Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On February 13, 2023, ROC Energy Acquisition Corp., a Delaware corporation
(prior to the Effective Time (as defined below), "ROC Energy" and, at and after
the Effective Time, "PubCo") entered into an agreement and plan of merger (as it
may be amended, supplemented or otherwise modified from time to time, the
"Merger Agreement") with ROC Merger Sub, Inc., a Delaware corporation and a
direct, wholly owned subsidiary of ROC Energy ("Merger Sub"), and Drilling Tools
International Holdings, Inc., a Delaware corporation ("Drilling Tools").
Pursuant to the terms of the Merger Agreement, a business combination between
ROC Energy and Drilling Tools will be effected through the merger of Merger Sub
with and into Drilling Tools, with Drilling Tools surviving the merger as a
wholly owned subsidiary of PubCo (the "Merger," and together with the other
transactions contemplated by the Merger Agreement and the other agreements
contemplated thereby, the "Transactions"). The board of directors of ROC Energy
(the "Board") has unanimously (i) approved and declared advisable the Merger
Agreement and the Transactions and (ii) resolved to recommend the approval and
adoption of the Merger Agreement and the Transactions by the stockholders of ROC
Energy.
Treatment of Securities
Preferred Stock of Drilling Tools. At the effective time of the Merger (the
"Effective Time") and without any action on the part of any Drilling Tools
stockholder, subject to and in consideration of the terms and conditions set
forth in the Merger Agreement, each share of Drilling Tools preferred stock, par
value $0.01 per share ("Drilling Tools Preferred Stock") that is issued and
outstanding immediately prior to the Effective Time (other than Dissenting
Shares (as defined in the Merger Agreement)) shall be converted into the right
to receive (a) the Per Share Company Preferred Cash Consideration and (ii) the
Per Share Company Preferred Stock Consideration (as such terms are defined in
the Merger Agreement). All shares of Drilling Tools Preferred Stock converted
into such consideration shall thereafter no longer be outstanding and shall
cease to exist, and each holder of Drilling Tools Preferred Stock shall
thereafter cease to have any rights with respect to such securities (including
any right to accrued but unpaid dividends), except the right to receive the
applicable consideration into which such shares of Drilling Tools Preferred
Stock shall have been converted into in the Merger.
Common Stock of Drilling Tools. At the Effective Time, by virtue of the Merger
and without any action on the part of any Drilling Tools stockholder, subject to
and in consideration of the terms and conditions set forth in the Merger
Agreement, each share of Drilling Tools common stock, par value $0.01 per share
("Drilling Tools Common Stock") that is issued and outstanding immediately prior
to the Effective Time (other than Dissenting Shares) shall be converted into the
right to receive the applicable Per Share Company Common Stock Consideration (as
defined in the Merger Agreement). All shares of Drilling Tools Common Stock
converted into such consideration shall thereafter no longer be outstanding and
shall cease to exist, and each holder of Drilling Tools Common Stock shall
thereafter cease to have any rights with respect to such securities, except the
right to receive the applicable consideration into which such shares of Drilling
Tools Common Stock shall have been converted into in the Merger.
Common Stock of Merger Sub. At the Effective Time, by virtue of the Merger and
without any action on the part of any holder thereof, each share of common
stock, par value $0.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall no longer be outstanding and shall
be converted into and become one validly issued, fully paid and non-assessable
share of common stock, par value $0.01 per share, of the Surviving Company (as
defined in the Merger Agreement) and all such shares shall constitute the only
outstanding shares of capital stock of the Surviving Company as of immediately
following the Effective Time .
Treasury Shares. At the Effective Time, by virtue of the Merger and without any
action on the part of any holder thereof, each share of Drilling Tools Preferred
Stock and Drilling Tools Common Stock held in the treasury of Drilling Tools
immediately prior to the Effective Time shall be cancelled and no payment or
distribution shall be made with respect thereto.
Stock Options. As of the Effective Time, each then-outstanding unexercised
option (whether vested or exercisable) to purchase shares of Drilling Tools
Common Stock granted under any Drilling Tools stock plan (a "Drilling Tools
Option") shall be assumed by PubCo and shall be converted into a stock option (a
"PubCo Option") to acquire shares of PubCo common stock, par value $0.0001 per
share ("PubCo Common Stock") in accordance with the Merger Agreement. Each such
PubCo Option as so assumed and converted shall be for that number of shares of
PubCo Common Stock determined by multiplying the number of shares of the PubCo
Common Stock subject to such Drilling Tools Option immediately prior to the
Effective Time by the Per Share Company Common Stock Consideration, which
product shall be rounded down to the nearest whole number of shares, at a per
share exercise price determined by dividing the per share exercise price of such
Drilling Tools Option immediately prior to the Effective Time by the Per Share
Company Common Stock Consideration which quotient shall be rounded up to the
nearest whole cent. As of the Effective Time, all Drilling Tools Options shall
no longer be outstanding and each holder of PubCo Options shall cease to have
any rights with respect to such Drilling Tools Options, except as otherwise set
forth in the Merger Agreement. Following the Effective Time, each PubCo Option
shall be subject to the Incentive Plan (as defined below) and to the same terms
and conditions, including, without limitation, vesting conditions, as had
applied to the corresponding Drilling Tools Option as of immediately prior to
the Effective Time, except for such terms rendered inoperative by reason of the
Transactions, subject to such adjustments as reasonably determined by the Board
to be necessary or appropriate to give effect to the conversion or the
Transactions.
Dissenting Shares. Dissenting Shares shall not be converted into the right to
receive, as applicable, Per Share Company Preferred Cash Consideration, Per
Share Company Preferred Stock Consideration or Per Share Company Common Stock
Consideration, and shall instead represent the right to receive payment of the
fair value of such Dissenting Shares in accordance with and to the extent
provided by the General Corporation Law of the State of Delaware (the "DGCL").
At the Effective Time, all Dissenting Shares shall be cancelled, extinguished
and cease to exist and the holders of Dissenting Shares shall be entitled only
to such rights as may be granted to them under the DGCL. If any such holder
fails to perfect or otherwise waives, withdraws or loses such holder's right to
appraisal under the DGCL or other applicable law, then the right of such holder
to be paid the fair value of such Dissenting Shares shall cease and such
Dissenting Shares shall be deemed to have been converted, as of the Effective
Time, into the right to receive, as applicable, the Preferred Per Share Cash
Consideration, the Preferred Per Share Stock Consideration or the Common Per
Share Merger Consideration, in each case, upon the terms and conditions set
forth in the Merger Agreement.
Representations and Warranties
The Merger Agreement includes representations and warranties of each of the
parties thereto that are customary for transactions of this type, including with
respect to the operations of ROC Energy, Merger Sub and Drilling Tools.
Covenants
The Merger Agreement includes customary covenants of the parties with respect to
the operation of their respective businesses prior to the consummation of the
Merger and efforts to satisfy conditions to the consummation of the Merger. The
Merger Agreement also contains additional covenants of the parties, including,
among others, covenants providing for ROC Energy and Drilling Tools to use
reasonable best efforts to cause the registration statement to be filed by ROC
Energy to register the shares of PubCo Common Stock to be issued in the
Transactions (the "Registration Statement") and the related proxy
statement/prospectus (the "Proxy Statement") to comply with the rules and
regulations promulgated by the Securities and Exchange Commission (the "SEC"),
to have the Registration Statement declared effective under the Securities Act
as promptly as practicable after such filing and to keep the Registration
Statement effective as long as is necessary to consummate the Merger. ROC Energy
and Drilling Tools have also agreed to obtain all requisite approvals of their
respective stockholders including, in the case of ROC Energy, (a) approval of
the Merger, (b) approval of PubCo's amended and restated certificate of
incorporation, the (c) approval of the issuance of PubCo Common Stock in
connection with the Transactions (including pursuant to the consummation of the
Subscription Agreements (as defined below)), to the extent required under Nasdaq
listing rules, (d) adoption of the Incentive Plan (as defined below), and (e)
approval of any other proposals reasonably necessary to consummate the
Transactions. Additionally, ROC Energy has agreed to include in the Proxy
. . .
Item 7.01 Regulation FD Disclosure.
On February 14, 2023, ROC Energy issued a press release announcing its entry
into the Merger Agreement. The press release is attached hereto as Exhibit 99.1
and incorporated by reference herein.
Furnished as Exhibit 99.2 hereto and incorporated into this Item 7.01 by
reference is the investor presentation that ROC Energy and Drilling Tools have
prepared for use in presentations to potential investors in connection with the
Equity Financing.
The statements under this Item 7.01 and Exhibits 99.1 and 99.2 are being
furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes
of Section 18 of the Exchange Act or otherwise be subject to the liabilities of
that section, nor will they be deemed to be incorporated by reference in any
filing under the Securities Act or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Description
2.1* Agreement and Plan of Merger dated as of February 13, 2023, by and
among ROC Energy Acquisition Corp., ROC Merger Sub. Inc. and Drilling
Tools International Holdings, Inc.
10.1 Sponsor Support Agreement dated as of February 13, 2023, by and
among ROC Energy Acquisition Corp., ROC Energy Holdings, LLC and
Drilling Tools International Holdings, Inc.
10.2 Company Stockholder Support Agreement dated as of February 13, by
and among ROC Energy Acquisition Corp., Drilling Tools International
Holdings, Inc. and certain stockholders of Drilling Tools
International Holdings, Inc.
10.3 Amended and Restated Registration Rights Agreement, dated as of
February 13, 2023, by and among ROC Energy Acquisition Corp., certain
stockholders of ROC Energy Acquisition Corp., and certain stockholders
of Drilling Tools International Holdings, Inc.
10.4 Form of Company Stockholder Lock-up Agreement (included in Exhibit G
of Exhibit 2.1 hereto)
10.5 Form of Director Nomination Agreement (included in Exhibit F of
Exhibit 2.1 hereto)
99.1 Press release, dated February 14, 2023
99.2 Investor presentation, dated February 14, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Certain exhibits and schedules to this Exhibit have been omitted in accordance
with Regulation S-K Item 601(b)(2). ROC Energy agrees to furnish supplementally
a copy of all omitted exhibits and schedules to the SEC upon its request.
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