with insurance companies having the same or better
AM Best Financial rating as the Company's and Rice MLP's current directors' and officers' liability insurance companies with terms and conditions providing retentions, limits and other material terms
no less favorable than the current directors' and officers' liability insurance policies maintained by the Company and Rice MLP with respect to matters, acts or omissions existing or occurring at or
prior to the Effective Time;
provided
,
however
, that Parent may elect in its sole discretion to, but
shall not be required to, spend more than 300% (the "
Cap Amount
") of the last annual premium paid by the Company and Rice MLP prior to the date hereof
for the six (6) years of coverage under such "tail" policy;
provided
,
further
, that if the cost
of such insurance exceeds the Cap Amount, and Parent elects not to spend more than the Cap Amount for such purpose, then Parent shall purchase as much coverage as is reasonably available for the Cap
Amount.
(e) In
the event that Parent, the Surviving Corporation or any Subsidiary of the Surviving Corporation, or any of their respective successors or assigns
(i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then, in each such case, proper provisions shall be made so that the successors and assigns of the Surviving Corporation or such
Subsidiary of the Surviving Corporation, as the case may be, shall assume the obligations set forth in
Section 6.10(a)
. Parent and the Surviving
Corporation shall not sell, transfer, distribute or otherwise dispose of any of their assets or the assets of any Subsidiary in a manner that would reasonably be expected to render Parent or Surviving
Corporation unable to satisfy their obligations under
Section 6.10(a)
. The provisions of
Section 6.10(a)
are intended to be for the benefit of,
and shall be enforceable by, the parties and each Person entitled to indemnification or
insurance coverage or expense advancement pursuant to
Section 6.10(a)
, and his heirs and representatives.
6.11
Agreement to Defend; Stockholder Litigation.
In the event any Proceeding by any Governmental
Entity or other Person is commenced that questions the validity or legality of the Transactions or seeks damages
in connection therewith, the parties agree to cooperate and use their reasonable best efforts to defend against and respond thereto. Without limiting the foregoing, the Company shall give Parent the
right to review and comment on all material filings or responses to be made by the Company in connection with any such Proceeding, and no settlement shall be agreed to or offered without Parent's
prior written consent.
6.12
Public Announcements.
The initial press release with respect to the execution of this Agreement
shall be a joint press release to be reasonably agreed upon by the parties. The parties
will not, and each of the foregoing will cause its Representatives not to, issue any public announcements or make other public disclosures regarding this Agreement or the transactions contemplated
hereby, without the prior written approval of the parties unless such statements are substantially identical to
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public
statements previously approved by each party;
provided
,
however
, that a party, its Subsidiaries
or their Representatives may issue a public announcement or other public disclosures required by applicable Law or the rules of any stock exchange upon which such party's or its Subsidiary's capital
stock is traded;
provided
that such party uses reasonable best efforts to afford the other party an opportunity to first review the content of the
proposed disclosure and provide reasonable comment regarding same;
provided
,
however
, that neither party
shall be (i) restricted from making internal communications with its employees which are not made public or (ii) required by any provision of this Agreement to consult with or obtain any
approval from any other party with respect to a public announcement or press release issued in connection with the receipt and existence of a Company Competing Proposal or Parent Competing Proposal,
as applicable, and matters related thereto or a Company Change of Recommendation or Parent Change of Recommendation other than as set forth in
Section 6.3
or
Section 6.4
, as applicable.
6.13
Advice of Certain Matters; No Control of Business.
Subject to compliance with applicable Law,
the Company and Parent, as the case may be, shall confer on a regular basis with each other, report on operational
matters and shall promptly advise each other orally and in writing of any change or event having, or which would be reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect or Parent Material Adverse Effect, as the case may be. Except with respect to Antitrust Laws as provided in
Section 6.8
, the
Company and Parent shall promptly provide each other (or their respective counsel) copies of all filings made by such party or its Subsidiaries with the SEC or any other Governmental Entity in
connection with this Agreement and the Transactions. Without limiting in any way any party's rights or obligations under this Agreement, nothing contained in this Agreement shall give any party,
directly or indirectly, the right to control or direct the other party and their respective Subsidiaries' operations prior to the Effective Time. Prior to the Effective Time, each of the parties shall
exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations.
6.14
Transfer Taxes.
Except as otherwise provided in this Agreement, (i) all Transfer Taxes
imposed with respect to the Integrated Mergers, if any, shall be borne and paid by
Parent, the Company or any of their respective Subsidiaries when due, and Parent shall file or cause to be filed all necessary Tax Returns and other documentation required to be filed by Parent, the
Company or any of their respective Subsidiaries with respect to any such Transfer Taxes, and (ii) Parent shall reimburse, indemnify, defend and hold harmless against liability for any such
Transfer Taxes any holder of Company Common Stock. The parties will cooperate, in good faith, in the filing of any such Tax Returns with respect to such Transfer Taxes and the minimization, to the
extent reasonably permissible under applicable Law, of the amount of any such Transfer Taxes.
6.15
Reasonable Best Efforts; Notification.
(a) Except
to the extent that the parties' obligations are specifically set forth elsewhere in this
Article VI
, upon
the terms and subject to the conditions set forth in this Agreement (including
Section 6.3
and
Section 6.4
), each of the parties shall use
reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done,
and to assist and cooperate with the other party in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the
other Transactions.
(b) The
Company shall give prompt notice to Parent, and Parent or Merger Sub shall give prompt notice to the Company, upon becoming aware of (i) any condition, event
or circumstance that will result in any of the conditions in
Section 7.2(a)
or
7.3(a)
not being
met, or (ii) the failure by such party to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement;
provided
,
however
, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement.
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6.16
Section 16 Matters.
Prior to the Effective Time, Parent, Merger Sub and the Company shall
take all such steps as may be required to cause any dispositions of equity securities of the
Company (including derivative securities) or acquisitions of equity securities of Parent (including derivative securities) in connection with this Agreement by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to the Company, or will become subject to such reporting requirements with respect to Parent, to be exempt under
Rule 16b-3 under the Exchange Act.
6.17
Listing Application.
Parent shall take all action necessary to cause the Parent Common Stock to
be issued in the Merger to be approved for listing on the NYSE prior to the Effective
Time, subject to official notice of issuance.
6.18
Tax Matters.
Each of Parent and the Company will use its reasonable best efforts to cause the
Integrated Mergers, taken together, to qualify, and will not take or knowingly
fail to take (and will cause its Subsidiaries not to take or knowingly fail to take) any action that could reasonably be expected to prevent or impede the Integrated Mergers, taken together, from
qualifying, as a "reorganization" within the meaning of Section 368(a) of the Code. Each of Parent and the Company will use its reasonable best efforts and will cooperate with one another to
obtain the opinions of counsel referred to in
Section 7.2(e)
and
Section 7.3(e)
. In
connection therewith, (a) Parent shall deliver to each such counsel a duly executed certificate containing such representations, warranties and covenants as shall be reasonably necessary or
appropriate to enable each such counsel to render the opinion described in
Sections 7.2(e)
or
Section 7.3(e)
, as applicable, (the "
Parent Tax Certificate
") and (b) the Company shall
deliver to each such counsel a duly executed certificate containing such representations, warranties and covenants as shall be reasonably necessary or appropriate to enable each such counsel to render
the opinion described in
Section 7.2(e)
or
Section 7.3(e)
, as applicable, (the
"
Company Tax Certificate
"), in each case dated as of the Closing Date (and, if requested, dated as of the date on which the Registration Statement is
declared effective by the SEC), and Parent and the Company shall provide such other information as reasonably requested by each such counsel for purposes of rendering the opinion described in
Section 7.2(e)
or
Section 7.3(e)
, as applicable.
6.19
Takeover Laws.
None of the parties will take any action that would cause the Transactions to be
subject to requirements imposed by any Takeover Laws, and each of them will take
all reasonable steps within its control to exempt (or ensure the continued exemption of) the Transactions from the Takeover Laws of any state that purport to apply to this Agreement or the
Transactions.
6.20
Obligations of Merger Sub.
Parent shall take all action necessary to cause Merger Sub and the
Surviving Corporation to perform their respective obligations under this Agreement.
6.21
Financing Cooperation.
(a) The
Company shall, and shall cause its Subsidiaries to, and shall cause its and their Representatives to, use reasonable best efforts to provide all cooperation
reasonably requested by Parent, or as Parent may reasonably determine necessary or advisable, in connection with financing arrangements (including, without limitation, assisting in the arrangement of
new financing arrangements (including the Financing) and any assumptions, guarantees, amendments, supplements, modifications, refinancings, replacements, repayments, redemptions, terminations or
prepayments of existing financing arrangements of Parent or the Company or their respective subsidiaries) to fund the cash portion of the Merger Consideration, the completion of the Merger or the
other transactions contemplated hereby or to be consummated in connection therewith and the payment of related fees and expenses. Such cooperation shall include, without limitation,
(A) furnishing Parent and any of its Financing Sources with (i) unaudited consolidated balance sheets and related statements of income, stockholders' equity and cash flows for the
Company for the fiscal quarter ended June 30, 2017 and each subsequent fiscal quarter (other than the fourth fiscal quarter in any fiscal year) ended after the close of its most recent fiscal
year and at least
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forty
(40) days prior to the Closing Date (with respect to which independent auditors have performed a SAS 100 review) and (ii) in the event that the Closing Date occurs on a date that
is more than sixty (60) days following December 31, 2017, audited consolidated balance sheets and related statements of income, stockholders' equity and cash flows for the fiscal year
ended December 31, 2017, in each case
prepared in accordance with GAAP and (B) using reasonable best efforts to (i) cause management teams of the Company or its Subsidiaries, with appropriate seniority and expertise, upon
reasonable notice, to participate in, and provide reasonable and timely assistance with the preparation of materials for, meetings, due diligence and drafting sessions, rating agency presentations and
road shows, if any, related to such financing arrangements; (ii) provide information with respect to the Company and its Subsidiaries reasonably requested by Parent or any of its Financing
Sources to facilitate such financing arrangements, including reasonably assisting Parent in connection with the preparation of pro forma financial information and financial statements to be included
in any Offering Document; (iii) as promptly as practical upon the reasonable request of Parent, furnish Parent and any of its Financing Sources with such financial and other information
reasonably requested by Parent relating to the Company or its Subsidiaries that is customary or reasonably required for the preparation of the Offering Documents; (iv) assist in the preparation
of SEC filings to be made by Parent, offering memoranda, private placement memoranda, prospectuses, bank confidential information memoranda, syndication materials, rating agency presentations and
similar documents required in connection with such financing arrangements ("
Offering Documents
"); (v) (x) cause Ernst & Young LLP
or other relevant accountants of the Company and its Subsidiaries to provide assistance and cooperation to Parent, including using reasonable best efforts to (1) cause their participation in
drafting sessions and accounting due diligence sessions and assistance in the preparation of any pro forma financial statements referred to in
clause (B)(ii)
above, (2) cause them to provide
customary consents to use their audit reports on the consolidated financial statements of
the Company as required in any Offering Documents or in connection with any filings made with the SEC or pursuant to applicable law, and (3) cause them to provide any customary comfort letters
(including "negative assurance" comfort) in connection with any such financing arrangements and (y) cooperate with Parent's legal counsel in connection with any legal opinions that such counsel
may be required to deliver in connection with such financing arrangements; (vi) cooperate with any due diligence, to the extent customary and reasonable; (vii) in connection with any
such financing arrangements, provide customary authorization letters authorizing the distribution of information provided by the Company to prospective lenders, subject to customary confidentiality
undertakings by such prospective lenders with respect thereto, and containing customary representations that such information does not contain a material misstatement or omission and that the "public
side" versions of any Offering Documents only include information about the Company that is public information or information that is not material to the Company or its Subsidiaries or its or their
securities; (viii) furnish promptly, and in any event at least four (4) Business Days prior to the Closing Date (to the extent requested within nine (9) Business Days prior to the
Closing Date), all documentation and other information required by any Governmental Authority or as reasonably requested by any Financing Source under applicable "know your customer," anti-bribery and
anti-money laundering rules and regulations, including the PATRIOT Act, the Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd 1
et seq.
, and economic sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department; (ix) in connection with
such financing arrangements, execute and deliver any definitive financing documents, including any necessary pledge and security documents, as reasonably requested by Parent and otherwise facilitating
the pledging of collateral in connection with such financing arrangements, including taking reasonable actions necessary to permit the applicable Financing Sources to evaluate the Company's and its
Subsidiaries' assets, inventory, cash management and accounting systems, policies and procedures relating thereto for the purpose of establishing collateral arrangements (including establishing bank
and other accounts
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and
blocked account and control agreements in connection with the foregoing); and (x) cause the taking of any corporate, limited liability company or partnership actions, as applicable, by the
Company or its Subsidiaries reasonably necessary to permit the completion of such financing arrangements, subject to the occurrence of the Closing.
(b) The
Company shall, and shall cause its Subsidiaries to, as soon as reasonably practicable after (and not prior to) the receipt of a written request from Parent to do so,
on the terms and conditions specified by Parent and in compliance with all applicable terms and conditions of the applicable Company Debt Agreement, use reasonable best efforts to seek an amendment or
amendments to any of the Company Debt Agreements or pursue any approach chosen by Parent to the assumption, defeasance, satisfaction and discharge, constructive satisfaction and discharge,
refinancing, repayment, repurchase, redemption, termination, amendment, guarantee, purchase, tender, exchange or other treatment of, the Company Debt Agreements and the indebtedness incurred pursuant
thereto, in each case, subject to the occurrence of the Closing (any such transaction, a "
Debt Transaction
"). The Company shall not be required to take
any action in respect of any Debt Transaction until Parent shall have provided the Company with drafts of the necessary legal documentation required in connection with such Debt Transaction
(collectively, the "
Debt Transaction Documents
"), and the Company and its legal counsel shall have had a reasonable opportunity to review and comment on
the Debt Transaction Documents. The Company shall, and shall cause its Subsidiaries to, cause its and their respective Representatives to use reasonable best efforts to provide cooperation and
assistance reasonably requested by Parent in connection with the Debt Transactions (including taking all corporate action reasonably necessary to authorize the execution and delivery of any Debt
Transaction Documents to be entered into prior to Closing and delivering all officer's certificates and legal opinions required to be delivered in connection therewith (such corporate action,
execution and delivery not to be unreasonably withheld, delayed or conditioned));
provided
that any such Debt Transaction Documents that amend any
Company Debt Agreement prior to the Closing Date shall provide that such amendments are not operative until the Closing.
(c) The
Company shall, and shall cause its Subsidiaries to, after (and not prior to) the receipt of a written request from Parent to do so, use reasonable best efforts to
deliver all notices and take all other actions to facilitate the termination at the Closing of all commitments in respect of each of the Company Credit Agreement, the Rice Midstream Holdco Credit
Agreement and the Rice MLP Credit Agreement, the repayment in full on the Closing Date of all obligations in respect of the indebtedness thereunder, the release on the Closing Date of any Encumbrances
securing such indebtedness and guarantees in connection therewith, and, with respect to any letters of credit outstanding thereunder, the cash collateralization thereof or the making of any alternate
arrangements with respect thereto that are reasonably requested by Parent. In furtherance and not in limitation of the foregoing, after (and not prior to) the receipt of a written request from Parent
to do so, the Company and its Subsidiaries shall use reasonable best efforts to deliver to Parent (i) at least five (5) Business Days prior to the Closing Date, a draft payoff letter
with respect to each of the Company Credit Agreement, the Rice Midstream Holdco Credit Agreement and the Rice MLP Credit Agreement and any other indebtedness
of the Company or its Subsidiaries to be paid off, discharged and terminated on the Closing Date and (ii) at least three (3) Business Days prior to the Closing Date, an executed payoff
letter with respect to each of Company Credit Agreement, the Rice Midstream Holdco Credit Agreement and the Rice MLP Credit Agreement (the "
Payoff
Letters
"), in each case in customary form and substance from the applicable agent on behalf of the Persons to whom such indebtedness is owed, which Payoff Letters together with
any related release documentation shall, among other things, include the payoff amount and provide that Encumbrances (and guarantees), if any, granted in connection with the Company Credit Facilities
or any other indebtedness of the Company or its Subsidiaries to be paid off, discharged and terminated on the Closing Date relating to the assets, rights and properties of the Company
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and
its Subsidiaries securing or relating to such indebtedness, shall, upon the payment of the amount set forth in the applicable Payoff Letter at or prior to the Effective Time, be released and
terminated. To the extent Parent has requested the termination of the commitments under the Company Credit Agreement, the Rice Midstream Holdco Credit Agreement or the Rice MLP Credit Agreement,
Parent shall deposit, or cause to be deposited, funds with the applicable administrative agent no later than the Closing Date in an amount sufficient for such repayment.
(d) The
Company shall, and shall cause its Subsidiaries to, after (and not prior to) the receipt of a written request from Parent to do so, use reasonable best efforts to
(i) issue one or more notices of optional redemption (and any updates thereto), which notices may be subject to one or more conditions specified by Parent, for all of the outstanding aggregate
principal amount of each series of Company Notes pursuant to the applicable Company Notes Indenture in order to effect a redemption of the Company Notes on or after the Closing Date, and
(ii) provide any other reasonable cooperation requested by Parent to facilitate the redemption of the Company Notes (and, if elected by Parent, the satisfaction and discharge of the Company
Notes and the Company Notes Indentures substantially concurrently with the Closing) and the release of all guarantees in connection therewith, effective as of and conditioned upon the occurrence of
the Closing Date (including delivering any legal opinions, notices, requests, order or certificates required to be delivered in connection with the Discharge). Parent shall deposit, or cause to be
deposited, funds with the trustee for the applicable series of Company Notes sufficient to fund any Discharge requested by Parent no later than the redemption time specified in the applicable
redemption notice in accordance with the applicable Company Notes Indentures. The redemption (or, if applicable, satisfaction and discharge) of the Company Notes and Company Notes Indentures pursuant
to this
Section 6.21(d)
and the release of all guarantees in connection therewith, are referred to collectively as the
"
Discharge.
"
(e) Notwithstanding
anything to the contrary in this
Section 6.21
, no action shall be required of the Company or its
Subsidiaries pursuant to
Section 6.21(a)-(d)
, if any such action shall: (i) unreasonably disrupt or interfere with the business or ongoing
operations of Company and its Subsidiaries; (ii) cause
any representation or warranty or covenant contained in this Agreement to be breached (unless waived by Parent); (iii) involve the entry by the Company or any Subsidiary into any agreement with
respect to any financing arrangement that is operative prior to the Closing (it being understood and agreed that such agreements may be effective and binding against the Company and its Subsidiaries
prior to the Closing); (iv) require Company or any of its Subsidiaries or any of its or their Representatives to provide (or to have provided on its behalf) any certificates or legal opinions,
other than certificates or legal opinions delivered at (or effective as of) the Closing Date, customary representation and authorization letters and, any officer's certificate required to be delivered
pursuant to the Company Notes Indenture in connection with any Discharge pursuant to
Section 6.21(d)
; (v) require the Company or any
Subsidiary to pay any commitment or other fee prior to the Closing Date for which it has not received prior reimbursement; (vi) require the Company or any of its Subsidiaries or their
respective Representatives to prepare pro forma financial information or projections, which shall be the responsibility of Parent (without waiver of the covenant set forth in
Section 6.21(a)(B)(ii)
); or (vii) cause any director, officer, or employee of Company or any of its Subsidiaries to execute any agreement
or certificate in his or her individual, rather than official, capacity.
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(f) Promptly
upon the Company's request, all reasonable and documented out-of-pocket fees and expenses incurred by the Company and its Subsidiaries in connection with
assisting in any financing arrangement pursuant to this
Section 6.21
shall be paid or reimbursed by Parent, and, in the event the Closing shall
not occur, Parent shall indemnify and hold harmless Company, its Subsidiaries and its and their Representatives from and against any and all losses actually suffered or incurred by them in connection
with the arrangement or consummation of such financing arrangement, except to the extent such losses arise out of or results from the fraud, intentional misrepresentation, intentional breach, gross
negligence, bad faith or willful misconduct of the Company, its Subsidiaries or any of its or their Representatives related to this
Section 6.21
,
or from the information provided by the Company or its Subsidiaries for use in the Offering Documents or otherwise in connection with such financing arrangement.
6.22
Discussions with Third Party Security Holders.
If Parent shall so request, the
Company shall reasonably cooperate with and assist Parent to facilitate Parent's discussions with Third Party Security Holders and
any transactions that are contemplated by or arise from such discussions, it being understood and agreed that the Company shall only be required pursuant to this
Section 6.22
to facilitate
transactions (and discussions with respect thereto) that would be conditioned upon the occurrence of the Closing.
6.23
Directors of Parent Following the Effective Time.
(a) Subject
to
Section 6.23(b)
, (i) prior to the Effective Time, Parent shall take all necessary corporate
action so that the Company's Chief Executive Officer as of the date of this Agreement (the "
Company CEO
") and the Chairman of the Company Board as of
the date of this Agreement (the "
Company Chairman
," and together with the Company CEO, the "
New
Directors"
), are appointed to the Parent Board immediately following the Effective Time and (ii) Parent, through the Parent Board, shall take all necessary action to
nominate the New Directors for election to the Parent Board in the proxy statement relating to the first annual meeting of the shareholders of Parent following the Closing with respect to which a
definitive proxy statement has not been filed by Parent prior to the Closing (the "
Post-Closing Annual Meeting
"). In the event that either the Company
CEO or the Company Chairman are unable or unwilling to serve on the Parent Board as of immediately following the Effective Time, then a substitute shall be chosen by Parent from among the directors of
the Company Board identified as independent in the Company's definitive proxy statement for its 2017 annual meeting who indicate to Parent their willingness to serve on the Parent Board, which
substitute member shall be deemed to be a New Director for purposes of this Agreement.
(b) Notwithstanding
anything to the contrary in this Agreement, (i) the parties expressly acknowledge that approval by Parent's shareholders of the Parent Charter
Amendment is not a condition to any party's obligation to complete the Transactions and (ii) if the Parent Charter Amendment has not been approved by Parent's shareholders prior to the
Effective Time, (x) Parent and the Parent Board shall only be required to appoint to the Parent Board immediately following the Effective Time and nominate in the proxy statement with respect
to the Post-Closing Annual Meeting (the "
Post-Closing Proxy Statement
") one New Director selected by the Company Board and (y) Parent shall
include in the Post-Closing Proxy Statement a proposal to amend its articles of incorporation in the manner contemplated by the Parent Charter Amendment (the "
Post-Closing
Charter Amendment Proposal
") in order to permit the other New Director to be appointed to the Parent Board, which appointment shall be effected as soon as reasonably
practicable following approval by Parent's shareholders of the Post-Closing Charter Amendment Proposal;
provided
that all obligations of Parent and the
Parent Board pursuant to this
clause (y)
shall terminate in the event that Parent's shareholders fail to approve the Post-Closing Charter
Amendment at the Post-Closing Annual Meeting.
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(c) The
provisions of this
Section 6.23
are intended to be for the benefit of, and shall be enforceable by, the
parties and each New Director.
ARTICLE VII
CONDITIONS PRECEDENT
7.1
Conditions to Each Party's Obligation to Consummate the Merger.
The respective obligation of each party
to consummate the Merger is subject to the satisfaction at or prior to the Effective Time of the following conditions, any
or all of which may be waived jointly by the parties, in whole or in part, to the extent permitted by applicable Law:
(a)
Stockholder Approvals.
The Company Stockholder Approval and the Parent Shareholder Approval shall have been
obtained in accordance with applicable Law and the Organizational Documents of the Company and Parent, as applicable.
(b)
Regulatory Approval.
Any waiting period applicable to the Transactions under the HSR Act shall have been
terminated or shall have expired.
(c)
No Injunctions or Restraints.
No Governmental Entity having jurisdiction over any party shall have issued
any order, decree, ruling, injunction or other action that is in effect (whether temporary, preliminary or permanent) restraining, enjoining or otherwise prohibiting the consummation of the Merger,
and no Law shall have been adopted that makes consummation of the Merger illegal or otherwise prohibited.
(d)
Registration Statement.
The Registration Statement shall have been declared effective by the SEC under the
Securities Act and shall not be the subject of any stop order or Proceedings seeking a stop order.
(e)
NYSE Listing.
The shares of Parent Common Stock issuable to the Company's stockholders pursuant to this
Agreement shall have been authorized for listing on the NYSE, upon official notice of issuance.
7.2
Additional Conditions to Obligations of Parent and Merger Sub.
The obligations of Parent and
Merger Sub to consummate the Merger are subject to the satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived exclusively by Parent, in whole or in part, to the extent permitted by applicable Law:
(a)
Representations and Warranties of the Company.
(i) The representations and warranties of the Company set
forth in
Section 4.2(a)
,
Section 4.2(b)
and
Section 4.6(a)
shall be true and correct (except,
with respect to
Section 4.2(a)
and
Section 4.2(b)
for any
de minimis
inaccuracies) as of the date
of this Agreement and the Closing
Date, as though made on and as of the such date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date), (ii) the
representations and warranties of the Company set forth in
Section 4.3(a)
and
Section 4.23
shall be true and correct (without regard to qualification or exceptions contained therein as to "materiality" or "Company Material Adverse Effect") in all material respects as of the date of this
Agreement and the Closing Date, as though made on and as of such date (except that representations and warranties that speak as of a specified date shall have been true and correct in all material
respects only as of such date) and (iii) all other representations and warranties of the Company set forth in
Article IV
of this Agreement shall
be true and correct as of the date of this Agreement and the Closing Date, as though made on and as of such date (except that representations and warranties that speak as of a specified date shall
have been true and correct only as of such date), except where the failure of such representations and warranties to be so true and correct (without regard to qualification or exceptions contained
therein as to "materiality" or "Company Material Adverse Effect") would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
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(b)
Performance of Obligations of the Company.
The Company shall have performed, or complied with, in all
material respects all agreements and covenants required to be performed or complied with by it under this Agreement on or prior to the Effective Time.
(c)
No Company Material Adverse Effect.
Since the date of this Agreement, there has not been any event, change,
effect or development that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.
(d)
Compliance Certificate.
Parent shall have received a certificate of the Company signed by an executive
officer of the Company, dated the Closing Date, confirming that the conditions in
Sections 7.2(a)
and
(b)
have been satisfied.
(e)
Tax Opinion.
Parent shall have received an opinion from Wachtell, Lipton, Rosen & Katz, in form and
substance reasonably satisfactory to Parent, dated as of the Closing Date, to the effect that, on the basis of the facts, representations and assumptions set forth or referred to in such opinion, the
Integrated Mergers, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. In rendering the opinion described in this
Section 7.2(e)
, Wachtell,
Lipton, Rosen & Katz shall have received and may rely upon the Parent Tax Certificate and the Company Tax
Certificate and such other information reasonably requested by and provided to it by the Company or Parent for purposes of rendering such opinion.
7.3
Additional Conditions to Obligations of the Company.
The obligation of the Company to consummate
the Merger is subject to the satisfaction at or prior to the Effective Time of the following conditions, any or all of
which may be waived exclusively by the Company, in whole or in part, to the extent permitted by applicable Law:
(a)
Representations and Warranties of Parent and Merger Sub.
(i) The representations and warranties of Parent
and Merger Sub set forth in
Section 5.2(a)
,
Section 5.2(b)
and
Section 5.6(a)
shall be true
and correct (except, with respect to
Section 5.2(a)
and
Section 5.2(b)
for any
de minimis
inaccuracies) as of the date of this Agreement and the Closing
Date, as though made on and as of the Closing Date (except that representations and warranties that speak as of a specified date shall have been true and correct only as of such date) and
(ii) the representations and warranties of Parent set forth in
Section 5.3(a)
and shall be
Section 5.22
true and correct (without regard to
qualification or exceptions contained therein as to "materiality" or "Parent Material Adverse
Effect") in all material respects as of the date of this Agreement and the Closing Date, as though made on and as of such (except that representations and warranties that speak as of a specified date
shall have been true and correct in all material respects only as of such date) and (iii) all other representations and warranties of Parent and Merger Sub set forth in
Article V
of this
Agreement shall be true and correct as of the date of this Agreement and the Closing Date, as though made on and as of such
date (except that representations and warranties that speak as of specified date shall have been true and correct only as of such date), except where the failure of such representations and warranties
to be so true and correct (without regard to qualification or exceptions contained therein as to "materiality" or "Parent Material Adverse Effect") would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
(b)
Performance of Obligations of Parent and Merger Sub.
Parent and Merger Sub each shall have performed, or
complied with, in all material respects all agreements and covenants required to be performed or complied with by them under this Agreement at or prior to the Effective Time.
(c)
No Parent Material Adverse Effect.
Since the date of this Agreement, there has not been any event, change,
effect or development that, individually or in the aggregate, has had or would reasonably be expected to have a Parent Material Adverse Effect.
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(d)
Compliance Certificate.
The Company shall have received a certificate of Parent signed by an executive
officer of Parent, dated the Closing Date, confirming that the conditions in
Sections 7.3(a)
and
(b)
have been satisfied.
(e)
Tax Opinion.
The Company shall have received an opinion from Vinson & Elkins LLP, in form and
substance reasonably satisfactory to the Company, dated as of the Closing Date, to the effect that, on the basis of the facts, representations and assumptions set forth or referred to in such opinion,
the Integrated Mergers, taken together, will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. In rendering the opinion described in this
Section 7.3(e)
,
Vinson & Elkins LLP shall have received and may rely upon the Parent Tax Certificate and the Company Tax
Certificate and such other information reasonably requested by and provided to it by the Company or Parent for purposes of rendering such opinion.
7.4
Frustration of Closing Conditions.
None of the parties may rely, either as a basis for not
consummating the Merger or for terminating this Agreement, on the failure of any condition set forth in
Section 7.1
,
7.2
or
7.3
, as the case may be, to
be satisfied if such failure was caused by such party's breach in any material respect of any provision of this Agreement.
ARTICLE VIII
TERMINATION
8.1
Termination.
This Agreement may be terminated and the Merger and the other Transactions contemplated
hereby may be abandoned at any time prior to the Effective Time, whether
(except as expressly set forth below) before or after the Company Stockholder Approval or the Parent Shareholder Approval has been obtained:
(a) by
mutual written consent of the Company and Parent;
(b) by
either the Company or Parent:
(i) if
any Governmental Entity having jurisdiction over any party shall have issued any order, decree, ruling or injunction or taken any other action permanently
restraining, enjoining or otherwise prohibiting the consummation of the Merger and such order, decree, ruling or injunction or other action shall have become final and nonappealable, or if there shall
be adopted any Law that permanently makes consummation of the Merger illegal or otherwise permanently prohibited;
provided
,
however
, that the right to
terminate this Agreement under this
Section 8.1(b)(i)
shall not be
available to any party whose failure to fulfill any material covenant or agreement under this Agreement has been the cause of or resulted in the action or event described in this
Section 8.1(b)(i)
occurring;
(ii) if
the Merger shall not have been consummated on or before 5:00 p.m. Eastern time, on February 19, 2018;
provided
that if on such date the condition to closing set forth in
Section 7.1(b)
or
Section 7.1(c)
(if the failure of such condition to be then satisfied is due to an Antitrust Law) shall not have been satisfied but all
other
conditions to Closing shall have been satisfied (or in the case of conditions that by their terms are to be satisfied at the Closing, shall be capable of being satisfied or waived by all parties
entitled to the benefit of such conditions), such date may be extended by Parent or the Company from time to time by written notice to the other party up to a date that is no later than May 19,
2018 (the "
End Date Extension
", and such date, as it may be extended by the End Date Extension, the "
End
Date
");
provided
,
however
, that the right to terminate this Agreement under this
Section 8.1(b)(ii)
shall not be available to any party whose failure to fulfill any material covenant or agreement under this Agreement has been
the cause of or resulted in the failure of the Merger to occur on or before such date;
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(iii) in
the event of a breach by the other party of any representation, warranty, covenant or other agreement contained in this Agreement (other than those contained in
Section 6.21(a)(A)
) which
(A) would give rise to the failure of a condition set forth in
Section 7.2(a)
or
(b)
or
Section 7.3(a)
or
(b)
,
as applicable, if it was continuing as of the Closing Date and (B) cannot be or has not been cured by the earlier of thirty (30) days after the giving of written notice to the breaching
party of such breach and the basis for such notice, and the date of the proposed termination (a "
Terminable Breach
");
provided
,
however
, that the terminating party is not then in Terminable Breach of any representation,
warranty, covenant or other agreement contained in this Agreement; or
(iv) if
(A) the Company Stockholder Approval shall not have been obtained upon a vote held at a duly held Company Stockholders Meeting, or at any adjournment or
postponement thereof or (B) the Parent Shareholder Approval shall not have been obtained upon a vote held at a duly held Parent Shareholders Meeting, or at any adjournment or postponement
thereof.
(c) by
Parent, prior to the time the Company Stockholder Approval is obtained:
(i) if
the Company Board or any committee thereof shall have effected a Company Change of Recommendation; or
(ii) if
the Company is in violation in any material respect of its obligations under
Section 6.3
;
(d) by
the Company in order to enter into a definitive agreement with respect to a Company Superior Proposal;
provided
,
however
, that the Company shall have
contemporaneously with such termination tendered payment to Parent of the fee pursuant to
Section 8.3(b)
;
(e) by
the Company, prior to the time the Parent Shareholder Approval is obtained:
(i) if
the Parent Board or any committee thereof shall have effected a Parent Change of Recommendation; or
(ii) if
Parent is in violation in any material respect of its obligations under
Section 6.4
.
8.2
Notice of Termination; Effect of Termination.
(a) A
terminating party shall provide written notice of termination to the other party specifying with particularity the reason for such termination, and any termination
shall be effective immediately upon delivery of such written notice to the other party.
(b) In
the event of termination of this Agreement by any party as provided in
Section 8.1
, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part of any party except with respect to this
Section 8.2
,
Section 6.7(b)
,
Section 8.3
and
Articles I
and
IX
;
provided
,
however
, that notwithstanding anything to the contrary herein, no such termination shall relieve any party from liability for any damages for any
willful and material breach of any covenant, agreement or obligation hereunder or intentional fraud.
8.3
Expenses and Other Payments.
(a) Except
as otherwise provided in this Agreement, each party shall pay its own expenses incident to preparing for, entering into and carrying out this Agreement and the
consummation of the Transactions, whether or not the Merger shall be consummated.
(b) If
(i) Parent terminates this Agreement pursuant to
Section 8.1(c)
(Company Change of Recommendation or
Material Breach of Non-Solicit) or (ii) the Company terminates this Agreement pursuant to
Section 8.1(d)
(Company Superior Proposal), then
the Company shall pay Parent the Termination Fee in cash by wire transfer of immediately available funds to an account
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designated
by Parent. If the fee shall be payable pursuant to
clause (i)
of the immediately preceding sentence, the fee shall be paid no later
than two Business Days after notice of termination of this Agreement, and if the fee shall be payable pursuant to
clause (ii)
of the immediately
preceding sentence, the fee shall be paid contemporaneously with such termination of this Agreement.
(c) If
the Company terminates this Agreement pursuant to
Section 8.1(e)
(Parent Change of Recommendation or Material
Breach of Non-Solicit), then Parent shall pay the Company the
Termination Fee in cash by wire transfer of immediately available funds to an account designated by the Company no later than two Business Days after notice of termination of this Agreement.
(d) If
either the Company or Parent terminates this Agreement pursuant to (i)
Section 8.1(b)(iv)(A)
(Failure to
Obtain Company Stockholder Approval), then the Company shall pay Parent the Expenses (unless Parent is then entitled to terminate this Agreement pursuant to
Section 8.1(c)
(Company Change of
Recommendation or Material Breach of Non-Solicit), in which event the Company shall pay Parent the Termination
Fee) or (ii)
Section 8.1(b)(iv)(B)
(Failure to Obtain Parent Shareholder Approval), then Parent shall pay the Company the Expenses (unless
the Company is then entitled to terminate this Agreement pursuant to
Section 8.1(e)
(Parent Change of Recommendation or Material Breach of
Non-Solicit), in which event Parent shall pay the Company the Termination Fee), in each case, no later than two Business Days after notice of termination of this Agreement.
(e) If
(i) (A) Parent or the Company terminates this Agreement pursuant to
Section 8.1(b)(iv)(A)
(Failure to
Obtain Company Stockholder Approval), (B) the Company terminates this Agreement pursuant to
Section 8.1(b)(ii)
(End Date), or
(C) Parent terminates this Agreement pursuant to
Section 8.1(b)(iii)
(Company Terminable Breach), (ii) on or before the date of any
such termination a Company Competing Proposal shall have been announced, disclosed or otherwise communicated to the Company Board and not withdrawn (A) at least three (3) Business Days
prior to the Company Stockholders Meeting (in the case of a termination pursuant to
clause (i)(A)
) or (B) at least three
(3) Business Days prior to the date of such termination (in the case of a termination pursuant to
clauses (i)(B)
or
(i)(C)
) and (iii) within
twelve (12) months after the date of such termination, the Company enters into a definitive agreement with
respect to a Company Competing Proposal or consummates any transaction meeting the parameters of a Company Competing Proposal, then the Company shall pay Parent the Termination Fee, less any amount
previously paid by the Company pursuant to
Section 8.3(d)
, in cash by wire transfer of immediately available funds to an account designated by
Parent, on the earliest date of when such definitive agreement is executed or such transaction is consummated. For purposes of this
Section 8.3(e)
, any reference in the definition of Company
Competing Proposal to "20%" shall be deemed to be a reference to "more than 50%."
(f) If
(i) (A) Parent or the Company terminates this Agreement pursuant to
Section 8.1(b)(iv)(B)
(Failure to
Obtain Parent Shareholder Approval), (B) Parent terminates this Agreement pursuant to
Section 8.1(b)(ii)
(End Date) or (C) the
Company terminates this Agreement pursuant to
Section 8.1(b)(iii)
(Parent Terminable Breach), (ii) on or before the date of any such
termination a Parent Competing Proposal shall have been announced, disclosed or otherwise communicated to the Parent Board and not withdrawn (A) at least three (3) Business Days prior to
the Parent Stockholders Meeting (in the case of a termination pursuant to
clause (i)(A)
) or (B) at least three (3) Business Days
prior to the date of such termination (in the case of a termination pursuant to
clauses (i)(B)
or
(i)(C)
) and (iii) within twelve (12)
months after the date of such termination, Parent enters into a definitive agreement with respect to
a Parent Competing Proposal or consummates any transaction meeting the parameters of a Parent Competing Proposal, then Parent shall pay the Company the Termination Fee, less any amount previously paid
by Parent pursuant to
Section 8.3(d)
, in cash by wire transfer of immediately
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available
funds to an account designated by the Company, on the earliest date of when such definitive agreement is executed or such transaction is consummated. For purposes of this
Section 8.3(f)
, any
reference in the definition of Parent Competing Proposal to "20%" shall be deemed to be a reference to "more than 50%."
(g) In
no event shall either party be entitled to receive more than one payment of the applicable Termination Fee and one payment of the applicable Expenses. Notwithstanding
the foregoing sentence, if a party receives an applicable Termination Fee, then such party will not be entitled to also receive a payment of the applicable Expenses, and any payment of the Expenses
shall be fully creditable against any subsequent payment by the applicable party of the Termination Fee. The parties agree that the agreements contained in this
Section 8.3
are an integral part of
the Transactions, and that, without these agreements, the parties would not enter into this Agreement. If a
party fails to promptly pay the amount due by it pursuant to this
Section 8.3
, interest shall accrue on such amount from the date such payment
was required to be paid pursuant to the terms of this Agreement until the date of payment at the prime rate set forth in
The Wall Street Journal
in
effect on the date such payment was required to be made. If, in order to obtain such payment, the other party commences a Proceeding that results in judgment for such party for such amount, the
defaulting party shall pay the other party its reasonable out-of-pocket costs and expenses (including reasonable attorneys' fees and expenses) incurred in connection with such Proceeding. The parties
agree that the monetary remedies set forth in
Section 8.1(d)
and this
Section 8.3
and the
specific performance remedies set forth in
Section 9.10
shall be the sole and exclusive remedies of (i) the Company and its Subsidiaries
against Parent and Merger Sub and any of their respective former, current or future general or limited partners, shareholders, managers, members, Representatives or Affiliates for any loss suffered as
a result of the failure of the Merger to be consummated except in the case of intentional fraud or a willful and material breach of any covenant, agreement or obligation (in which case only Parent
shall be liable for damages for such intentional fraud or willful and material breach), and upon payment of such amount, none of Parent or Merger Sub or any of their respective former, current or
future general or limited partners, shareholders, managers, members, Representatives or Affiliates shall have any further liability or obligation relating to or arising out of this Agreement or the
Transactions, except for the liability of Parent in the case of intentional fraud or a willful and material breach of any covenant, agreement or obligation; and (ii) Parent and Merger Sub
against the Company and its Subsidiaries and any of their respective former, current or future general or limited partners, shareholders, managers, members, Representatives or Affiliates for any loss
suffered as a result of the failure of the Merger to be consummated except in the case of intentional fraud or a willful and material breach of any covenant, agreement or obligation (in which case
only the Company shall be liable for damages for such intentional fraud or willful and material breach), and upon payment of such amount, none of the Company and its Subsidiaries or any of their
respective former, current or future general or limited partners, shareholders, managers, members, Representatives or Affiliates shall have any further liability or obligation relating to or arising
out of this Agreement or the Transactions, except for the liability of the Company in the case of intentional fraud or a willful and material breach of any covenant, agreement or obligation.
ARTICLE IX
GENERAL PROVISIONS
9.1
Schedule Definitions.
All capitalized terms in the Company Disclosure Letter and the Parent Disclosure
Letter shall have the meanings ascribed to them herein (including in
Annex A
) except as otherwise defined therein.
9.2
Survival.
Except as otherwise provided in this Agreement, none of the representations, warranties,
agreements and covenants contained in this Agreement will survive the
Closing;
provided
,
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however
, the agreements of the parties in
Articles I
,
II
,
III
and
IX
, and the sixth sentence of
Section 6.7(a)
,
Sections 6.7(b)
, Sectio
n
6.9
and
Section 6.10
will survive the Closing. The Confidentiality Agreement shall (i) survive termination of this
Agreement in accordance with its terms and (ii) terminate as of the Effective Time.
9.3
Notices.
All notices, requests and other communications to any party under, or otherwise in
connection with, this Agreement shall be in writing and shall be deemed to have
been duly given (a) if delivered in person; (b) if transmitted by facsimile (but only upon confirmation of transmission by the transmitting equipment); (c) if transmitted by
electronic mail ("
e-mail
") (but only if confirmation of receipt of such e-mail is requested and received); or (d) if transmitted by national
overnight courier, in each case as addressed as follows:
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(i)
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if to Parent or Merger Sub, to:
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EQT Corporation
625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania
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Attention:
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General Counsel
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Facsimile:
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412-553-7781
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E-mail:
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lgardner@eqt.com
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with a required copy to (which copy shall not constitute notice):
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Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
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Attention:
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Steven A. Cohen
Benjamin M. Roth
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Facsimile
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(212) 403-2000
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E-mail:
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SACohen@wlrk.com
BMRoth@wlrk.com
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(ii)
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if to the Company, to:
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Rice Energy Inc.
2200 Rice Drive
Canonsburg, Pennsylvania 15317
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Attention:
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General Counsel
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Facsimile
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(832) 708-3445
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E-mail:
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will.jordan@riceenergy.com
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with a required copy to (which copy shall not constitute notice):
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Vinson & Elkins LLP
1001 Fannin, Suite 2500
Houston, Texas 77002
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Attention:
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Stephen M. Gill
Douglas E. McWilliams
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Facsimile
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(713) 615-5956
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E-mail:
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sgill@velaw.com
dmcwilliams@velaw.com
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9.4
Rules of Construction.
(a) Each
of the parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and
that it has
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executed
the same with the advice of said independent counsel. Each party and its counsel cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any and
all drafts relating thereto exchanged between the parties shall be deemed the work product of the parties and may not be construed against any party by reason of its preparation. Accordingly, any rule
of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted it is of no application and is hereby expressly waived.
(b) The
inclusion of any information in the Company Disclosure Letter or Parent Disclosure Letter shall not be deemed an admission or acknowledgment, in and of itself and
solely by virtue of the inclusion of such information in the Company Disclosure Letter or Parent Disclosure Letter, as applicable, that such information is required to be listed in the Company
Disclosure Letter or Parent Disclosure Letter, as applicable, that such items are material to the Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a whole, as
the case may be, or that such items have resulted in a Company Material Adverse Effect or a Parent Material Adverse Effect. The headings, if any, of the individual sections of each of the Parent
Disclosure Letter and Company Disclosure Letter are inserted for convenience only and shall not be deemed to constitute a part thereof or a part of this Agreement. The Company Disclosure Letter and
Parent Disclosure Letter are arranged in sections corresponding to the Sections of this Agreement merely for convenience, and the disclosure of an item in one section of the Company Disclosure Letter
or Parent Disclosure Letter, as applicable, as an exception to a particular representation or warranty shall be deemed adequately disclosed as an exception with respect to all other representations or
warranties to the extent that the relevance of such item to such representations or warranties is reasonably apparent on the face of such disclosure, notwithstanding the
presence or absence of an appropriate section of the Company Disclosure Letter or Parent Disclosure Letter with respect to such other representations or warranties or an appropriate cross reference
thereto.
(c) The
specification of any dollar amount in the representations and warranties or otherwise in this Agreement or in the Company Disclosure Letter or Parent Disclosure
Letter is not intended and shall not be deemed to be an admission or acknowledgment of the materiality of such amounts or items, nor shall the same be used in any dispute or controversy between the
parties to determine whether any obligation, item or matter (whether or not described herein or included in any schedule) is or is not material for purposes of this Agreement.
(d) All
references in this Agreement to Annexes, Exhibits, Schedules, Articles, Sections, subsections and other subdivisions refer to the corresponding Annexes, Exhibits,
Schedules, Articles, Sections, subsections and other subdivisions of this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections or
other subdivisions of this Agreement are for convenience only, do not constitute any part of such Articles, Sections, subsections or other subdivisions, and shall be disregarded in construing the
language contained therein. The words "this Agreement," "herein," "hereby," "hereunder" and "hereof" and words of similar import, refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The words "this Section," "this subsection" and words of similar import, refer only to the Sections or subsections hereof in which such words occur. The word
"including" (in its various forms) means "including, without limitation." Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender and words, terms
and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise expressly requires. Unless the context otherwise
requires, all defined terms contained herein shall include the singular and plural and the conjunctive and disjunctive forms of such defined terms. Unless the context otherwise requires, all
references to a specific time shall refer to Eastern time.
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(e) In
this Agreement, except as the context may otherwise require, references to: (i) any agreement (including this Agreement), contract, statute or regulation are
to the agreement, contract, statute or regulation as amended, modified, supplemented, restated or replaced from time to time (in the case of an agreement or contract, to the extent permitted by the
terms thereof and, if applicable, by the terms of this Agreement); (ii) any Governmental Entity include any successor to that Governmental Entity; (iii) any applicable Law refers to such
applicable Law as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under such statute) and references to any
section of any applicable Law or other law include any successor to such section; and (iv) "days" mean calendar days.
9.5
Counterparts.
This Agreement may be executed in two or more counterparts, including via facsimile
or email in "portable document format" (".pdf") form transmission, all of
which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
9.6
Entire Agreement; Third Party Beneficiaries.
This Agreement (together with the Confidentiality
Agreement, the Voting Agreement, the Non-Competition Agreements and any other documents and instruments executed
pursuant hereto) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. Except for
the provisions of (a)
Article III
(including, for the avoidance of doubt, the rights of the former holders of Company Common Stock,
Company RSU Awards and/or Company PSU Awards to receive the Merger Consideration), (b)
Section 6.23
(which from and after the Effective
Time are intended for the benefit of, and shall be enforceable by, the New Directors), and (c)
Sections 6.9
and
6.10
(which from and after the
Effective Time are intended for the benefit of, and shall be enforceable by, the Persons referred to therein and by their
respective heirs and representatives), nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement;
provided
that the provisions set forth in this proviso to
Section 9.6
,
Sections 9.7(d)
and
9.13
and
the proviso to
Section 9.11
, in each case will inure to the benefit of the Financing Sources and their respective successors, legal
representatives and permitted assigns, all of whom are expressly intended to be third-party beneficiaries thereof and with respect to their rights thereunder.
9.7
Governing Law; Venue; Waiver of Jury Trial.
(a) THIS
AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS AGREEMENT, OR THE NEGOTIATION,
EXECUTION OR PERFORMANCE OF THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. NOTWITHSTANDING THE FOREGOING, ALL MATTERS RELATING TO THE FIDUCIARY DUTIES OF THE PARENT BOARD SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF TO THE EXTENT THAT SUCH PRINCIPLES WOULD DIRECT A MATTER TO ANOTHER JURISDICTION.
(b) THE
PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE OR, IF THE COURT OF CHANCERY OF THE
STATE OF DELAWARE OR THE DELAWARE SUPREME COURT DETERMINES THAT, NOTWITHSTANDING SECTION 111 OF THE DGCL, THE COURT OF CHANCERY DOES NOT HAVE OR SHOULD NOT EXERCISE SUBJECT MATTER JURISDICTION
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OVER
SUCH MATTER, THE SUPERIOR COURT OF THE STATE OF DELAWARE AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE SOLELY IN CONNECTION WITH ANY DISPUTE THAT ARISES
IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS AGREEMENT OR IN RESPECT OF THE TRANSACTIONS, AND HEREBY WAIVE, AND AGREE NOT
TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT
BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES
IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED EXCLUSIVELY BY SUCH A DELAWARE STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND
GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR
PROCEEDING IN THE MANNER PROVIDED IN
SECTION 9.3
OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE
THEREOF.
(c) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH
SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH
PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS
SECTION 9.7
.
(d) Notwithstanding
anything in this
Section 9.7
or otherwise in this Agreement to the contrary, each of the parties
hereto acknowledges and irrevocably agrees (i) that it will not bring or support, or permit any of its Affiliates to bring or support, any Affiliates to, bring or support any action, cause of
action, claim, cross-claim or third-party claim of any kind or description, whether in law or in equity and whether in contract or in tort or otherwise (each, an
"
Action
") involving the Financing Sources arising out of, or relating to, the transactions contemplated hereby, the Financing Commitment Letter, the
Financing or the performance of services thereunder or related thereto in any forum other than the state or federal court sitting in the Borough of Manhattan, New York, New York, and any appellate
court thereof and each party hereto submits for itself and its property with respect to any such Action to the exclusive jurisdiction of such court, (ii) to waive any right to trial by jury in
respect of any such Action, and (iii) that any such Action shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the conflicts of law rules
of such State that would result in the application of the laws of any other State.
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9.8
Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If a final judgment of a
court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the
power to limit such term or provision, to delete specific words or phrases or to replace such term or provision with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be valid and enforceable as so modified. In the event such court does not exercise the power
granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid or unenforceable term or provision.
9.9
Assignment.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties (whether by operation of law or
otherwise) without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns. Any purported assignment in violation of this
Section 9.9
shall be void.
9.10
Specific Performance.
The parties agree that irreparable damage, for which monetary damages
would not be an adequate remedy, would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached by the parties. Prior to the termination of this Agreement pursuant to
Section 8.1
, it is accordingly
agreed that the parties shall be entitled to an injunction or injunctions, or any other appropriate form of
specific performance or equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction, in each case in
accordance with this
Section 9.10
, this being in addition to any other remedy to which they are entitled under the terms of this Agreement at law
or in equity. Each party accordingly agrees not to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of,
or to enforce compliance with, the covenants and obligations of such party under this Agreement all in accordance with the terms of this
Section 9.10
. Each party further agrees that no other party
or any other Person shall be required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any remedy referred to in this
Section 9.10
, and each party irrevocably waives any
right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument. If prior to the End Date, any party hereto brings an action to enforce specifically the
performance of the terms and provisions hereof by any other party, the End Date shall automatically be extended by such other time period established by the court presiding over such action.
9.11
Amendment.
This Agreement may be amended by the parties, by action taken or authorized by their
respective Boards of Directors at any time before or after adoption of this
Agreement by the stockholders of the Company, but, after any such adoption, no amendment shall be made which by law would require the further approval by such stockholders without first obtaining such
further approval;
provided
that
Sections 9.7(d)
and
9.13
, the proviso to
Section 9.6
, and this proviso to
Section 9.11
, and the definitions of "Financing", "Financing Commitment Letter" and "Financing Sources", in each case, may
not be amended,
supplemented, waived or otherwise modified without the prior written consent of the Financing Sources. This Agreement may not be amended except by an instrument in writing signed on behalf of each of
the parties.
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9.12
Extension; Waiver.
At any time prior to the Effective Time, the Company and Parent may, by
action taken or authorized by their respective Boards of Directors, to the extent legally
allowed:
(a) extend
the time for the performance of any of the obligations or acts of the other party hereunder;
(b) waive
any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto; or
(c) waive
compliance with any of the agreements or conditions of the other party contained herein.
Notwithstanding
the foregoing, no failure or delay by the Company or Parent in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right hereunder. No agreement on the part of a party to any such extension or waiver shall be valid unless set forth in an instrument in
writing signed on behalf of such party.
9.13
No Liability of Financing Sources.
Notwithstanding anything to the contrary contained herein,
the Company agrees that none of the Financing Sources will have any liability to the Company or any of
its Subsidiaries or respective Affiliates relating to or arising out of this Agreement, the Financing or otherwise, whether at law, or equity, in contract, in tort or otherwise, and neither the
Company nor any of its Affiliates will have any rights or claims against any of the Financing Sources hereunder or thereunder.
[
Signature Pages Follow
]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be signed by its respective officer thereunto duly authorized, all as of the date first written
above.
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EQT CORPORATION
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By:
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/s/ ROBERT J. MCNALLY
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Name:
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Robert J. McNally
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Title:
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Senior Vice President and Chief Financial Officer
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EAGLE MERGER SUB I, INC.
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By:
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/s/ ROBERT J. MCNALLY
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Name:
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Robert J. McNally
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Title:
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Senior Vice President and Chief Financial Officer
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SIGNATURE
PAGE TO
AGREEMENT AND PLAN OF MERGER
Table of Contents
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RICE ENERGY INC.
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By:
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/s/ DANIEL J. RICE IV
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Name:
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Daniel J. Rice IV
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Title:
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Chief Executive Officer
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SIGNATURE
PAGE TO
AGREEMENT AND PLAN OF MERGER
Table of Contents
ANNEX A
Certain Definitions
"
Affiliate
" means, with respect to any Person, any other Person directly or indirectly,
controlling, controlled by, or under common control with, such Person, through one or more intermediaries or otherwise.
"
Aggregated Group
" means all entities under common control with any Person within the meaning of Section 414(b), (k), or
(m) of the Code or Section 4001 of ERISA.
"
beneficial ownership
," including the correlative term "
beneficially owning
," has the
meaning ascribed to such term in Section 13(d) of the Exchange Act.
"
Business Day
" means a day other than a day on which banks in the State of New York or the State of Delaware are authorized or obligated
to be closed.
"
Closing Parent Common Stock Price
" means the last reported sale price of Parent Common Stock on the New York Stock Exchange (as reported
in The Wall Street Journal) on the Closing Date.
"
Company 2022 Notes Indenture
" means that certain Indenture, dated as of April 25, 2014, by and among the Company, the guarantors
from time to time party thereto and Wells Fargo Bank, National Association, as trustee, in respect of the Company's 6.25% Senior Notes due 2022, and as otherwise modified or supplemented prior to the
date of this Agreement.
"
Company 2023 Notes Indenture
" means that certain Indenture, dated as of March 26, 2015, by and among the Company, the guarantors
from time to time party thereto and Wells Fargo Bank, National Association, as trustee, in respect of the Company's 7.25% Senior Notes due 2023, and as otherwise modified or supplemented prior to the
date of this Agreement.
"
Company Competing Proposal
" means any contract, proposal, inquiry, offer or indication of interest relating to any transaction or series
of related transactions (other than transactions with Parent or any of its Subsidiaries) involving: (a) any direct or indirect acquisition (by asset purchase, stock purchase, merger, or
otherwise) by any Person or group of any business or assets of the Company or any of its Subsidiaries (including capital stock of or ownership interest in any Subsidiary) that generated 20% or more of
the Company's and its Subsidiaries' net revenue or earnings before interest, Taxes, depreciation and amortization for the preceding twelve (12) months, or any license, lease or long-term supply
agreement having a similar economic effect, (b) any direct or indirect acquisition of beneficial ownership by any Person or group of 20% or more of the outstanding shares of Company Common
Stock or any tender or exchange offer that if consummated would result in any Person or group beneficially owning 20% or more of the outstanding shares of Company Common Stock or (c) merger,
consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company which is structured to permit any Person or group to
acquire beneficial ownership of at least 20% of the Company's and its Subsidiaries' assets or equity interests.
"
Company Credit Agreement
" means that certain Fourth Amended and Restated Credit Agreement, dated as of October 19, 2016, by and
among the Company, the Operating Company, the lenders and other parties from time to time party thereto, and Wells Fargo Bank, N.A., as administrative agent, as amended, amended and restated,
supplemented or otherwise modified from time to time.
"
Company Debt Agreements
" means the Company Credit Agreement, the Rice Midstream Holdco Credit Agreement, the Rice MLP Credit Agreement
and the Company Notes Indentures.
"
Company Intervening Event
" means a development, event, effect, state of facts, condition, occurrence or change in circumstance that is
material to the Company that occurs or arises after the date of this Agreement that was not known to or reasonably foreseeable by the Company Board as of
Annex A-1
Table of Contents
the
date of this Agreement;
provided
,
however
, that in no event shall (i) the receipt, existence
or terms of an actual or possible Company Competing Proposal, (ii) changes in general economic circumstances or industry or market conditions (including commodity prices) or (iii) the
fact that the Company or any of its Subsidiaries exceeds internal or published projections or guidance or any matter relating thereto or of consequence thereof constitute a Company Intervening Event.
"
Company Notes
" means (a) the Company's 6.25% Senior Notes due 2022 issued pursuant to the Company 2022 Notes Indenture and
(b) the Company's 7.25% Senior Notes due 2023 issued pursuant to the Company 2023 Notes Indenture.
"
Company Notes Indentures
" means (a) the Company 2022 Notes Indenture and (b) the Company 2023 Notes Indenture.
"
Company Retained Midstream
" means all Systems except such assets as are held as of the date hereof by Rice MLP, including, without
limitation, all assets held as of the date hereof by Strike Force Midstream LLC and Rice Olympus Midstream LLC.
"
Company Stock Award
" means a Company RSU Award or Company PSU Award.
"
Company Stockholder Approval
" means the adoption of this Agreement by the stockholders of the Company in accordance with the DGCL and the
Organizational Documents of the Company.
"
Company Superior Proposal
" means any written proposal by any Person or group (other than Parent or any of its Affiliates) to acquire,
directly or indirectly, (a) businesses or assets of the Company or any of its Subsidiaries (including capital stock of or ownership interest in any Subsidiary) that generated two thirds or more
of the Company's and its Subsidiaries' net revenue or earnings before interest, Taxes, depreciation and amortization for the preceding twelve (12) months, respectively, or (b) more than
two-thirds of the outstanding shares of Company Common Stock, in each case whether by way of merger, amalgamation, share exchange, tender offer, exchange offer, recapitalization, consolidation, sale
of assets or otherwise, business combination or similar transaction, that in the good faith determination of the Company Board or any committee thereof, after consultation with its financial advisors
and outside legal counsel and after taking into account relevant legal, financial, regulatory, estimated timing of consummation and other aspects of such proposal and the Person or group making such
proposal, would, if consummated in accordance with its terms, result in a transaction more favorable to the Company's stockholders than the Transactions.
"
Consent
" means any approval, consent, ratification, permission, waiver, or authorization.
"
control
" and its correlative terms, means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
"
Controlled Group Liability
" means any and all liabilities (a) under Title IV of ERISA, (b) under Section 302 of
ERISA, (c) under Sections 412 and 4971 of the Code, or (d) as a result of a failure to comply with the continuation coverage requirements of Section 601
et seq
. of ERISA and
Section 4980B of the Code.
"
Derivative Transaction
" means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap
transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events,
credit-related events or conditions or any indexes, or any other similar transaction (including any option with respect to any of these transactions) or combination of any of these transactions,
including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support,
collateral or other similar arrangements related to such transactions.
Annex A-2
Table of Contents
"
Employee Benefit Plan
" of any Person means any "employee benefit plan" (within the meaning of Section 3(3) of ERISA, regardless of
whether such plan is subject to ERISA), and any personnel policy (oral or written), equity option, restricted equity, equity purchase plan, equity compensation plan, phantom equity or appreciation
rights plan, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, vacation or holiday pay policy, retention or severance pay plan, policy or agreement,
deferred compensation agreement or arrangement, change in control, hospitalization or other medical, dental, vision, accident, disability, life or other insurance, executive compensation or
supplemental income arrangement, consulting agreement, employment agreement, and any other employee benefit plan, agreement, arrangement, program, practice, or understanding for any present or former
director, employee or contractor of the Person.
"
Encumbrances
" means liens, pledges, charges, encumbrances, claims, mortgages, deeds of trust, security interests, restrictions, rights of
first refusal, defects in title, or other burdens, options or encumbrances of any kind.
"
Environmental Laws
" means any and all Laws pertaining to exposure to Hazardous Substances or contamination in the environment, or
protection of the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), conservation of natural resources (including threatened or
endangered species) or natural resource damages, currently in effect and applicable to a specified Person and its Subsidiaries, including the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980, as amended, the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the
Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Hazardous & Solid Waste Amendments Act of 1984, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, the Oil Pollution Act of 1990, as amended, the Atomic Energy Act, as amended, the Occupational, Safety and Health Act,
as amended, the Emergency Planning and Community Right to Know Act, as amended, the Pennsylvania Oil and Gas Act, as amended, the West Virginia Natural Gas Horizontal Well Control Act, as amended, and
any state or local Laws implementing or analogous to the foregoing federal Laws.
"
EQT GP
" means EQT GP Holdings, LP, a Delaware limited partnership.
"
EQT MLP
" means EQT Midstream Partners, LP, a Delaware limited partnership.
"
ERISA
" means the Employee Retirement Income Security Act of 1974.
"
Exchange Act
" means the Securities Exchange Act of 1934.
"
Expenses
" means a cash amount equal to $67,000,000 to be paid in respect of the applicable party's costs and expenses in connection with
the negotiation, execution and performance of this Agreement and the Transactions.
"
Financing
" means the debt financing incurred or intended to be incurred pursuant to the Financing Commitment Letter, including the
offering or private placement of debt securities or borrowing of loans contemplated by the Financing Commitment Letter and any related engagement letter.
"
Financing Commitment Letter
" means that certain commitment letter, dated as of the date hereof, by and between Citigroup Global
Markets Inc. and Parent, as amended, supplemented or otherwise modified from time to time.
"
Financing Sources
" means the Persons that have committed to provide or arrange or otherwise have entered into agreements pursuant to the
Financing Commitment Letter or in connection with all or any part of the Financing described therein, or replacement debt financings in connection with the transactions contemplated hereby, including
the parties providing or arranging financing pursuant to
Annex A-3
Table of Contents
any
commitment letters, engagement letters, joinder agreements, indentures or credit agreements entered pursuant thereto or relating thereto, together with their respective Affiliates' officers,
directors, employees, agents and representatives and their respective successors and assigns.
"
Governmental Entity
" means any court, governmental, regulatory or administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign.
"
group
" has the meaning ascribed to such term in Section 13(d) of the Exchange Act.
"
Hazardous Substance
" means and includes each substance or material defined, designated or classified as a hazardous waste, hazardous
substance, hazardous material, solid waste, pollutant, contaminant or toxic substance under any Environmental Law, and any petroleum or petroleum products that have been Released into the environment.
"
Hydrocarbons
" means crude oil, natural gas, condensate, drip gas and natural gas liquids, coalbed gas, ethane, propane, iso-butane,
nor-butane, gasoline, scrubber liquids and other liquids or gaseous hydrocarbons or other substances (including minerals or gases), or any combination thereof, produced or associated therewith.
"
Indebtedness
" of any Person means, without duplication: (a) indebtedness of such Person for borrowed money; (b) obligations
of such Person to pay the deferred purchase or acquisition price for any property of such Person; (c) reimbursement obligations of such Person in respect of drawn letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the account of such Person; (d) obligations of such Person under a lease to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP;
(e) indebtedness of others as described in
clauses (a)
through
(d)
above guaranteed
by such Person; but Indebtedness does not include accounts payable to trade creditors, or accrued expenses arising in the ordinary course of business consistent with past practice, in each case, that
are not yet due and payable, or are being disputed in good faith, and the endorsement of negotiable instruments for collection in the ordinary course of business.
"
Intellectual Property
" means any and all proprietary, industrial and intellectual property rights, under the applicable Law of any
jurisdiction or rights under international treaties, both statutory and common law rights, including: (a) utility models, supplementary protection certificates, patents and applications for
same, and extensions, divisions, continuations, continuations-in-part, reexaminations, and reissues thereof; (b) trademarks, service marks, trade names, slogans, domain names, logos, trade
dress and other identifiers of source, and registrations and applications for registrations thereof (including all goodwill associated with the foregoing); (c) copyrights, moral rights,
database rights, other rights in works of authorship and registrations and applications for registration of the foregoing; and (d) trade secrets, know-how, and rights in confidential
information, including designs, formulations, concepts, compilations of information, methods, techniques, procedures, and processes, whether or not patentable.
"
knowledge
" means the actual knowledge of, (a) in the case of the Company, the individuals listed in
Schedule 1.1
of the Company Disclosure Letter and
(b) in the case of Parent, the individuals listed in
Schedule 1.1
of the Parent Disclosure Letter.
"
Law
" means any law, rule, regulation, ordinance, code, judgment, order, treaty, convention, governmental directive or other legally
enforceable requirement, U.S. or non-U.S., of any Governmental Entity, including common law.
"
Material Adverse Effect
" means, when used with respect to any Person, any fact, circumstance, occurrence, state of fact, effect, change,
event or development that, individually or in the aggregate, materially adversely affects (a) the financial condition, business, assets, properties or results of operations of such Person and
its Subsidiaries, taken as a whole, or (b) the ability of such Person and
Annex A-4
Table of Contents
its
Subsidiaries to consummate the Transactions;
provided
,
however
, that no effect (by itself or when
aggregated or taken together with any and all other effects) directly or indirectly resulting from, arising out of, attributable to, or related to any of the following shall be deemed to be or
constitute a "Material Adverse Effect," and no effect (by itself or when aggregated or taken together with any and all other such effects) directly or indirectly resulting from, arising out of,
attributable to, or related to any of the following shall be taken into account when determining whether a "Material Adverse Effect" has occurred or may, would or could occur: (i) general
economic conditions (or changes in such
conditions) or conditions in the global economy generally; (ii) conditions (or changes in such conditions) in the securities markets, credit markets, currency markets or other financial
markets, including (A) changes in interest rates and changes in exchange rates for the currencies of any countries and (B) any suspension of trading in securities (whether equity, debt,
derivative or hybrid securities) generally on any securities exchange or over-the-counter market; (iii) conditions (or changes in such conditions) in the oil and gas exploration and production
industry (including changes in commodity prices, general market prices and regulatory changes affecting the industry); (iv) political conditions (or changes in such conditions) or acts of war,
sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism); (v) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild
fires or other natural disasters, weather conditions; (vi) the announcement of this Agreement or the pendency or consummation of the transactions contemplated hereby
(
provided
that the exception in this clause (vi) shall not apply to any representation or warranty contained in
Section 4.3(b)
,
Section 4.10(i)
or
Section 5.3(b))
or to the determination of whether any inaccuracy in such representations or warranties constitutes, individually or in the
aggregate, a Company Material Adverse Effect for purposes of
Section 7.2(a)(iii)
or
Section 7.2(c)
or a Parent Material Adverse Effect for
purposes of
Section 7.3(a)(iii)
or
Section 7.3(c)
), (vii) any actions taken or failure to take action, in each case, to which Parent or the
Company, as applicable, has
requested in writing; (viii) compliance with the terms of, or the taking of any action expressly permitted or required by, this Agreement, or the failure to take any action prohibited by this
Agreement (
provided
that the exception in this clause (viii) shall not apply to any representation or warranty contained in
Section 4.3(b)
,
Section 4.10(i)
or
Section 5.3(b)
or to the determination of whether any inaccuracy in such representations or warranties constitutes,
individually or in the
aggregate, a Company Material Adverse Effect for purposes of
Section 7.2(a)(iii)
or
Section 7.2(c)
or a Parent Material Adverse Effect for
purposes of
Section 7.3(a)(iii)
or
Section 7.3(c)
); (ix) changes in Law or other legal or regulatory conditions, or the interpretation
thereof, or changes in GAAP or other
accounting standards (or the interpretation thereof), or that result from any action taken for the purpose of complying with any of the foregoing; (x) any changes in such Person's stock price
or the trading volume of such Person's stock, or any failure by such Person to meet any analysts' estimates or expectations of such Person's revenue, earnings or other financial performance or results
of operations for any period, or any failure by such Person or any of its Subsidiaries to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or
results of operations (it being understood that the facts or occurrences giving rise to or contributing to such changes or failures may constitute, or be taken into account in determining whether
there has been or will be, a Material Adverse Effect); or (xi) any Proceedings made or brought by any of the current or former stockholders or shareholders of such Person (on their own behalf
or on behalf of such Person) against the Company, Parent, Merger Sub or any of their directors or officers, arising out of the Merger or in connection with any other transactions contemplated by this
Agreement; except to the extent such effects directly or indirectly resulting from, arising out of, attributable to or related to the matters described in the foregoing
clauses (i) through (v)
disproportionately adversely affect such Person and its Subsidiaries, taken as a whole, as compared to other Persons that
conduct business in the regions in the world and in the industries in which such Person and its Subsidiaries conduct business (in which case, such adverse effects (if any) shall be taken into account
when determining whether a "Material Adverse Effect" has occurred or may, would or could occur solely to the extent they are disproportionate).
Annex A-5
Table of Contents
"
Midstream Holdings
" means Rice Midstream Holdings LLC, a Delaware limited liability company.
"
Midstream Holdings LLC Agreement
" means that certain Amended and Restated Limited Liability Company Agreement of Midstream
Holdings dated as of February 22, 2016, as amended, amended and restated, supplemented or otherwise modified from time to time.
"
NYSE
" means the New York Stock Exchange.
"
Oil and Gas Leases
" means all leases, subleases, licenses or other occupancy or similar agreements under which a Person leases, subleases
or licenses or otherwise acquires or obtains operating rights in and to Hydrocarbons or any other real property which is material to the operation of such Person's business.
"
Oil and Gas Properties
" means all interests in and rights with respect to (a) oil, gas, mineral, and similar properties of any
kind and nature, including working, leasehold and mineral interests and operating rights and royalties, overriding royalties, production payments, net profit interests and other non-working interests
and non-operating interests (including all Oil and Gas Leases, operating agreements, unitization and pooling agreements and orders, division orders, transfer orders, mineral deeds, royalty deeds, and
in each case, interests thereunder), surface interests, fee interests, reversionary interests, reservations and concessions and (b) all wells located on or producing from such leases and
properties and (c) all Systems.
"
Operating Company
" means Rice Energy Operating LLC, a Delaware limited liability company.
"
Operating Company LLC Agreement
" means that certain Third Amended and Restated Limited Liability Company Agreement of the
Operating Company dated as of October 19, 2016, as amended, amended and restated, supplemented or otherwise modified from time to time.
"
Organizational Documents
" means (a) with respect to a corporation, the charter, articles or certificate of incorporation, as
applicable, and bylaws thereof, (b) with respect to a limited liability company, the certificate of formation or organization, as applicable, and the operating or limited liability company
agreement thereof, (c) with respect to a partnership, the certificate of formation and the partnership agreement, and (d) with respect to any other Person the organizational, constituent
and/or governing documents and/or instruments of such Person.
"
other party
" means (a) when used with respect to the Company, Parent and Merger Sub and (b) when used with respect to
Parent or Merger Sub, the Company.
"
Parent Charter Amendment
" means an amendment to Parent's Restated Articles of Incorporation providing that the number of members of the
Parent Board be no more than thirteen (13).
"
Parent Competing Proposal
" means any contract, proposal, inquiry, offer or indication of interest relating to any transaction or series
of related transactions involving: (a) any direct or indirect acquisition (by asset purchase, stock purchase, merger, or otherwise) by any Person or group of any business or assets of Parent or
any of its Subsidiaries (including capital stock of or ownership interest in any Subsidiary) that generated 20% or more of Parent's and its Subsidiaries' net revenue or earnings before interest,
Taxes, depreciation and amortization for the preceding twelve (12) months, or any license, lease or long-term supply agreement having a similar economic effect, (b) any direct or
indirect acquisition of beneficial ownership by any Person or group of 20% or more of the outstanding shares of Parent Common Stock or any tender or exchange offer that if consummated would result in
any Person or group beneficially owning 20% or more of the outstanding shares of Parent Common Stock or (c) merger, consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Parent which is structured to permit any Person or group to, directly or indirectly, acquire beneficial ownership of at least 20% of Parent's
and its Subsidiaries' assets or equity interests.
Annex A-6
Table of Contents
"
Parent Intervening Event
" means a development, event, effect, state of facts, condition, occurrence or change in circumstance that is
material to Parent that occurs or arises after the date of this Agreement that was not known to or reasonably foreseeable by the Parent Board as of the date of this Agreement;
provided
,
however
, that in no event shall (i) the receipt, existence or terms of an actual or
possible Parent Competing Proposal, (ii) changes in general economic circumstances or industry or market conditions (including commodity prices) or (iii) the fact that Parent or any of
its Subsidiaries exceeds internal or published projections or guidance or any matter relating thereto or of consequence thereof constitute a Parent Intervening Event.
"
Parent Stock Plans
" means Parent 2014 Long-Term Incentive Plan, Parent 2009 Long-Term Incentive Plan, Parent 1999 Non-Employee Directors'
Stock Incentive Plan, Parent 2009 Dividend Reinvestment and Stock Purchase Plan, Parent 2008 Employee Stock Purchase Plan, Parent 2005 Directors' Deferred Compensation Plan and Parent 1999 Directors'
Deferred Compensation Plan.
"
Parent Shareholder Approval
" means the approval of the Parent Stock Issuance by the affirmative vote of the holders of a majority of the
votes cast at the Parent Shareholders Meeting in accordance with the rules and regulations of the NYSE and the Organizational Documents of Parent.
"
Parent Shareholders Meeting
" means a meeting of the shareholders of Parent to consider the approval of the Parent Stock Issuance and the
Parent Charter Amendment, including any postponement, adjournment or recess thereof.
"
Parent Superior Proposal
" means any written proposal by any Person or group to acquire, directly or indirectly, (a) businesses or
assets of Parent or any of its Subsidiaries (including capital stock of or ownership interest in any Subsidiary) that generated two-thirds or more of Parent's and its Subsidiaries' net revenue or
earnings before interest, Taxes, depreciation and amortization for the preceding twelve (12) months, respectively, or (b) more than two-thirds of the outstanding shares of Parent Common
Stock, in each case whether by way of merger, amalgamation, share exchange, tender offer, exchange offer, recapitalization, consolidation, sale of assets or otherwise, that in the good faith
determination of the Parent Board or any committee thereof, after consultation with its financial advisors and outside legal counsel and after taking into account relevant legal, financial,
regulatory, estimated timing of consummation and other aspects of such proposal and the Person or group making such proposal, would, if consummated in accordance with its terms, result in a
transaction more favorable to Parent's shareholders than the Transactions.
"
party
" or "
parties
" means a party or the parties to this Agreement, except as the context
may otherwise require.
"
Permitted Encumbrances
" means:
(a) to
the extent not applicable to the transactions contemplated hereby or thereby or otherwise waived prior to the Effective Time, preferential purchase rights, rights of
first refusal, purchase options and similar rights granted pursuant to any contracts, including joint operating agreements, joint ownership agreements, stockholders agreements, organic documents and
other similar agreements and documents;
(b) contractual
or statutory mechanic's, materialmen's, warehouseman's, journeyman's and carrier's liens and other similar Encumbrances arising in the ordinary course of
business for amounts not yet delinquent and Encumbrances for Taxes or assessments that are not yet delinquent or, in all instances, if delinquent, that are being contested in good faith in the
ordinary course of business and for which adequate reserves have been established by the party responsible for payment thereof;
(c) Production
Burdens payable to third parties that are deducted in the calculation of discounted present value in the Company Reserve Report or the Parent Reserve Report,
as
Annex A-7
Table of Contents
applicable,
and any Production Burdens payable to third parties affecting any Oil and Gas Property that was acquired subsequent to the date of the Company Reserve Report or Parent Reserve Report, as
applicable;
(d) Encumbrances
arising in the ordinary course of business under operating agreements, joint venture agreements, partnership agreements, Oil and Gas Leases, farm-out
agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other Hydrocarbons, unitization and pooling declarations and agreements, area of
mutual interest agreements, development agreements, joint ownership arrangements and other agreements that are customary in the oil and gas business;
provided
,
however
, that, in each case, such Encumbrance (i) secures obligations that are not
Indebtedness or a deferred purchase price and are not delinquent and (ii) has no material adverse effect on the value, use or operation of the property encumbered thereby;
(e) such
Encumbrances as the Company (in the case of Encumbrances with respect to properties or assets of the Company or its Subsidiaries) or the Parent (in the case of
Encumbrances with respect to properties or assets of Parent or its Subsidiaries), as applicable, may have expressly waived in writing;
(f) all
easements, zoning restrictions, rights-of-way, servitudes, permits, surface leases and other similar rights in respect of surface operations, and easements for
pipelines, streets, alleys, highways, telephone lines, power lines, railways and other easements and rights-of-way, on, over or in respect of any of the properties of the Company or Parent, as
applicable, or any of their respective Subsidiaries, that are customarily granted in the oil and gas industry and do not materially interfere with the operation, value or use of the property or asset
affected;
(g) any
Encumbrances discharged at or prior to the Effective Time (including Encumbrances securing any Indebtedness that will be paid off in connection with the Closing);
(h) Encumbrances
imposed or promulgated by applicable Law or any Governmental Entity with respect to real property, including zoning, building or similar restrictions;
(i) Encumbrances,
exceptions, defects or irregularities in title, easements, imperfections of title, claims, charges, security interests, rights-of-way, covenants,
restrictions and other similar matters that would be
accepted by a reasonably prudent purchaser of oil and gas interests, that would not reduce the net revenue interest share of the Company or Parent, as applicable, or such party's Subsidiaries, in any
Oil and Gas Lease below the net revenue interest share shown in the Company Reserve Report or Parent Reserve Report, as applicable, with respect to such lease, or increase the working interest of the
Company or Parent, as applicable, or of such party's Subsidiaries, in any Oil and Gas Lease above the working interest shown on the Company Reserve Report or Parent Reserve Report, as applicable, with
respect to such lease and, in each case, that have not and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or Parent Material Adverse
Effect, as applicable; or
(j) with
respect to the Company and its Subsidiaries, Encumbrances arising under or the Company Credit Agreement, the Rice Midstream Holdco Credit Agreement or the Rice MLP
Credit Agreement.
"
Person
" means any individual, partnership, limited liability company, corporation, joint stock company, trust, estate, joint venture,
Governmental Entity, association or unincorporated organization, or any other form of business or professional entity.
"
Proceeding
" means any actual or threatened claim (including a claim of a violation of applicable Law), action, audit, demand, suit,
proceeding, investigation or other proceeding at law or in equity or order or ruling, in each case whether civil, criminal, administrative, investigative or otherwise and
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whether
or not such claim, action, audit, demand, suit, proceeding, investigation or other proceeding or order or ruling results in a formal civil or criminal litigation or regulatory action.
"
Production Burdens
" means any royalties (including lessor's royalties), overriding royalties, production payments, net profit interests
or other burdens upon, measured by or payable out of oil, gas or mineral production.
"
Release
" means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging,
migrating, injecting, escaping, leaching, dumping, or disposing.
"
Representatives
" means, with respect to any Person, the officers, directors, employees, accountants, consultants, agents, legal counsel,
financial advisors and other representatives of such Person.
"
Rice Midstream Holdco Credit Agreement
" means that certain Credit Agreement, dated as of December 22, 2014, among Midstream
Holdings, the lenders and other parties from time to time party thereto, and Wells Fargo Bank, N.A., as administrative agent, as amended, amended and restated, supplemented or otherwise modified from
time to time.
"
Rice MLP
" means Rice Midstream Partners LP, a Delaware limited partnership.
"
Rice MLP Credit Agreement
" means that certain Credit Agreement, dated as of December 22, 2014, among Rice MLP, Rice Midstream
OpCo LLC, the lenders and other parties from time to time party thereto, and Wells Fargo Bank, N.A., as administrative agent, as amended, amended and restated, supplemented or otherwise
modified from time to time.
"
Rice MLP LP Agreement
" means that certain Amended and Restated Agreement of Limited Partnership of Rice MLP, dated as of
December 22, 2014, as amended, amended and restated, supplemented or otherwise modified from time to time.
"
SEC
" means the United States Securities and Exchange Commission.
"
Securities Act
" means the Securities Act of 1933.
"
Stock Award Exchange Ratio
" means the sum of (a) the Exchange Ratio and (b) the quotient of (i) the Cash
Consideration divided by (ii) the average of the closing sale prices of Parent Common Stock on the NYSE as reported by
The Wall Street Journal
for each of the five (5) consecutive trading days ending on (and including) the last complete trading day immediately prior to the Effective Time.
"
Stockholders' Agreement
" means that certain Stockholders' Agreement, dated as of January 29, 2014, by and among the Company, Rice
Energy Holdings LLC, NGP Rice Holdings, LLC, Rice Energy Family Holdings, LP and Alpha Natural Resources, Inc.
"
Strike Force Midstream LLC Agreement
" means that certain Amended and Restated Limited Liability Company Agreement of Strike Force
Midstream LLC, dated as of February 1, 2016, as amended, amended and restated, supplemented or otherwise modified from time to time.
"
Subsidiary
" means, with respect to a Person, any Person, whether incorporated or unincorporated, of which (a) at least 50% of the
securities or ownership interests having by their terms ordinary voting
power to elect a majority of the board of directors or other Persons performing similar functions, (b) a general partner interest or (c) a managing member interest, is directly or
indirectly owned or controlled by the subject Person or by one or more of its respective Subsidiaries.
"
Systems
" means the refined petroleum product, crude oil, natural gas, liquefied natural gas, natural gas liquid and other pipelines,
lateral lines, pumps, pump stations, compressors, meters, storage facilities, terminals, processing plants and other related operations, assets, machinery and equipment and rights of way, easements,
licenses, surface interests, fee interests and other real property interests related or appurtenant to the foregoing that are owned by the Company or any of its Subsidiaries, and
Annex A-9
Table of Contents
are
used for the conduct of the business of the Company or any of its Subsidiaries as presently conducted.
"
Takeover Law
" means any "fair price," "moratorium," "control share acquisition," "business combination" or any other anti-takeover
statute or similar statute enacted under applicable Law.
"
Taxes
" means any and all taxes, duties, levies or other similar governmental assessments of any kind, including, but not limited to,
income, estimated, business, occupation, corporate, gross receipts, transfer, stamp, employment, occupancy, license, severance, capital, impact fee, escheat, production, ad valorem, excise, property,
sales, use, turnover, value added and franchise taxes, deductions, withholdings and custom duties, imposed by any Governmental Entity, including interest, penalties and additions to tax imposed with
respect thereto.
"
Tax Returns
" means any return, report, statement, information return or other document (including any related or supporting information)
filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection or administration of any Taxes, including any schedule or attachment thereto and
any amendment thereof.
"
Taxing Authority
" means any Governmental Entity having jurisdiction in matters relating to Tax matters.
"
Termination Fee
" means a cash amount equal to $255,000,000.
"
Third Party Security Holders
" means third party security holders in the Operating Company, Midstream Holdings, GP Holdings or
Strike Force Midstream LLC.
"
Transaction Agreements
" means this Agreement and each other agreement to be executed and delivered in connection herewith and therewith.
"
Transactions
" means the Integrated Mergers and the other transactions (including the Redemption and the Parent Stock Issuance)
contemplated by this Agreement and the Transaction Agreements.
"
Transfer Taxes
" means any transfer, sales, use, stamp, registration or other similar Taxes;
provided
that, for the avoidance of doubt, Transfer Taxes shall not include
any income, franchise or similar Taxes.
"
Voting Debt
" of a Person means bonds, debentures, notes or other Indebtedness having the right to vote (or convertible into securities
having the right to vote) on any matters on which stockholders of such Person may vote.
Annex A-10
Table of Contents
EXHIBIT A
FORM OF LLC SUB MERGER AGREEMENT
Exhibit A-1
Table of Contents
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "
Agreement
") dated as of
[
·
], is by and between [ ], a Delaware
corporation ("[ ]"), and EQT RE, LLC, a Delaware limited liability company (the "
Company
," and together with
[ ], the "
Parties
") and an indirect wholly owned subsidiary of EQT Corporation, a Delaware corporation
("
Parent
").
RECITALS
WHEREAS
, EQT Investments Holdings, LLC, a Delaware limited liability company and a
direct, wholly owned subsidiary of Parent ("
EIH
"), is an entity disregarded as separate from Parent for U.S. federal income tax purposes;
WHEREAS
, EQT Production Company, an indirect wholly owned subsidiary of Parent and a direct wholly owned subsidiary of EIH
("
EPC
"), is taxed as a corporation for U.S. federal income tax purposes and is the sole member of the Company, which is treated as an entity disregarded
as separate from EPC for U.S. federal income tax purposes;
WHEREAS
, Parent, Rice Energy Inc. ("
Rice
") and Eagle Merger I, Inc.
("
Merger Sub
"), a Delaware corporation and a direct wholly owned subsidiary of EIH, entered into an Agreement and Plan of Merger dated as of
June 19, 2017 (the "
Acquisition Agreement
");
WHEREAS
, pursuant to the Acquisition Agreement, at the Effective Time (as defined in the Acquisition Agreement), Merger Sub was merged
with and into Rice (the "
First Merger
"), with Rice as the surviving corporation (the "
Surviving
Corporation
");
WHEREAS
, pursuant to the Acquisition Agreement, at the Effective Time (as defined in the Acquisition Agreement), the name of the Surviving
Corporation was changed to [ ];
WHEREAS
, the Acquisition Agreement provides that immediately following the First Merger, [ ] shall be
merged with and into the Company, with the Company continuing as the surviving entity following such merger (the "
Second Merger
" and, together with the
First Merger, the "
Mergers
");
WHEREAS
, for U.S. federal income tax purposes, it is intended that the Mergers, taken together, qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "
Code
"), and the regulations thereunder, and that the Acquisition
Agreement and this Agreement together constitute and be adopted as a "plan of reorganization" within the meaning of Treasury Regulations §§ 1.368-2(g) and 1.368-3(a);
WHEREAS
, it is proposed that the Company and [ ] enter into this Merger Agreement to effectuate the
Second Merger; and
WHEREAS
, the sole Member and Manager of the Company and the Board of Directors of [ ] have each
approved this Agreement and the transactions contemplated hereby.
NOW, THEREFORE
, in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
THE MERGER
1.1
Merger.
At the Effective Time, upon the terms and subject to the conditions hereof and in accordance
with the Delaware General Corporation Law (the
"
DGCL
") and the Delaware Limited Liability Company Act (the "
DLLCA
"),
[ ] shall be merged with and into the Company, whereupon the separate existence of [ ] shall cease and the Company shall
continue its existence as a limited
Exhibit A-2
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liability
company under the laws of the State of Delaware (the "
Surviving Entity
"). As of the Second Merger Effective Time (as defined below), the
separate corporate existence of [ ] shall cease.
1.2
Effective Time of the Second Merger.
Subject to the provisions of this Agreement and the
Acquisition Agreement, the Second Merger will become effective immediately upon the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware, or such later date and time as may be specified in the Certificate of Merger (the "
Second Merger Effective
Time
").
1.3
Effects of the Merger.
At and after the Second Merger Effective Time, the Second Merger shall have
the effects set forth in the DGCL and DLLCA.
1.4
Cancellation of [ ] Common Stock.
At the Effective Time, by
virtue of the Second Merger and without any actions of the Parties or otherwise, each share of the common stock, par value $0.01 per
share, of [ ] issued and outstanding immediately prior to the Second Merger Effective Time, shall automatically be canceled and extinguished without any conversion
thereof, and no payment shall be made with respect thereto.
1.5
Surviving Entity Membership Interests.
The limited liability company interests in the Company
shall not be affected, altered or modified in any respect by reason of the Second Merger, and shall remain
as they were immediately prior to the Second Merger Effective Time.
ARTICLE II
THE SURVIVING ENTITY
2.1
Certificate of Formation.
At the Second Merger Effective Time and without any further action on the part
of the Parties or otherwise, the certificate of formation of the Company (the
"
Certificate of Formation
"), as in effect immediately prior to the Second Merger Effective Time, shall become the Certificate of Formation of the
Surviving Entity until altered, amended or repealed in accordance with applicable law.
2.2
Limited Liability Company Agreement.
At the Second Merger Effective Time and without any further
action on the part of the Parties or otherwise, the Limited Liability Company Operating Agreement of
the Company, as in effect immediately prior to the Second Merger Effective Time, shall become the Limited Liability Company Operating Agreement of the Surviving Entity until altered, amended or
repealed in accordance with the provisions thereof or applicable law.
2.3
Intended Tax Treatment.
It is intended that the Mergers, taken together, shall qualify as a
"reorganization" within the meaning of Section 368(a) of the Code, and that the
Acquisition Agreement and this Agreement shall together constitute and be adopted as a "plan of reorganization" within the meaning of Treasury Regulations §§ 1.368-2(g)
and 1.368-3(a).
ARTICLE III
CONDITION
3.1
Condition to Each Party's Obligations to Effect the Merger.
The respective obligation of each Party to
effect the Second Merger shall be subject to the requisite approval and adoption of this Agreement and the Merger by
the sole stockholder of [ ] and the sole member of the Company in accordance with the DGCL and the DLLCA, respectively.
ARTICLE IV
MISCELLANEOUS
4.1
Captions and Counterparts.
The captions in this Agreement are for convenience only and shall not be
considered a part, or to affect the construction or interpretation, of any provision of
this
Exhibit A-3
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Agreement.
This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.
4.2
Governing Law.
This Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Delaware, without regard to any conflicts of law
principles.
4.3
Further Assurances.
The Parties shall execute and deliver such further instruments of conveyance,
transfer and assignment, including filing the necessary documents with the Secretary
of State of Delaware to complete the Second Merger and will take such other actions as either of them may reasonably request of the other to effectuate the purposes of this Agreement and to carry out
the terms hereof.
4.4
Complete Agreement.
This Agreement contains the complete agreement among the Parties with respect
to the Second Merger and supersedes all prior agreements and understandings with
respect to the Second Merger.
4.5
Successors; Binding Effect; Third Parties.
This Agreement shall be binding on the successors of
[ ] and the Company. Nothing herein expressed or implied is intended or
is to be construed to confer upon or give to any person, other than the Parties to this Agreement or their respective successors and assigns any rights, remedies, obligations or liabilities under, or
by reason of, this Agreement.
4.6
Severability.
Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any
other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
[SIGNATURES ON THE FOLLOWING PAGE]
Exhibit A-4
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first written above.
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Name:
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Title:
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EQT RE, LLC
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[Signature page for LLC Sub Merger Agreement]
Table of Contents
Annex B
PROPOSED AMENDMENT AND RESTATEMENT OF EQT RESTATED ARTICLES
OF INCORPORATION
Table of Contents
FORM OF RESTATED ARTICLES OF EQT CORPORATION
(As
amended through [
·
])
First:
The name of the Company is EQT CORPORATION.
Second:
The location and post office address of its current registered office in the Commonwealth of Pennsylvania is c/o CT Corporation
System,
Allegheny County.
Third:
The purposes for which the Company is incorporated under the Business Corporation Law of the Commonwealth of Pennsylvania are to
engage in,
and to do any lawful act concerning, any or all lawful business for which corporations may be incorporated under said Business Corporation Law, including but not limited to:
A. the
supply of heat, light and power to the public by any means;
B. the
production, purchase, generation, manufacture, transmission, transportation, storage, distribution and supplying of natural or artificial gas, steam or air
conditioning, electricity, or any combination thereof to or for the public; and
C. manufacturing,
processing, owning, using and dealing in personal property of every class and description, engaging in research and development, the furnishing of
services, and acquiring, owning, using and disposing of real property of every nature whatsoever.
Fourth:
The term of the Company's existence shall be perpetual.
Fifth:
The aggregate number of shares which the Company shall have authority to issue shall be:
-
(a)
-
3,000,000
shares of Preferred Stock, without par value; and
-
(b)
-
320,000,000
shares of Common Stock, without par value.
The
designations, preferences, qualifications, limitations, restrictions, and the special or relative rights in respect of the Preferred Stock and of the Common Stock of the Company, and a statement
of the authority hereby vested in the Board of Directors of the Company to fix and determine the designations, preferences, qualifications, limitations, restrictions, and special or relative rights in
respect of all series of the Preferred Stock shall be as follows:
Division A: THE PREFERRED STOCK
1.1 Preferred Stock
. The Preferred Stock may be divided into and issued in series. The Board of Directors is
hereby expressly authorized, at any time or from time to time, to divide any or all of the shares of the Preferred Stock into series, and in the resolution or resolutions establishing a particular
series, before issuance of any of the shares thereof, to fix and determine the designation and the relative rights and preferences of the series so established, to the fullest extent now or hereafter
permitted by the laws of the Commonwealth of Pennsylvania, including, but not limited to, the variations between different series in the following respects:
(a) the
distinctive serial designation of such series;
(b) the
annual dividend rate for such series, and the date or dates from which dividends shall commence to accrue;
(c) the
redemption price or prices, if any, for shares of such series and the terms and conditions on which such shares may be redeemed;
(d) the
provisions for a sinking, purchase or similar fund, if any, for the redemption or purchase of shares of such series;
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(e) the
preferential amount or amounts payable upon shares of such series in the event of the voluntary or involuntary liquidation of the Company;
(f) the
voting rights, if any, of shares of such series;
(g) the
terms and conditions, if any, upon which shares of such series may be converted and the class or classes or series of securities of the Company into which such
shares may be converted;
(h) the
relative seniority, parity or junior rank of such series with respect to other series of Preferred Stock then or thereafter to be issued; and
(i) such
other terms, limitations and relative rights and preferences, if any, of shares of such series as the Board of Directors may, at the time of such resolutions,
lawfully fix and determine under the laws of the Commonwealth of Pennsylvania.
Division B: PROVISIONS APPLICABLE TO BOTH THE
PREFERRED STOCK AND THE COMMON STOCK
2.1 Voting Rights
. Except as provided in this Section 2.1, the holders of the Common Stock shall have
exclusive voting rights for the election of Directors and for all other purposes and shall be entitled to one vote for each share held. The holders of the Preferred Stock shall have no voting rights
except as may be provided with respect to any particular series of the Preferred Stock by the Board of Directors pursuant to Subdivision 1.1 of Division A hereof. On any matter on which the holders of
the Preferred Stock shall be entitled to vote, they shall be entitled to vote as established by the Board of Directors pursuant to Subdivision 1.1 of Division A hereof.
A
nominee for director shall be elected to the Board of Directors at a meeting of shareholders if the votes by the shareholders entitled to vote in the election cast
for
such nominee exceed the votes cast
against
such nominee's election (excluding abstentions),
provided
, that if the number of nominees exceeds the number of directors to be elected, then the
nominees receiving the highest number of votes up to
the number of directors to be elected shall be elected. No shareholder shall in any election of directors have any right to cumulate his votes and cast them for one candidate or distribute them among
two or more candidates. The foregoing provisions of this paragraph shall not be changed with respect to any class of stock unless the holders of record of not less than two-thirds of the number of
shares of such class of stock then outstanding shall consent thereto in writing or by voting therefor in person or by proxy at the meeting of shareholders at which any such change is considered.
2.2 Pre-emptive Rights
. The Company may issue shares of any class of stock, option rights, or securities having
conversion or option rights, without first offering them to the holders of Common Stock or Preferred Stock. The provisions of this Subdivision shall be effective to eliminate and deny any preemptive
right which may exist or may have existed in respect of any outstanding shares.
2.3 Amendments to By-Laws
. The Board of Directors may make, amend and repeal the By-Laws with respect to those
matters which are not, by statute, reserved exclusively to the shareholders, subject always to the power of the shareholders to change such action as provided herein. No By-Law may be made, amended or
repealed by the shareholders unless such action is approved by the affirmative vote of the holders of not less than 80% of the voting power of the then outstanding shares of capital stock of the
Company entitled to vote in an annual election of directors, voting together as a single class, unless such action has been previously approved by a two-thirds vote of the whole Board of Directors, in
which event (unless otherwise expressly provided in the Articles or the By-Laws) the vote specified by applicable law for valid shareholder action shall be required.
2.4 Amendments to Articles
. Subject to the voting rights given to any particular series of the Preferred Stock
by the Board of Directors pursuant to Subdivision 1.1 of Division A hereof, and except
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as
may be specifically provided to the contrary in any other provision in the Articles with respect to amendment or repeal of such provision, the affirmative vote of the holders of not less than 80%
of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual election of directors, voting together as a single class, shall be required to amend
the Articles of the Company or repeal any provision thereof, unless such action has been previously approved by a two-thirds vote of the whole Board of Directors, in which event (unless otherwise
expressly provided in the Articles) such shareholder approval as may be specified by law shall be required.
2.5 General
. The Company may issue and dispose of any of its authorized shares for such consideration as may be
fixed by the Board of Directors subject to the laws then applicable.
Division C: BOARD OF DIRECTORS;
CLASSIFICATION; REMOVAL; VACANCIES
3.1
The business and affairs of the Company shall be managed by a Board of Directors comprised as follows:
(a) The
Board of Directors shall consist of not less than 5 nor more than
12
13
persons, the exact number
to be fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority vote of the directors then in office.
(b) Each
person elected as a director of the Company after the 2013 annual meeting of shareholders, whether to succeed a person whose term of office as a director has
expired (including the expiration of such person's term) or to fill any vacancy, shall be elected for a term expiring at the next annual meeting. Each director elected at or prior to the 2013 annual
meeting of shareholders shall be deemed to serve as a member of the class of directors to which he or she was so elected for the term elected. At and after the 2016 annual meeting of shareholders, the
directors shall no longer be classified with respect to the time for which they hold office. Notwithstanding the foregoing, each director elected shall hold office until such director's successor
shall have been duly elected and qualified or until such director's earlier death, resignation or removal.
(c) Any
director, any class of directors (if the Board of Directors is then classified) or the entire Board of Directors may be removed from office by shareholder vote at
any time, without assigning any cause, but only if shareholders entitled to cast at least 80% of the votes which all shareholders would be entitled to cast at an annual election of directors (or of
such class of directors if the Board is then classified) shall vote in favor of such removal.
(d) Vacancies
in the Board of Directors, including vacancies resulting from an increase in the number of directors, shall be filled only by a majority vote of the remaining
directors then in office, though less than a quorum, except that vacancies resulting from removal from office by a vote of the shareholders may be filled by the shareholders at the same meeting at
which such removal occurs. A person elected to fill a vacancy in the Board of Directors shall hold office for a term expiring at the next annual meeting of shareholders held immediately following such
person being elected to fill the vacancy. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
(e) Whenever
the holders of any class or series of preferred stock shall have the right, voting separately as a class, to elect one or more directors of the Company, none of
the foregoing provisions of this Section 3.1 shall apply with respect to the director or directors elected by such holders of preferred stock.
3.2
Notwithstanding any other provisions of law, the Articles or the By-Laws of the Company, the affirmative vote of the
holders of not less than 80% of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual election of directors, voting together as a
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single
class, shall be required to amend, alter, change or repeal, or adopt any provision inconsistent with, this Division C, unless such action has been previously approved by a two-thirds vote of
the whole Board of Directors.
3.3
No Director shall be personally liable for monetary damages as such (except to the extent otherwise provided by law) for
any action taken, or any failure to take any action, unless such Director has breached or failed to perform the duties of his or her office under Title 42, Chapter 83, Subchapter F of
the Pennsylvania Consolidated Statutes (or any successor statute relating to Directors' standard of care and justifiable reliance); and the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
If
the Pennsylvania Consolidated Statutes are amended after May 22, 1987, the date this section received shareholder approval, to further eliminate or limit the personal liability
of Directors, then a Director shall not be liable, in addition to the circumstances set forth in this section, to the fullest extent permitted by the Pennsylvania Consolidated Statutes, as so amended.
The
provisions of this section shall not apply to any actions filed prior to January 27, 1987 nor to any breach of performance of duty, or any failure of performance of duty, by
any Director occurring prior to January 27, 1987.
Division D: PROCEDURES RELATING
TO CERTAIN BUSINESS COMBINATIONS
4.1 Votes Required; Exceptions
.
(a) The
affirmative vote of the holders of not less than 80% of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual
election of directors (the "Voting Stock"), voting together as a single class, shall be required for the approval or authorization of any "Business Combination" (as hereinafter defined) involving a
"Related Person" (as hereinafter defined);
provided
,
however
, that the 80% voting requirement shall not
be applicable if:
(1) The
"Continuing Directors" (as hereinafter defined) of the Company by a two-thirds vote have expressly approved such Business Combination either in advance of or
subsequent to such Related Person's having become a Related Person; or
(2) both
the following conditions are satisfied:
(A) the
aggregate amount of the cash and the "Fair Market Value" (as hereinafter defined) of the property, securities and "Other Consideration" (as hereinafter defined) to
be received per share by holders of capital stock of the Company in the Business Combination, other than the Related Person, is not less than the "Highest Equivalent Price" (as hereinafter defined) of
such shares of capital stock; and
(B) a
proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934, as amended,
whether or not the Company is then subject to such requirements, shall have been mailed to all shareholders of the Company. The proxy or information statement shall contain at the front thereof, in a
prominent place, the position of the Continuing Directors as to the advisability (or inadvisability) of the Business Combination and, if deemed advisable by a majority of the Continuing Directors, the
opinion of an investment banking firm selected by the Continuing Directors as to the fairness of the terms of the Business Combination, from the point of view of the holders of the outstanding shares
of capital stock of the Company other than any Related Person.
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(b) Such
80% vote shall in any such instance be required notwithstanding the fact that no vote may be required or that a lesser percentage may be specified by law or in any
agreement with any national securities exchange or otherwise.
4.2
Definitions
. For purposes of this Division D:
(a) A
"Person" shall mean any individual, partnership, corporation or other entity. As used herein, the pronouns "which" and "it" in relation to Persons which are
individuals shall be construed to mean "who" or "whom", "he" or "she", and "him" or "her", as appropriate.
(b) The
terms "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on November 10, 1983 (the term "registrant" in said Rule 12b-2 meaning in this case the Company).
(c) The
term "Beneficial Owner" (and variations thereof) shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on November 10, 1983;
provided
,
however
, that
notwithstanding any provision of Rule 13d-3 to the contrary, an entity shall be deemed to be the Beneficial Owner of any share of capital stock of the Company that such entity has the right to
acquire at any time pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise.
(d) The
term "Voting Stock" shall have the meaning set forth at the beginning of Section 4.1(a) of this Division D.
(e) The
term "Subsidiary" of any Person shall mean any corporation of which a majority of the capital stock entitled to vote for the election of directors is Beneficially
Owned by such Person directly or indirectly though other Subsidiaries of such Person.
(f) The
term "Substantial Part" of the assets of any person shall mean more than 10% of the Fair Market Value, as determined by a two-thirds vote of the Continuing
Directors, of the total consolidated
assets of such Person and its Subsidiaries as of the end of its most recent fiscal year ended prior to the time the determination is being made.
(g) The
term "Other Consideration" shall include, without limitation, shares of Common Stock or other capital stock of the Company retained by the holders of such shares in
the event of a Business Combination in which the Company is the surviving corporation.
(h) The
term "Continuing Director" shall mean a director of the Company who is unaffiliated with any Related Person and either (1) was a director of the Company
immediately prior to the time the Related Person involved in a Business Combination became a Related Person or (2) is a successor to a Continuing Director and is recommended to succeed a
continuing Director by a majority of the then Continuing Directors. Where this Division D contains provisions for a determination, recommendation or approval by the Continuing Directors, if there is
at any particular relevant time no Continuing Director in office, then such provision shall be deemed to be satisfied if the Board, by a two-thirds vote of the whole Board of Directors, makes or gives
such determination, recommendation or approval.
(i) The
term "Business Combination" shall mean
(1) any
merger, consolidation or share exchange of the Company or a Subsidiary of the Company with a Related Person, in each case without regard to which entity is the
surviving entity;
(2) any
sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, of all or any Substantial Part of the
assets of the Company (including without limitation any voting securities of a Subsidiary of the Company)
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or
a Subsidiary of the Company to or with a Related Person (whether in one transaction or series of transactions), or of all or any Substantial Part of the assets of a Related Person to the Company or
a Subsidiary of the Company;
(3) the
issuance, transfer or delivery of any securities of the Company or a Subsidiary of the Company by the Company or any of its Subsidiaries to a Related Person, or of
any securities of a Related Person to the Company or a Subsidiary of the Company (other than an issuance or transfer of securities which is effected on a pro rata basis to all shareholders of the
Company or of the Related Person, as the case may be);
(4) any
recapitalization, reorganization or reclassification of securities (including any reverse stock split) or other transaction that would have the effect, directly or
indirectly, of increasing the voting power of a Related Person;
(5) the
adoption of any plan or proposal for the liquidation or dissolution of the Company proposed by or on behalf of a Related Person; or
(6) any
agreement, plan, contract or other arrangement providing for any of the transactions described in this definition of Business Combination.
(j) The
term "Related Person" at any particular time shall mean any Person if such Person, its Affiliates, its Associates, and all Persons of which it is an Affiliate or
Associate Beneficially Own in the aggregate 10% or more of the outstanding Voting Stock of the Company, and any Affiliate or Associate of any such Person, and any Person of which such Person is an
Affiliate or Associate. With respect to any particular Business Combination, the term "Related Person" means the Related Person involved in such Business Combination, any Affiliate or Associate of
such Related Person, and any Person of which such Related Person is an Affiliate or Associate. Where in this Division D any reference is made to a transaction involving, or ownership of securities by,
a Related Person, it shall mean and include one or more transactions involving different Persons all included within the definition of "Related Person", or ownership of securities by any or all of
such Persons. Each Person who is an Affiliate or Associate of a Related Person shall be deemed to have become a Related Person at the earliest time any of such Persons becomes a Related Person.
(k) The
term "highest Equivalent Price" with respect to shares of capital stock of the Company of any class or series shall mean the following:
(1) with
respect to shares of Common Stock, the highest price that can be determined to have been paid at any time by a Related Person for any shares of Common Stock; and
(2) with
respect to any class or series of shares of capital stock other than Common Stock, the higher of the following:
(A) if
any shares of such class or series are Beneficially Owned by a Related Person, the highest price that can be determined to have been paid at any time by a Related
Person for such shares; or
(B) the
amount determined by the Continuing Directors, on whatever basis they believe is appropriate, to be the per share price equivalent of the highest price that can be
determined to have been paid at any time by a Related Person for any shares of any other class or series of capital stock of the Company.
In
determining the Highest Equivalent Price, all purchases by a Related Person shall be taken into account regardless of whether the shares were purchased before or after the Related Person became a
Related Person. Also, the Highest Equivalent Price shall include any brokerage commissions, transfer taxes, soliciting dealers' fees and other expenses paid by the Related Person with respect to the
shares of capital stock of the Company acquired by the Related Person. In the
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case
of any Business Combination with a Related Person, the Continuing Directors by a two-thirds vote shall determine the Highest Equivalent Price for each class and series of capital stock of the
Company.
(l) The
term "Fair Market Value" shall mean (1) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the New York Stock Exchange's consolidated transaction reporting system, or, if such stock is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any system then in
use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Continuing Directors; and (2) in the case of property
other than stock or cash, the fair market value of such property on the date in question as determined by a two-thirds vote of the Continuing Directors.
4.3 Miscellaneous
.
(a) The
Continuing Directors, by a two-thirds vote, are authorized to determine for purposes of this Division D on the basis of information known to them after reasonable
inquiry: (1) whether a Person is a Related Person, (2) the number of shares of Voting Stock Beneficially Owned by any Person, (3) whether a Person is an Affiliate or Associate of
another, (4) whether certain assets constitute a Substantial Part of the assets of any Person, (5) the amounts of prices paid, market prices, and other factors relative to fixing the
Highest Equivalent Price of shares of capital stock of the Company and (6) the Fair Market Value of property, securities and Other Consideration received in a Business Combination. Any such
determination made in good faith shall be binding and conclusive on all parties.
(b) Nothing
contained in this Division D shall be construed to relieve any Related Person from any fiduciary obligation imposed by law.
(c) The
fact that any Business Combination complies with the conditions set forth in Subsection (a)(2) of Section 4.1 of this Division D shall not be construed
to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the
shareholders of the Company, nor shall such compliance limit, prohibit or otherwise restrict in any manner the Board of Directors, or any member thereof, with respect to evaluations of or actions and
responses taken with respect to such Business Combination.
(d) Notwithstanding
any other provisions of law, the Articles or the By-Laws of the Company, the affirmative vote of the holders of not less than 80% of the voting power of
the Voting Stock of the Company, voting together as a single class, shall be required to amend, alter, change or repeal, or adopt any provision inconsistent with, this Division D.
Sixth:
Henceforth, these Articles of the Company shall not include any prior documents.
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ANNEX C
Opinion of Citigroup Global Markets Inc.
June 19,
2017
The
Board of Directors
EQT Corporation
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222
The
Board of Directors:
You
have requested our opinion as to the fairness, from a financial point of view, to EQT Corporation ("EQT") of the Merger Consideration (defined below) to be paid by EQT pursuant to
the terms and subject to the conditions set forth in an Agreement and Plan of Merger (the "Agreement") to be entered into among EQT, Eagle Merger Sub I, Inc., an indirect wholly owned
subsidiary of EQT ("Merger Sub"), and Rice Energy Inc. ("Rice Energy"). As more fully described in the Agreement, (i) Merger Sub will be merged with and into Rice Energy (the "Merger"),
with Rice Energy as the surviving corporation, and (ii) each outstanding share of the common stock, par value $0.01 per share, of Rice Energy ("Rice Energy Common Stock") will be converted into
the right to receive (a) $5.30 in cash and (b) 0.37 of a share of the common stock, no par value, of EQT ("EQT Common Stock" and, such cash amount and fraction of a share of EQT Common
Stock, collectively, the "Merger Consideration"). We understand that, pursuant to the Agreement, immediately following consummation of the Merger and as part of a single integrated transaction, the
surviving corporation in the Merger will be merged with and into an indirect wholly owned limited liability company subsidiary of EQT ("LLC Sub" and, such merger, the "LLC Sub Merger" and
the LLC Sub Merger, together with the Merger, the "Mergers"), with LLC Sub as the surviving corporation.
We
also understand that, at or prior to consummation of the Merger, (i) Rice Energy will cause Rice Midstream Holdings LLC ("Rice Midstream") to redeem the Series B
units of Rice Midstream held by entities related to EIG Global Energy Partners, LLC ("EIG") and (ii) the common units of Rice Energy Operating LLC ("REO") held by members of REO
other than Rice Energy will be redeemed in exchange for shares of Rice Energy Common Stock, with such shares of Rice Energy Common Stock being converted into the right to receive the Merger
Consideration, and the associated shares of Series A preferred stock of Rice Energy will be canceled in connection with such redemption (the transactions described in clauses (i) and
(ii) above, together with the other transactions contemplated by the Agreement (other than the Mergers), the "Related Transactions"). The terms and conditions of the Mergers and the Related
Transactions are more fully set forth in the Agreement.
In
arriving at our opinion, we reviewed an execution version, provided to us on June 19, 2017, of the Agreement and held discussions with certain senior officers, directors and
other representatives of EQT and certain senior officers and other representatives of Rice Energy concerning the businesses, operations and prospects of EQT and Rice Energy. We reviewed certain
publicly available and other business and financial information relating to EQT and Rice Energy provided to or discussed with us by the respective managements of EQT and Rice Energy, including certain
internal financial forecasts and other information and data relating to EQT provided to or discussed with us by the management
of EQT and certain financial forecasts and other information and data relating to Rice Energy provided to or discussed with us by the managements of EQT and Rice Energy and as adjusted by the
management of EQT. We also were provided with certain information and data relating to the potential strategic implications and financial and operational benefits (including the amount, timing and
achievability thereof) anticipated by the management of EQT to result from the Mergers. We reviewed the financial terms of the Mergers as set forth in the Agreement in relation to, among other things:
current and historical market prices of EQT Common Stock and Rice Energy Common Stock; the financial condition and historical and projected cash
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The
Board of Directors
EQT Corporation
June 19, 2017
Page 2
flows
and other operating data of EQT and Rice Energy; and the capitalization of EQT and Rice Energy. We analyzed certain financial, stock market and other publicly available information relating to
the businesses of other companies whose operations we considered relevant in evaluating those of EQT and Rice Energy. We also evaluated certain potential pro forma financial effects of the Mergers on
EQT utilizing the financial forecasts and other information and data relating to EQT and Rice Energy and the potential strategic implications and financial and operational benefits referred to above.
In addition to the foregoing, we conducted such other analyses and examinations and considered such other information and financial, economic and market criteria as we deemed appropriate in arriving
at our opinion. The issuance of our opinion has been authorized by our fairness opinion committee.
In
rendering our opinion, we have assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly
available or provided to or otherwise reviewed by or discussed with us and upon the assurances of the managements and other representatives of EQT and Rice Energy that they are not aware of any
relevant information that has been omitted or that remains undisclosed to us. With respect to the financial forecasts and other information and data (including tax rate assumptions and adjustments to
the financial forecasts and other information and data relating to Rice Energy prepared by the management of EQT) that we have been directed to utilize in our analyses, we have been advised by the
respective managements of EQT and Rice Energy, and we have assumed, with your consent, that such forecasts and other information and data were reasonably prepared on bases reflecting the best
currently available estimates and judgments of such managements, as the case may be, as to, and are a reasonable basis upon which to evaluate, the future financial performance of EQT and Rice Energy,
the potential strategic implications and financial and operational benefits (including the amount, timing and achievability thereof) anticipated by the management of EQT to result from, and other
potential pro forma financial effects of, the Mergers and the other matters covered thereby. We express no opinion as to any financial and other information or data (or underlying assumptions on which
any such financial and other information or data are based) provided to or otherwise reviewed by or discussed with us and we have assumed, with your consent, that the financial results, including with
respect to the potential strategic implications and financial and operational benefits anticipated to result from the Mergers, reflected in such financial forecasts and other information and data will
be realized in the amounts and at the times projected.
We
have relied, at your direction, upon the assessments of the managements of EQT and Rice Energy as to, among other things, (i) the Related Transactions, including with respect
to the timing thereof and assets, liabilities and financial and other terms involved, (ii) the potential impact on EQT and Rice Energy of market, competitive and other trends and developments
in and prospects for, and governmental, regulatory and legislative matters relating to or otherwise affecting, the natural gas, oil and natural gas liquid and energy infrastructure industries,
including commodity pricing and supply and demand for natural gas, oil and natural gas liquid, which are subject to significant volatility and which, if different than as assumed, could have a
material impact on our analyses or opinion, (iii) natural gas, oil and natural gas liquid reserves and growth, expansion and other development and exploration projects of EQT and Rice Energy,
including with respect to the likelihood and timing thereof and capital expenditures and other financial aspects involved, (iv) existing and future contracts and relationships, agreements and
arrangements with, and the ability to attract, retain and/or replace, key lessors, employees, customers, derivatives counterparties and other commercial relationships of EQT and Rice Energy and
(v) the ability to integrate the operations of EQT and Rice Energy. We have assumed, with your consent, that there will be no developments with respect to any such matters that would be
meaningful in any respect to our analyses or opinion.
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The
Board of Directors
EQT Corporation
June 19, 2017
Page 3
We
have not made or been provided with an independent evaluation or appraisal of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise) of EQT, Rice
Energy or any other entity nor have we made any physical inspection of the properties or assets of EQT, Rice Energy or any other entity. We have assumed, with your consent, that the Mergers and the
Related
Transactions will be consummated in accordance with their respective terms and in compliance with all applicable laws, documents and other requirements, without waiver, modification or amendment of
any material term, condition or agreement, and that there will not be any delays, limitations, restrictions, conditions or other actions, including any divestiture or other requirements, amendments or
modifications, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers and agreements for the Mergers or the Related Transactions that
would be meaningful in any respect to our analyses or opinion. We also have assumed, with your consent, that the Merger and the LLC Sub Merger, taken together, will qualify for U.S. federal
income tax purposes as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. We are not expressing any view or opinion as to the actual value
of EQT Common Stock or any other securities when issued, redeemed or acquired in connection with the Mergers and the Related Transactions or the prices at which EQT Common Stock, Rice Energy Common
Stock or any other securities will trade or otherwise be transferable at any time, including following the announcement or consummation of the Mergers and the Related Transactions. Representatives of
EQT have advised us, and we further have assumed, that the final terms of the Agreement will not vary materially from those set forth in the execution version reviewed by us. We are not expressing any
view or opinion with respect to accounting, tax, regulatory, legal or similar matters and we have relied, with your consent, upon the assessments of representatives of EQT as to such matters.
Our
opinion does not address any terms (other than the Merger Consideration to the extent expressly specified herein) or other aspects or implications of the Mergers or the Related
Transactions, including, without limitation, the form or structure of the Mergers, the form or structure, or financial or other terms, of any Related Transactions or any terms, aspects or implications
of any voting or non-competition agreement or any other agreement, arrangement or understanding to be entered into in connection with or contemplated by the Mergers, the Related Transactions or
otherwise. We express no view as to, and our opinion does not address, the underlying business decision of EQT to effect or enter into the Mergers or any Related Transactions, the relative merits of
the Mergers or any Related Transactions as compared to any alternative business strategies that might exist for EQT or the effect of any other transaction which EQT might engage in or consider. We
also express no view as to, and our opinion does not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation or other payments to any officers,
directors or employees of any parties to the Mergers or any Related Transactions, or any class of such persons, relative to the Merger Consideration or otherwise. Our opinion is necessarily based upon
information available, and financial, stock market and other conditions and circumstances existing and disclosed, to us as of the date hereof. Although subsequent developments may affect our opinion,
we have no obligation to update, revise or reaffirm our opinion. As you are aware, the credit, financial and stock markets, and the industries in which EQT and Rice Energy operate, have experienced
and continue to experience volatility and we express no view or opinion as to any potential effects of such volatility on EQT, Rice Energy, the Mergers (including the contemplated benefits thereof) or
the Related Transactions.
Citigroup
Global Markets Inc. has acted as financial advisor to EQT in connection with the proposed Mergers and will receive a fee for such services, the principal portion of
which is contingent upon consummation of the Mergers. We also will receive a fee in connection with the delivery of this opinion. In addition, EQT has agreed to reimburse our expenses and to indemnify
us against certain liabilities arising
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The
Board of Directors
EQT Corporation
June 19, 2017
Page 4
out
of our engagement. As you are aware, at EQT's request, we and certain of our affiliates expect to participate in a bridge facility and related financings in connection with the Mergers, for which
services we and such affiliates will receive compensation, including acting as lead arranger for, and as a lender under, such financings. As you also are aware, we and our affiliates in the past have
provided, currently are providing and in the future may provide investment banking, commercial banking and other similar financial services to EQT and certain of its affiliates unrelated to the
proposed Mergers and the Related Transactions, for which services we and our affiliates have received and expect to receive compensation, including, during the past two years, having acted or acting
as (i) co-syndication agent, joint lead arranger and bookrunner for, and as a lender under, certain credit facilities of EQT and an affiliate of EQT and (ii) joint bookrunning manager
and/or as an underwriter or sales agent for initial and follow-on equity offerings of certain affiliates of EQT. As you further are aware, we and our affiliates in the past have provided, currently
are providing and in the future may provide investment banking, commercial banking and other similar financial services to Rice Energy and certain of its affiliates and EIG and certain of its
affiliates and portfolio companies, for which services we and our affiliates have received and expect to receive compensation, including, during the past two years, having acted or acting as
(i) with respect to Rice Energy and certain of its affiliates, co-documentation agent for, and/or as a lender under, certain credit facilities of Rice Energy and certain of its affiliates and
(ii) with respect to EIG and certain of its affiliates and portfolio companies, a lender under certain credit facilities of certain portfolio companies of EIG. In the ordinary course of
business, we and our affiliates may actively trade or hold the securities of EQT, Rice Energy, EIG and their respective affiliates (or portfolio companies, as applicable) for our own account or for
the account of our customers and, accordingly, may at any time hold a long or short position in such securities. In addition, we and our affiliates (including Citigroup Inc. and its affiliates)
may maintain relationships with EQT, Rice Energy, EIG and their respective affiliates (or portfolio companies, as applicable).
Our
advisory services and the opinion expressed herein are provided for the information of the Board of Directors of EQT (in its capacity as such) in its evaluation of the proposed
Mergers. Our opinion is not intended to be and does not constitute a recommendation to any securityholder as to how such securityholder should vote or act on any matters relating to the proposed
Mergers, any Related Transactions or otherwise.
Based
upon and subject to the foregoing, our experience as investment bankers, our work as described above and other factors we deemed relevant, we are of the opinion that, as of the
date hereof, the Merger Consideration to be paid by EQT pursuant to the Agreement is fair, from a financial point of view, to EQT.
Very
truly yours,
/s/ CITIGROUP
GLOBAL MARKETS INC.
CITIGROUP
GLOBAL MARKETS INC.
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ANNEX D
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745 Seventh Avenue
New York, NY 10019
United States
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CONFIDENTIAL
June 19, 2017
Board
of Directors
Rice Energy Inc.
2200 Rice Drive
Canonsburg, PA 15317
Members
of the Board of Directors:
We
understand that Rice Energy Inc. ("Rice" or the "Company") intends to enter into a transaction (the "Proposed Transaction") with EQT Corporation ("EQT") and Eagle Merger Sub
I, Inc. ("Merger Sub"), a wholly-owned subsidiary of EQT, pursuant to which (i) Merger Sub will merge with and into the Company, with the Company surviving the merger as a wholly-owned
subsidiary of EQT and (ii) upon the effectiveness of the merger, each share of common stock, par value $0.01 per share, of the Company ("Rice Common Stock") issued and outstanding immediately
prior to the effective time of the merger (other than Appraisal Shares, Cancelled Shares and Converted Shares (in each case, as defined in the Agreement) (collectively, the "Excluded Shares")) will be
converted into the right to receive (a) 0.37 of a share (the "Exchange Ratio") of common stock, par value $0.01 per share, of EQT ("EQT Common Stock") and (b) $5.30 in cash, without
interest (together with the Exchange Ratio, the "Merger Consideration"). The terms and conditions of the Proposed Transaction are set forth in more detail in the Agreement and Plan of Merger among
Rice, EQT and Merger Sub, dated as of June 19, 2017 (the "Agreement"). The summary of the Proposed Transaction set forth above is qualified in its entirety by the terms of the Agreement.
We
have been requested by the Board of Directors of the Company to render our opinion with respect to the fairness, from a financial point of view, to the Company's stockholders (other
than holders of Excluded Shares) of the Merger Consideration to be offered to such stockholders. We have not been requested to opine as to, and our opinion does not in any manner address, the
Company's underlying business decision to proceed with or effect the Proposed Transaction or the likelihood of consummation of the Proposed Transaction. In addition, we express no opinion on, and our
opinion does not in any manner address, the fairness of the amount or the nature of any compensation to any officers, directors or employees of any parties to the Proposed Transaction, or any class of
such persons, relative to the consideration to be offered to the stockholders of the Company in the Proposed Transaction. Our opinion does not address the relative merits of the Proposed Transaction
as compared to any other transaction or business strategy in which the Company might engage.
In
arriving at our opinion, we reviewed and analyzed: (1) the Agreement and the specific terms of the Proposed Transaction; (2) publicly available information concerning
the Company and EQT that we believe to be relevant to our analysis, including, without limitation, the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016,
the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, EQT's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and
EQT's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017; (3) publicly available information concerning Rice Midstream Partners LP
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("RMP"),
EQT Midstream Partners, LP ("EQM") and EQT GP Holdings, LP ("EQGP") that we believe to be relevant to our analysis, including, without limitation, RMP's Annual Report on
Form 10-K for the fiscal year ended December 31, 2016, RMP's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, EQM's Annual Report on
Form 10-K for the fiscal year ended December 31, 2016, EQM's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, EQGP's Annual Report on
Form 10-K for the fiscal year ended December 31, 2016, and EQGP's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017; (4) certain financial
and operating information with respect to the business, operations and prospects of the Company furnished to us by
the Company, including financial projections of the Company prepared by management of the Company (the "Rice Management Projections"); (5) certain financial and operating information with
respect to the business, operations and prospects of EQT furnished to us by EQT, including financial projections of EQT prepared by management of EQT (the "EQT Management Projections");
(6) estimates of certain oil and gas reserves and resources provided by the Company (the "Rice Resources") as prepared by the management of the Company (the "Rice Resources Report");
(7) estimates of certain oil and gas reserves and resources provided by EQT (the "EQT Resources") as prepared by the management of EQT (the "EQT Resources Report"); (8) a trading history
of each of the Rice Common Stock and EQT Common Stock from January 23, 2014 to June 16, 2017 and a comparison of that trading history with those of other companies that we deemed
relevant; (9) a comparison of the historical financial results and present financial condition of the Company and EQT with each other and with those of other companies that we deemed relevant;
(10) a comparison of the financial terms of the Proposed Transaction with the financial terms of certain other transactions that we deemed relevant; (11) the pro forma impact of the
Proposed Transaction on the future financial performance of the combined company, including the amounts and timing of the cost savings and operational synergies expected by the management of the
Company and EQT to result from a combination of the businesses (the "Expected Synergies") and other strategic benefits expected by the management of the Company and EQT to result from a combination of
the businesses; (12) published estimates of independent research analysts with respect to the future financial performance and price targets of the Company and EQT; (13) the relative
contributions of the Company and EQT to the anticipated future financial and operating performance of the combined company on a pro forma basis; and (14) commodity price assumptions and the
outlook for future commodity prices published by independent information service providers. In addition, we have had discussions with management of both the Company and EQT concerning its business,
operations, assets, liabilities, financial condition and prospects and have undertaken such other studies, analyses and investigations as we deemed appropriate.
In
arriving at our opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information used by us without any independent verification of such
information (and have not assumed responsibility or liability for any independent verification of such information) and have further relied upon the assurances of the management of the Company that
they are not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the Rice Management Projections, upon the advice and at the direction of the
Company, we have assumed that such projections have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company as to the
future financial performance of the Company and that the Company will perform substantially in accordance with such projections. With respect to the Rice Resources Report, we have discussed this
resources database with the management of the Company and upon the advice and at the direction of the Company, we have assumed that the Rice Resources Report is a reasonable basis on which to evaluate
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the
Rice Resources. With respect to the EQT Management Projections, upon the advice and at the direction of the Company, we have assumed that such projections have been reasonably prepared on a basis
reflecting the best currently available estimates and judgments of the management of EQT as to the future financial performance of EQT and that EQT will perform substantially in accordance with such
projections. With respect to the EQT Resources Report, we have discussed this resources database with the management of the Company and upon the advice and at the direction of the Company, we have
assumed that the EQT Resources Report is a reasonable basis on which to evaluate the EQT Resources. Furthermore, upon the advice and at the direction of the Company, we have assumed that the amounts
and timing of the Expected Synergies are reasonable and that the Expected Synergies will be realized in accordance with such estimates. We assume no responsibility for and we express no view as to any
such projections or estimates or the assumptions on which they are based. In arriving at our opinion, we have not conducted a physical inspection of the properties and facilities of the Company and
have not made or obtained any evaluations or appraisals of the assets or liabilities of the Company. Our opinion necessarily is based upon market, economic and other conditions as they exist on, and
can be evaluated as of, the date of this letter. We assume no responsibility for updating or revising our opinion based on events or circumstances that may occur after the date of this letter. We
express no opinion as to the prices at which shares of Rice Common Stock or EQT Common Stock would trade following the announcement of the Proposed Transaction or EQT Common Stock would trade
following consummation of the Proposed Transaction. Our opinion should not be viewed as providing any assurance that the market value of the shares of EQT Common Stock to be held by the stockholders
of the Company after the consummation of the Proposed Transaction will be in excess of the market value of Rice Common Stock owned by such stockholders at any time prior to the announcement or
consummation of the Proposed Transaction.
We
have assumed the accuracy of the representations and warranties contained in the Agreement and all agreements related thereto. We have also assumed, upon the advice and at the
direction of the Company, that all material governmental, regulatory and third party approvals, consents and releases for the Proposed Transaction will be obtained within the constraints contemplated
by the Agreement and that the Proposed Transaction will be consummated in accordance with the terms of the Agreement without waiver, modification or amendment of any material term, condition or
agreement thereof. We do not express any opinion as to any tax or other consequences that might result from the Proposed Transaction, nor does our opinion address any legal, tax, regulatory or
accounting matters, as
to which we understand that the Company has obtained such advice as it deemed necessary from qualified professionals.
Based
upon and subject to the foregoing, we are of the opinion as of the date hereof that, from a financial point of view, the Merger Consideration to be offered to the holders of shares
of Rice Common Stock in the Proposed Transaction (other than the holders of Excluded Shares) is fair to such stockholders.
We
have acted as financial advisor to the Company in connection with the Proposed Transaction and will receive a fee for our services, a portion of which is payable upon rendering this
opinion and a substantial portion of which is contingent upon the consummation of the Proposed Transaction. In addition, the Company has agreed to reimburse a portion of our expenses and indemnify us
for certain liabilities that may arise out of our engagement. We have performed various investment banking services for the Company, EQT and certain of their affiliates in the past, and expect to
perform such services in the future, and have received, and expect to receive, customary fees for such services.
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Specifically,
in the past two years, we have performed the following investment banking and financial services: (A) for the Company and its affiliates, (i) in December 2016, acted as
joint bookrunner and joint lead arranger on the Company's refinancing of its $1,450 million credit facility, and as a lender under the credit facility, (ii) in October 2016, acted as
joint bookrunner and joint lead arranger on RMP's refinancing of RMP's $850 million credit facility, and as a lender under the credit facility, (iii) in September 2016, acted as
placement agent on RMP's $450 million private placement, (iv) in September 2016, acted as joint bookrunner on the Company's $1,200 million registered block trade, (v) in
February 2016, acted as sole financial advisor to the Company on the $500 million investment by EIG Global Energy Partners into Rice Midstream Holdings LLC, a subsidiary of the Company,
and (vi) in November 2015, acted as placement agent on RMP's $175 million private placement; (B) for EQT and its affiliates, (i) in November 2015, acted as joint bookrunner
on EQM's $400 million registered block trade, (ii) in
March 2015, acted as joint bookrunner on EQM's $697 million registered block trade, (iii) in May 2015, acted as lead left bookrunner on EQGP's $621 million initial public
offering, and (iv) acted as lender under EQT's credit facility.
Barclays
Capital Inc., its subsidiaries and its affiliates engage in a wide range of businesses from investment and commercial banking, lending, asset management and other
financial and non-financial services. In the ordinary course of our business, we and our affiliates may actively trade and effect transactions in the equity, debt and/or other securities (and any
derivatives thereof) and financial instruments (including loans and other obligations) of the Company and EQT for our own account and for the accounts of our customers and, accordingly, may at any
time hold long or short positions and investments in such securities and financial instruments.
This
opinion, the issuance of which has been approved by our Fairness Opinion Committee, is for the use and benefit of the Board of Directors of the Company and is rendered to the Board
of Directors in connection with its consideration of the Proposed Transaction. This opinion is not intended to be and does not constitute a recommendation to any stockholder of the Company as to how
such stockholder should vote with respect to the Proposed Transaction.
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Very truly yours,
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By:
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/s/ BARCLAYS CAPITAL INC.
BARCLAYS CAPITAL INC.
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ANNEX E
[Section 262 of the General Corporation Law of the State of Delaware]
§ 262 Appraisal rights [For application of this section, see 79 Del. Laws, c. 72,
§ 22, 79 Del. Laws, c. 122, § 12 and 80 Del. Laws, c. 265, § 18]
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(a)
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Any
stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with
respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of
the fair value of the stockholder's shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word "stockholder" means a
holder of record of stock in a corporation; the words "stock" and "share" mean and include what is ordinarily meant by those words; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.
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(b)
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Appraisal
rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant
to § 251 (other than a merger effected pursuant to § 251(g) of this title and, subject to paragraph (b)(3) of this section, § 251(h) of
this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or
§ 264 of this title:
-
(1)
-
Provided,
however, that, except as expressly provided in § 363(b) of this title, no appraisal rights under this section shall be available for the
shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of
stockholders to act upon the agreement of merger or consolidation, were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and
further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the
stockholders of the surviving corporation as provided in § 251(f) of this title.
-
(2)
-
Notwithstanding
paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263
and 264 of this title to accept for such stock anything except:
-
a.
-
Shares
of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
-
b.
-
Shares
of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository
receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
-
c.
-
Cash
in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2) a. and b. of this section; or
-
d.
-
Any
combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing
paragraphs (b)(2)a., b. and c. of this section.
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-
(3)
-
In
the event all of the stock of a subsidiary Delaware corporation party to a merger effected under §§ 251(h), 253 or 267 of this
title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
-
(4)
-
In
the event of an amendment to a corporation's certificate of incorporation contemplated by § 363(a) of this title, appraisal rights shall be
available as contemplated by § 363(b) of this title, and the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall
apply as nearly as practicable, with the word "amendment" substituted for the words "merger or consolidation," and the word "corporation" substituted for the words "constituent corporation" and/or
"surviving or resulting corporation."
-
(c)
-
Any
corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of
its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of
the assets of the corporation. If the certificate of incorporation contains such a provision, the provisions of this section, including those set forth in subsections (d), (e), and
(g) of this section, shall apply as nearly as is practicable.
-
(d)
-
Appraisal
rights shall be perfected as follows:
-
(1)
-
If
a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in
accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that
appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a
nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such stockholder's shares shall deliver to the corporation, before the
taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder's shares. Such demand will be sufficient if it reasonably informs the corporation of the identity
of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder's shares. A proxy or vote against the merger or consolidation shall not constitute such a
demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the
surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become effective; or
-
(2)
-
If
the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267
of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify
each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a
nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice or, in the case of
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a
merger approved pursuant to § 251(h) of this title, within the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days
after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder's shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder's shares. If such notice did not notify stockholders of the effective
date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the
holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or
resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than
20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of this title, later than the later of the consummation of the
offer contemplated by § 251(h) of this title and 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled
to appraisal rights and who has demanded appraisal of such holder's shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the
corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given,
provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given
prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.
-
(e)
-
Within
120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation,
any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder's demand for appraisal and to accept the
terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a
statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder's written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later.
Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such
person's own name, file a petition or request from the corporation the statement described in this subsection.
-
(f)
-
Upon
the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within
20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names
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and
addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation.
If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
-
(g)
-
At
the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The
Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. If immediately
before the merger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange,
the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of
the outstanding shares of the class or series eligible for appraisal, (2) the value of the consideration provided in the merger or consolidation for such total number of shares exceeds
$1 million, or (3) the merger was approved pursuant to § 253 or § 267 of this title.
-
(h)
-
After
the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of
Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising
from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in this subsection, interest from the effective
date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from
time to time during the period between the effective date of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation
may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between
the amount so paid and the fair value of the shares as determined by the Court, and (2) interest theretofore accrued, unless paid at that time. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the
stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has
submitted such stockholder's certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is
not entitled to appraisal rights under this section.
-
(i)
-
The
Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders
entitled thereto. Payment shall be so
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made
to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of
this State or of any state.
-
(j)
-
The
costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a
stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney's fees and
the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
-
(k)
-
From
and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this
section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder's demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with
the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be
dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect
the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder's demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.
The
shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the surviving or resulting corporation.
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ANNEX F
VOTING AND SUPPORT AGREEMENT
This VOTING AGREEMENT, dated as of June 19, 2017 (this "
Agreement
"), is entered into by
and among EQT Corporation, a Pennsylvania corporation ("
Parent
") and the undersigned signatories set forth on the signature pages hereto under the
heading "Company Stockholders" (collectively, the "
Company Stockholders
"). Parent and the Company Stockholders are each sometimes referred to herein
individually as a "
Party
" and collectively as the "
Parties
."
W I T N E S S E T H
:
WHEREAS,
each of the Company Stockholders are the beneficial or record owners, and have either sole voting power or shared voting power with other Company Stockholders
over, such number of shares of common stock, par value $0.01 per share, of the Company (the "
Company Common Stock
") as is indicated opposite each such
Company Stockholder's name on
Schedule A
attached hereto;
WHEREAS,
concurrently with the execution and delivery of this Agreement, Parent, Eagle Merger Sub I, Inc., a Delaware corporation and indirect wholly-owned subsidiary of Parent
("
Merger Sub
") and Rice Energy Inc., a Delaware corporation (the "
Company
") are entering into an
Agreement and Plan of Merger (the "
Merger Agreement
"), that provides, among other things, for the merger of Merger Sub with and into the Company, with
the Company being the surviving corporation of the Merger, upon the terms and subject to the conditions set forth in the Merger Agreement (the
"
Merger
");
WHEREAS,
as a condition and an inducement to Parent's willingness to enter into the Merger Agreement, Parent has required that the Company Stockholders agree, and the Company
Stockholders have agreed to, enter into this Agreement with respect to all Company Common Stock that the Company Stockholders Beneficially Own, or own of record; and
WHEREAS,
Parent desires that the Company Stockholders agree, and the Company Stockholders are willing to agree, subject to the limitations herein, not to Transfer (as defined below) any
of their Subject Securities (as defined below), and to vote their Subject Securities in a manner so as to facilitate consummation of the Merger.
NOW,
THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:
1.
Definitions.
Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such
terms in the Merger Agreement. When used in this Agreement, the following terms in all of their tenses, cases and correlative forms shall have the meanings assigned to them in this
Section 1
or
elsewhere in this Agreement.
"
Beneficially Own
" or "
Beneficial Ownership
" has the meaning assigned to such term in
Rule 13d-3 under the Exchange Act, and a Person's beneficial ownership of securities shall be calculated in
accordance with the provisions of such Rule (in each case, irrespective of whether or not such Rule is actually applicable in such circumstance). For the avoidance of doubt, Beneficially Own and
Beneficial Ownership shall also include record ownership of securities.
"
Beneficial Owners
" shall mean Persons who Beneficially Own the referenced securities.
"
Distribution Date
" shall mean September 28, 2017.
"
Expiration Time
" shall mean the earliest to occur of (a) Effective Time, (b) such date and time as the Merger Agreement
shall be terminated pursuant to Article VIII thereof or (c) the termination of this Agreement by mutual written consent of the Parties.
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"
Holdings LLC
" shall mean Rice Energy Holdings LLC.
"
Holdings LLC Agreement
" shall mean that certain Amended and Restated Limited Liability Company Agreement of Holdings LLC,
dated as of January 29, 2014.
"
Permitted Transfer
" shall mean, in each case, with respect to each Company Stockholder, so long as (a) such Transfer is in
accordance with applicable Law and (b) such Company Stockholder is, and at all times has been, in compliance with this Agreement, any Transfer of Subject Securities by the Company Stockholder
to another Company Stockholder or to an Affiliate of such Company Stockholder, so long as such Affiliate, in connection with, and prior to, such Transfer, executes a joinder to this Agreement, in form
and substance reasonably acceptable to Parent, pursuant to which such Affiliate agrees to become a party to this Agreement and be subject to the restrictions and obligations applicable to such Company
Stockholder and otherwise become a party for all purposes of this Agreement;
provided
that no such Transfer shall relieve the transferring Company
Stockholder from its obligations under this Agreement, other than with respect to the Company Common Stock transferred in accordance with the foregoing provision;
provided
,
further
, that Holdings LLC may distribute Subject Securities on the Distribution Date
as required by Section 4.3 of the Holdings LLC Agreement to its members without the requirement that any members who are not Company Stockholders or Named Executive Officers (or any of
their respective family members or spouses) or any Affiliate of the foregoing execute a joinder to this Agreement.
"
Subject Securities
" shall mean, collectively, shares of Company Common Stock and New Company Common Stock.
"
Transfer
" means (a) any direct or indirect offer, sale, lease, assignment, encumbrance, loan, pledge, grant of a security
interest, hypothecation, disposition or other transfer (by operation of law or otherwise), either voluntary or involuntary, or entry into any contract, option or other arrangement or understanding
with respect to any offer, sale, lease, assignment, encumbrance, loan, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any capital stock or interest in any
capital stock (or any security convertible or exchangeable into such capital stock), including in each case through the Transfer of any Person or any interest in any Person or (b) in respect of
any capital stock or interest in any capital stock, to enter into any swap or any other agreement, transaction or series of transactions that hedges or transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of such capital stock or interest in capital stock, whether any such swap, agreement, transaction or series of transaction is to be settled by
delivery of securities, in cash or otherwise. For purposes of this Agreement, "capital stock" shall include interests in a partnership or limited liability company.
2.
Agreement to Retain Subject Securities
.
2.1
Transfer and Encumbrance of Subject Securities.
Other than a Permitted Transfer, hereafter until
the Expiration Time, no Company Stockholder shall, with respect to any Subject Securities Beneficially Owned by
such Company Stockholder, (a) Transfer any such Subject Securities, or (b) deposit any such Subject Securities into a voting trust or enter into a voting agreement or arrangement with
respect to such Subject Securities or grant any proxy (except as otherwise provided herein) or power of attorney with respect thereto.
2.2
Injunction.
Notwithstanding anything to the contrary in this Agreement, if at any time following
the date hereof and prior to the Expiration Time a Governmental Entity of
competent jurisdiction enters an order restraining, enjoining or otherwise prohibiting the Company Stockholders or their Affiliates from (a) consummating the transactions contemplated by the
Merger Agreement or (b) taking any action pursuant to
Section 3
or
Section 4
, then
(i) the obligations of each Company Stockholder set forth in
Section 3
and the irrevocable proxy and power of attorney in
Section 4
shall be
of no force and effect for so long as such order is in effect and, in the case of clause (b), solely to the
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extent
such order restrains, enjoins or otherwise prohibits such Company Stockholder from taking any such action, and (ii) each Company Stockholder shall cause the Subject Securities to not be
represented in person or by proxy at any meeting at which a vote of such Company Stockholder on the Merger is requested. Notwithstanding anything to the contrary in this
Section 2.2
, the
restrictions set forth in
Section 2.1
shall continue to apply with
respect to the Subject Securities until the Expiration Time.
2.3
Additional Purchases; Adjustments.
Each Company Stockholder agrees that any shares of Company
Common Stock and any other shares of capital stock or other equity that such Company Stockholder
purchases or otherwise acquires or with respect to which such Company Stockholder otherwise acquires voting power after the execution of this Agreement and prior to the Expiration Time (the
"
New Company Common Stock
") shall be subject to the terms and conditions of this Agreement to the same extent as if they constituted the Company Common
Stock, and such Company Stockholder shall promptly notify Parent of the existence of any New Company Common Stock. In the event of any stock split, stock dividend, merger, reorganization,
recapitalization, reclassification, combination, exchange of shares or the like of the capital stock of the Company affecting the Subject Securities, the terms of this Agreement shall apply to the
resulting securities.
2.4
Unpermitted Transfers; Involuntary Transfers.
Any Transfer or attempted Transfer of any Subject
Securities in violation of this
Section 2
shall, to the
fullest extent permitted by Law, be null and void
ab initio
. If any involuntary Transfer of any of such Company Stockholder's Subject Securities shall
occur, the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold such Subject Securities subject to
all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect until valid termination of this Agreement.
2.5
Transfers by Holdings LLC.
Holdings LLC will not take any action that would increase
the number of shares that would be required by Section 4.3 of the Holdings LLC
Agreement to be distributed to its members who are not Company Stockholders or Named Executive Officers (or any of their respective family members or spouses) or any Affiliate of the foregoing. To the
extent the Distribution Date occurs prior to the Expiration Time, Holdings LLC shall provide Parent with a written notice (a) at least five (5) Business Days in advance of such
distribution of the estimated number of shares of Company Common Stock that will be so distributed to members who are not Company Stockholders or Named Executive Officers (or any of their respective
family members or spouses) or any Affiliate of the foregoing and (b) within one Business Day of such distribution confirming the actual number of shares of Company Common Stock that will be so
distributed to members who are not Company Stockholders or Named Executive Officers (or any of their respective family members or spouses) or any Affiliate of the foregoing.
3.
Agreement to Vote and Approve.
From and after the date hereof until the Expiration Time, at every meeting of the
stockholders of the Company called with respect to any of the following matters, and at every adjournment or postponement thereof, and on every action or approval by written consent of the
stockholders of the Company with respect to any of the following matters, each Company Stockholder shall, and shall cause each holder of record on any applicable record date to (including via proxy),
vote the Subject Securities: (a) in favor of (i) the approval of the Merger, and (ii) any proposal to adjourn or postpone such meeting of stockholders of the Company to a later
date if there are not sufficient votes to approve the Merger and (b) against (i) any action or agreement that would reasonably be expected to result in any condition to the consummation
of the Merger set forth in Article VII of the Merger Agreement not being fulfilled, (ii) any Company Competing Proposal, (iii) any action which could reasonably be expected to
materially delay, materially postpone or materially adversely affect the consummation of the transactions contemplated by the Merger Agreement, including the Merger, or dilute, in any material
respect, the benefit of the transactions contemplated thereby to Parent or to Parent's shareholders and (iv) any action which could reasonably
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be
expected to result in a breach of any representation, warranty, covenant or agreement of the Company in the Merger Agreement.
4.
Irrevocable Proxy.
By execution of this Agreement, each Company Stockholder hereby appoints and constitutes Parent, until
the Expiration Time (at which time this proxy shall automatically be revoked), with full power of substitution and resubstitution, as such Company Stockholder's true and lawful attorney-in-fact and
proxy (which proxy is irrevocable and which appointment is coupled with an interest, including for purposes of Section 212 of the Delaware General Corporation Law), to the fullest extent of
such Company Stockholder's rights with respect to the Subject Securities Beneficially Owned by such Company Stockholder, to vote such Subject Securities solely with respect to the matters set forth in
Section 3
hereof and each Company Stockholder shall retain the authority to vote its Subject Securities on all other matters;
provided
,
however
, that the foregoing shall only be effective if such Company Stockholder fails to be
counted as present, to consent or to vote such Company Stockholder's Subject Securities, as applicable, in accordance with this Agreement.
5.
Representations and Warranties of the Company Stockholders.
Each Company Stockholder, on behalf of itself and each other
Company Stockholder, hereby severally, but not jointly, represents and warrants to Parent as follows:
5.1
Due Authority.
Such Company Stockholder has the full power and authority to make, enter into and
carry out the terms of this Agreement and to grant the irrevocable proxy as set
forth in
Section 4
hereof. This Agreement has been duly and validly executed and delivered by such Company Stockholder and constitutes a valid
and binding agreement of such Company Stockholder enforceable against it in accordance with its terms.
5.2
Ownership of the Company Common Stock
.
As of the date hereof, such Company Stockholder (a) Beneficially Owns the shares of Company Common Stock indicated on
Schedule A
hereto opposite such Company
Stockholder's name, free and clear of any and all Encumbrances, other than those created by this Agreement or as set forth
on
Schedule B1
, and (b) except as set forth on
Schedule B2
, has sole voting power over all of the
shares of Company Common Stock Beneficially Owned by such Company Stockholder. As of the date hereof, such Company Stockholder does not Beneficially Own any capital stock or other securities of the
Company other than the shares of Company Common Stock set forth on
Schedule A
opposite such Company Stockholder's name. As of the date hereof,
such Company Stockholder does not Beneficially Own any rights to purchase or acquire any shares of capital stock of the Company except as set forth on
Schedule A
opposite such Company Stockholder's
name, or as set forth on
Schedule B3
.
5.3
No Conflict; Consents
.
(a) The
execution and delivery of this Agreement by such Company Stockholder does not, and the performance by such Company Stockholder of the obligations under this
Agreement and the compliance by such Company Stockholder with any provisions hereof do not and will not: (i) conflict with or violate any Law applicable to such Company Stockholder, or
(ii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a Encumbrance on any of the shares of Company Common Stock Beneficially Owned by such Company Stockholder pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which such Company Stockholder is a party or by which such Company
Stockholder is bound.
(b) No
consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any other Person, is required by or with respect
to such Company Stockholder in connection with the execution and delivery of this Agreement or the consummation by such Company Stockholder of the transactions contemplated hereby.
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5.4
Absence of Litigation.
There is no Proceeding pending against, or, to the knowledge
of such Company Stockholder, threatened against or affecting, such Company Stockholder that could reasonably be expected to materially impair or materially adversely affect the ability of such Company
Stockholder to perform such Company Stockholder's obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.
5.5
Ownership of Parent Common Stock.
As of the date hereof, such Company Stockholder does not Beneficially Own
any shares of Parent Common Stock.
5.6
Shares by Holdings LLC.
As of the date of this Agreement, Holdings LLC owns of record
4,007,041 shares of Company Common Stock. Pursuant to Section 4.3 of the Holdings LLC Agreement, Holdings LLC is required to make a distribution of all of its property and assets
on the Distribution Date. Assuming that the Distributable Amount Value (as defined in the Holdings LLC Agreement) of Company Common Stock is $40 per share or less on the applicable
determination date, the maximum number of shares of Company Common Stock that would be distributed as required by Section 4.3 of the Holdings LLC Agreement to members of
Holdings LLC (who are not Company Stockholders or
Named Executive Officers (or any of their respective family members or spouses) or any Affiliate of the foregoing) is 2,400,000.
6.
Termination.
This Agreement shall terminate and shall have no further force or effect immediately as of and
following the Expiration Time.
7.
Notice of Certain Events.
Each Company Stockholder shall notify Parent in writing promptly of (a) any
fact, event or circumstance that would cause, or reasonably be expected to cause or constitute, a breach in any material respect of the representations and warranties of each Company Stockholder under
this Agreement and (b) the receipt by each Company Stockholder of any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection
with this Agreement;
provided
,
however
, that the delivery of any notice pursuant to this
Section 7
shall not limit or otherwise affect the remedies available to any party.
8.
No Solicitation.
Each Company Stockholder agrees that neither it nor any of its Affiliates, directors,
officers and employees of it, and that it shall use reasonable best efforts to cause its Representatives not to, directly or indirectly, (a) initiate, solicit or knowingly encourage or
knowingly facilitate any inquiries, proposals, or offers regarding, or the making of a Company Competing Proposal, (b) engage in any discussions or negotiations with any Person with respect to
a Company Competing Proposal or any indication of interest that would reasonably be expected to lead to a Company Competing Proposal, (c) furnish any non-public information regarding the
Company or its Subsidiaries, or access to the properties, assets or employees of the Company or its Subsidiaries, to any Person in connection with or in response to a Company Competing Proposal,
(d) enter into any letter of intent or agreement in principle, or other agreement providing for a Company Competing Proposal or (e) resolve, agree or publicly propose to, or permit the
Company or any of its Subsidiaries or any of its or their Representatives to agree or publicly propose to take any of the actions referred to in clauses (a)(d).
9.
Waiver of Certain Actions.
Each Company Stockholder hereby agrees not to commence or participate in, and to
take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, the Company or any of their respective Subsidiaries or
successors (a) challenging the validity of, or seeking to enjoin or delay the operation of, any provision of this Agreement or the Merger Agreement (including any claim seeking to enjoin or
delay the Closing) or (b) alleging a breach of any duty of the Company Board or Parent Board in connection with the Merger Agreement, this Agreement or the transactions contemplated thereby or
hereby.
F-5
Table of Contents
10.
Miscellaneous
.
10.1
Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any
other situation or in any other jurisdiction. If a final judgment of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the Parties
agree that the court making such determination shall have the power to limit such term or provision, to delete specific words or phrases or to replace such term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be valid and enforceable as so modified. In
the event such court does not exercise the power granted to it in the prior sentence, the Parties agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or
provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term or provision.
10.2
Successors and Assigns.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the Parties (whether by operation of law or otherwise) without the prior written consent of the other Party. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns. Any purported assignment in violation of this
Section 10.2
shall not
be deemed to prevent Parent from engaging in any merger, consolidation or other business combination transaction.
10.3
Amendments and Modifications.
No provision of this Agreement may be amended or modified unless such
amendment or modification is in writing and signed by (a) Parent, and (b) each of the Company Stockholders. No failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable Law.
10.4
Notices.
All notices and other communications hereunder shall be in writing and shall be deemed given if
delivered personally (notice deemed given upon receipt), transmitted by email or facsimile (notice deemed given upon confirmation of receipt) or sent by a nationally recognized overnight courier
service, such as Federal Express (notice deemed given upon receipt of proof of delivery), to the Parties at the following addresses (or at such other address for a Party as shall be specified by like
notice):
-
(a)
-
if
to any of the Company Stockholders, to it at:
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Rice Energy Inc.
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2200 Rice Drive
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Canonsburg, Pennsylvania 15317
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Attention:
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General Counsel
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Email:
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Will.Jordan@RiceEnergy.com
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Fax No.:
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832 708-3445
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F-6
Table of Contents
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With a copy (which shall not be considered notice) to:
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Vinson & Elkins L.L.P.
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1001 Fannin Street, Suite 2500
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Houston, Texas 77002
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Attention:
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Stephen M. Gill
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Doug E. McWilliams
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Email:
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sgill@velaw.com
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dmcwilliams@velaw.com
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Fax No.:
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(713) 615-5956
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and
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Nixon Peabody LLP
100 Summer Street
Boston, Massachusetts 02110
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Attention:
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Jay D. Rosenbaum
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Email:
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jrosenbaum@nixonpeadbody.com
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Fax No.:
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(877) 567-1974
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(b)
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if
to Parent, to:
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EQT Corporation
625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania
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Attention:
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General Counsel
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Email:
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lgardner@eqt.com
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Fax No.:
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412-553-7781
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With a copy (which shall not be considered notice) to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
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Phone:
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(212) 403-1000
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Email:
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SACohen@wlrk.com
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BMRoth@wlrk.com
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Fax:
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(212) 403-2000
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Attention:
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Steven A. Cohen
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Benjamin M. Roth
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Or
to such other address as any Party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective upon receipt.
10.5
Governing Law.
This Agreement shall be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware, without giving effect to any choice of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any
other jurisdiction.
10.6
Submission to Jurisdiction.
Each of the Parties agrees that it shall bring any action or proceeding in
respect of any claim arising under or relating to this Agreement or the transactions contemplated by this Agreement exclusively in the Court of Chancery of the State of Delaware (or if such court
declines to accept jurisdiction over a particular matter, any Federal court located within the State of Delaware) (the "
Chosen Courts
") and, solely in
connection with such claims, (a) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (b) waives any objection to the laying of venue in any such action or proceeding
in the Chosen Courts, (c) waives any objection that the Chosen
F-7
Table of Contents
Courts
are an inconvenient forum or do not have jurisdiction over any Party and (d) agrees that mailing of process or other papers in connection with any such action or proceeding in the manner
provided in
Section 10.4
or in such other manner as may be permitted by Law shall be valid and sufficient service thereof. The consent to
jurisdiction set forth in this
Section 10.6
shall not constitute a general consent to service of process in the State of Delaware and shall have
no effect for any purpose except as provided in this
Section 10.6
. The Parties agree that a final judgment in any such suit, action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
10.7
Enforcement.
The Parties agree that irreparable damage, for which monetary damages would not be an adequate
remedy, would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached by the Parties. Prior to the
termination of this Agreement pursuant to
Section 6
, it is accordingly agreed that the Parties shall be entitled to an injunction or injunctions,
or any other appropriate form of specific performance or equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent
jurisdiction, in each case in accordance with this
Section 10.7
, this being in addition to any other remedy to which they are entitled under the
terms of this Agreement at law or in equity.
10.8
No Third Party Beneficiaries.
Nothing in this Agreement express or implied, is intended to or shall confer
upon any Person other than the Parties any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
10.9
WAIVER OF JURY TRIAL
. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER; (B) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (C) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND
(D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS
SECTION 10.9
.
10.10
Entire Agreement.
This Agreement constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the Parties with respect to the subject matter hereof.
10.11
Counterparts.
This Agreement may be executed in two or more counterparts, including via facsimile or email
in "portable document format" (".pdf") form transmission, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each
of the Parties and delivered to the other Party, it being understood that all parties need not sign the same counterpart.
10.12
No Agreement Until Executed.
This Agreement shall not constitute or be deemed to evidence a contract,
agreement, arrangement or understanding between the Parties unless and until (a) the Merger Agreement is executed and delivered by all parties thereto, and (b) this Agreement is executed
and delivered by the Parties.
F-8
Table of Contents
10.13
Expenses.
All costs and expenses incurred in connection with this Agreement shall be paid by the Party
incurring such cost or expense, whether or not the Merger is consummated.
10.14
Action in Company Stockholder Capacity Only.
No Person executing this Agreement (or designee or
Representative of such Person) who has been, is or becomes during the term of this Agreement a director or officer of the Company shall be deemed to make any agreement or understanding in this
Agreement in such Person's capacity as a director or officer of the Company. The Parties acknowledge and agree that this Agreement is entered into by the Company Stockholders solely in their capacity
as the Beneficial Owners of shares of Company Common Stock and nothing in this Agreement shall (a) restrict in any respect any actions taken by the Company Stockholders or their designees or
Representatives who are a director or officer of the Company solely in his or her capacity as a director or officer of the Company or (b) be construed to prohibit, limit or restrict such
Company Stockholder from exercising its fiduciary duties as a director or officer of the Company. For the avoidance of doubt, nothing in this
Section 10.14
shall in any way modify, alter or amend
any of the terms of the Merger Agreement.
10.15
Documentation and Information.
No Company Stockholder shall make any public announcement regarding this
Agreement and the transactions contemplated hereby without the prior written consent of Parent (such consent not to be unreasonably withheld), except as may be required by applicable Law (provided
that reasonable notice of any such disclosure will be provided to Parent). Each Company Stockholder consents to and hereby authorizes Parent and the Company to publish and disclose in all documents
and schedules filed with the SEC, and any press release or other disclosure document that Parent reasonably determines to be necessary in connection with the Merger and any transactions contemplated
by the Merger Agreement, such Company Stockholder's identity and ownership of the Subject Securities, the existence of this Agreement and the nature of such Company Stockholder's commitments and
obligations under this Agreement, and such Company Stockholder acknowledges that Parent may, in Parent's sole discretion, file this Agreement or a form hereof with the SEC or any other Governmental
Entity. Each Company Stockholder agrees to promptly give Parent any information it may reasonably require for the preparation of any such disclosure documents, and such Company Stockholder agrees to
promptly notify Parent of any required corrections with respect to any written information supplied by such Company Stockholder specifically for use in any such disclosure document, if and to the
extent that any such information shall have become false or misleading in any material respect.
10.16
Obligation to Update Schedule A.
Each of the Company Stockholders agree that in connection with any
acquisitions or Transfers (to the extent permitted) of Subject Securities by any Company Stockholder, the Company Stockholders will, as promptly as practicable following the completion of thereof,
notify Parent in writing of such acquisition or Transfer and the Parties will update Schedule A to reflect the effect of such acquisition or Transfer.
[Signature pages follow]
F-9
Table of Contents
IN
WITNESS WHEREOF, the Parties have duly executed this Agreement by their authorized representatives as of the date first above written.
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EQT CORPORATION
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By:
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/s/ ROBERT J. MCNALLY
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Name:
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Robert J. McNally
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Title:
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Senior Vice President and Chief Financial Officer
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SIGNATURE
PAGE TO
VOTING AGREEMENT
F-10
Table of Contents
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RICE ENERGY 2016 IRREVOCABLE TRUST
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By:
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/s/ ANDREW L. SHARE
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Name:
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Andrew L. Share
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Title:
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Trustee
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RICE ENERGY HOLDINGS LLC
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By:
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/s/ WILLIAM E. JORDAN
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Name:
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William E. Jordan
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Title:
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Attorney-in-Fact
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/s/ DANIEL J. RICE III
Daniel J. Rice III
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/s/ DANIEL J. RICE IV
Daniel J. Rice IV
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/s/ DEREK A. RICE
Derek A. Rice
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/s/ TOBY Z. RICE
Toby Z. Rice
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SIGNATURE
PAGE TO
VOTING AGREEMENT
F-11
Table of Contents
SCHEDULE A
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Company Stockholder
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Number of Shares of
Company Common Stock
Beneficially Owned
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Number of Shares of
Company Common Stock
Owned of Record
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Rice Energy 2016 Irrevocable Trust
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33,807,041
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29,800,000
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Rice Energy Holdings LLC
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33,807,041
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4,007,041
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Daniel J. Rice III
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2,556,844
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2,556,844
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Daniel J. Rice IV
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230,470
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230,470
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Derek A. Rice
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230,470
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230,470
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Toby Z. Rice
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278,132
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189,196
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F-12
Table of Contents
SCHEDULE B
B1
-
1.
-
As
of the date of this agreement, 13,000,000 shares beneficially owned by the Rice Energy 2016 Irrevocable Trust are held in a margin account at a brokerage firm,
subject to the broker's lien on all of the account assets.
B2
-
1.
-
Rice
Energy Holdings LLC and Rice Energy 2016 Irrevocable Trust have shared voting power of Company Common Stock pursuant to the Stockholders' Agreement.
-
2.
-
As
of the date of this Agreement, the number of shares beneficially owned by Toby Z. Rice includes an aggregate of 88,936 shares and restricted stock units that vest
within 60 days of June 15, 2017 that are held by Toby Z. Rice's spouse.
B3
-
1.
-
As
of the date of this Agreement, the number of shares beneficially owned by Daniel J. Rice IV does not include 60,396 restricted stock units or unearned
performance stock units which may be settled in up to 771,770 shares (assuming settlement at the maximum possible level) that have been granted to Daniel J. Rice IV under the Company's 2014 Long-Term
Incentive Plan (the "LTIP").
-
2.
-
As
of the date of this Agreement, the number of shares beneficially owned by Toby Z. Rice does not include (i) 60,396 restricted stock units that have been
granted to Toby Z. Rice under the LTIP, (ii) unearned performance stock units which may be settled in up to 771,770 shares (assuming settlement at the maximum possible level) that have been
granted to Toby Z. Rice under the LTIP, (iii) 12,824 restricted stock units that have been granted to Toby Z. Rice's spouse under the LTIP or (iv) unearned performance stock units which
may be settled in up to 5,372 shares (assuming settlement at the maximum possible level) that have been granted to Toby Z. Rice's spouse under the LTIP.
-
3.
-
As
of the date of this Agreement, the number of shares beneficially owned by Derek A. Rice does not include 60,396 restricted stock units or unearned performance
stock units which may be settled in up to 771,770 shares (assuming settlement at the maximum possible level) that have been granted to Derek A. Rice under the LTIP.
F-13
RICE ENERGY INC. PROXY CARD YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. We encourage you to take advantage of Internet or telephone voting. Both are available 24 hours a day, 7 days a week. Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to special meeting. VOTE BY INTERNET WWW.CESVOTE.COM Use the Internet to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the special meeting date. Have your proxy card in hand when you access the website and follow the instructions. OR VOTE BY TELEPHONE 1-888-693-8683 Use a touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the special meeting date. Have your proxy card in hand when you call and follow the instructions. OR VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided to: Rice Energy Inc., c/o Corporate Election Services, P.O. Box 3230, Pittsburgh, PA 15230. If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card Important Notice Regarding the Availability of Proxy Materials for the Special Meeting: Notice & Proxy Statement are available at www.ViewOurMaterial.com/Rice If submitting a proxy by mail, please sign and date the card below and fold and detach card at perforation before mailing. The Board of Directors recommends a vote FOR Proposals 1, 2 and 3. Proposal 1 Adopt the Agreement and Plan of Merger, dated as of June 19, 2017, among Rice Energy Inc., EQT Corporation, and Eagle Merger Sub I, Inc. (as it may be amended from time to time, the Merger Agreement). Proposal 3 Approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not Agreement. FOR sufficient votes to adopt the Merger FOR AGAINST ABSTAIN ABSTAIN AGAINST Proposal 2 Approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Rice Energy Inc.s named executive officers in connection with the merger. FOR AGAINST ABSTAIN Shareholder Signature Date Title Shareholder (Joint Owner) Signature Date Title Note: Please sign your name exactly as it appears hereon. If signing as attorney, executor, administrator, trustee or guardian, please give full title as such, and, if signing for a corporation, give your title. When shares are in the names of more than one person, each should sign. CONTROL NUMBER
Driving Directions: From Pittsburgh International Airport Take Airport Parkway - Merge onto I-376 East for 10.3 miles. Merge onto I-79 South via Exit 64A Washington. Travel for approximately 13 miles. Take exit 48 (Southpointe/Hendersonville). Turn right off the exit onto Southpointe Boulevard for approximately 1.5 miles. Turn right onto Technology Drive for .2 miles. Turn left onto Town Center Boulevard and then immediately turn right onto Woodcliff Drive for .4 miles. Rice Energy is on the right. From I-79 southbound Take exit 48 (Southpointe/Hendersonville). Turn right off the exit onto Southpointe Boulevard for approximately 1.5 miles. Turn right onto Technology Drive for .2 miles. Turn left onto Town Center Boulevard and then immediately turn right onto Woodcliff Drive for .4 miles. Rice Energy is on the right. From I-79 northbound Take exit 48 (Southpointe/Hendersonville). Turn left off the exit onto Southpointe Boulevard for approximately 1.5 miles. Turn right onto Technology Drive for .2 miles. Turn left onto Town Center Boulevard and then immediately turn right onto Woodcliff Drive for .4 miles. Rice Energy is on the right. From I-70 east/west Follow signs for I-79 north. Take exit 48 (Southpointe/Hendersonville). Turn left off the exit onto Southpointe Boulevard for approximately 1.5 miles. Turn right onto Technology Drive for .2 miles. Turn left onto Town Center Boulevard and then immediately turn right onto Woodcliff Drive for .4 miles. Rice Energy is on the right. TO SUBMIT A PROXY BY MAIL, DETACH ALONG THE PERFORATION, MARK, SIGN, DATE AND RETURN THE BOTTOM PORTION PROMPTLY USING THE ENCLOSED ENVELOPE. RICE ENERGY INC. SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON November 9, 2017 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF RICE ENERGY INC. The undersigned stockholder of Rice Energy Inc., a Delaware corporation, revoking all prior proxies, hereby appoints Daniel J. Rice IV, and William E. Jordan, each or either of them, with full power of substitution, to represent and to vote on behalf of the undersigned all shares which the undersigned is entitled to vote at the Special Meeting of Stockholders scheduled to be held on November 9, 2017 at Rices executive offices at 2200 Rice Drive, Canonsburg, PA 15317, at 8:00 a.m. local time, and at any and all postponements or adjournments thereof, upon all matters described in the Notice of 2017 Special Meeting of Stockholders and related Proxy Statement for the Special Meeting (receipt of which is hereby acknowledged), and upon any other business that may properly come before such Special Meeting. PROXY CARD If this proxy card is properly executed, the shares represented by this proxy card will be voted as directed on the reverse side, but if no such direction is made, the proxies named above intend to vote such shares FOR Proposals 1, 2 and 3 and upon other such business as many properly come before the Special Meeting. PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE BY THE INTERNET OR BY TELEPHONE. (Continued and to be signed on the reverse side)
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