-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JFW0EkE4hHva+mnSSZyncceARr5gJVz7cvs5qqlo9AzTTPdgA01/tzqQBMtwPUZk 5+Us0QmvvbWZ8B+QBpjYrw== 0000921749-95-000009.txt : 19950530 0000921749-95-000009.hdr.sgml : 19950530 ACCESSION NUMBER: 0000921749-95-000009 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19950518 SROS: NYSE GROUP MEMBERS: ACF INDUSTRIES HOLDING CORP. GROUP MEMBERS: ACF INDUSTRIES, INCORPORATED GROUP MEMBERS: CARL C. ICAHN GROUP MEMBERS: CHELONIAN CORP. GROUP MEMBERS: HIGH RIVER LIMITED PARTNERSHIP GROUP MEMBERS: HIGHCREST INVESTORS CORP. GROUP MEMBERS: ICAHN HOLDING CORP/NY GROUP MEMBERS: RIVERDALE INVESTORS CORP., INC. GROUP MEMBERS: UNICORN ASSOCIATES CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BJ SERVICES CO CENTRAL INDEX KEY: 0000864328 STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389] IRS NUMBER: 630084140 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-41164 FILM NUMBER: 95540692 BUSINESS ADDRESS: STREET 1: 5500 NW CENTRAL DR CITY: HOUSTON STATE: TX ZIP: 77210 BUSINESS PHONE: 713-462-4239 MAIL ADDRESS: STREET 1: 5500 NORTHWEST CENTRAL DR STREET 2: 5500 NORTHWEST CENTRAL DR CITY: HOUSTON STATE: TX ZIP: 77092 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ICAHN HOLDING CORP/NY CENTRAL INDEX KEY: 0000860850 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133135018 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 100 SOUTH BEDFORD ROAD CITY: MOUNT STATE: NY ZIP: 10549 BUSINESS PHONE: 914-242-4003 MAIL ADDRESS: STREET 1: 114 W 47TH STREET STREET 2: 21ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10036-1510 SC 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* BJ Services Company (Name of Issuer) Common Stock, par value $0.10 per share (Title of Class of Securities) 055482 10 3 (CUSIP Number) Marc Weitzen, Esq. Gordon Altman Butowsky Weitzen Shalov & Wein 114 West 47th Street, 21st Floor New York, New York 10036 (212) 626-0800 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 13, 1995 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box //. Check the following box if a fee is being paid with the statement //. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7). NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Chelonian Corp. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 225,560 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 225,560 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,560 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 0.8% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Unicorn Associates Corporation 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 225,560 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 225,560 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,560 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 0.8% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON ACF Industries, Incorporated 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 225,560 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 225,560 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,560 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 0.8% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON ACF Industries Holding Corp. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 225,560 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 225,560 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,560 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 0.8% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Highcrest Investors Corp. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 225,560 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 225,560 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,560 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 0.8% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Icahn Holding Corporation 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 225,560 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 225,560 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,560 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 0.8% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON High River Limited Partnership 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC; OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Riverdale Investors Corp., Inc. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO; AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 617,028 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 617,028 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 617,028 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 2.2% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 055482 10 3 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Carl C. Icahn 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO; AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 842,588 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 842,588 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 842,588 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 3.0% 14 TYPE OF REPORTING PERSON* IN SCHEDULE 13D Item 1. Security and Issuer This statement relates to the common stock, par value $0.10 per share ("Shares"), of BJ Services Company, a Delaware corporation (the "Issuer"). The address of the principal executive offices of the Issuer is 5500 Northwest Central Drive, Houston, Texas 77092. Item 2. Identity and Background The persons filing this statement are Chelonian Corp., a New York corporation ("Chelonian"), Unicorn Associates Corporation, a New York corporation ("Unicorn"), ACF Industries, Incorporated, a New Jersey corporation ("ACF"), ACF Industries Holding Corp., a Delaware corporation ("Holding"), Highcrest Investors Corp., a Delaware corporation ("Highcrest"), Icahn Holding Corporation, a Delaware corporation ("IHC"), High River Limited Partnership, a Delaware limited partnership ("High River"), Riverdale Investors Corp., Inc., a Delaware corporation ("Riverdale") and Carl C. Icahn, a citizen of the United States of America (collectively, the "Registrants"). The principal business address and the address of the principal office of the Registrants is 100 South Bedford Road, Mount Kisco, New York 10549, with the exception of ACF, whose principal business address and the address of its principal office is 3301 Rider Trail South, Earth City, Missouri 63045. Chelonian is a wholly-owned subsidiary of Unicorn. Unicorn is a wholly-owned subsidiary of ACF. ACF is a wholly-owned subsidiary of Holding. Holding is a wholly-owned subsidiary of Highcrest. Highcrest is approximately 99.5% owned by IHC. Mr. Icahn is the sole stockholder of IHC. Riverdale is the general partner of High River, and Mr. Icahn is the sole stockholder of Riverdale. Registrants may be deemed to be a "group" within the meaning of Rule 13d-5 promulgated under the Securities Exchange Act of 1934, as amended (the "Act"). Chelonian and Unicorn are primarily engaged in the business of investing in securities. ACF is primarily engaged in the leasing, sale and manufacture of railroad freight and tank cars. Holding, Highcrest and IHC are primarily engaged in holding, either directly or through subsidiaries, a majority of the common stock of ACF. IHC also holds all of the stock of Icahn & Co., Inc. ("Icahn & Co."), a registered broker-dealer. From time to time, IHC invests directly and indirectly in securities. High River is primarily engaged in the business of investing in securities. Riverdale is primarily engaged in the business of owning real estate and acting as general partner of High River. Mr. Icahn's present principal occupation is acting as Chairman of the Board of Directors of ACF. The name, present principal occupation or employment and business address of each director and executive officer of Chelonian, Unicorn, ACF, Holding, Highcrest, IHC and Riverdale are set forth on Schedule A attached hereto. Carl C. Icahn is the sole stockholder and director of Riverdale and the sole stockholder, a director and President of IHC. Mr. Icahn is also Chairman of the Board, a director and President of Highcrest and Chairman of the Board and a director of Holding and ACF. Further, Mr. Icahn is a director of Unicorn and Chelonian. As such, Mr. Icahn is in a position directly and indirectly to determine the investment and voting decisions made by Registrants. Neither Chelonian, Unicorn, ACF, Holding, Highcrest, IHC, High River, Riverdale, Mr. Icahn, nor any executive officer or director of any of the Registrants, has, during the past five years, (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or a finding of any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration Pursuant to the Agreement and Plan of Merger, as amended, effective April 13, 1995, a copy of which is attached hereto as Exhibits 5(a) and 5(b) and which is hereby incorporated by reference (the "Merger Agreement"), providing for, among other things, the merger of The Western Company of North America, a Delaware corporation ("Western"), into the Issuer (the "Merger"), Chelonian acquired 166,400 Shares and 59,160 warrants, each warrant representing the right to purchase one Share at $30 per share (the "Warrants"). The Warrants are exercisable at any time after the effective date of the Merger and prior to the fifth anniversary of the closing date of the Merger. Chelonian acquired the Shares and the Warrants in exchange for its respective holdings of Western common stock, common stock which was previously acquired by Chelonian in the open market. Prior to the Merger, High River purchased 335,600 Shares in the open market for the aggregate purchase price of $5,741,930.50, including payment of commissions. The sources of funding for the purchase of these Shares were working capital of High River and borrowings pursuant to a margin account agreement with Bear, Stearns Securities Corp., Bear, Stearns & Co. Inc. ("Bear Stearns"), a form of which is attached hereto as Exhibit 2 and which is hereby incorporated by reference. Prior to the Merger, Riverdale purchased 179,100 Shares in the open market for the aggregate purchase price of $3,530,348, including payment of commissions. The sources of funding for the purchase of these Shares were borrowings pursuant to (i) margin account agreements with each of (A) National Financial Services Corporation ("NFSC"), a form of which is attached hereto as Exhibit 3 and which is hereby incorporated by reference, and (B) Bear Stearns, a form of which is attached hereto as Exhibit 2 and which is hereby incorporated by reference, and (ii) a $10,000,000 line of credit facility provided to Riverdale by Highcrest, a form of which is attached hereto as Exhibit 4 and which is hereby incorporated by reference. Pursuant to the Merger, Riverdale acquired an additional 859,538 Shares and 305,590 Warrants. These Shares and Warrants were issued in exchange for Riverdale's respective holdings of Western common stock, which common stock Riverdale previously acquired in the open market. Item 4. Purpose of Transaction Prior to the Merger, Registrants acquired their Shares based upon their belief that Shares were undervalued. Registrants acquired the balance of their Shares in connection with the Merger. On May 10,1995, Registrants determined to begin selling their Shares. Depending on market conditions and other factors, Registrants reserve the right at any time and from time to time to acquire additional Shares, whether in open market purchases, privately negotiated transactions or otherwise. Registrants also reserve the right at any time and from time to time to dispose of some or all of their Shares, whether in the open market, in privately negotiated transactions to third parties or otherwise. Item 5. Interest in Securities of Issuer (a) As of the close of business on May 17, 1995, Registrants may be deemed to beneficially own in the aggregate 842,588 Shares (including the Shares underlying the Warrants), representing approximately 3.0% of the Issuer's outstanding Shares (based upon the 27,921,880 Shares stated to be outstanding by the Company). Registrants have direct beneficial ownership of the Shares, including the Shares underlying the Warrants, as follows:
NUMBER OF APPROXIMATE PERCENTAGE OF NAME SHARES OUTSTANDING SHARES Chelonian 225,560 0.8% High River 0 0.0% Riverdale 617,028 2.2%
Mr. Icahn (by virtue of his relationships to the other Registrants, as disclosed in Item 2) may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Act), the Shares which each of Chelonian and Riverdale directly beneficially own. Mr. Icahn disclaims beneficial ownership of such Shares for all other purposes. Each of Unicorn (by virtue of its position as sole shareholder of Chelonian), ACF (by virtue of its position as sole shareholder of Unicorn), Holding (by virtue of its position as sole shareholder of ACF), Highcrest (by virtue of its position as sole stockholder of Holding) and IHC (by virtue of its position as controlling stockholder of Highcrest) may be deemed to beneficially own the Shares which Chelonian directly beneficially owns. Each of Unicorn, ACF, Holding, Highcrest and IHC disclaims beneficial ownership of such Shares for all other purposes. To the best of Registrants' knowledge, except as set forth herein, neither the directors nor the executive officers of the Registrants beneficially own any Shares. (b) Each of Chelonian and Riverdale has the sole power to vote or to direct the vote and to dispose or to direct the disposition of the Shares which it directly beneficially owns. Each of Unicorn, ACF, Holding, Highcrest, IHC and Mr. Icahn may be deemed to share with Chelonian the power to vote or to direct the vote and to dispose or to direct the disposition of Shares which Chelonian directly beneficially owns. Mr. Icahn may also be deemed to share with Riverdale the power to vote or to direct the vote and to dispose or to direct the disposition of the Shares which Riverdale directly beneficially owns. (c) The following table sets forth all transactions with respect to the Shares, including all Shares underlying the Warrants, effected during the past sixty days by each of the persons named in Item 5(a) above. The transactions taking place on May 2, 1995 reflect receipt of Shares pursuant to the Merger. All other transactions set forth below in parentheses reflect open market sales effected on the New York Stock Exchange.
PRICE PER RIVERDALE HIGH RIVER CHELONIAN TRADE DATE SHARE ($) SHARES SHARES SHARES 5/02/95 Not 1,165,128 0 225,560 Applicable 5/10/95 24.5000 (1,900) (335,600) 0 5/12/95 24.4074 (40,500) 0 0 5/15/95 24.2823 (199,200) 0 0 5/16/95 24.086 (178,100) 0 0 5/17/95 24.002 (307,500) 0 0
(d) No other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of any Shares which Registrants may be deemed to beneficially own. (e) As of May 16, 1995, the Registrants ceased to be beneficial owners of more than five percent of the Shares. Contracts, Arrangements, Understandings or Relationships With Respect to Item 6. Securities of the Issuer Registrants are party to a Joint Filing Agreement, a copy of which is attached hereto as Exhibit 1, with respect to the filing of this statement and any amendments thereto. Each of Riverdale and High River is a party to a margin agreement with Bear Stearns, a form of which is attached hereto as Exhibit 2. Each of Riverdale and Chelonian is a party to a margin agreement with NFSC, a form of which is attached hereto as Exhibit 3. Riverdale has entered into a line of credit facility with Highcrest, a form of which is attached hereto as Exhibit 4. Item 7. Materials to be filed as Exhibits The following documents are filed as Exhibits to this Schedule 13D: Exhibit 1 Joint Filing Agreement Exhibit 2 Form of Margin Agreement between Bear Stearns and each of Riverdale and High River Exhibit 3 Form of Margin Agreement between NFSC and Riverdale Exhibit 4 Form of Promissory Note between Riverdale and Highcrest Exhibit 5(a) Agreement and Plan of Merger Exhibit 5(b) First Amendment to Agreement and Plan of Merger Schedule A Name, Business Address and Principal Occupation of each Executive Officer and Director of Registrants ---------------------------------------- The following sets forth the name and principal occupation of each executive officer and director of the Registrants. Each such person is a citizen of the United States of America. Except as otherwise indicated, the business address of each director and officer is 100 South Bedford Road, Mt. Kisco, New York 10549. To the best of Registrants' knowledge, except as set forth in this statement on Schedule 13D, none of the directors or executive officers of the Registrants owns any Shares of Issuer.
ACF INDUSTRIES HOLDING CORP. NAME POSITION Carl C. Icahn Chairman of the Board and Director Richard T. Buonato Director, Vice President and Secretary Robert J. Mitchell President and Treasurer ACF INDUSTRIES, INCORPORATED NAME POSITION Carl C. Icahn Chairman of the Board and Director Alfred D. Kingsley Vice Chairman of the Board and Director James J. Unger President and Director Roger D. Wynkoop Executive Vice President James C. Bates Vice President and Chief Financial Officer Carl D. Eckhoff Vice President-Taxes John L. Bowers Vice President and General Manager-Manufacturing Operations William L. Finn Vice President-Operations and General Manager-New Business Group David R. Sutliff Vice President-Engineering George E. Sullivan Vice President-Sales and Leasing Robert J. Mitchell Treasurer and Secretary CHELONIAN CORP. NAME POSITION Carl C. Icahn Director Edward E. Mattner President and Treasurer Gail Golden Vice President and Secretary HIGHCREST INVESTORS CORP. NAME POSITION Carl C. Icahn Chairman of the Board, Director and President Richard T. Buonato Director, Senior Vice President and Treasurer Edward E. Mattner Director Mark H. Rachesky Managing Director Gail Golden Vice President and Secretary ICAHN HOLDING CORPORATION NAME POSITION Carl C. Icahn Director and President Joseph D. Freilich Director, Secretary and Treasurer Mark H. Rachesky Managing Director Richard T. Buonato Vice President and Controller RIVERDALE INVESTORS CORP., INC. NAME POSITION Carl C. Icahn Director Edward E. Mattner President Robert J. Mitchell Vice President and Treasurer Gail Golden Vice President and Secretary Richard T. Buonato Assistant Secretary UNICORN ASSOCIATES CORPORATION NAME POSITION Carl C. Icahn Director Edward Mattner President and Treasurer Gail Golden Vice President and Secretary _______ Business address is 3301 Rider Trial South, Earth City, Missouri 63045. Business address is 1 Wall Street Court, Suite 980, New York, New York 10005
SIGNATURES After reasonable inquiry and to the best of the knowledge and belief of each of the undersigned, each of the undersigned certifies that the information set forth in this statement on Schedule 13D concerning the common stock, par value $.10 per share, of BJ Services Company, a Delaware corporation, is true, complete and correct. Dated: May 17, 1995 ICAHN HOLDING CORPORATION By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President and Controller HIGHCREST INVESTORS CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Senior Vice President and Treasurer ACF INDUSTRIES HOLDING CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President and Secretary ACF INDUSTRIES, INCORPORATED By: /s/ Robert J. Mitchell Robert J. Mitchell Its: Treasurer and Secretary RIVERDALE INVESTORS CORP., INC. UNICORN ASSOCIATES CORPORATION CHELONIAN CORP. By: /s/ Gail Golden Gail Golden Its: Vice President and Secretary HIGH RIVER LIMITED PARTNERSHIP By: RIVERDALE INVESTORS CORP., INC. Its: General Partner By: /s/ Gail Golden Gail Golden Its: Vice President and Secretary /s/ Carl C. Icahn Carl C. Icahn [Signature Page of Schedule 13D with respect to BJ Services Company] EX-99 2 EXHIBIT 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, par value $.10 per share of BJ Services Company and further agree that this Joint Filing Agreement be included as an Exhibit to such joint filings. In evidence thereof, the undersigned, being duly authorized, have executed this Joint Filing Agreement this 16th day of May, 1995. ICAHN HOLDING CORPORATION By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President and Controller HIGHCREST INVESTORS CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Senior Vice President and Treasurer ACF INDUSTRIES HOLDING CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President and Secretary ACF INDUSTRIES, INCORPORATED By: /s/ Robert J. Mitchell Robert J. Mitchell Its: Treasurer and Secretary RIVERDALE INVESTORS CORP., INC. UNICORN ASSOCIATES CORPORATION CHELONIAN CORP. By: /s/ Gail Golden Gail Golden Its: Vice President and Secretary HIGH RIVER LIMITED PARTNERSHIP By: RIVERDALE INVESTORS CORP., INC. Its: General Partner By: /s/ Gail Golden Gail Golden Its: Vice President and Secretary /s/ Carl C. Icahn Carl C. Icahn [Joint Filing Agreement for Schedule 13D with respect to BJ Services Company] EX-10 3 EXHIBIT 2 BEAR STEARNS BEAR, STEARNS SECURITIES CORP. ONE METROTECH CENTER NORTH BROOKLYN, NEW YORK 11201-3859 (212) 272-1000 CUSTOMER AGREEMENT PLEASE READ CAREFULLY, SIGN AND RETURN This agreement ("Agreement") sets forth the terms and conditions under which Bear, Stearns Securities Corp., Bear, Stearns & Co. Inc., and their successors and assigns (collectively "Bear Stearns") will transact business with you including but not limited to the maintenance of your account(s). If these accounts are cash accounts and you have fully paid for all securities therein, the provisions of paragraphs 16 and 17 shall not bind you unless you enter into a margin transaction. 1. APPLICABLE LAW AND REGULATIONS. All transactions shall be subject to all applicable law and the rules and regulations of all federal, state and self- regulatory agencies, including, but not limited to, the Board of Governors of the Federal Reserve System and the constitution, rules and customs of the exchange or market (and clearing house) where executed. 2. SECURITY INTEREST AND LIEN. As security for the payment of all of your obligations and liabilities to Bear Stearns, Bear Stearns shall have a continuing security interest in all property in which you have an interest held by or through Bear Stearns or its affiliates, including, but not limited to, securities, commodity futures contracts, commercial paper, monies and any after-acquired property. In addition, in order to satisfy any such outstanding liabilities or obligations, Bear Stearns may, at any time and without prior notice to you, use, apply or transfer any such securities or property interchangeably. In the event of a breach or default under this Agreement, Bear Stearns shall have all rights and remedies available to a secured creditor under any applicable law in addition to the rights and remedies provided herein. 3. DEPOSITS ON TRANSACTIONS. Whenever Bear Stearns, in its sole discretion, considers it necessary for its protection, it may require you to deposit cash or collateral immediately in your account(s) prior to any applicable settlement date in order to assure due performance of your open contractual commitments. 4. BREACH, BANKRUPTCY OR DEFAULT. Any breach of this Agreement or the filing of a petition or other proceeding in bankruptcy, insolvency, or for the appointment of a receiver by or against you, the levy of an attachment against your account(s) with Bear Stearns, or your death, mental incompetence or dissolution, or any other grounds for insecurity, as determined by Bear Stearns in its sole discretion, shall constitute, at Bear Stearns' election, a default by you under all agreements Bear Stearns may then have with you, whether heretofore or hereafter entered into. In the event of default, Bear Stearns reserves the right to sell, without prior notice to you, any and all property in which you have an interest, held by or through Bear Stearns or any of its affiliates, to buy any or all property which may have been sold short, to cancel any or all outstanding transactions and/or to purchase or sell any other securities or property to offset market risk, and to offset any indebtedness you may have (either individually or jointly with others), after which you shall be liable to Bear Stearns for any remaining deficiency, loss, costs or expenses sustained by Bear Stearns in connection therewith. Such purchases and/or sales may be effected publicly or privately without notice or advertisement in such manner as Bear Stearns may in its sole discretion determine. At any such sale or purchase, Bear Stearns may purchase or sell the property free of any right of redemption. In addition, Bear Stearns shall have the right to set off and apply any amount owing from Bear Stearns or any of its affiliates to you against any indebtedness in your accounts, whether matured or unmatured. 5. FEES AND CHARGES. You understand that Bear Stearns may charge commissions and other fees for execution, custody or any other service furnished to you, and you agree to pay such commissions and fees at Bear Stearns' then prevailing rates. You understand further that such commissions and fees may be changed from time to time, upon thirty days' prior written notice to you, and you agree to be bound thereby. 6. TRANSACTION REPORTS AND ACCOUNT STATEMENTS. Reports of the execution of orders and statements of your account(s) shall be conclusive if not objected to in writing within five days in the case of reports of execution, and ten days in the case of account statements, after such documents have been transmitted to you by mail or otherwise. 7. DEBIT BALANCES/TRUTH-IN-LENDING. You hereby acknowledge receipt of Bear Stearns' Truth-in-Lending disclosure statement. You understand that interest will be charged on any debit balances in your account(s), in accordance with the methods described in such statement or in any amendment or revision thereto which may be provided to you. Any debit balance which is not paid at the close of an interest period will be added to the opening balance for the next interest period. 8. CLEARANCE ACCOUNTS. Bear, Stearns Securities Corp. carries your account(s) as clearing agent for your broker. Unless Bear, Stearns Securities Corp. receives from you prior written notice to the contrary, Bear, Stearns Securities Corp. may accept from such other broker, without any inquiry or investigation: (a) orders for the purchase or sale of securities and other property in your account(s) on margin or otherwise and (b) any other instructions concerning your account(s) or the property therein. You understand and agree that Bear Stearns shall have no responsibility or liability to you for any acts or omissions of such broker, its officers, employees or agents. You agree that your broker and its employees are third-party beneficiaries of this Agreement, and that the terms and conditions hereof, including the arbitration provision, shall be applicable to all matters between or among any of you, your broker and its employees, and Bear Stearns and its employees. 9. COSTS OF COLLECTION. You hereby authorize Bear Stearns to charge you for any reasonable direct or indirect costs of collection including, but not limited to, attorneys' fees, court costs and other expenses. 10. IMPARTIAL LOTTERY ALLOCATION. You agree that in the event Bear Stearns holds on your behalf bonds or preferred stocks in street name or bearer form which are callable in part, you will participate in the impartial lottery allocation system of the called securities in accordance with the rules of the New York Stock Exchange, Inc. or any other appropriate self-regulatory organization. When any such call is favorable, no allocation will be made to any account(s) in which Bear Stearns has actual knowledge that its officers, directors or employees have any financial interest until all other customers are satisfied on an impartial lottery basis. 11. WAIVER, ASSIGNMENT AND NOTICES. Neither Bear Stearns' failure to insist at any time upon strict compliance with this Agreement or with any of the terms hereof nor any continued course of such conduct on its part shall constitute or be considered a waiver by Bear Stearns of any of its rights or privileges hereunder. Any assignment of your rights and obligations hereunder or interest in any property held by or through Bear Stearns without obtaining the prior written consent of an authorized representative of Bear Stearns shall be null and void. Notices or other communications, including margin calls, delivered or mailed to the address provided by you, shall, until Bear Stearns has received notice in writing of a different address, be deemed to have been personally delivered to you. 12. FREE CREDIT BALANCES. You hereby direct Bear Stearns to use any free credit balance awaiting investment or reinvestment in your account(s) in accordance with all applicable rules and regulations and to pay interest thereon at such rate or rates and under such conditions as are established from time to time by Bear Stearns for such account(s) and for the amounts of cash so used. 13. RESTRICTIONS ON ACCOUNT. You understand that Bear Stearns, in its sole discretion, may restrict or prohibit trading of securities or other property in your account(s). 14. CREDIT INFORMATION AND INVESTIGATION. You authorize Bear Stearns and your broker, in their discretion, to make and obtain reports concerning your credit standing and business conduct. You may make a written request within a reasonable period of time for a description of the nature and scope of the reports made or obtained by Bear Stearns. 15. SHORT AND LONG SALES. In placing any sell order for a short account, you will designate the order as such and hereby authorize Bear Stearns to mark the order as being "short." In placing any sell order for a long account, you will designate the order as such and hereby authorize Bear Stearns to mark the order as being "long." The designation of a sell order as being for a long account shall constitute a representation that you own the security with respect to which the order has been placed, that such security may be sold without restriction in the open market and that, if Bear Stearns does not have the security in its possession at the time you place the order, you shall deliver the security by settlement date in good deliverable form or pay to Bear Stearns any losses or expenses incurred as a result of your failure to make delivery. 16. MARGIN ACCOUNTS. You hereby agree to deposit and maintain such margin in your margin account(s) as Bear Stearns may in its sole discretion require, and you agree to pay forthwith on demand any debt balance owing with respect to any of your margin account(s). Upon your failure to pay, or at any time Bear Stearns, in its discretion, deems necessary for its protection, whether with or without prior demand, call or notice, Bear Stearns shall be entitled to exercise all rights and remedies provided in paragraphs 2 and 4 above. No demands, calls, tenders or notices that Bear Stearns may have made or given in the past in any one or more instances shall invalidate your waiver of the requirement to make or give the same in the future. Unless you advise Bear Stearns to the contrary, you represent that you are not an affiliate (as defined in Rule 144(a)(1) under the Securities Act of 1933) of the issuer of any security held in your account(s). 17. CONSENT TO LOAN OR PLEDGE OF SECURITIES. Within the limits of applicable law and regulations, you hereby authorize Bear Stearns to lend either to itself or to others any securities held by Bear Stearns in your account(s), together with all attendant rights of ownership and to use all such property as collateral for its general loans. Any such property, together with all attendant rights of ownership, may be pledged, repledged, hypothecated or rehypothecated either separately or in common with other such property for any amounts due to Bear Stearns thereon or for a greater sum, and Bear Stearns shall have no obligation to retain a like amount of similar property in its possession and control. 18. LEGALLY BINDING. You hereby agree that this Agreement and all the terms hereof shall be binding upon you and your estate, heirs, executors, administrators, personal representatives, successors and assigns. You agree that all purchases and sales shall be for your account(s) in accordance with your oral or written instructions. You hereby waive any and all defenses that any such instruction was not in writing as may be required by the Statute of Frauds or any other similar law, rule or regulation. 19. AMENDMENT; ENTIRE AGREEMENT. You agree that Bear Stearns may modify the terms of this Agreement at any time upon prior written notice. By continuing to accept services from Bear Stearns, you will have indicated your acceptance of any such modifications. If you do not accept such modifications, you must notify Bear Stearns in writing; your account may then be terminated by Bear Stearns, after which you will remain liable to Bear Stearns for all remaining liabilities or obligations. Otherwise, this Agreement may not be waived or modified absent a written instrument signed by an authorized representative of Bear Stearns. Except as set forth above, this Agreement represents the entire agreement and understanding between you and Bear Stearns concerning the subject matter hereof. 20. NEW YORK LAW TO GOVERN. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES DETERMINED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. 21. ARBITRATION. - ARBITRATION IS FINAL AND BINDING ON THE PARTIES. - THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY TRIAL. - PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT PROCEEDINGS. - THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED. - THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY. - NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PRE- DISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION OR WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (I) THE CLASS CERTIFICATION IS DENIED; (II) THE CLASS IS DECERTIFIED; OR (III) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN. YOU AGREE, AND BY MAINTAINING AN ACCOUNT FOR YOU BEAR STEARNS AGREES, THAT CONTROVERSIES ARISING BETWEEN YOU AND BEAR STEARNS, ITS CONTROL PERSONS, PREDECESSORS, SUBSIDIARIES AND AFFILIATES AND ALL RESPECTIVE SUCCESSORS, ASSIGNS AND EMPLOYEES, WHETHER ARISING PRIOR TO, ON OR SUBSEQUENT TO THE DATE HEREOF, SHALL BE DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE HELD AT THE FACILITIES AND BEFORE AN ARBITRATION PANEL APPOINTED BY THE NEW YORK STOCK EXCHANGE, INC., THE AMERICAN STOCK EXCHANGE, INC., OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (AND ONLY BEFORE SUCH EXCHANGES OR ASSOCIATION). YOU MAY ELECT ONE OF THE FOREGOING FORUMS FOR ARBITRATION, BUT IF YOU FAIL TO MAKE SUCH ELECTION BY REGISTERED MAIL OR TELEGRAM ADDRESSED TO BEAR, STEARNS SECURITIES CORP. 245 PARK AVENUE, NEW YORK, NEW YORK 10167, ATTENTION: CHIEF LEGAL OFFICER (OR ANY OTHER ADDRESS OF WHICH YOU ARE ADVISED IN WRITING), BEFORE THE EXPIRATION OF TEN DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM BEAR STEARNS TO MAKE SUCH ELECTION, THEN BEAR STEARNS MAY MAKE SUCH ELECTION, FOR ANY ARBITRATION SOLELY BETWEEN YOU AND A BROKER FOR WHICH BEAR STEARNS ACTS AS CLEARING AGENT, SUCH ELECTION SHALL BE MADE BY REGISTERED MAIL TO SUCH BROKER AT ITS PRINCIPAL PLACE OF BUSINESS. THE AWARD OF THE ARBITRATORS, OR OF THE MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION. 22. SEVERABILITY. If any provision herein is or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with any such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect. 23. CAPACITY TO CONTRACT; CUSTOMER AFFILIATION. You represent that you are of legal age and that, unless you have notified Bear Stearns to the contrary, neither you nor any member of your immediate family is an employee of any exchange or member thereof, the National Association of Securities Dealers, Inc. or a member thereof, or of any corporation, firm or individual engaged in the business of dealing, as broker or principal, in securities, options or futures, or of any bank, trust company or insurance company. 24. EXTRAORDINARY EVENTS. Bear Stearns shall not be liable for losses caused directly or indirectly by government restrictions, exchange or market rulings, suspension of trading, war, strikes or other conditions beyond its control. 25. HEADINGS. The headings of the provisions hereof are for descriptive purposes only and shall not modify or qualify any of the rights or obligations set forth in such provisions. 26. TELEPHONE CONVERSATIONS. For the protection of both you and Bear Stearns, and as a tool to correct misunderstandings, you hereby authorize Bear Stearns at Bear Stearns' discretion and without prior notice to you, to monitor and/or record any or all telephone conversations between you, Bear Stearns and any of Bear Stearns' employees or agents. If this is a Joint Account, both parties must sign. Persons signing on behalf of others should indicate the titles or capacities in which they are signing. BY SIGNING THIS AGREEMENT YOU ACKNOWLEDGE THAT: 1. THE SECURITIES IN YOUR MARGIN ACCOUNT(S) AND ANY SECURITIES FOR WHICH YOU HAVE NOT FULLY PAID TOGETHER WITH ALL ATTENDANT OWNERSHIP RIGHTS, MAY BE LOANED TO BEAR STEARNS OR LOANED OUT TO OTHERS AND 2. YOU HAVE RECEIVED A COPY OF THIS AGREEMENT. THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PARAGRAPH 21. THIS AGREEMENT DATED AS OF , 19 . (Typed or Printed Name) (Signature) (Mailing Address) __________________________ Account No.: 905-01422-1-6-007 (Typed or Printed Name) __________________________ Date: (Signature) Accepted By: Date: (Bear Stearns Securities Corp.) EX-10 4 EXHIBIT 3 MARGIN ACCOUNT AGREEMENT To: National Financial Services Corporation ("NFSC" or "you"). 1. I agree as follows with respect to all of my accounts, in which I have an interest alone or with others, which I have opened or will open in the future, with you for the purchase and sale of securities. I hereby acknowledge that I have read, understand and agree to the terms set forth below. Upon acceptance of my application(s), I understand NFSC will maintain an account for me and, as my broker, buy or sell securities or other products according to my instructions. All decisions relating to my investment or trading activity shall be made by me or my duly authorized representative. Any information I give NFSC on this account agreement will be subject to verification, and I authorize you to obtain a credit report about me at any time. Upon written request, NFSC will provide the name and address of the credit reporting agency used. I authorize NFSC and my Broker/Dealer to exchange credit information about me. My Broker/Dealer also may tape record conversations with me in order to verify data concerning any transactions I request, and I consent to such recording. I also understand that my account(s) is carried by National Financial Services Corporation (NFSC), and that all terms of this agreement also apply between me and NFSC. I have carefully examined my financial resources, investment objectives, tolerance for risk along with the terms of the margin agreement, and have determined that margin financing is appropriate for me. I understand that investing on margin involves the extension of credit to me and that my financial exposure could exceed the value of my securities. 2. I am of legal age in the state in which I reside and represent that, except as otherwise disclosed to you in writing, I am not an employee of any Exchange or of a Member Firm of any Exchange or the NASD, or of a bank, trust company, or insurance company and that I will promptly notify you if I become so employed. 3. All transactions through NFSC are subject to the constitution, rules, regulations, customs, and usages of the exchange, market or clearing house where executed, as well as to any applicable federal or state laws, rules and regulations. 4. Any and all credit balances, securities, or contracts relating thereto, and all other property of whatsoever kind belonging to me or in which I may have an interest held by you or carried for my accounts shall be subject to a general lien for the discharge of my obligations to you (including unmatured and contingent obligations) however arising and without regard to whether or not you have made advances with respect to such property and without notice to me may be carried in your general loans and all securities may be pledged, repledged, hypothecated or rehypothecated, separately or in common with other securities or any other property, for the sum due to you thereon or for a greater sum and without retaining in your possession and control for delivery a like amount of similar securities or other property. At any time and from time to time you may, in your discretion, without notice to me, apply and/or transfer any securities, contracts relating thereto, cash or any other property therein, interchangeably between any of my accounts, whether individual or joint from any of my accounts to any account guaranteed by me. You are specifically authorized to transfer to my cash account, on the settlement day following a purchase made in that account, excess funds available in any of my other accounts, including, but not limited to any free balances in any margin account, sufficient to make full payment of this cash purchase. I agree that any debit occurring in any of my accounts may be transferred by you at your option to my margin account. 5. I will maintain such margins as you may in your discretion require from time to time and will pay on demand any debit balance owing with respect to any of my accounts. I will be liable to you for any deficiencies in such account in the event of the liquidation of such accounts, in whole or in part, by you or the undersigned. Whenever in your discretion you deem it desirable for your protection (and without the necessity of a margin call), including but not limited to extreme market volatility or trading volumes, an instance where a petition in bankruptcy or for the appointment of a receiver is filed by or against me, or an attachment is levied against my account, or in the event of notice of my death or incapacity, or incompliance with the orders of any Exchange, you may, without prior demand, tender, and without any notice of the time or place of sale, all of which are expressly waived, sell any or all securities, or contracts relating thereto which may be in your possession, or which you may be carrying for me, or buy any securities, or contracts relating thereto of which my account or accounts may be short, in order to close out in whole or in part any commitment in my behalf or you may place stop orders with respect to such securities and such sale or purchase may be made at your discretion on any Exchange or other market where such business is then transacted, or at public auction or private sale with or without advertising and neither any demands, calls, tenders or notices which you may make or give in any one or more instances nor any prior course of conduct or dealings between us shall invalidate the aforesaid waivers on my part. You shall have the right to purchase for your own account any or all of the aforesaid property at such sale, discharged of any right of redemption which is hereby waived. I understand that my financial exposure could exceed the value of securities in my account. 6. In the absence of a specific demand, all transactions in any of my accounts are to be paid for, securities delivered or required margin deposited, no later than 2 p.m. Eastern Time on the settlement date. NFSC reserves the right to cancel or liquidate at my risk any transaction not timely settled. Margin calls are due on the date indicated regardless of the settlement date of the transaction. For most stocks and bonds, the settlement date is the fifth business day following the trade date. Settlement dates for U.S. government issues vary. Options settle on the next business day. Interest will be charged on any debit balance which remains in my account past the settlement date as explained in the Disclosure of Credit Terms section of this Agreement. 7. I agree to be charged interest on any credit extended to or maintained for me by you for the purpose of purchasing, carrying or trading in any security. The annual rate of interest which will be charged on net debit balances will be calculated by means of a formula based on the rate for brokers' call money published in financial sections of newspapers. The annual rate of interest is subject to change without prior notice in accordance with changes in the brokers' call money rate. With the exception of a credit balance in the short account, all other credit balances in all cash and margin accounts are combined and interest is charged to the margin account on any resulting debit balance. Interest is computed monthly on the net debit balances during the month. If during the month, there is a change in interest rates, separate charges will be shown for each interest period under the different rate. The combining of balances, as well as the actual interest calculations, are done by computer, but interest is arrived at by multiplying the net debit balance by the effective rate of interest divided by 360, times the number of days. In the event there is a decline in the market value of the securities in the margin account, you may have to request additional collateral. Generally, such a request for additional collateral will be made by you when the equity in the account falls below 30%. However, you retain the right to require additional margin at any time you deem it necessary or advisable. Any such call for additional collateral may be met by delivery of additional marginable securities or cash. Any securities in any of the accounts of the undersigned are collateral for any debit balances in the account with you. A lien is created by these debits to secure the amount of money owed you. This means that, in accordance with the terms of this agreement, securities in the said accounts can be sold by you to redeem or to liquidate any debit balances in these accounts. 8. I agree that, in giving orders to sell, all "short" sale orders will be designated as "short" and all "long" sale orders will be designated as "long" and that the designation of a sell order as "long" is a representation on my part that I own the security and, unless otherwise waived by you in your discretion that I have delivered such security to you. 9. Reports of the execution of orders and statements of my account shall be conclusive if not objected to in writing within five days and ten days, respectively, after transmittal to me by mail or otherwise. 10. All communications including margin calls may be sent to me at my address given you, or at such other address as I may hereafter give you in writing, and all communications so sent, whether in writing or otherwise, shall be deemed given to me personally, whether actually received or not. 11. I am liable for payment upon demand of any debit balance or other obligation owed in any of my accounts or any deficiencies following a whole or partial liquidation, and I agree to satisfy any such demand or obligation. Interest will accrue on any such deficiency at prevailing margin rates until paid. I agree to reimburse NFSC for all reasonable costs and expenses incurred in the collection of any debit balance or unpaid deficiency in any of my accounts, including, but not limited to, attorneys' fees. 12. NFSC is not liable for any losses caused directly or indirectly by government restrictions, exchange or market rulings, suspension of trading or other conditions beyond its control, including, but not limited to, extreme market volatility or trading volumes. 13. No waiver of any provision of this Agreement shall be deemed a waiver of any other provision, nor a continuing waiver of the provision or provisions so waived. 14. I understand that no provision of this Agreement can be amended or waived except by an officer of your Company, and that this Agreement shall continue in force until its termination by me is acknowledged in writing by an officer of your Company, or until written notice of termination by you shall have been mailed to me at my address last given you. 15. THIS CONTRACT SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, AND SHALL INURE TO THE BENEFIT OF YOUR SUCCESSORS AND ASSIGNS, AND SHALL BE BINDING ON THE UNDERSIGNED, HIS HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS. 16. If any provision hereof is or at any time should become inconsistent with any present or future law, rule or regulation of any securities exchange, or of any sovereign government or a regulatory body thereof and of these bodies have jurisdiction over the subject matter of this Agreement, said provision shall be deemed to be superseded or modified to conform to such law, rule or regulation, but in all other respects this Agreement shall continue and remain in full force and effect. 17. If the undersigned shall consist of more than one individual, their obligations under Agreement shall be joint and several. 18. I understand that you may deliver margin calls and other notices to my agent, __________________________ for the sole purpose of collection of obligations of mine under this agreement. I agree to the foregoing and further understand that _______ may act on your behalf with respect to margin calls in your discretion. 19. I represent that I have read and understand the Disclosure of Credit Terms on Transactions. I further understand that they may be amended from time to time. 20. YOU ARE HEREBY AUTHORIZED TO LEND SEPARATELY OR TOGETHER WITH THE PROPERTY OF OTHERS EITHER TO YOURSELVES OR TO OTHERS AND PROPERTY WHICH YOU MAY BE CARRYING FOR ME ON MARGIN. THIS AUTHORIZATION SHALL APPLY TO ALL ACCOUNTS CARRIED BY YOU FOR ME AND SHALL REMAIN IN FULL FORCE UNTIL WRITTEN NOTICE OF REVOCATION IS RECEIVED BY YOU AT YOUR PRINCIPAL OFFICE IN BOSTON, MASSACHUSETTS. I REPRESENT THAT I HAVE READ THE TERMS AND CONDITIONS AS CURRENTLY IN EFFECT AND AGREE TO BE BOUND BY SUCH TERMS AND CONDITIONS AS CURRENTLY IN EFFECT AND AS MAY BE AMENDED FROM TIME TO TIME. THIS ACCOUNT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE WHICH IS ENCLOSED. I ACKNOWLEDGE RECEIPT OF THE PRE-DISPUTE ARBITRATION CLAUSE. Date:__________________ Customer's Signature/Date__________________________________ _______________________________________ Signature of Joint Tenant (if any)/Date EX-4 5 EXHIBIT 4 $10,000,000 as of January 20, 1994 PROMISSORY NOTE For Value Received, the undersigned, Riverdale Investors Corp., Inc. ("Borrower"), hereby promises to pay to the order of Highcrest Investors Corp. ("Highcrest") the principal sum of TEN MILLION DOLLARS and NO CENTS ($10,000,000), or if less, the outstanding principal amount of the Loans made to Borrower by Highcrest pursuant to the letter agreement (the "Agreement") dated as of January 20, 1994, between Borrower and Highcrest. The principal amount of this promissory note ("Note") shall be payable on January 19, 1996, in an amount equal to the then outstanding principal balance of this Note. This Note shall bear interest from January 20, 1994, on the unpaid principal hereof at the rate per annum equal to the prime rate, as established by National Westminster Bank, USA from time to time. Interest shall be computed on the basis of a 365-day year for the actual number of days elapsed, and shall be payable semi-annually in arrears on the first day of July and January and at maturity. On January 19, 1996, this Note shall become at once due and payable, without notice, presentment or demand of payment, which are expressly waived. No delay on the part of Highcrest in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute a waiver thereof. This Note is the Note referred to in the Agreement and may be prepaid in accordance with the provisions thereof. All borrowings evidenced by this Note and all payments and prepayments of the principal hereof and interest hereon shall be endorsed by the holder hereof on Schedule A attached hereto and made a part hereof, or on a continuation hereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such a notation shall not in any manner affect the obligation of Borrower to make payments of principal and interest in accordance with the terms of this Note. The Borrower may prepay principal, and, or interest on the Note, in whole or in part, without premium or penalty. Each prepayment of principal shall be accompanied by the amount of interest accrued but unpaid, on the amount of principal prepaid to the date of prepayment. IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the 20th day of January, 1994. RIVERDALE INVESTORS CORP., INC. By:___________________________ Robert J. Mitchell, Vice President and Treasurer [Promissory Note- Highcrest Riverdale regarding $10 million line of credit dated as of January 20, 1994] EX-2 6 Exhibit 5(a) AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER, dated as of November 17, 1994, among BJ SERVICES COMPANY ("BJ"), WCNA ACQUISITION CORP., a wholly owned subsidiary of BJ ("BJ Sub"), and THE WESTERN COMPANY OF NORTH AMERICA ("Western"), each a Delaware corporation. WHEREAS, the respective Boards of Directors of BJ, BJ Sub and Western have approved the merger of Western with and into BJ Sub (the "Merger"), upon the terms and subject to the conditions set forth herein; and WHEREAS, for federal income tax purposes, it is intended that the Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended; NOW, THEREFORE, in consideration of the premises, and the representations, warranties and covenants contained herein, the parties hereto agree as follows: ARTICLE I THE MERGER Section 1.1 The Merger. Upon the terms and subject to the conditions hereof, at the Effective Time (as defined in Section 1.2) and in accordance with the General Corporation Law of the State of Delaware (the "Delaware Corporation Law"), Western shall be merged with and into BJ Sub, which shall be the surviving corporation in the Merger (hereinafter sometimes referred to as the "Surviving Corporation") whose corporate existence shall continue under the Delaware Corporation Law. At the Effective Time the separate existence of Western shall cease. Section 1.2 Effective Time of the Merger. As soon as practicable after the Closing (as defined in Section 1.3 hereof), BJ, BJ Sub and Western shall cause this Agreement to be duly certified and acknowledged in accordance with the Delaware Corporation Law, and as soon as practicable thereafter BJ shall cause the Surviving Corporation to file with the Delaware Secretary of State and the appropriate County Recorder a certificate of merger (the "Certificate of Merger") in such form as required by, and executed in accordance with, the Delaware Corporation Law. The Merger shall become effective as of the time and date of the filing of the Certificate of Merger with the Delaware Secretary of State, unless otherwise provided in the Certificate of Merger (the "Effective Time"). Section 1.3 Closing and Closing Date. Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to the provisions of Section 10.1, the closing (the "Closing") of this Agreement shall take place (a) at 10:00 a.m. (New York time) on the fifth Trading Day (as defined in Section 3.1(b) hereof) immediately following the date on which the waiting periods under the Hart Scott Act (as hereinafter defined) shall have expired or otherwise been terminated and all other conditions to the respective obligations of the parties set forth in Article IX hereof shall have been satisfied or waived or (b) at such other time and date as BJ and Western shall agree (such date and time on and at which the Closing occurs being referred to herein as the "Closing Date"). The Closing shall take place at such location as BJ and Western shall agree. Section 1.4 Effects of the Merger. The Merger shall have the effects set forth in the Delaware Corporation Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of Western and BJ Sub A-1 shall vest in the Surviving Corporation, and all debts, liabilities, obligations and duties of Western and BJ Sub shall become the debts, liabilities, obligations and duties of the Surviving Corporation. Section 1.5 Alternative Structure. Notwithstanding anything to the contrary provided elsewhere in this Agreement, if BJ notifies Western in writing prior to the Closing Date that BJ prefers to structure the Merger so that Western merges into BJ and BJ is the Surviving Corporation after the Effective Time, the parties hereto shall forthwith execute an appropriate amendment to this Agreement which eliminates BJ Sub as a party hereto and otherwise reflects the foregoing changes and any other changes required to be made as a result thereof. ARTICLE II THE SURVIVING CORPORATION Section 2.1 Certificate of Incorporation. The Certificate of Incorporation of BJ Sub, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation after the Effective Time, until amended in accordance with its terms, or as otherwise provided by law. Section 2.2 Bylaws. The Bylaws of BJ Sub as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation unless and until amended in accordance with their terms or the Certificate of Incorporation of the Surviving Corporation, or as otherwise provided by law. Section 2.3 Officers and Directors. The officers and directors of BJ Sub immediately prior to the Effective Time shall be the officers and directors of the Surviving Corporation until their respective successors are duly elected and/or appointed and qualify in the manner provided in the Certificate of Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided by law. The senior executive officers of Western, Western, BJ and BJ Sub will enter into the Senior Executive Termination Agreements, dated the date hereof (the "Senior Executive Termination Agreements"). ARTICLE III CONVERSION AND EXCHANGE OF SECURITIES Section 3.1 Conversion of Stock. At the Effective Time, by virtue of the Merger and without any action on the part of any of the parties hereto or any holder of any of the following securities: (a) Western Common Stock. Except as otherwise provided herein and subject to Section 3.3, each share of common stock, par value $.10 per share, of Western ("Western Common Stock") issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares, as hereinafter defined, and shares of Western Common Stock owned by BJ, BJ Sub or any other direct or indirect subsidiary of BJ) shall be converted into, exchanged for and represent the right to receive (without interest) (i) $20.00 in cash ("Cash Consideration") and .2 warrants (the "BJ Warrants") to purchase one share of BJ Common Stock in substantially the form annexed to the Warrant Agreement (the "Warrant Agreement") attached hereto as Exhibit A at an exercise price of $30 per share of BJ Common Stock (subject to adjustment as provided in the Warrant Agreement) ("Warrant Consideration"), or (ii) Stock Consideration (as defined in Section 3.1(b) (ii)) and Warrant Consideration, in each case as the holder thereof shall have elected or be deemed to have elected, in accordance with Section 3.3 (collectively, the "Merger Consideration"); provided, however, that, in any event, if between the date of this Agreement and the Effective Time the outstanding shares of BJ Common Stock or Western Common Stock shall have been changed into a different number of shares or a different class by reason of any stock dividend, subdivision, reclassification, recapitalization, split, A-2 combination or exchange of shares, the Cash Consideration, the Warrant Consideration and the Stock Consideration shall be correspondingly adjusted to reflect such stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares. All shares of Western Common Stock so converted or exchanged shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each certificate previously evidencing any such shares shall thereafter represent the right to receive, upon the surrender of such certificate in accordance with the provisions of Section 3.6, the applicable Merger Consideration and any cash to be paid in lieu of fractional shares of BJ Common Stock and associated fractional rights ("BJ Purchase Rights") to purchase one one-hundredth of a share of Series Two Junior Preferred Stock, without par value, of BJ ("BJ Junior Preferred Stock") pursuant to the Rights Agreement, dated as of January 12, 1994, as amended, between BJ and First Chicago Trust Company of New York, as rights agent, to which such holder is entitled pursuant to Section 3.4 (without interest thereon). The holders of such certificates previously evidencing such shares of Western Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Western Common Stock except as otherwise provided herein or by law. (b) Certain Definitions. As used in this Agreement: (i) "Closing Price" means the average of the midpoint of the daily high and low trading prices of BJ Common Stock, rounded to four decimal places, as reported in The Wall Street Journal's New York Stock Exchange Composite Transactions Reports, for each of the first 20 consecutive Trading Days in the period commencing 25 Trading Days prior to the Closing Date. (ii) "Stock Consideration" is (x) if the Closing Price of BJ Common Stock is $17.25 or lower, 1.1594 shares of BJ Common Stock, together with a corresponding number of BJ Purchase Rights; (y) if the Closing Price of BJ Common Stock is $22.25 or greater, .8989 shares of BJ Common Stock, together with a corresponding number of BJ Purchase Rights; or (z) if the Closing Price of the BJ Common Stock is greater than $17.25 but less than $22.25, that portion of a share of BJ Common Stock equal to the quotient of $20.00 divided by the Closing Price of the BJ Common Stock, together with a corresponding number of BJ Purchase Rights. (iii) "Trading Day" means a day on which the New York Stock Exchange, Inc. (the "NYSE") is open for trading. (c) Western Common Stock Held by Western or BJ; Western Preferred Stock. Each share of Western Common Stock held in the treasury of Western or held by BJ, BJ Sub or any other direct or indirect subsidiary of BJ immediately prior to the Effective Time shall be canceled and cease to exist, and no payment or other consideration shall be made in respect thereof. The Western Preferred Stock shall be canceled, and no payment or other consideration shall be made in respect thereof. (d) BJ Sub Shares. Each share of common stock, par value $0.01 per share, of BJ Sub issued and outstanding immediately prior to the Effective Time shall remain outstanding and shall be unchanged after the Merger and shall thereafter constitute all of the issued and outstanding capital stock of the Surviving Corporation. (e) Convertible Debentures. The 7 1/4% Convertible Subordinated Debentures due January 15, 2015 of Western (the "Western Convertible Debentures") which are outstanding at the Effective Time shall continue to be outstanding subsequent to the Effective Time as debt instruments of the Surviving Corporation, subject to their respective terms and conditions and the execution and delivery of a supplemental indenture in the form required thereby. A-3 Following the Effective Time of the Merger, each outstanding Western Convertible Debenture will be convertible into the amount of Stock Consideration (and cash in lieu of fractional shares of BJ Common Stock and associated BJ Purchase Rights), Cash Consideration and Warrant Consideration which the holder thereof would have had the right to receive after the Effective Time of the Merger if such Western Convertible Debenture had been converted immediately prior to the Effective Time of the Merger and the holder thereof had made the Stock Election (as defined in Section 3.3(b)) with respect to 50% of such holder's Western Convertible Debentures and the Cash Election (as defined in Section 3.3(b)) with respect to the remaining 50% of such holder's Western Convertible Debentures. (f) Senior Notes. The 12-7/8% Senior Notes due December 1, 2002 of Western ("Western Senior Notes") that are outstanding at the Effective Time shall continue to be outstanding subsequent to the Effective Time as debt instruments of the Surviving Corporation, subject to their respective terms and conditions and the execution and delivery of a supplemental indenture in the form required thereby. Section 3.2 Treatment of Western Options. (a) Immediately prior to the Effective Time, Western shall take such action as may be necessary so that each outstanding Western Option (as defined in Section 6.2) whether or not then exercisable, shall be canceled by Western, and each holder of a canceled Western Option shall be entitled to receive, as soon as practicable after the Effective Time, in consideration for the cancellation of such Western Option an amount in cash equal to the product (the "Spread") of (i) the total number of shares of Western Common Stock subject to such holder's Western Option and (ii) the excess, if any, of (x) $20.00 plus the "Warrant Consideration Value" (as hereinafter defined) over (y) the exercise price per share of the Western Common Stock previously subject to such Western Option. The "Warrant Consideration Value" shall be equal to the greater of (i) $1.00 or (ii) .2 multiplied by the "Warrant Current Market Price" (as defined below). (b) For the purpose of any computation hereunder, the "Warrant Current Market Price" means the average of the midpoint of the daily high and low trading prices of BJ Warrants, rounded to four decimal places, on a when-issued basis as reported in The Wall Street Journal's New York Stock Exchange Composite Transactions Reports, for each of the first 20 consecutive Trading Days in the period commencing 25 Trading Days prior to the Closing Date or, if the BJ Warrants are not then admitted to trading on the NYSE on a when-issued basis, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such securities are admitted to trading on a when-issued basis or, if the BJ Warrants are not admitted to trading on any national securities exchange on a when-issued basis, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), of BJ Warrants on a when-issued basis. If on any such Trading Day or Days the BJ Warrants are not quoted on a when-issued basis by any such organization, the 20 Trading Day period referred to above shall be reduced by the number of such Trading Days on which the BJ Warrants are not so quoted. If the BJ Warrants are not quoted on a when-issued basis on any Trading Day during such 20 Trading Day period, the Warrant Current Market Price shall be deemed to be $1.00. Section 3.3 Allocation of Merger Consideration; Election Procedures. (a) Allocation. Notwithstanding anything in this Agreement to the contrary, the maximum number of shares of Western Common Stock (the "Cash Election Number") to be converted into the right to receive Cash Consideration and Warrant Consideration in the Merger shall be equal to (i) 50% of the number of shares of Western Common Stock issued and outstanding immediately prior to the Effective Time of the Merger less (ii) the sum of (A) the number of Dissenting Shares (as defined in Section 3.5), if any, which are not to be treated as Non-Election Shares pursuant to Section 3.5, and (B) the number of shares of Western Common Stock to be canceled in accordance with Section 3.1(c). The number of shares of Western Common Stock to be converted into the right to receive Stock Consideration and Warrant Consideration in the Merger (the "Stock Election Number") shall be equal to the number of A-4 shares of Western Common Stock issued and outstanding immediately prior to the Effective Time of the Merger less the sum of (i) the Cash Election Number, (ii) the number of Dissenting Shares, if any, which are not to be treated as Non-Election Shares pursuant to Section 3.5 and (iii) the number of shares of Western Common Stock to be canceled in accordance with Section 3.1(c). (b) Election. Subject to allocation and proration in accordance with the provisions of this Section 3.1, each record holder of shares of Western Common Stock (other than Dissenting Shares, if any, which are not to be treated as Non-Election Shares pursuant to Section 3.5 and shares to be canceled in accordance with Section 3.1(c)) issued and outstanding immediately prior to the Election Deadline (as defined below) shall be entitled to elect to receive in respect of each such share (in addition to Warrant Consideration) (i) Cash Consideration (a "Cash Election") or (ii) Stock Consideration (a "Stock Election") or to indicate that such record holder has no preference as to the receipt (in addition to Warrant Consideration) of Cash Consideration or Stock Consideration for such shares (a "Non-Election"). Shares of Western Common Stock in respect of which a Non-Election is made (including shares in respect of which such an election is deemed to have been made pursuant to this Section 3.3 and Section 3.5) (collectively, "Non-Election Shares") shall be deemed by BJ, in its sole and absolute discretion, to be shares in respect of which Cash Elections or Stock Elections have been made. (c) Procedure for Elections. Elections pursuant to Section 3.3(b) shall be made on a form to be mutually agreed upon by Western and BJ (a "Form of Election") to be provided by the Exchange Agent (as defined in Section 3.6) for that purpose to holders of record of Western Common Stock, together with appropriate transmittal materials, at the time of mailing to holders of record of Western Common Stock of the Joint Proxy Statement (as defined in Section 4.3) in connection with the Stockholders Meetings referred to in Section 8.3. Elections shall be made by mailing to the Exchange Agent a duly completed Form of Election. To be effective, a Form of Election must be (i) properly completed, signed and submitted to the Exchange Agent at its designated office, by 5:00 p.m., on the business day that is two Trading Days prior to the Closing Date (which date shall be publicly announced by BJ as soon as practicable but in no event less than five Trading Days prior to the Closing Date) (the "Election Deadline") and (ii) accompanied by the certificates representing the shares of Western Common Stock as to which the election is being made (or by an appropriate guarantee of delivery of such certificates by a commercial bank or trust company in the United States or a member of a registered national security exchange or of the National Association of Securities Dealers, Inc., provided such certificates are in fact delivered to the Exchange Agent within eight Trading Days after the date of execution of such guarantee of delivery). Western shall use its best efforts to make a Form of Election available to all persons who become holders of record of Western Common Stock between the date of mailing described in the first sentence of this Section 3.3(c) and the Election Deadline. BJ shall determine, in its sole and absolute discretion, which authority it may delegate in whole or in part to the Exchange Agent, whether Forms of Election have been properly completed, signed and submitted or revoked. The decision of BJ (or the Exchange Agent, as the case may be) in such matters shall be conclusive and binding. Neither BJ nor the Exchange Agent will be under any obligation to notify any person of any defect in a Form of Election submitted to the Exchange Agent. A holder of shares of Western Common Stock that does not submit an effective Form of Election prior to the Election Deadline shall be deemed to have made a Non-Election. (d) Revocation of Election; Return of Certificates. An election may be revoked, but only by written notice received by the Exchange Agent prior to the Election Deadline. Any certificate(s) representing shares of Western Common Stock which have been submitted to the Exchange Agent in connection with an election shall be returned- without charge to the holder thereof in the event such election is revoked as aforesaid and such holder requests in writing the return of such certificate(s). Upon any such revocation, unless a duly completed Election Form is thereafter submitted in accordance with paragraph (c), such shares shall be Non-Election Shares. In the event that this Agreement is terminated pursuant to the provisions hereof and any shares of Western Common Stock A-5 have been transmitted to the Exchange Agent pursuant to the provisions hereof, such shares shall promptly be returned without charge to the person submitting the same. (e) Proration of Cash Election Shares. In the event that the aggregate number of shares in respect of which Cash Elections have been made and, in the case of Non-Election Shares, are deemed to have been made (collectively, the "Cash Election Shares") exceeds the Cash Election Number, all shares of Western Common Stock in respect of which Stock Elections have been made and all Non-Election Shares in respect of which Stock Elections are deemed to have been made (collectively, the "Stock Election Shares") shall be converted into the right to receive Stock Consideration (in addition to Warrant Consideration), and the Cash Election Shares shall be converted into the right to receive Stock Consideration or Cash Consideration (in addition to Warrant Consideration) in the following manner: (i) Cash Election Shares shall be deemed converted to Stock Election Shares, on a pro-rata basis for each record holder of Western Common Stock with respect to those shares of Western Common Stock, if any, of such record holder which are Cash Election Shares, so that the number of Cash Election Shares so converted, when added to the other Stock Election Shares, shall equal as closely as practicable the Stock Election Number, and all such Cash Election Shares so converted shall be converted into the right to receive Stock Consideration (and cash in lieu of fractional interests in accordance with Section 3.4) (in addition to Warrant Consideration); and (ii) any remaining Cash Election Shares shall be converted into the right to receive Cash Consideration (in addition to Warrant Consideration). (f) Proration of Stock Election Shares. In the event that the aggregate number of Stock Election Shares exceeds the Stock Election Number, all Cash Election Shares shall be converted into the right to receive Cash Consideration (in addition to Warrant Consideration), and all Stock Election Shares shall be converted into the right to receive Stock Consideration or Cash Consideration (in addition to Warrant Consideration) in the following manner: (i) Stock Election Shares shall be deemed converted into Cash Election Shares, on a pro-rata basis for each record holder of Western Common Stock with respect to those shares of Western Common Stock, if any, of such record holder which are Stock Election Shares, so that the number of Stock Election Shares so converted, when added to the other Cash Election Shares, shall equal as closely as practicable the Cash Election Number, and all such shares of Western Common Stock so converted shall be converted into the right to receive the Cash Consideration (in addition to Warrant Consideration); and (ii) the remaining Stock Election Shares shall be converted into the right to receive the Stock Consideration (and cash in lieu of fractional interests in accordance with Section 3.4) (in addition to Warrant Consideration). (g) No Proration. In the event that neither paragraph (e) nor paragraph (f) of this Section 3.3 is applicable, all Cash Election Shares shall be converted into the right to receive Cash Consideration (in addition to Warrant Consideration) and all Stock Election Shares shall be converted into the right to receive Stock Consideration (and cash in lieu of fractional interests in accordance with Section 3.4) (in addition to Warrant Consideration). (h) Computations. The Exchange Agent, in consultation with BJ, shall make all computations to give effect to this Section 3.3. Section 3.4 Fractional Interests. No certificates or scrip representing fractional shares of BJ Common Stock and associated BJ Purchase Rights or fractions of BJ Warrants shall be issued in A-6 connection with the Merger, and such fractional interests will not entitle the owner thereof to any rights of a stockholder or warrantholder of BJ. In lieu of any such fractional securities, each holder of shares of Western Common Stock exchanged pursuant to Section 3.1(a) who would otherwise have been entitled to receive a fraction of a share of BJ Common Stock and associated BJ Purchase Rights or a fraction of a BJ Warrant (after taking into account all shares of Western Common Stock then held of record by such holder) shall receive (a) cash (without interest) in an amount equal to the product of such fractional part of a share of BJ Common Stock multiplied by the Closing Price, and/or (b) cash (without interest) in an amount equal to the product of such fraction of a BJ Warrant multiplied by the Warrant Consideration Value. Section 3.5 Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, no share of Western Common Stock, the holder of which shall have complied with the provisions of Section 262 of the Delaware Corporation Law as to appraisal rights (a "Dissenting Share"), shall be deemed converted into and to represent the right to receive Merger Consideration hereunder; and the holders of Dissenting Shares, if any, shall be entitled to payment, solely from the Surviving Corporation, of the appraised value of such Dissenting Shares to the extent permitted by and in accordance with the provisions of Section 262 of the Delaware Corporation Law; provided, however, that (i) if any holder of Dissenting Shares shall, under the circumstances permitted by the Delaware Corporation Law, subsequently deliver a written withdrawal of his or her demand for appraisal of such Dissenting Shares, or (ii) if any holder fails to establish his or her entitlement to rights to payment as provided in such Section 262, or (iii) if neither any holder of Dissenting Shares nor the Surviving Corporation has filed a petition demanding a determination of the value of all Dissenting Shares within the time provided in such Section 262, such holder or holders (as the case may be) shall forfeit such right to payment for such Dissenting Shares pursuant to such Section 262 and each such Dissenting Share shall thereupon be treated as a Non-Election Share for purposes of Section 3.3. Western shall give BJ (i) prompt notice of any written demands for appraisal of any Western Common Stock, attempted withdrawals of such demands, and any other instruments served pursuant to applicable law received by Western relating to stockholders' rights of appraisal and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the Delaware Corporation Law. Western shall not, except with the prior written consent of BJ, voluntarily make any payment with respect to any demands for appraisals of Western Common Stock, offer to settle or settle any such demands or approve any withdrawal of any such demands. Section 3.6 Exchange of Certificates. (a) As soon as practicable after the execution and delivery of this Agreement and, in any event, not less than five Trading Days prior to the mailing to holders of Western Common Stock of the Joint Proxy Statement, BJ shall designate a bank or trust company (or such other person or persons as shall be reasonably acceptable to BJ and Western) to act as exchange agent (the "Exchange Agent") in effecting the exchange of certificates (the "Certificates") that, prior to the Effective Time, represented shares of Western Common Stock for Merger Consideration pursuant to Section 3.1(a) hereof (and cash in lieu of fractional interests in accordance with Section 3.4). Upon the surrender of each such Certificate representing shares of Western Common Stock, the Exchange Agent shall pay the holder of such Certificate the Merger Consideration multiplied by the number of shares of Western Common Stock formerly represented by such Certificate in exchange therefor (and cash in lieu of fractional interests in accordance with Section 3.4), and such Certificate shall forthwith be canceled. Until so surrendered and exchanged, each such Certificate that prior to the Effective Time represented shares of Western Common Stock (other than Certificates representing Dissenting Shares which are not to be treated as Non-Election Shares pursuant to Section 3.3 or shares of Western Common Stock to be canceled in accordance with Section 3.1(c)) shall represent solely the right to receive Merger Consideration (and cash in lieu of fractional interests in accordance with Section 3.4). No interest shall be paid or accrue on Merger Consideration. A-7 (b) As of or promptly after the Effective Time, BJ shall deposit or cause to be deposited, in trust with the Exchange Agent, for the benefit of the holders of shares of Western Common Stock, for exchange in accordance with this Article III, the aggregate Merger Consideration. (c) The cash portion of the aggregate Merger Consideration shall be invested by the Exchange Agent, as directed by and for the benefit of the Surviving Corporation, provided that such investments shall be limited to direct obligations of the United States of America, obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, commercial paper rated of the highest quality by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc. ("S&P"), and certificates of deposit issued by a commercial bank whose long-term debt obligations are rated at least A2 by Moody's or at least A by S&P, in each case having a maturity not in excess of one year. (d) Promptly following the date which is six months after the Effective Time, the Exchange Agent shall deliver to the Surviving Corporation all cash, shares of BJ Common Stock, Certificates and other documents in its possession relating to the transactions described in this Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each holder of a Certificate may surrender such Certificate to the Surviving Corporation and (subject to applicable abandoned property, escheat and similar laws and, in the case of Dissenting Shares, subject to applicable law) receive in exchange therefor the applicable Merger Consideration (and cash in lieu of fractional interests in accordance with Section 3.4), without any interest or dividends or other payments thereon. (e) After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of any shares of Western Common Stock. If, after the Effective Time, Certificates formerly representing shares of Western Common Stock are presented to the Surviving Corporation or the Exchange Agent, they shall be canceled and (subject to applicable abandoned property, escheat and similar laws and, in the case of Dissenting Shares, subject to applicable law) exchanged for Merger Consideration (and cash in lieu of fractional interests in accordance with Section 3.4), as provided in this Article III. (f) No dividends or other distributions declared or made after the Effective Time with respect to shares of BJ Common Stock shall be paid to the holder of any unsurrendered Certificate with respect to the shares of BJ Common Stock they are entitled to receive and no cash payment in lieu of fractional interests shall be paid pursuant to Section 3.4 until the holder of such Certificate shall surrender such Certificate, in accordance with the provisions of this Agreement. Section 3.7 No Liability. Neither BJ nor the Surviving Corporation shall be liable to any holder of shares of Western Common Stock for any Merger Consideration in respect of such shares (or dividends or distributions with respect thereto) delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. In the event any Certificate 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 required by BJ, the posting by such person of a bond in customary form and amount as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration (and cash in lieu of fractional interests in accordance with Section 3.4), without any interest or dividends or other payments thereon, upon due surrender of and deliverable in respect of such Certificate pursuant to this Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BJ BJ represents and warrants to Western as follows, except as set forth in the disclosure letter delivered to Western by BJ on or prior to the date hereof(the "BJ Disclosure Memorandum"): A-8 Section 4.1 Organization and Qualification. BJ is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own its assets and to carry on its business as it is now being conducted or proposed to be conducted. BJ is duly qualified as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or be in good standing is not reasonably likely, individually or in the aggregate, to have a BJ Material Adverse Effect (as defined below). As used in this Agreement, the term "BJ Material Adverse Effect" means a material adverse effect on the business, properties, assets, financial condition or results of operations of BJ and its subsidiaries taken as a whole; provided, however, that any change or changes in, or caused by, the prices of oil, gas or chemical products, general economic conditions or local, regional, national or international industry conditions shall not be deemed to constitute a BJ Material Adverse Effect, it also being understood that a BJ Material Adverse Effect shall not include a change with respect to BJ resulting from any change in law, rule or regulation or generally accepted accounting principles, consistently applied, that applies to both BJ and Western. Section 4.2 Capitalization. As of the date hereof, the authorized capital stock of BJ consists of 40,000,000 shares of BJ Common Stock and 5,000,000 shares of preferred stock, without par value. As of November 11, 1994, 15,717,270 shares of BJ Common Stock (together with the associated BJ Purchase Rights) were validly issued and outstanding, fully paid and nonassessable and no other shares of BJ's capital stock were outstanding. Since November 11, 1994, no shares of BJ's capital stock have been issued, except for shares of BJ Common Stock issued pursuant to (i) the exercise of stock options granted to employees under BJ's 1990 Stock Option Plan ("BJ Options") and (ii) pursuant to other employee plans disclosed in the BJ SEC Documents (as defined in Section 4.5 hereof) ("Other Plans"). Except for (i) BJ Options, (ii) the BJ Purchase Rights and (iii) the Other Plans, as of the date hereof there are no options, warrants, calls, subscriptions, rights, agreements, commitments or other obligations outstanding obligating BJ to issue or sell shares of its capital stock or any securities exercisable or exchangeable for or convertible into any shares of its capital stock. There are no voting trusts or other agreements or understandings to which BJ or any of its subsidiaries is a party or by which BJ or any of its subsidiaries is bound with respect to the voting of BJ Common Stock or the stock of any subsidiary of BJ. Except as disclosed prior to the date hereof in the BJ SEC Documents (as defined in Section 4.5), there are no agreements or other understandings to which BJ or any of its subsidiaries is a party or by which BJ or any of its subsidiaries is bound with respect to the repurchase, redemption or other acquisition of or payment in respect of any shares of capital stock of BJ or any of its subsidiaries. Each of the shares of BJ Common Stock issuable in accordance with this Agreement in exchange for Western Common Stock at the Effective Time will be, when so issued, duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights, and will include an associated BJ Purchase Right. Section 4.3 BJ Subsidiaries. Each Significant Subsidiary (as defined in Rule 12b-1 under the Exchange Act) of BJ is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to own its assets and to carry on its business as it is now being conducted or proposed to be conducted. Each such Significant Subsidiary of BJ is duly qualified as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of its properties directly or indirectly owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or be in such good standing is not, individually or in the aggregate, reasonably likely to have a BJ Material Adverse Effect. Except as disclosed in the BJ SEC Documents and except for directors' qualifying shares, all the outstanding shares of capital stock of each such Significant Subsidiary of BJ are directly or indirectly owned (of record and beneficially) by BJ or a wholly owned subsidiary of BJ. All the outstanding shares of capital stock of such Significant Subsidiaries of BJ are A-9 validly issued, fully paid and nonassessable, and those shares owned by BJ or by a subsidiary of BJ are owned free and clear of any pledges, liens, claims, security interests or other encumbrances of any kind other than those arising pursuant to the certificate of incorporation or bylaws or other organizational document of such Significant Subsidiary, as required by law or pursuant to an agreement among the equity owners of such Significant Subsidiary to which BJ, directly or indirectly through a subsidiary, is a party. As of the date hereof, there are no options, warrants, calls, subscriptions, rights, agreements, commitments or other obligations of any character relating to the issued or unissued capital stock or other securities of any of the Significant Subsidiaries of BJ other than those arising pursuant to the certificate of incorporation or bylaws or other organizational document of such Significant Subsidiary, as required by law pursuant to an agreement among the equity owners of such Significant Subsidiary to which BJ, directly or indirectly through a subsidiary, is a party. BJ does not directly or indirectly have any investment in any corporation, partnership, joint venture or other business association or entity which equity investment was when initially made, or has a current market value as of the date hereof, in excess of $750,000, except as disclosed prior to the date of this Agreement in the BJ SEC Documents. Section 4.4 Authority Relative to this Agreement. BJ has the requisite corporate power and authority to enter into this Agreement and the Warrant Agreement and to carry out its obligations hereunder and thereunder. The execution and delivery of each of this Agreement and the Warrant Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by BJ's Board of Directors and, except for the approval of its stockholders as contemplated in Section 8.3, no other corporate proceedings on the part of BJ are necessary to authorize any of this Agreement, the Warrant Agreement and the consummation of the transactions contemplated hereby and thereby. This Agreement has been duly executed, acknowledged and delivered by each of BJ and BJ Sub and (assuming the valid authorization, execution and delivery of this Agreement by Western) is a valid and binding obligation of BJ and of BJ Sub, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally or by equitable principles. When executed and delivered by BJ at the Closing, the Warrant Agreement will be a valid and binding obligation of BJ, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally or by general equitable principles and except that indemnification for certain matters pertaining to federal and state securities laws may not be enforceable by reason of applicable public policy. Neither BJ nor BJ Sub is subject to or obligated under (i) any charter or bylaw provision or (ii) any other contract, indenture, loan document, license, franchise, permit, order, decree or instrument binding on BJ or any of its subsidiaries which would be breached or violated by its executing and performing this Agreement and the transactions contemplated hereby or, with respect to BJ, the Warrant Agreement (or pursuant to which the transactions contemplated hereby may give rise to any right of termination, cancellation, acceleration or payment) other than, in the case of clause (ii) only, any breaches or violations (or rights of termination, cancellation, acceleration or payment) which will not, either singly or in the aggregate, have a BJ Material Adverse Effect or materially impair the ability of BJ to perform its obligations hereunder or under the Warrant Agreement. Except as referred to herein or in connection, or in compliance, with the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "Hart Scott Act"), the Securities Act of 1933, as amended, and the rules promulgated thereunder (the "Securities Act"), the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder (the "Exchange Act"), applicable NYSE rules or rules promulgated by the National Association of Securities Dealers, Inc. ("NASD") and the corporation, securities, takeover or blue sky laws of the various states, no filing or registration with, or authorization, consent or approval of, any public body or authority is necessary for the consummation by BJ of the Merger or the other transactions contemplated by this Agreement and the Warrant Agreement, other than such as may be required solely because Western is a party to the Merger, except where the failure to so file or register or to obtain such authorizations, consents or approvals is not reasonably likely to have a BJ Material Adverse Effect. A-10 Section 4.5 Reports and Financial Statements. BJ has filed with the Securities and Exchange Commission (the "Commission") all prospectuses, proxy statements and reports (including all exhibits and schedules thereto and documents incorporated by reference therein) which were required under the Securities Act or the Exchange Act to be filed with the Commission by BJ since December 31, 1991, and will file all proxy statements and reports (including all exhibits and schedules thereto and documents incorporated by reference therein) required to be filed after the date hereof and prior to the Effective Time (collectively, the "BJ SEC Documents"). As of their respective dates, the BJ SEC Documents filed with the Commission prior to the date hereof complied in all material respects with all material requirements of the Securities Act or the Exchange Act, as the case may be, and the BJ SEC Documents to be filed with the Commission after the date hereof will so comply. BJ has made available to Western copies of all BJ SEC Documents filed with the Commission prior to the date hereof and will deliver promptly to Western after they are filed with the Commission all BJ SEC Documents filed after the date hereof. None of the BJ SEC Documents contained, or will contain, as of its date, any untrue statement of a material fact or omitted or will omit, to state a material fact required to be stated therein or necessary to make the statements made, in light of the circumstances under which they were made, not misleading. The (i) audited fiscal year end consolidated statements of financial position and related consolidated statements of operations, stockholders' equity and cash flows, including the notes thereto, together with the reports thereon of BJ's independent public accountants, and (ii) unaudited interim consolidated statements of financial position and the related unaudited interim consolidated statements of operations, stockholders' equity and cash flows, which are, or will be, included in the BJ SEC Documents or incorporated by reference therein present, or will present, in accordance with the books and records of BJ and its subsidiaries, fairly the financial position, results of operations, cash flows and financial position of BJ and its subsidiaries as of the dates and for the periods indicated and are, or will be, in conformity with generally accepted accounting principles, except, in the case of interim financial statements, for the lack of explanatory footnote disclosures required by generally accepted accounting principles, and subject to normal year end audit adjustments. BJ's consolidated balance sheet at June 30, 1994 included in the BJ SEC Documents is hereinafter called the "Latest BJ Balance Sheet." There is no liability or obligation of any kind, whether accrued, absolute, fixed or contingent, of BJ or any subsidiary of BJ required by generally accepted accounting principles to be reflected or reserved against or otherwise disclosed in the Latest BJ Balance Sheet which is not so reflected or reserved against of which the executive officers of BJ have knowledge, that individually or in the aggregate is reasonably likely to have a BJ Material Adverse Effect, except for normal year-end adjustments and other adjustments described in the Latest BJ Balance Sheet. Section 4.6 Absence of Certain Changes or Events. Except as disclosed prior to the date of this Agreement in BJ SEC Documents, since September 30, 1993, the respective businesses of BJ and its subsidiaries have been conducted only in the ordinary course and consistent with past practice and there has not been (i) any change in the business, assets, liabilities, financial condition or results of operations of BJ and its subsidiaries, taken as a whole, that is reasonably likely to (x) have a BJ Material Adverse Effect or (y) as of the date hereof, materially impair the ability of BJ to perform its obligations hereunder or (ii) any material change by BJ or its subsidiaries in accounting principles or methods except insofar as required by a change in generally accepted accounting principles or rules of the Commission. Section 4.7 Tax Matters. Each of BJ and each of its Significant Subsidiaries, and any consolidated, combined, unitary or aggregate group for tax purposes of which BJ or any of its Significant Subsidiaries is or has been a member, has timely filed all material Tax Returns (as hereinafter defined) required to be filed by it, has paid all Taxes (as hereinafter defined) shown thereon to be due and has provided adequate reserves in its financial statements for any Taxes that have not been paid but are properly accruable under generally accepted accounting principles, whether or not shown as being due on any returns. Except to the extent that the inaccuracy of any of the following, individually or in the aggregate, is not reasonably likely to have a BJ Material Adverse A-11 Effect, no claim for unpaid Taxes has become a lien or encumbrance of any kind against the property of BJ or any of its Significant Subsidiaries or is being asserted against BJ or any of its Significant Subsidiaries; no audit of any Tax Return of BJ or any of its Significant Subsidiaries is being conducted by a Tax authority; and no extension of the statute of limitations on the assessment of any Taxes has been granted by BJ or any of its Significant Subsidiaries and is currently in effect. As used herein, "Taxes" shall mean any taxes of any kind, including but not limited to those measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, value added, property or windfall profits or assessments of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. Neither BJ nor any of its Significant Subsidiaries has made an election under Section 341(f) of the Internal Revenue Code. As used herein, "Tax Return" shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes. Section 4.8 Environmental Matters. (a) Except to the extent that the inaccuracy of any of the following, individually or in the aggregate, is not reasonably likely to have a BJ Material Adverse Effect, to the knowledge of the executive officers of BJ: (i) BJ and its subsidiaries hold, and are in compliance with and have been in compliance with for the last two years, all Environmental Permits (as hereinafter defined), and are otherwise in substantial compliance and have been in substantial compliance for the last two years with, all applicable Environmental Laws (as hereinafter defined) and there is no condition that is reasonably likely to prevent or materially interfere in the near future with compliance by BJ and its subsidiaries with Environmental Laws; (ii) no modification, revocation, reissuance, alteration, transfer or amendment of any Environmental Permit, or any review by, or approval of, any third party of any Environmental Permit is required in connection with the execution or delivery of this Agreement or the consummation by BJ of the transactions contemplated hereby or the operation of the business of BJ or any of its subsidiaries on the Closing Date; (iii) neither BJ nor any of its subsidiaries has received any Environmental Claim (as hereinafter defined), nor has any Environmental Claim been threatened against BJ or any of its subsidiaries; (iv) neither BJ nor any of its subsidiaries has entered into, agreed to or is subject to any outstanding judgment, decree, order or consent arrangement with any governmental authority under any Environmental Laws, including without limitation those relating to compliance with any Environmental Laws or to the investigation, cleanup, remediation or removal of Hazardous Materials (as hereinafter defined); (v) there are no circumstances that are reasonably likely to give rise to liability under any agreements with any person pursuant to which BJ or any subsidiary of BJ would be required to defend, indemnify, hold harmless, or otherwise be responsible for any violation by or other liability or expense of such person, or alleged violation by or other liability or expense of such person, arising out of any Environmental Law; and (vi) there are no other circumstances or conditions that are reasonably likely to give rise to liability of BJ or any of its subsidiaries under any Environmental Laws. (b) For purposes of this Agreement, the terms below shall have the following meanings: "Environmental Claim" means any written complaint, notice, claim, demand, action, suit or judicial, administrative or arbitral proceeding by any person to BJ or any of its A-12 subsidiaries (or, for purposes of Section 6.10, Western or any of its subsidiaries) asserting liability or potential liability (including without limitation liability or potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damage, personal injury, fines or penalties) arising out of, relating to, based on or resulting from (i) the presence, discharge, emission, release or threatened release of any Hazardous Materials at any location, (ii) circumstances forming the basis of any violation or alleged violation of any Environmental Laws or Environmental Permits, or (iii) otherwise relating to obligations or liabilities under any Environmental Law. "Environmental Permits" means all permits, licenses, registrations, exemptions and other governmental authorizations required under Environmental Laws for BJ or any of its subsidiaries (or, for purposes of Section 6.10, Western or any of its subsidiaries) to conduct their operations as presently conducted. "Environmental Laws" means all applicable foreign, federal, state and local statutes, rules, regulations, ordinances, orders, decrees and common law relating in any manner to pollution or protection of the environment, to the extent and in the form that such exist at the date hereof. "Hazardous Materials" means all hazardous or toxic substances, wastes, materials or chemicals, petroleum (including crude oil or any fraction thereof) and petroleum products, asbestos and asbestos-containing materials, pollutants, contaminants and all other materials and substances, including but not limited to radioactive materials regulated pursuant to any Environmental Laws or that could result in liability under any Environmental Laws. Section 4.9 Litigation. Except as disclosed prior to the date hereof in BJ SEC Documents, there is no suit, action, investigation or proceeding pending or, to the knowledge of the executive officers of BJ, threatened against or affecting BJ or any of its subsidiaries at law or in equity before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or before any arbitrator of any kind, that is reasonably likely to have a BJ Material Adverse Effect or (with respect to such matters that are pending or threatened as of the date hereof) materially impair the ability of BJ to perform its obligations hereunder and there is no judgment, decree, injunction, rule or order of any court, governmental department,commission, board, bureau, agency, instrumentality or arbitrator outstanding against or applicable to BJ or any of its subsidiaries that is reasonably likely to have a BJ Material Adverse Effect or (with respect to such items that are outstanding or applicable as of the date hereof) materially impair the ability of BJ to perform its obligations hereunder. Section 4.10 Governmental Licenses and Permits; ComPliance with Law. Except as disclosed prior to the date hereof in the BJ SEC Documents, since September 30, 1993 neither BJ nor any of its Significant Subsidiaries has received notice of any revocation or modification of any federal, state, local or foreign governmental license, certification, tariff, permit, authorization or approval the revocation or modification of which has had or is reasonably likely to have a BJ Material Adverse Effect. To the knowledge of the executive officers of BJ, the conduct of the business of each of BJ and its subsidiaries complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto, except for violations or failures to comply, if any, that, individually or in the aggregate, are not reasonably likely to have a BJ Material Adverse Effect. Section 4.11 Required Vote of BJ Stockholders. The affirmative vote of holders of outstanding shares of BJ Common Stock provided for in NYSE Rule 312.05 is required to approve this Agreement and the issuance of BJ Common Stock and BJ Warrants in the Merger. No other vote of the stockholders of BJ is required by law, the Restated Certificate of Incorporation or Bylaws of BJ or otherwise to approve this Agreement and the transactions contemplated hereby. A-13 Section 4.12 BJ Action. The Board of Directors of BJ (at a meeting duly called and held on November 17, 1994) unanimously (a) determined that the Merger is fair to and in the best interests of BJ and its stockholders, (b) approved this Agreement and the issuance of BJ Common Stock and BJ Warrants in the Merger, (c) resolved to recommend approval by BJ's stockholders of this Agreement and the issuance of BJ Common Stock and BJ Warrants in the Merger and (d) directed that this Agreement be submitted to BJ's stockholders for their approval, including approval of the Stock Consideration and Warrant Consideration to be issued pursuant to this Agreement. Section 4.13 Opinion of Financial Advisor. On the date hereof, BJ has received the opinion of Merrill Lynch & Co. to the effect that the Merger is fair to BJ's stockholders. Section 4.14 Brokers and Finders. Except for Merrill Lynch & Co, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with this Agreement or the Merger based upon arrangements made by or on behalf of BJ or BJ Sub. Except as expressly set forth in this Agreement, no valid claim against BJ or BJ Sub or, to the knowledge of the executive officers of BJ, against Western exists for payment of any fee or other compensation as a result of any of the transactions contemplated hereby. Section 4.15 Available Funds. BJ will have available to it at the Effective Time all funds necessary to satisfy all of its obligations hereunder and in connection with the transactions contemplated herein. ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING BJ SUB BJ and BJ Sub jointly and severally represent and warrant to Western as follows: Section 5.1 Organization. BJ Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. BJ Sub has not engaged in any business since it was incorporated, except in connection with the Merger and the other transactions contemplated hereby. Section 5.2 Capitalization. The authorized capital stock of BJ Sub consists of 1,000 shares of common stock, par value $0.01 per share, 100 shares of which are validly issued and outstanding, fully paid and nonassessable and are owned by BJ free and clear of all liens, claims and encumbrances. Section 5.3 Authority Relative to this Agreement. BJ Sub has the requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by BJ Sub's Board of Directors and its sole stockholder and no other corporate proceedings on the part of BJ Sub are necessary to authorize this Agreement and the consummation of the transactions contemplated hereby. Except as referred to herein or in connection, or in compliance, with the provisions of the Act, the Securities Act, the Exchange Act, applicable NYSE rules and the corporation, securities, takeover or blue sky laws of the various states, no filing or registration with, or authorization, consent or approval of, any public body or authority is necessary for the consummation by BJ Sub of the Merger or the other transactions contemplated by this Agreement, other than such as may be required solely because Western is a party to the Merger. A-14 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF WESTERN Western represents and warrants to BJ and BJ Sub, except as set forth in the disclosure letter delivered to BJ by Western on or prior to the date hereof (the "Western Disclosure Memorandum") as follows: Section 6.1 Organization and Qualification. Western is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own its assets and to carry on its business as it is now being conducted or proposed to be conducted. Western is duly qualified as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or be in such good standing is not reasonably likely to, individually or in the aggregate, have a Western Material Adverse Effect (as defined below). As used in this Agreement, the term "Western Material Adverse Effect" means a material adverse effect on the business, properties, assets, financial condition or results of operations of Western and its subsidiaries taken as a whole; provided, however, that any change or changes in, or caused by, the prices of oil, gas or chemical products, general economic conditions or local, regional, national or international industry conditions shall not be deemed to constitute a Western Material Adverse Effect, it also being understood that a Western Material Adverse Effect shall not include a change with respect to Western resulting from any change in law, rule or regulation or generally accepted accounting principles, consistently applied, that applies to both BJ and Western. Section 6.2 Capitalization. The authorized capital stock of Western consists of 50,000,000 shares of Western Common Stock and 6,000,000 shares of preferred stock, without par value ("Western Preferred Stock"). As of November 11, 1994, 18,243,238 shares of Western Common Stock were validly issued and outstanding, fully paid and nonassessable and no other shares of Western's capital stock were outstanding. As of November 9, 1994, Western had outstanding options to purchase, in the aggregate, 1,018,714 shares of Western Common Stock granted under the Western Plans (as defined in Section 6.7), which includes options to purchase 268,750 shares of Western Common Stock granted under an agreement, dated May 12, 1989, with an executive officer of Western, options to purchase 37,500 shares of Western Common Stock granted under Western's Non-Employee Directors' Plan and options to purchase 712,464 shares of Western Common Stock granted under Western's Long-Term Performance Incentive Plan (collectively, the "Western Options"). As of October 31, 1994, there was outstanding $88,746,000 principal amount of Western Convertible Debentures convertible into 5,220,352 shares of Western Common Stock. Since November 11, 1994, no shares of Western's capital stock have been issued. Except for Western Options, Western Convertible Debentures and the preferred stock purchase rights (the "Western Rights") issued pursuant to Western's Stockholders Protection Rights Agreement dated as of March 5, 1990, as amended (the "Western Rights Agreement"), there are no options, warrants, calls, subscriptions, rights, agreements, commitments or other obligations outstanding obligating Western to issue or sell any shares of its capital stock or any securities exercisable or exchangeable for or convertible into any shares of its capital stock. There are no voting trusts or other agreements or understandings to which Western or any of its subsidiaries is a party or by which Western or any of its subsidiaries is bound with respect to the voting of Western Common Stock or the stock of any subsidiary of Western. Western has provided to BJ true and correct lists of the record holders as of November 9, 1994 of all Western Options. Except as disclosed prior to the date hereof in the Western SEC Documents (as defined in Section 6.5), there are no agreements or other understandings to which Western or any of its subsidiaries is a party or by which Western or any of its subsidiaries is bound with respect to the repurchase, redemption or other acquisition of or payment in respect of any shares of capital stock of Western or any of its subsidiaries. A-15 Section 6.3 Western Subsidiaries. Each Significant Subsidiary (as defined in Rule 12b-1 under the Exchange Act) of Western is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to own its assets and to carry on its business as it is now being conducted or proposed to be conducted. Each such Significant Subsidiary of Western is duly qualified as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of its properties directly or indirectly owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or be in such good standing is not, individually or in the aggregate, reasonably likely to have a Western Material Adverse Effect. Except as disclosed in the Western SEC Documents all the outstanding shares of capital stock of each such Significant Subsidiary of Western are directly or indirectly owned (of record and beneficially) by Western or a wholly owned subsidiary of Western. All the outstanding shares of capital stock of such Significant Subsidiaries of Western are validly issued, fully paid and nonassessable, and those shares owned by Western or by a subsidiary of Western are owned free and clear of any pledges, liens, claims, security interests or other encumbrances of any kind other than those arising pursuant to the certificate of incorporation or bylaws or other organizational document of such Significant Subsidiary, as required by law or pursuant to an agreement among the equity owners of such Significant Subsidiary to which Western, directly or indirectly through a subsidiary, is a party. As of the date hereof, there are no options, warrants, calls, subscriptions, rights, agreements, commitments or other obligations of any character relating to the issued or unissued capital stock or other securities of any of the Significant Subsidiaries of Western other than those arising pursuant to the certificate of incorporation or bylaws or other organizational document of such Significant Subsidiary, as required by law or pursuant to an agreement among the equity owners of such Significant Subsidiary to which Western, directly or indirectly through a subsidiary, is a party. Western does not directly or indirectly have any equity investment in any corporation, partnership, joint venture or other business association or entity which equity investment was when initially made, or has a current market value as of the date hereof, in excess of $750,000, except as disclosed prior to the date of this Agreement in the Western SEC Documents. Section 6.4 Authority Relative to this Agreement. Subject to the approval of this Agreement by the holders of at least two-thirds of the outstanding shares of Western Common Stock, Western has the requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by Western's Board of Directors and, except for the approval of its stockholders as contemplated in Section 8.3, no other corporate proceedings on the part of Western are necessary to authorize this Agreement and the consummation of the transactions contemplated hereby. This Agreement has been duly executed, acknowledged and delivered by Western and (assuming the valid authorization, execution and delivery of this Agreement and the transactions contemplated hereby by each of BJ and BJ Sub) is a valid and binding obligation of Western, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally or by equitable principles and except that indemnification for certain matters pertaining to federal and state securities laws may not be enforceable by reason of applicable public policy. Western is not subject to or obligated under (i) any charter or bylaw provision or (ii) any other contract, indenture, loan document, license, franchise, permit, order, decree or instrument (except for master service contracts which are terminable upon no more than 90 days' notice) binding on Western or any of its subsidiaries which would be breached or violated by its executing and performing this Agreement and the transactions contemplated hereby (or pursuant to which the transactions contemplated hereby may give rise to any right of termination, cancellation, acceleration or payment) other than, in the case of clause (ii) only, any breaches or violations (or rights of termination, cancellation, acceleration or payment) which will not, either singly or in the aggregate, have a Western Material Adverse Effect or materially impair the ability of Western to perform its obligations hereunder. Except as referred to herein or in connection, or in compliance, with the provisions of the Hart Scott Act, the Securities Act, the Exchange Act, applicable NYSE rules and the A-16 corporation, securities, takeover or blue sky laws of the various states, no filing or registration with, or authorization, consent or approval of, any public body or authority is necessary for the consummation by Western of the Merger or the other transactions contemplated by this Agreement, other than such as may be required solely because BJ or BJ Sub is a party to the Merger, except where the failure to so file or register or to obtain such authorizations, consents or approvals is not reasonably likely to have a Western Material Adverse Effect. Section 6.5 Reports and Financial Statements. Western has filed with the Commission all prospectuses, proxy statements and reports (including all exhibits and schedules thereto and documents incorporated by reference therein) which were required under the Securities Act or the Exchange Act to be filed with the Commission by Western since December 31, 1991, and will file all proxy statements and reports (including all exhibits and schedules thereto and documents incorporated by reference therein) required to be filed after the date hereof and prior to the Effective Time (collectively, the "Western SEC Documents"). As of their respective dates, the Western SEC Documents filed with the Commission prior to the date hereof complied in all material respects with all material requirements of the Securities Act or the Exchange Act, as the case may be, and the Western SEC Documents to be filed with the Commission after the date hereof will so comply. Western has made available to BJ copies of all Western SEC Documents filed with the Commission prior to the date hereof and will deliver promptly to BJ after they are filed with the Commission all Western SEC Documents filed after the date hereof. None of the Western SEC Documents contained, or will contain, as of its date, any untrue statement of a material fact or omitted, or will omit, to state a material fact required to be stated therein or necessary to make the statements made, in light of the circumstances under which they were made, not misleading. The (i) audited fiscal year end consolidated balance sheets and related consolidated statements of operations, stockholders' equity and cash flows, including the notes thereto, together with the reports thereon of Western's independent public accountants, and (ii) unaudited interim consolidated balance sheets and the related unaudited interim consolidated statements of operations, stockholders' equity and cash flows, which are, or will be, included in Western SEC Documents or incorporated by reference therein, present, or will present, in accordance with the books and records of Western and its subsidiaries, fairly the financial position, results of income, cash flows and financial position of Western and its subsidiaries as of the dates and for the periods indicated and are, or will be, in conformity with generally accepted accounting principles, except, in the case of interim financial statements, for the lack of explanatory footnote disclosures required by generally accepted accounting principles, and subject to normal year end audit adjustments. Western's consolidated balance sheet at September 30, 1994 included in the Western SEC Documents is hereinafter called the "Latest Western Balance Sheet." There is no liability or obligation of any kind, whether accrued, absolute, fixed or contingent, of Western or any subsidiary of Western required by generally accepted accounting principles to be reflected or reserved against or otherwise disclosed in the Latest Western Balance Sheet which is not so reflected or reserved against of which the executive officers of Western have knowledge, that individually or in the aggregate is reasonably likely to have a Western Material Adverse Effect, except for normal year-end adjustments and other adjustments described in the Latest Western Balance Sheet. Section 6.6 Absence of Certain Changes or Events. Except as disclosed prior to the date of this Agreement in the Western SEC Documents, since December 31, 1993, (a) the respective businesses of Western and its subsidiaries have been conducted only in the ordinary course and consistent with past practice, (b) there has not been any change in the business, assets, properties, financial condition or results of operations of Western and its subsidiaries, taken as a whole, that is reasonably likely to (x) have a Western Material Adverse Effect (it being acknowledged by BJ that the public announcement on September 13, 1994 by BJ of its proposal to acquire Western and subsequent events related thereto, including, without limitation, entering into this Agreement and the transactions contemplated hereby, could have a negative impact on operating results prior to the Effective Time) or (y) as of the date hereof, materially impair the ability of Western to perform its obligations hereunder and (c) there has not been: (i) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of Western, or any repurchase, redemption or other acquisition by Western of any outstanding shares of capital stock or other equity securities of Western or any options, warrants or rights of any kind to acquire any, or any securities exercisable or exchangeable for or convertible into shares of, capital stock or other equity securities of Western (other than the extinguishment of options upon the exercise of Western Options and other than purchases of Western Common Stock by the trustee under the Western Retirement Savings Plan); (ii) any change in any method of accounting or accounting practice by Western, except for any such change required to be implemented pursuant to generally accepted accounting principles or rules of the Commission; or (iii) any (A) grant of any severance or termination pay to any director, officer or employee of Western or any of its subsidiaries (other than settlement arrangements with employees other than officers in accordance with past practice and pursuant to which Western or its subsidiaries obtain certain waivers of rights), (B) entering into of any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of Western or any subsidiary thereof, (C) any increase in benefits payable under any existing severance or termination pay policies or employment agreements, or (D) any increase in compensation, bonus or other benefits payable to directors, officers or employees of Western or any subsidiary thereof, other than in the ordinary course (including normal individual periodic performance reviews and related compensation and benefit increases and bonus payments and awards under existing plans). Section 6.7 Benefit Plans. (a) Section 6.7(a) of the Western Disclosure Memorandum contains a complete list of each "employee benefit plan" (within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including, without limitation, multiemployer plans within the meaning of ERISA section 3(37), stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive or deferred compensation plans) under which any employee or director or former employee or director of Western, including any beneficiary thereof, has any present or future right to benefits or under which Western has any present or future liability (other than payments by insurance companies under terminated insurance contracts). All such plans, agreements, programs, policies and arrangements shall be collectively referred to as the "Western Plans". (b) With respect to each Western Plan, Western has delivered or, in the case of clauses (i), (ii) and (iv) below, made available to BJ a current, accurate and complete copy (or, to the extent no such copy exists, an accurate description) thereof and, to the extent applicable: (i) any related trust agreement, annuity contract or other funding instrument; (ii) the most recent Internal Revenue Service determination letter; (iii) any summary plan description and other written communications by Western to its employees which are materially inconsistent with any summary plan description; and (iv) the most recent (I) Form 5500 and attached schedules; (II) audited financial statements; (III) actuarial valuation reports; and (IV) attorney's response to an auditor's request for information. (c) (i) Each Western Plan has been established and administered in accordance with its terms, and in substantial compliance with the applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended (the "Code") and other applicable laws, rules and regulations; (ii) each Western Plan which is intended to be qualified within the meaning of Code section 401(a) is so qualified and has received a favorable determination letter as to its qualification and nothing has occurred to the knowledge of the executive officers of Western, whether by action or failure to act, which would cause the loss of such qualification; and (iii) with respect to any Western Plan, no actions, A-18 suits or claims (other than routine claims for benefits in the ordinary course) are pending or, to the knowledge of the executive officers of Western, threatened. Western will promptly notify BJ in writing of any pending or threatened claims arising between the date hereof and the Closing Date (other than routine claims for benefits in the ordinary course). No event has occurred and no condition exists with respect to or relating to any Western Plan that is reasonably likely to subject Western, either directly or by reason of its affiliation with any member of its Controlled Group (defined as any organization which is a member of a controlled group of organizations within the meaning of Code sections 414(b), (c), (m) or (o)), to any material tax,fine or penalty or other liability imposed by ERISA, the Code or other applicable laws. (d) (i) No Western Plan has incurred any "accumulated funding deficiency" as such term is defined in ERISA section 302 and Code section 412 (whether or not waived); (ii) to the knowledge of the executive officers of Western, no event or condition exists which could be deemed a reportable event within the meaning of ERISA section 4043 with respect to any Western Plan that is subject to Title IV of ERISA where the present value of accrued benefits exceeds the fair market value of assets available for such benefits by a material amount; (iii) Western and each member of its Controlled Group have made all required premium payments when due to the PBGC; (iv) neither Western nor any member of its Controlled Group is subject to any liability to the PBGC for any plan termination; (v) no amendment has occurred which has required or could require Western or any member of its Controlled Group to provide security pursuant to Code section 401(a)(29); and (vi) neither Western nor any member of its Controlled Group has engaged in a transaction which is reasonably likely to subject it to liability under ERISA section 4069. (e) Section 6.7(e) of the Western Disclosure Memorandum sets forth, on a plan by plan basis, the present value of benefits payable presently or in the future to present or former employees of Western under each unfunded Western Plan which is a pension plan within the meaning of Section 3(2) of ERISA. (f) No Western Plan is a multiemployer plan (within the meaning of Section 3(37) of ERISA) and neither Western nor any member of its Controlled Group has incurred or is likely to incur any liability to any multiemployer plan nor is engaged in a transaction which could subject Western to liability under ERISA section 4212(c). (g) (i) No Western Plan, by its terms, provides for an increase in the rate of accrual or the amount of benefits thereunder on or after the Closing Date (other than increases due to ordinary accruals or contributions under the plan), (ii) each Western Plan may be amended or terminated under the terms of such Western Plan without material obligation or liability (other than those obligations and liabilities for which specific assets have been set aside in a trust or other funding vehicle or reserved for on Western's balance sheet); and (iii) except as specifically contemplated by this Agreement, no Western Plan exists which could result in the payment to any Western employee of any money or other property or rights or accelerate or provide any other rights or benefits to any Western employee as a result of the transaction contemplated by this Agreement, whether or not such payment would constitute a parachute payment within the meaning of Code section 280G. Section 6.8 Labor Matters. (i) Neither Western nor any of its Significant Subsidiaries is party to any collective bargaining agreement or other material contract or agreement with any labor organization or other representative of employees nor is any such contract being negotiated; (ii) there is no material unfair labor practice charge or complaint pending nor, to the knowledge of the executive officers of Western, threatened, with regard to employees of Western or any Significant Subsidiary; (iii) there is no labor strike, material slowdown, material work stoppage or other material labor controversy in effect, or, to the knowledge of the executive officers of Western, threatened against Western or any of its Significant Subsidiaries; (iv) as of the date hereof, no representation question exists, nor to the knowledge of the executive officers of Western are there any campaigns being conducted to solicit cards from the employees of Western or any Significant Subsidiary of Western to A-19 authorize representation by any labor organization; (v) neither Western nor any Significant Subsidiary of Western is party to, or is otherwise bound by, any consent decree with any governmental authority relating to employees or employment practices of Western or any Significant Subsidiary of Western; and (vi) Western and each Significant Subsidiary of Western are in compliance with all applicable agreements, contracts and policies relating to employment, employment practices, wages, hours and terms and conditions of employment of the employees except where failure to be in compliance with each such agreement, contract and policy is not, either singly or in the aggregate, reasonably likely to have a Western Material Adverse Effect. Section 6.9 Tax Matters. Each of Western and each of its Significant Subsidiaries, and any consolidated, combined, unitary or aggregate group for tax purposes of which Western or any of its subsidiaries is or has been a member, has timely filed all material Tax Returns required to be filed by it, has paid all Taxes shown thereon to be due and has provided adequate reserves in its financial statements for any Taxes that have not been paid but are properly accruable under generally accepted accounting principles, whether or not shown as being due on any returns. Except to the extent that the inaccuracy of any of the following, individually or in the aggregate, is not reasonably likely to have a Western Material Adverse Effect, no claim for unpaid Taxes has become a lien or encumbrance of any kind against the property of Western or any of its Significant Subsidiaries or is being asserted against Western or any of its Significant Subsidiaries; no audit of any Tax Return of Western or any of its Significant Subsidiaries is being conducted by a Tax authority; and no extension of the statute of limitations on the assessment of any Taxes has been granted by Western or any of its Significant Subsidiaries and is currently in effect. Neither Western nor any of its Significant Subsidiaries has made an election under Section 341(f) of the Internal Revenue Code. Section 6.10 Environmental Matters. Except to the extent that the inaccuracy of any of the following, individually or in the aggregate, is not reasonably likely to have a Western Material Adverse Effect, to the knowledge of the executive officers of Western: (i) Western and its subsidiaries hold, and are in compliance with and have been in compliance with for the last two years, all Environmental Permits, and are otherwise in substantial compliance and have been in substantial compliance for the last two years with, all applicable Environmental Laws and there is no condition that is reasonably likely to prevent or materially interfere prior to the Effective Time with compliance by Western and its subsidiaries with Environmental Laws; (ii) no modification, revocation, reissuance, alteration, transfer or amendment of any Environmental Permit, or any review by, or approval of, any third party of any Environmental Permit is required in connection with the execution or delivery of this Agreement or the consummation by Western of the transactions contemplated hereby or the operation of the business of Western or any of its subsidiaries on the Closing Date; (iii) neither Western nor any of its subsidiaries has received any Environmental Claim, nor has any Environmental Claim been threatened against Western or any of its subsidiaries; (iv) neither Western nor any of its subsidiaries has entered into, agreed to or is subject to any outstanding judgment, decree, order or consent arrangement with any governmental authority under any Environmental Laws, including without limitation those relating to compliance with any Environmental Laws or to the investigation, cleanup, remediation or removal of Hazardous Materials; (v) there are no circumstances that are reasonably likely to give rise to liability under any agreements with any person pursuant to which Western or any subsidiary of Western would be required to defend, indemnify, hold harmless, or otherwise be responsible for any A-20 violation by or other liability or expense of such person, or alleged violation by or other liability or expense of such person, arising out of any Environmental Law; and (vi) there are no other circumstances or conditions that are reasonably likely to give rise to liability of Western or any of its subsidiaries under any Environmental Laws. Section 6.11 Litigation. Except as disclosed prior to the date hereof in Western SEC Documents, there is no suit, action, investigation or proceeding pending or, to the knowledge of the executive officers of Western, threatened against Western or any of its subsidiaries at law or in equity before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or before any arbitrator of any kind, that is reasonably likely to have a Western Material Adverse Effect or, with respect to such matters that are pending or threatened as of the date hereof, materially impair the ability of Western to perform its obligations hereunder and there is no judgment, decree, injunction, rule or order of any court, governmental department, commission, board, bureau, agency, instrumentality or arbitrator to which Western or any of its subsidiaries is subject that is reasonably likely to have a Western Material Adverse Effect or, with respect to such items that are outstanding and applicable as of the date hereof, materially impair the ability of Western to perform its obligations hereunder. Section 6.12 Governmental Licenses and Permits; Compliance with Law. Except as disclosed prior to the date hereof in the Western SEC Documents, since December 31, 1993 neither Western nor any of its Significant Subsidiaries has received notice of any revocation or modification of any federal, state, local or foreign governmental license, certification, tariff, permit, authorization or approval the revocation or modification of which has had or is reasonably likely to have a Western Material Adverse Effect. To the knowledge of the executive officers of Western, the conduct of the business of each of Western and its subsidiaries complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto, except for violations or failures to comply, if any, that, individually or in the aggregate, are not reasonably likely to have a Western Material Adverse Effect. Section 6.13 Amendment to Western Rights Agreement. (a) The Board of Directors of Western has taken all necessary action to amend the Western Rights Agreement so that none of the execution and delivery of this Agreement, the conversion of shares of Western Common Stock into the right to receive Merger Consideration in accordance with Article III of this Agreement, and the consummation of the Merger or any other transaction contemplated hereby will cause (i) the Western Rights issued pursuant to the Western Rights Agreement to become exercisable under the Western Rights Agreement, (ii) BJ or any of BJ's direct or indirect subsidiaries to be deemed an "Acquiring Person" (as defined in the Western Rights Agreement), (iii) any such event to be deemed a "Flip-over Transaction or Event" (as defined in the Western Rights Agreement) or (iv) the "Stock Acquisition Date" (as defined in the Western Rights Agreement) to occur upon any such event. (b) The "Expiration Time" (as defined in the Western Rights Agreement) of the Western Rights will occur immediately prior to the Effective Time. (c) The "Separation Time" (as defined in the Western Rights Agreement) has not occurred. Section 6.14 Required Vote of Western Stockholders. The affirmative vote of the holders of not less than 66-2/3% of the outstanding shares of Western Common Stock is required to adopt this Agreement and approve the Merger and the other transactions contemplated hereby. No other vote of the stockholders of Western is required by law, the Restated Certificate of Incorporation or Bylaws of Western or otherwise to adopt this Agreement and approve the Merger and the other transactions contemplated hereby. A-21 Section 6.15 Western Action. The Board of Directors of Western (at a meeting duly called and held on November 17, 1994) unanimously (a) determined that the Merger is fair to and in the best interests of Western and its stockholders, (b) approved this Agreement and the Merger in accordance with the Delaware Corporation Law, (c) resolved to recommend approval and adoption of this Agreement and Merger by Western's stockholders and (d) directed that this Agreement be submitted to Western's stockholders. Section 6.16 Opinion of Financial Advisor. On the date hereof, Western has received the opinion of Goldman, Sachs & Co. to the effect that the consideration to be received in the Merger by Western's stockholders is fair to such stockholders. Section 6.17 Brokers and Finders. Except for Goldman, Sachs & Co. and Alexander Corporate Financial Consulting, Inc., no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with this Agreement or the Merger based upon arrangements made by or on behalf of Western. Except as expressly set forth in this Agreement, no valid claim against Western or, to the knowledge of the executive officers of Western, against BJ or BJ Sub exists for payment of any fee or other compensation as a result of any of the transactions contemplated hereby. Section 6.18 Intellectual Property. Western and each of its subsidiaries owns, or is licensed to use (in each case, clear of any material liens or other encumbrances) all patents, trademarks, trade names, copyrights, technology, know-how and processes used in or necessary for the conduct of its business as currently conducted which are material to the business of Western. To the knowledge of the executive officers of Western, the use of such patents, trademarks, trade names, copyrights, technology, know-how and processes by Western and its subsidiaries does not infringe on the rights of any person, subject to such claims and infringements as do not, in the aggregate, give rise to any liability that is reasonably likely to have a Western Material Adverse Effect. ARTICLE VII CONDUCT OF BUSINESS PENDING THE MERGER Section 7.1 Conduct of Business by Western Pending the Merger. Prior to the Effective Time, unless BJ shall otherwise consent in writing (it being understood that BJ must act in good faith whenever it withholds such consent), Western shall, and shall cause its subsidiaries to, carry on their respective businesses only in the ordinary course and consistent with past practice and, to the extent consistent therewith and with the specific terms of this Agreement, use all commercially reasonable efforts to preserve intact their current business organizations, keep available the services of their current employees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, prior to the Effective Time, except as expressly contemplated by this Agreement or unless BJ shall otherwise agree in writing, Western shall not and shall cause each of its subsidiaries not to: (i) (A) sell or pledge or otherwise encumber or agree to sell or pledge any stock owned by it in any direct or indirect subsidiary of Western; (B) redeem, purchase or otherwise acquire any shares of, or any options, warrants or rights of any kind to acquire any shares of or any securities exercisable or exchangeable for or convertible into shares of, the capital stock of Western or any of its subsidiaries, other than the extinguishment of options outstanding as of the date hereof upon the exercise of such options and other than purchases of Western Common Stock by the trustee under the Western Retirement Savings Plan; (C) amend the Restated Certificate of Incorporation or Bylaws of Western or the certificate of incorporation or bylaws or other governing documents of any of Western's subsidiaries; (D) split, combine or reclassify any of Western's capital stock or the capital stock of any of Western's subsidiaries; or (E) declare, set aside or pay any dividend on, or make any other distributions in respect of, any of Western's A-22 capital stock or the capital stock of any of Western's subsidiaries, other than dividends and distributions by a direct or indirect subsidiary of Western to its stockholder or stockholders; (ii) (A) issue, authorize the issuance of or agree to issue any shares of, or any options, warrants or rights of any kind to acquire any shares of, or any securities exercisable or exchangeable for or convertible into shares of, Western's capital stock or the capital stock of any of Western's subsidiaries (except to issue shares of Western Common Stock (including associated Western Rights) upon the due exercise of Western Options, or the due conversion of Western Convertible Debentures, outstanding on the date hereof or the due exercise of outstanding Western Rights) or issue or agree to issue any other equity securities; (B) acquire or dispose of any business or line of business or any assets, other than in the ordinary course of business and consistent with past practice (or pursuant to the agreement dated November 1, 1994 with respect to the sale of the Alaskan Star Rig), or engage in any negotiations with any person or entity concerning any such transaction (other than negotiations with respect to the possible sale of offshore drilling rigs); (C) make any (1) capital expenditures which have not been expressly provided for in the list of currently authorized financial expenditures as of October 31,1994 (a copy of which has been delivered to BJ), or (2) capital expenditures in excess of $3,000,000 in the fourth calendar quarter of 1994 or in any calendar quarter of 1995, in addition to those permitted by clause (1) above; (D) enter into any other transaction not in the ordinary course of business and consistent with past practice; (E) amend or modify any of the terms of any Western Option or grant any stock option, stock appreciation rights or stock bonuses; (F) amend or modify the Western Rights Agreement or redeem any Western Rights; or (G) merge or consolidate with another corporation, other than the merger of a wholly-owned subsidiary of Western with and into Western or another wholly-owned subsidiary; (iii) (A) lease, license, mortgage or otherwise encumber or subject to any consensual lien any material assets other than in the ordinary course of business and consistent with past practice; (B) incur any indebtedness for borrowed money (other than letters of credit entered into, or short-term borrowings for working capital purposes incurred, in each case in the ordinary course of business and consistent with past practice) or guarantee any such indebtedness of another person or entity; or (C) make any loans, advances or capital contributions to, or investments in, any other person or entity, other than to Western or any direct or indirect subsidiary of Western, other than as required under existing agreements with third parties and other than in connection with the relocation of employees under existing Western policies and consistent with past practice; (iv) (A) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the payment, discharge or satisfaction of its liabilities or its obligations in the ordinary course of business or in accordance with their terms as in effect on the date hereof; (B) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, restructuring, recapitalization or reorganization, other than a plan or resolution authorizing the dissolution of a subsidiary of Western with less than $100,000 in assets; (C) enter into any collective bargaining agreement, successor collective bargaining agreement or amended collective bargaining agreement; (D) change any accounting principle used by it, except for such changes required to be implemented prior to the Effective Time pursuant to generally accepted accounting principles or rules of the Commission; or (E) settle or compromise any litigation brought against it other than settlements or compromises of any litigation where the amount paid in settlement or compromise (including without limitation the cost to Western and its subsidiaries of complying with any provision of such settlement or compromise other than cash payments) does not exceed $500,000, exclusive of amounts covered by insurance; (v) (A) enter into any new, or amend any existing, severance agreement arrangement (other than settlement arrangements with employees other than officers in A-23 accordance with past practice and pursuant to which Western obtains certain waivers of rights from such employees), deferred compensation arrangement or employment agreement with any current officer, director or employee, (B) adopt any new, or amend any existing, incentive, retirement or welfare benefit arrangements, plans or programs for the benefit of current, former or retired employees of Western and its subsidiaries and their respective predecessors that would increase the cost of aggregate benefits available by more than 1% (other than amendments required by law or to maintain the tax qualified status of such plans under the Code), or (C) grant any increases in employee compensation, other than in the ordinary course or pursuant to promotions, in each case consistent with past practice (which shall include normal individual periodic performance reviews and related compensation and benefit increases and bonus payments and awards under existing plans and forgiveness of employee indebtedness incurred in connection with relocation loans made under existing Western policies); or (vi) authorize or enter into any agreement to do any of the foregoing. ARTICLE VIII ADDITIONAL AGREEMENTS Section 8.1 Access and Information. Subject to the Confidentiality Agreements (as defined in Section 10.2), upon reasonable notice, Western and BJ shall each afford to the other and to the other's accountants, counsel and other authorized representatives reasonable access during normal business hours throughout the period prior to the Effective Time to all of its properties, books, contracts, commitments and records (including but not limited to tax returns) and, during such period, each shall furnish promptly to the other (i) a copy of each report and other document filed by it pursuant to the requirements of federal or state securities laws and (ii) all other information concerning its business, properties and personnel as such other party may reasonably request, provided that the foregoing shall not require Western or BJ to permit any inspection, or to disclose any information, that in the reasonable judgment of Western or BJ, as the case may be, would result in the disclosure of any trade secrets of third parties or violate any obligation of Western or BJ, as the case may be, with respect to confidentiality if Western or BJ, as the case may be, shall have used reasonable efforts to obtain the consent of such third party to such inspection or disclosure. All requests for information made pursuant to this Section 8.1 shall be directed to an executive officer of Western or BJ or such person as may be designated by either of their respective officers, as the case may be. No investigation pursuant to this Section 8.1 shall affect any representation or warranty in this Agreement of any party hereto or any condition to the obligations of the parties hereto. Section 8.2 Stock Exchange Listing. BJ shall use its best efforts to list on the NYSE, prior to the Effective Time, subject to official notice of issuance, (a) the BJ Common Stock (including associated BJ Purchase Rights) and the BJ Common Stock issuable upon exercise of the BJ Warrants to be issued pursuant to the Merger, and (b) the BJ Warrants to be issued pursuant to the Merger. If the BJ Warrants are not so listed on the NYSE, BJ shall use its best efforts to have the BJ Warrants listed on NASDAQ. Section 8.3 Stockholders' Approval. Each of BJ and Western shall take, in accordance with applicable law and their respective certificates of incorporation and bylaws, all action necessary to convene a meeting of its stockholders (collectively, the "Stockholders Meetings") as promptly as practicable after the registration statement on Form S-4 to be filed with the Commission by BJ in connection with the issuance of shares of BJ Common Stock (including associated BJ Purchase Rights) and BJ Warrants (including shares of BJ Common Stock issuable upon the exercise thereof) in the Merger (the "S-4") is declared effective for the purpose of voting, in the case of Western, to adopt this Agreement and approve the Merger and the other transactions contemplated hereby and, in the case of BJ, to approve this Agreement and the issuance of BJ Common Stock and BJ Warrants in the A-24 Merger and, in each case, such other matters as may be appropriate at such meetings and are consented to in writing by BJ and Western (which consent shall not be unreasonably withheld), provided that no proxy statement for use in connection with the stockholders' meeting of each of BJ and Western referred to in Section 8.3 hereof (the "Joint Proxy Statement") shall be mailed by Western or BJ without the prior approval of the other party hereto. Each of BJ and Western will use its best efforts to hold such meetings no later than April 30, 1995, unless otherwise agreed by the parties hereto, and will use its best efforts to hold such meetings on the same day. Unless otherwise required by applicable law because of the fiduciary duties of the directors of Western to its stockholders as determined by such directors in good faith after consultation with and based upon the advice of Sullivan & Cromwell, as legal counsel to Western, the Board of Directors of Western shall recommend to its stockholders approval of the transactions contemplated by this Agreement, Western shall use its best efforts to solicit from its stockholders proxies in favor of the adoption of this Agreement and the approval of the Merger and the other transactions contemplated hereby, and Western shall not take any actions that are inconsistent with such best efforts obligation. BJ shall recommend to its stockholders approval of the transactions contemplated by this Agreement, shall use its best efforts to solicit from its stockholders proxies in favor of the approval of this Agreement and the issuance of the Stock Consideration and Warrant Consideration in the Merger as required by NYSE Rule 312.05, and shall not take any actions that are inconsistent with such best efforts obligation. Each of Western and BJ shall take all other action necessary or advisable to secure the vote or consent of its stockholders required by Delaware Corporation Law or NYSE rules, as the case may be, to obtain such approvals. Western will cause its transfer agent to make stock transfer records relating to Western available to the extent reasonably necessary to effectuate the intent of this Agreement. Section 8.4 No Solicitation. (a) Except with respect to BJ and its affiliates, on or after the date hereof, Western shall not, and shall cause its subsidiaries and its and its subsidiaries' officers, directors, affiliates, agents and representatives (including without limitation any investment banker, attorney or accountant retained by Western or any of its subsidiaries), and shall use its best efforts to cause its and its subsidiaries' employees not to, initiate, solicit or encourage, directly or indirectly, any inquiries or the making of any proposal with respect to an Alternative Transaction (as hereinafter defined), participate in any negotiations concerning, or provide to any other person any information or data relating to Western or its subsidiaries for the purpose of, or have any substantive discussions with, any person relating to, or otherwise cooperate with or assist or participate in, or facilitate, any inquiries or the making of any proposal which constitutes, or would reasonably be expected to lead to, any effort or attempt by any other person to seek to effect an Alternative Transaction, or agree to or endorse any Alternative Transaction; provided, however, that nothing contained in this Section 8.4 shall prohibit Western or its Board of Directors from taking and disclosing to the stockholders of Western a position with respect to any such Alternative Transaction that, in the judgment of the Board of Directors of Western, as determined in good faith by such directors after consultation with and based upon the advice of Sullivan & Cromwell, as counsel to Western, is required by applicable law; and provided, further, that (x) the Board of Directors of Western may (i) upon the unsolicited request of a third party which executes a confidentiality agreement with Western in customary form, furnish information or data (including without limitation confidential information or data relating to Western or its subsidiaries) in order to allow such third party to consider making a proposal with respect to, or entering into, an Alternative Transaction involving such third party and Western, (ii) participate in negotiations or have substantive discussions with a third party who makes an unsolicited, bona fide proposal regarding an Alternative Transaction, and (iii) in connection therewith, cooperate with or assist or facilitate such third party in its attempt to effect such Alternative Transaction, and (y) following receipt of an unsolicited, bona fide proposal from a third party regarding an Alternative Transaction, the Board of Directors of Western may withdraw or modify its recommendation referred to in Section 8.3, in each case to the extent that the Board of Directors of Western determines in good faith, after consultation with and based upon the advice of Sullivan & Cromwell, as counsel to Western, that such action may be required in order for the Board of Directors to act in a manner that is consistent with its fiduciary obligations under applicable law. A-25 Western shall promptly advise BJ of any such request or proposal that Western may receive. Prior to taking any such action, if Western intends to participate in any such discussions or negotiations or provide any such information to any such third party, Western shall give reasonable prior notice to BJ. of each such action. Nothing in this Section 8.4 shall (A) permit Western to terminate this Agreement or (B) permit Western to enter into any written agreement with respect to an Alternative Transaction during the term of this Agreement (it being agreed that during the term of this Agreement Western shall not enter into any written agreement with any person that provides for, or in any way facilitates, an Alternative Transaction, other than a confidentiality agreement in the form referred to above), it being understood that Section 10.1(f) sets forth the rights of Western to terminate this Agreement in the circumstances specified in clause (y) above. (b) Western will immediately, and will cause its subsidiaries and its and its subsidiaries' officers, directors, agents and representatives (including without limitation any investment banker, attorney or accountant retained by Western or any of its subsidiaries), and will use its best efforts to cause its and its subsidiaries' employees, to immediately, cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any possible Alternative Transactions. (c) Without limiting the foregoing, it is understood that any violation of the restrictions set forth in the first sentence of Section 8.4(a) by any officer or director or authorized employee, agent or representative of Western or any of its subsidiaries (including, without limitation, any investment banker, attorney or accountant retained by Western or any of its subsidiaries), or otherwise shall be deemed to be a breach of Section 8.4(a) by Western. (d) As used herein, "Alternative Transaction" means (i) any merger, consolidation or other business combination transaction involving Western in which another corporation, partnership, person, other entity or group (as defined in Section 13(d)(3) of the Exchange Act) would acquire beneficial ownership of at least 20% of the aggregate voting power of all voting securities of Western or the Surviving Corporation, as the case may be; (ii) any tender offer or exchange offer for any securities of Western which, if consummated, would result in another corporation, partnership, person, other entity or group (as defined in Section 13(d)(3) of the Exchange Act) becoming the beneficial owner of at least 20% or more of the aggregate voting power of all voting securities of Western; (iii) any sale or other disposition of assets of Western or any of its subsidiaries (excluding the offshore drilling rigs) in a single transaction or in a series of related transactions if the fair market value of such assets exceeds 20% of the aggregate fair market value of the assets of Western and its subsidiaries taken as a whole before giving effect to such sale or other disposition; (iv) the adoption by Western of a plan of liquidation, the declaration or payment by Western of an extraordinary dividend on any of its shares of capital stock or the effectuation by Western of a recapitalization or other type of transaction which would involve either a change in Western's outstanding capital stock or a distribution of assets of any kind to the holders of such capital stock; or (v) the repurchase by Western or any of its subsidiaries of shares of Western Common Stock representing at least 20% or more of the aggregate voting power of all voting securities of Western. Section 8.5 Antitrust Filing and Divestitures. (a) Within two Trading Days after the date hereof, Western and BJ shall file notification and report forms under the Hart Scott Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of the Department of Justice (the "Antitrust Division") and shall promptly make all other necessary, proper or advisable filings with the applicable federal, state or local government or any court, administrative agency or commission or other governmental authority or agency, domestic or foreign (a "Governmental Entity"), related to the transactions contemplated by this Agreement and shall use their best efforts to respond as promptly as practicable to all inquiries received from the FTC or the Antitrust Division or such other Governmental Entities for additional information or documentation. Each of the parties hereto agrees to furnish the others with copies of all correspondence, filings and communications (and memoranda setting forth the substance thereof) between it and its affiliates and their respective representatives, A-26 on the one hand, and the FTC the Antitrust Division or any other Governmental Entity or members of their respective staffs, on the other hand, with respect to this Agreement and the transactions contemplated hereby. Each party hereto agrees to furnish the others with such necessary information and reasonable assistance as such other parties and their respective affiliates may reasonably request in connection with their preparation of necessary filings, registrations or submissions of information to any Governmental Entities, including without limitation any filings necessary under the provisions of the Hart Scott Act. (b) Without limiting the generality of the undertakings pursuant to this Section 8.5 and Section 8.14, BJ shall promptly take or cause to be taken all actions as it may determine to be reasonably appropriate in order to avoid the commencement of a proceeding by any Governmental Entity to restrain, enjoin or to otherwise prohibit consummation of the Merger so as to permit consummation of the Merger on a schedule as close as possible to that contemplated by this Agreement. Section 8.6 Indemnification and Insurance. (a) From and after the Effective Time, BJ agrees that it or the Surviving Corporation will indemnify and hold harmless each present and former director and officer of Western and its subsidiaries (the "Indemnified Parties") against any and all costs or expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages or liabilities (collectively, "Costs") incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent allowed by law (and BJ or the Surviving Corporation will also advance expenses as incurred to the fullest extent permitted under applicable law provided the person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification). (b) Any Indemnified Party wishing to claim indemnification under paragraph (a) of this Section 8.6, upon learning of any such claim, action, suit, proceeding or investigation, shall promptly notify BJ and the Surviving Corporation thereof, but the failure to so notify shall not relieve BJ or the Surviving Corporation of any liability it may have to such Indemnified Party except to the extent that such failure materially prejudices the indemnifying party. In the event of any such claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time), (i) BJ or the Surviving Corporation shall have the right to assume the defense thereof (which it shall, in cooperation with the Indemnified Parties, vigorously defend) and neither BJ nor the Surviving Corporation shall be liable to such Indemnified Parties for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Parties in connection with the defense thereof, except that if neither BJ nor the Surviving Corporation elects to assume such defense or there is a conflict of interest between BJ or the Surviving Corporation, on the one hand, and the Indemnified Parties, including situations in which there are one or more legal defenses available to the Indemnified Party that are different from or additional to those available to BJ or the Surviving Corporation, the Indemnified Parties may retain counsel satisfactory to them, and BJ or the Surviving Corporation shall pay all reasonable fees and expenses of such counsel for the Indemnified Parties promptly as statements therefor are received; provided, however, that neither BJ nor the Surviving Corporation shall, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties except to the extent that local counsel, in addition to such parties' regular counsel, is required in order to effectively defend against such action or proceeding, (ii) the Indemnified Parties will cooperate in the defense of any such matter and (iii) neither BJ nor the Surviving Corporation shall be liable for any settlement effected without its prior written consent, and provided, further, that neither BJ nor the Surviving Corporation shall have any obligation hereunder to any Indemnified Party when and if a court of competent jurisdiction shall ultimately determine, and such determination shall have become A-27 final, that the indemnification of such Indemnified Party in the manner contemplated hereby is prohibited by applicable law. (c) For a period of three years after the Effective Time, the Surviving Corporation shall use its best efforts to maintain in effect the current policies of directors' and officers' liability insurance maintained by Western (the "Current D&O Policy") (provided that the Surviving Corporation may substitute therefor policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous ("Substitute Coverage") and will, to the extent available, provide such Substitute Coverage if the Current D&O Policy is not available) with respect to claims arising from facts or events occurring at or prior to the Effective Time; provided, however, if the Current D&O Policy expires, is terminated or canceled during such three year period and Substitute Coverage cannot be obtained, the Surviving Corporation shall use its best efforts to obtain as much insurance as can be obtained for the remainder of such period up to a maximum of the coverage amount of the Current D&O Policy; provided further, that in no event shall the Surviving Corporation be required to expend for insurance premiums pursuant to this Section 8.6(b) more than 150% of the current annual premiums paid by Western for such insurance (which premiums Western represents and warrants to be $421,000 in the aggregate). (d) If the Surviving Corporation or any of its successors or assigns (i) shall consolidate with or merge into any other corporation or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any individual, corporation or other entity, then and in each such case, proper provisions shall be made so that the successors and assigns of the Surviving Corporation shall assume all of the obligations of the Surviving Corporation set forth in this Section 8.6. (e) The provisions of this Section 8.6 are intended to be for the benefit of, and shall be enforceable by, each of the directors and officers of Western who are the beneficiaries of the indemnification arrangements specified herein and their heirs and their representatives. Section 8.7 Amendment of Western Plans. Western shall take such action as is necessary to amend, as of the Effective Time, each Western Plan providing for the issuance of, or related to, the securities of Western or the Surviving Corporation to provide that on and after the Effective Time, no option or other right shall be outstanding to acquire any security of Western or the Surviving Corporation. Section 8.8 Employee Arrangements. (a) The Surviving Corporation agrees that, during the period commencing at the Effective Time and ending on the first anniversary thereof, the employees of Western will continue to be provided with benefits under employee benefit plans that are no less favorable in the aggregate than those currently provided by Western to such employees; provided, however, that nothing herein shall (i) prevent the amendment or termination of any Western Plan, (ii) require the Surviving Corporation to provide or permit investment in the securities of BJ, BJ Sub, Western or the Surviving Corporation, or (iii) limit or restrict the ability of BJ,Western or the Surviving Corporation to terminate the employment of any officer or employee. (b) Notwithstanding anything to the contrary in Section 8.8(a), BJ will, and will cause the Surviving Corporation to honor all employee benefit obligations to current and former employees and directors under the Western Plans, under the Retirement Plan for Non-Employee Directors and, to the extent set forth in Western SEC Documents or the Western Disclosure Memorandum, the Special Severance Policy in existence on the date hereof and all employment or severance agreements or indemnification agreements entered into by Western or adopted by the Board of Directors of Western prior to the date hereof; provided, however, that nothing shall prevent BJ or the Surviving Corporation from taking any action with respect to such plans, obligations or agreements or refraining from taking any such action which is permitted or provided for under the terms thereof. A-28 (c) Employees of the Surviving Corporation shall be given credit for all service with Western and its subsidiaries under all employee benefit plans, programs and policies of the Surviving Corporation or BJ in which they become participants for all purposes thereunder; provided, however, that employees of the Surviving Corporation who become participants in a defined benefit pension plan sponsored by BJ or in a defined benefit pension plan sponsored by the Surviving Corporation which is adopted on or after the Effective Time shall not be given credit for benefit accrual purposes to the extent such credit would result in a duplication of benefits under more than one defined benefit pension plan. (d) A special committee of the Board of Directors of BJ shall be established (the "Special Committee") consisting of two current outside directors of BJ and two current outside directors of Western who will become directors of BJ after the Closing Date as specified in Section 8.16. Except as otherwise specified in the last sentence of this Section 8.8(d), the provisions of this Section 8.8 shall be enforceable exclusively by the Special Committee for the benefit of the officers and employees of the Surviving Corporation and its subsidiaries who were officers and employees of Western and its subsidiaries prior to the Effective Time. If any such officer or employee has any claim that the provisions of this Section 8.8 have not been complied with, such officer or employee shall be required to submit such claim to the Special Committee, and any decision rendered by a majority of the members of the Special Committee shall be binding upon such officer or employee and shall be dispositive of such claim for all purposes whatsoever. If (and only if) the Special Committee is unable to reach a majority decision with respect to the disposition of such claim, such officer or employee may pursue his claim in any other appropriate manner. Section 8.9 Publicity. Except with respect to matters concerning an Alternative Transaction, the parties hereto shall consult with each other concerning any proposed press release or public announcement pertaining to the transactions contemplated by this Agreement and shall use their best efforts to agree upon the text of any such press release or the making of such public announcement prior to the public dissemination thereof and prior to making any filings with any Governmental Entity or national securities exchange with respect thereto, except as may be required by law or by obligations pursuant to any listing agreement with or rules of any national securities exchange. Section 8.10 Fees and Expenses. (a) Except as provided in Sections 8.10(b) through Section 8.10(g), whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense. (b) If (i) Western terminates this Agreement pursuant to Section 10.1(f); (ii) BJ terminates this Agreement pursuant to Section 10.1(e)(i); or (iii) either Western or BJ terminates this Agreement pursuant to Section 10.1(h) and, prior to such failure of Western stockholders to adopt this Agreement and approve the Merger, another party shall have made a proposal to effectuate an Alternative Transaction and such proposal shall have been publicly announced, then in any such event Western shall pay to BJ, in immediately available funds, (A) on the date on which such Alternative Transaction is consummated, $16,000,000 (the "Topping Fee") and (B) within one Trading Day after requested by BJ (accompanied by reasonably detailed documentation) from time to time, all of BJ's Expenses up to a maximum payment pursuant to this clause (B) of $3,500,000. The term "BJ's Expenses" shall include all out-of-pocket expenses and fees (including without limitation fees and expenses payable to all banks, investment banking firms and other financial institutions and their respective agents and counsel for arranging or providing, or agreeing to arrange or provide, financing for, or financing advice with respect to, the Merger and all fees of counsel, accountants, experts and consultants to BJ or BJ Sub) actually incurred by BJ and BJ Sub or on their behalf in connection with the consummation of all transactions contemplated by this Agreement, including the Merger. (c) If the provisions of Section 8.10(b) are not applicable and BJ terminates this Agreement pursuant to Section 10.1(e) (ii), then Western shall pay to BJ, within one Trading Day after requested A-29 by BJ (accompanied by reasonably detailed documentation) from time to time, all of BJ's Expenses up to a maximum payment pursuant to this Section 8.10(c) of $3,500,000. (d) If Western terminates this Agreement pursuant to Section 10.1(g) and if (and only if) such termination occurs on or after the date of consummation of the BJ Alternative Transaction which gave rise to such right of termination under Section 10.1(g) then in such event BJ shall pay to Western, in immediately available funds, (i) on the date of such termination, $16,000,000 and (ii) within one Trading Day after requested by Western (accompanied by reasonably detailed documentation) from time to time, all of Western's Expenses up to a maximum payment pursuant to this clause (ii) of $3,500,000. The term "Western's Expenses" shall include all out-of-pocket expenses and fees (including without limitation fees and expenses payable to all investment banking firms, counsel, accountants, experts and consultants to Western) actually incurred by Western or on its behalf in connection with the consummation of the transactions contemplated by this Agreement, including the Merger. (e) If either BJ or Western terminates this Agreement pursuant to Section 10.1(j), then BJ shall pay to Western, within one Trading Day after requested by Western (accompanied by reasonably detailed documentation) from time to time, all of Western's Expenses up to a maximum payment pursuant to this Section 8.10(e) of $3,500,000; provided, however, that BJ shall pay to Western a termination fee of $20,000,000 and shall not make any additional payment to Western in reimbursement of Western's Expenses, if either BJ or Western terminates this Agreement pursuant to Section 10.1(j) and both of the following conditions shall have been satisfied: (i) the meeting of BJ stockholders shall have been held subsequent to the receipt of the first Antitrust Termination Notice (as defined in Section 8.10(f)) sent by Western at the end of the 100-day period referred to in Section 10.1(l) (the "Antitrust Approval Period") (without regard to any extensions thereof) and (ii) BJ shall have elected to extend the Antitrust Approval Period pursuant to clause (i) of Section 8.10(f) rather than pursuant to clause (ii) of Section 8.10(f). (f) If either BJ or Western terminates this Agreement pursuant to Sections 10.1(i) or 10.1(l) (but only if, in the case of a termination pursuant to Section 10.1(i), the action giving rise to an order or injunction sought to enjoin or otherwise prohibit the Merger for alleged violations of the federal or state antitrust laws), then BJ shall pay to Western a termination fee of $20,000,000 within five Trading Days after written notice of termination under Sections 10.1(i) or 10.1(l) (the "Antitrust Termination Notice") is received by BJ from Western or received by Western from BJ; provided, however, that BJ shall have the option to require Western to rescind any such Antitrust Termination Notice sent by Western under Section 10.1(l) if either of the conditions set forth below shall have been satisfied, in which event such Antitrust Termination Notice shall be rescinded and the Antitrust Approval Period shall be deemed to have been changed to 130 days: (i) if at the time such Antitrust Termination Notice is received, BJ has been engaged in active and continuous negotiations with the Antitrust Division or the FTC with respect to the Consent Decree Final Agreement (as defined in Section 10.1(l)), provided that prior to the tenth day after receipt by BJ of the Western Compliance Certificates (as defined in Section 10.1(l)), BJ and its outside counsel each delivered to Western certificates that to the best of their knowledge BJ is in "substantial compliance" with the Antitrust Division's or FTC's "second request" for information from BJ under the Act, or (ii) if the foregoing clause (i) is not applicable, if BJ shall have paid a fee of $2,500,000 to Western on or prior to the fifth Trading Day after BJ's receipt of such Antitrust Termination Notice; provided, further, that at the end of such extended Antitrust Approval Period BJ shall have the option to extend the Antitrust Approval Period for a second 30-day period by (x) paying a fee of $5,000,000 to Western if the Antitrust Approval Period was extended pursuant to clause (i) above, or (y) paying an A-30 additional fee of $2,500,000 to Western if the Antitrust Approval Period was extended pursuant to clause (ii) above, in which event upon such payment the Antitrust Approval Period shall be deemed to have been changed to 160 days. (g) If either BJ or Western terminates this Agreement pursuant to Section 10.1(m), then BJ shall pay to Western a termination fee of $20,000,000; provided, however, that if Western's stockholders shall fail to have approved the Merger or BJ's stockholders shall fail to have approved the issuance of BJ Common Stock and BJ Warrants in the Merger and this Agreement at a meeting of stockholders held to vote thereon and BJ is not in breach of its obligations contained in this Agreement, BJ shall have no obligation to pay any termination fee to Western pursuant to this Section 8.10(g). Section 8.11 Preparation of Form S-4 and Joint Proxy Statement. As promptly as practicable following the date of this Agreement, Western and BJ shall prepare and file with the Commission the Joint Proxy Statement, and BJ shall prepare and file with the Commission the S-4, in which the Joint Proxy Statement will be included. Each of Western and BJ shall use its best efforts to have the S-4 declared effective under the Securities Act as promptly as practicable after such filing. Western will use its best efforts to cause the Joint Proxy Statement to be mailed to Western's stockholders, and BJ will use its best efforts to cause the Joint Proxy Statement to be mailed to BJ's stockholders, in each case as promptly as practicable after the S-4 is declared effective under the Securities Act. BJ shall also take any action required to be taken under any applicable state securities laws in connection with the issuance of BJ Common Stock (including associated BJ Purchase Rights) and BJ Warrants (including the BJ Common Stock issuable upon exercise thereof) in the Merger, and Western shall furnish all information concerning Western and the holders of Western Common Stock as may be reasonably requested in connection with any such action. BJ, BJ Sub and Western each covenant and agree that the information provided and to be provided by such party for inclusion or incorporation by reference in the S-4 shall not, at the time the S-4 becomes effective and on the date of each Stockholders 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 were made, not misleading. Western, BJ and BJ Sub each agree to correct promptly any information provided by it for use in the S-4 which shall have become false or misleading prior to the times referred to above. Section 8.12 Affiliates. Prior to the Closing Date, Western shall deliver to BJ a letter identifying all persons who are, at the time this Agreement is submitted for approval to the stockholders of Western, "affiliates" of Western for purposes of Rule 145 under the Securities Act. Western shall use its reasonable best efforts to cause each such person to deliver to BJ on or prior to the Closing Date an affiliates' agreement substantially in the form attached hereto as Exhibit B. Section 8.13 Conveyance Taxes. BJ and Western shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer and stamp taxes, any transfer, recording, registration and other fees, and any similar taxes which become payable in connection with the transactions contemplated hereby that are required or permitted to be filed on or before the Effective Time. Any liability with respect to the transfer of the property of Western arising out of the New York State Real Property Transfer Gains Tax, the New York State Real Estate Transfer Tax or the New York City Real Property Transfer Tax shall be borne by BJ and expressly shall not be the liability of the stockholders of Western. Section 8.14 Additional Agreements. Subject to the terms and conditions set forth herein, each of the parties hereto agrees to use its best efforts to take, or cause to be taken, all action and to use its best efforts to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations and to otherwise use its best efforts to consummate and make effective the transactions contemplated by this Agreement, including using its best efforts to satisfy the conditions A-31 precedent to the obligations of any of the parties hereto, to obtain all necessary waivers, consents and approvals, to obtain waivers or consents from holders of, or to arrange to pay or for the prepayment of, indebtedness which would be the subject of an event of default as a result of the Merger, to effect all necessary registrations and filings (including but not limited to filings under the Hart Scott Act), and to cause to be lifted any injunction or other legal bar to the Merger (and, in such case, to proceed with the Closing and the Merger as expeditiously as possible), subject, however, to the requisite vote of the stockholders of Western and BJ. Section 8.15 Dividends. BJ shall not declare, set aside or pay any dividend payable in cash, stock or property with respect to any capital stock prior to the Effective Time. Section 8.16 Election to BJ's Board of Directors. At the Effective Time of the Merger, BJ shall promptly increase the size of its board of directors in order to enable the three current outside directors of Western listed on Exhibit C hereto (the "Western Representatives") to be appointed to BJ's Board of Directors and for at least one year after the next annual meeting of stockholders of BJ, subject to fiduciary obligations under applicable law, shall use its best efforts to cause the Western Representatives to be elected to BJ's Board of Directors by the stockholders of BJ. Section 8.17 BJ Vote. BJ will vote (or consent with respect to) or cause to be voted (or a consent to be given with respect to) any Western Common Stock and any shares of common stock of BJ Sub beneficially owned by it or any of its subsidiaries or with respect to which it or any of its subsidiaries has the power (by agreement, proxy or otherwise) to cause to be voted (or to provide a consent), in favor of the adoption and approval of this Agreement at any meeting of stockholders of Western or BJ Sub, respectively, at which this Agreement shall be submitted for adoption and approval and at all adjournments or postponements thereof (or, if applicable, by any action of stockholders of either Western or BJ Sub by consent in lieu of a meeting). Section 8.18 Warrant Agreement; Reservation of BJ Common Stock. Prior to the Effective Time, BJ shall execute and deliver to Western the Warrant Agreement and shall reserve for issuance such number of shares of BJ Common Stock to be issued upon conversion of the Western Convertible Debentures. Section 8.19 Supplemental Indentures. BJ Sub will use its best efforts to execute and deliver to Western supplemental indentures with respect to each of the Western Senior Notes and the Western Convertible Debentures. Section 8.20 BJ Standstill. If this Agreement is terminated (a) under the circumstances specified in Section 8.10(f) and BJ is thereby obligated to pay to Western the $20 million fee specified in Section 8.10(f), (b) pursuant to Section 10.1(l), or (c) pursuant to Section 10.1(k), then for five years after the date of such termination in the case of a termination under the circumstances specified in Section 8.10(f) or pursuant to Section 10.10), and for two years after the date of such termination in the case of a termination pursuant to Section 10.1(k), BJ and each of its successors will not, and will cause its affiliates not to: (i) acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by merger, purchase or otherwise, beneficial ownership of any assets or voting securities of Western or its affiliates or any direct rights or options to acquire (through purchase, exchange, conversion or otherwise) any assets or voting securities of Western or its affiliates; (ii) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are defined in Rule 14a-1 of Regulation 14A promulgated by the Commission, disregarding clause (iv) of Rule 14a-1(1)(2), but including any solicitation exempted pursuant to Rule 14a-2(b)(1)) to vote (including by the execution of actions by written A-32 consent), or seek to advise, encourage or influence any person or entity with respect to the voting of, any voting securities of Western; (iii) call, or in any way participate in a call for, any meeting of stockholders of Western (or take any action with respect to stockholders acting by written consent); (iv) form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of Western; or (v) otherwise act to control or influence, or seek to control or influence, Western or the management, Board of Directors, policies or affairs of Western, including, without limitation, (A) making any offer or proposal to acquire any securities or assets of Western or any of its affiliates or soliciting or proposing to effect or negotiate any form of business combination, restructuring, recapitalization or other extraordinary transaction involving Western, its affiliates or any of their respective securities or assets, (B) seeking Board representation or the removal of any directors or a change in the composition or size of the Board of Directors of Western, (C) making any request to amend or waive any provision of this Section 8.20, (D) disclosing any intent, purpose, plan or proposal with respect to this Section 8.20 or Western, its affiliates or the boards of directors, management, policies or affairs or securities or assets of Western or its affiliates that is inconsistent with this Section 8.20, including an intent, purpose, plan or proposal that is conditioned on, or would require, waiver, amendment, nullification or invalidation of any provision of this Section 8.20, or take any action that could require Western or any of its affiliates to make any public disclosure relating to any such intent, purpose, plan, proposal or condition, or (E) assisting, advising or encouraging any person with respect to, or seeking to do, any of the foregoing. Section 8.21 Western Standstill. If this Agreement is terminated under the circumstances specified in Section 8.10(f) and BJ pays to Western the $20 million fee specified in Section 8.10(f), then for five years after the date of such termination Western and each of its successors will not, and will cause its affiliates not to: (i) acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by merger, purchase or otherwise, beneficial ownership of any assets or voting securities of BJ or its affiliates or any direct rights or options to acquire (through purchase, exchange, conversion or otherwise) any assets or voting securities of BJ or its affiliates; (ii) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are defined in Rule 14a-1 of Regulation 14A promulgated by the Commission, disregarding clause (iv) of Rule 14a-1(1)(2), but including any solicitation exempted pursuant to Rule 14a-2(b)(1)) to vote (including by the execution of actions by written consent), or seek to advise, encourage or influence any person or entity with respect to the voting of, any voting securities of BJ; (iii) call, or in any way participate in a call for, any meeting of stockholders of BJ (or take any action with respect to stockholders acting by written consent); (iv) form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of BJ; or (v) otherwise act to control or influence, or seek to control or influence, BJ or the management, Board of Directors, policies or affairs of BJ, including, without limitation, (A) making any offer or proposal to acquire any securities or assets of BJ or any of its affiliates or soliciting or proposing to effect or negotiate any form of business combination, restructuring, recapitalization or other extraordinary transaction involving BJ, its affiliates or any of their A-33 respective securities or assets, (B) seeking Board representation or the removal of any directors or a change in the composition or size of the Board of Directors of BJ, (C) making any request to amend or waive any provision of this Section 8.21, (D) disclosing any intent, purpose, plan or proposal with respect to this Section 8.21 or BJ, its affiliates or the boards of directors, management, policies or affairs or securities or assets of BJ or its affiliates that is inconsistent with this Section 8.21, including an intent, purpose, plan or proposal that is conditioned on, or would require, waiver, amendment, nullification or invalidation of any provision of this Section 8.21, or take any action that could require BJ or any of its affiliates to make any public disclosure relating to any such intent, purpose, plan, proposal or condition, or (E) assisting, advising or encouraging any person with respect to, or seeking to do, any of the foregoing. ARTICLE IX CONDITIONS PRECEDENT Section 9.1 Conditions to Each Party's Obligation to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the fulfillment at or prior to the Closing Date of the following conditions: (a) This Agreement and the Merger and the other transactions contemplated hereby shall have been adopted and approved by the requisite vote of the holders of Western Common Stock. (b) The waiting periods applicable to the consummation of the Merger under the Hart Scott Act shall have expired or been earlier terminated. (c) No preliminary or permanent injunction or other order, decree or ruling by any United States federal or state court of competent jurisdiction or by any United States federal or state governmental, regulatory or administrative agency or authority which prevents the consummation of the Merger shall have been issued and remain in effect. (d) No statute, rule or regulation shall have been enacted by any United States federal or state governmental, regulatory or administrative agency or authority that makes the consummation of the Merger illegal or would otherwise prevent the consummation of the Merger. (e) The S-4 shall have become effective, and any required post-effective amendment shall have become effective, under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order, and any material "blue sky" and other state securities laws applicable to the registration of the BJ Common Stock (including associated BJ Purchase Rights) and BJ Warrants (including the BJ Common Stock issuable upon exercise thereof) to be exchanged for Western Common Stock shall have been complied with. (f) The shares of BJ Common Stock (including associated BJ Purchase Rights) issuable to Western's stockholders pursuant to this Agreement shall have been approved for listing on the NYSE, subject to official notice of issuance. (g) The issuance of BJ Common Stock and BJ Warrants in the Merger and this Agreement shall have been approved by the affirmative vote of holders of BJ Common Stock required by NYSE Rule 312.05. Section 9.2 Condition to Obligations of Western to Effect the Merger. The obligations of Western to effect the Merger shall be subject to the fulfillment at or prior to the Closing Date of the following additional conditions: A-34 (a) BJ and BJ Sub shall have performed or complied with in all material respects their agreements and covenants contained in this Agreement and the Senior Executive Termination Agreements required to be performed or complied with at or prior to the Closing Date, and the representations and warranties of BJ and BJ Sub contained in this Agreement shall be true in all respects when made and on and as of the Closing Date with the same force and effect as if made on and as of such date, except as expressly contemplated or otherwise expressly permitted by this Agreement and except that any representation and warranty not modified by reference to a BJ Material Adverse Effect that is not true in all respects shall nevertheless be deemed, for purposes of this Section 9.2(a), to be true in all respects unless the failure of such representation or warranty to be so true has had, or is reasonably likely to have, a BJ Material Adverse Effect. (b) The Warrant Agreement shall have been executed and delivered by BJ. Section 9.3 Conditions to Obligations of BJ and BJ Sub to Effect the Merger. The obligations of BJ and BJ Sub to effect the Merger shall be subject to the fulfillment at or prior to the Closing Date of the following additional conditions: (a) Western shall have performed or complied with in all material respects its agreements and covenants contained in this Agreement required to be performed or complied with at or prior to the Closing Date, and the representations and warranties of Western contained in this Agreement shall be true in all respects when made and on and as of the Closing Date with the same force and effect as if made on and as of such date, except as expressly contemplated or otherwise expressly permitted by this Agreement and except that any representation and warranty not modified by reference to a Western Material Adverse Effect that is not true in all respects shall nevertheless be deemed, for purposes of this Section 9.3(a), to be true in all respects unless the failure of such representation or warranty to be so true has had, or is reasonably likely to have, a Western Material Adverse Effect. (b) The amendment to the Western Rights Agreement referred to in Section 6.13(a) shall be in full force and effect and shall be binding, valid and enforceable. ARTICLE X TERMINATION, AMENDMENT AND WAIVER Section 10.1 Termination. Except as provided in the concluding sentence of this Section 10.1, this Agreement may be terminated at any time prior to the Effective Time, whether before or after approval by the stockholders of Western: (a) by mutual written consent of the Board of Directors of BJ and the Board of Directors of the Western; (b) by either BJ or Western, if the Merger shall not have been consummated on or before August 31, 1995, which date may be extended by the mutual written consent of the Board of Directors of BJ and the Board of Directors of Western; provided, however, that such right to terminate this Agreement shall not be available to any party that has breached in any material respect its obligations under this Agreement in any manner that shall have proximately contributed to the failure of the Merger to occur on or before such date; provided, further, that BJ shall have no right to terminate this Agreement pursuant to this Section 10.1(b) if BJ shall have exercised its rights under Sections 8.10(f) or 10.1(m) to extend either the Antitrust Approval Period or the Section 10.1(m) Period (as defined below) until after the Antitrust Approval Period and the Section 10.1(m) Period shall have expired; A-35 (c) by Western, if any of the conditions specified in Sections 9.1(d) and 9.2 have not been met or waived by Western, but only at and after such time as such condition can no longer be satisfied; (d) by BJ, if any of the conditions specified in Sections 9.1(d) and 9.3 have not been met or waived by BJ, but only at and after such time as such condition can no longer be satisfied; (e) by BJ, if (i) the Board of Directors of Western shall have (A) withdrawn or modified, in any manner which is adverse to BJ or BJ Sub, its recommendation or approval of the Merger or this Agreement and the transactions contemplated hereby and (B) recommended to stockholders of Western any proposal involving an Alternative Transaction, or shall have resolved to do both of the foregoing, (ii) the Board of Directors of Western shall have withdrawn or modified, in any manner which is adverse to BJ or BJ Sub, its recommendation or approval of the Merger or this Agreement and the transactions contemplated hereby under any circumstances other than those specified in clause (i) above, or (iii) any corporation, partnership, person, other entity or group (as defined in Section 13(d)(3) of the Exchange Act) other than BJ or any of its subsidiaries (collectively, "Third Persons") shall have become an "Acquiring Person" (as defined in the Western Rights Agreement); (f) by Western, if it shall exercise the right specified in clause (y) of Section 8.4(a), provided that Western may not effect such termination pursuant to this Section 10.1(f) unless and until it gives BJ at least three Trading Days' prior notice of its intention to effect such termination pursuant to this Section 10.1(f); (g) by Western, if BJ shall have entered into an agreement to effectuate a BJ Alternative Transaction; (h) by either BJ or Western, if the stockholders of Western shall have failed to adopt this Agreement and approve the Merger at the meeting of Western's stockholders referred to in Section 8.3; (i) by either BJ or Western, if either is prohibited by a final and nonappealable order or injunction of a United States federal or state court of competent jurisdiction from consummating the Merger; (j) by either BJ or Western, if the stockholders of BJ shall have failed to approve the issuance of the Stock Consideration and Warrant Consideration in the Merger at the meeting of BJ's stockholders referred to in Section 8.3; (k) by Western, if the Closing Price is below $14.00, provided that Western may not effect such termination pursuant to this Section 10.1(k) if BJ should offer to amend Section 3.1(b)(ii) so that "Stock Consideration" will be defined so that each share of Western Common Stock which is the subject of a Stock Election will be converted into, exchangeable for and represent the right to receive, together with a corresponding number of BJ Purchase Rights, a number of shares of BJ Common Stock having the same aggregate value based on the actual Closing Price as the aggregate value of the number of shares of BJ Common Stock into which such share of Western Common Stock would have been converted if the Closing Price had been $14.00; (l) by either BJ or Western, if the final terms of a consent decree between BJ and the Antitrust Division or the FTC (the "Consenting Parties") with respect to the Merger (the "Consent Decree Final Agreement") have not been agreed to by the Consenting Parties (as confirmed by Western), or an order of a Federal District Court adjudging that the Merger does A-36 not violate the Federal antitrust laws shall not have been issued (such Consent Decree Final Agreement or court order being collectively referred to as the "Antitrust Disposition Action"), by 100 days after Western and its outside counsel have each certified to BJ (the "Western Compliance Certificates") that to the best of their knowledge Western has "substantially complied" with the Antitrust Division's or FTC's "second request" for information from Western under the Hart Scott Act, provided that such 100-day period may be extended for two successive 30-day periods in the manner specified in Section 8.10(f) (but in no event longer than a total of 160 days); (m) by either BJ or Western, if the Merger shall not have occurred by the thirtieth day after the later of (i) the date of the Antitrust Disposition Action, (ii) the date on which Western's stockholders shall have approved the Merger, or (iii) the date on which BJ's stockholders shall have approved the Merger (provided the meeting of BJ's stockholders shall have initially been scheduled to be held prior to the thirtieth day after the date of the Antitrust Disposition Action and adjourned for good reason to no later than the Final Adjournment Date (as defined below)); provided, however, that BJ and Western shall not have the right to terminate this Agreement pursuant to this Section 10.1(m) if the Merger shall not have occurred by such thirtieth day due to the existence of a preliminary or permanent injunction or other order, decree or ruling by any United States federal or state court of competent jurisdiction or by any United States federal or state governmental, regulatory or administrative agency or authority which prevents the consummation of the Merger (unless the action giving rise to such injunction, order, decree or ruling sought to enjoin or otherwise prohibit the Merger for alleged violations of the federal or state antitrust laws or such action was initiated by BJ); provided, further, that in the event any such injunction, order, decree or ruling shall cause the 30-day period referred to at the beginning of this Section 10.1(m) (the "Section 10.1(m) Period") to be delayed, the parties hereto shall use their best efforts to cause such injunction, order, decree or ruling to be lifted at the earliest practicable date; provided, further, that BJ shall have the option to extend the Section 10.1(m) Period for a period of 30 additional days (but in no event later than the Final Adjournment Date) if either of the following conditions shall have been satisfied: (A) if the Antitrust Approval Period was not extended pursuant to Section 8.10(f), by the delivery of written notice of such extension by BJ to Western; or (B) if the Antitrust Approval Period was not extended for more than 30 days pursuant to Section 8.10(f), by (i) paying a fee of $5,000,000 to Western if the Antitrust Approval Period was extended pursuant to clause (i) of the first sentence of Section 8.10(f), or (ii) by paying a fee of $2,500,000 to Western if the Antitrust Approval Period was extended pursuant to clause (ii) of the first sentence of Section 8.10(f). If the Antitrust Approval Period was not extended pursuant to Section 8.10(f), the date of BJ's stockholders' meeting may not be adjourned for more than 60 days after the Antitrust Disposition Action (the "Final Adjournment Date"). If the Antitrust Approval Period was extended for 30 days pursuant to Section 8.10(f), the Final Adjournment Date may not be more than 30 days after the Antitrust Disposition Action; provided, however, that BJ may extend the Final Adjournment Date for up to 60 days after the date of the Antitrust Disposition Action by (x) paying a fee of $5,000,000 to Western if the Antitrust Approval Period was extended pursuant to clause (i) of the first sentence of Section 8.10(f), or (y) by paying a fee of $2,500,000 to Western if the Antitrust Approval Period was extended pursuant to clause (ii) of the first sentence of Section 8.10(f). If the Antitrust Approval Period was extended for 60 days pursuant to Section 8.10(f), the Final Adjournment Date may not be more than 30 days after the Antitrust Disposition Action. Notwithstanding anything to the contrary provided elsewhere in this Section 10.1, BJ may not terminate this Agreement pursuant to Sections 10.1(d) or 10.1(e)(iii) after the 100-day Antitrust Approval Period. A-37 Section 10.2 Effect of Termination. In the event of termination of this Agreement by either BJ or Western, as provided above, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of either Western or BJ or BJ Sub or their respective officers or directors (except for this Section 10.2 and Sections 8.10, 8.20 and 8.21, which shall survive termination of this Agreement and except as set forth in the confidentiality agreements between BJ and Western dated October 7, 1994 (collectively with the confidentiality agreements among Collier, Shannon, Rill & Scott, Sullivan & Cromwell and Simpson Thacher & Bartlett, the "Confidentiality Agreements"), each of which Confidentiality Agreements shall survive such termination) and except that nothing herein shall relieve any party from liability for any breach of this Agreement; provided, however, that the payment of any fees and expense reimbursements specified in Sections 8.10(b),(d) or (i) upon the termination of this Agreement under any of the circumstances specified in Sections 8.10(b),(d) or (f) shall constitute the parties' sole remedy for any breach of this Agreement which may have occurred prior to such termination. Section 10.3 Amendment. This Agreement may be amended by the parties hereto, by or pursuant to action taken by their respective Boards of Directors, at any time before or after approval hereof by the stockholders of Western but, after any such approval, no amendment shall be made which changes the way in which the Merger Consideration is calculated under Article III or which in any way alters or changes any of the other terms or conditions of this Agreement if such alteration or change would materially adversely affect the rights of such stockholders, without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed and acknowledged on behalf of each of the parties hereto. Section 10.4 Waiver. At any time prior to the Closing Date, each of the parties hereto may (i) extend the time of the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, (iii) waive compliance with any of the agreements or conditions contained herein which may legally be waived and (iv) grant any consents hereunder. Any agreement on the part of any party hereto to any such extension or waiver shall be valid if set forth in an instrument in writing signed on behalf of such party. ARTICLE XI GENERAL PROVISIONS Section 11.1 Notice of Breach. Each party will promptly give written notice to each other party upon becoming aware of the occurrence of any breach of any of its representations, warranties and covenants contained in this Agreement and will use its best efforts to prevent or promptly remedy the same. Section 11.2 Survival of Representations and Warranties. The covenants of Western, BJ and BJ Sub contained in Sections 3.6, 8.6, 8.8, 8.10, 8.13 and 8.16 shall survive the consummation of the Merger. None of the representations and warranties in this Agreement shall survive the Merger. Section 11.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given (i) on the date delivered, if delivered personally, (ii) on the first Trading Day following the deposit thereof with Federal Express, if sent by Federal Express, and (iii) on the fourth Trading Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): A-38 (a) If to BJ or BJ Sub, to: BJ Services Company 5500 Northwest Central Drive Houston, Texas 77092 Attention: Mr. J.W. Stewart Chairman and President with copies to: Andrews & Kurth 4200 Texas Commerce Tower Houston, Texas 77002 Attention: G. Michael O'Leary, Esq. and Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: Robert L. Friedman, Esq. (b) if to Western, to: The Western Company of North America 515 Post Oak Boulevard Houston, Texas 77027 Attention: Mr. Sheldon R. Erikson Chairman and Chief Executive Officer with a copy to: Graham L. Adelman, Senior Vice President, General Counsel and Secretary with a copy to: Sullivan & Cromwell 125 Broad Street New York, New York 10004 Attention: James C. Morphy, Esq. Section 11.4 Definitions. (a) For purposes of this Agreement, (i) when a reference is made in this Agreement to subsidiaries of BJ or Western, the term "subsidiaries" means any domestic or foreign corporation more than 50% of whose outstanding voting securities are directly or indirectly owned by BJ or Western, as the case may be, and (ii) the term "affiliate" shall have the meaning set forth in Rule 12b-2 under the Exchange Act. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (b) As used herein, "BJ Alternative Transaction" means (i) any merger, consolidation or other business combination transaction involving BJ in which another corporation, partnership, person, other entity or group (as defined in Section 13(d)(3) of the Exchange Act) would acquire beneficial ownership of at least 50% of the aggregate voting power of all voting securities of BJ or the A-39 Surviving Corporation, as the case may be; (ii) any tender offer or exchange offer for any securities of BJ which, if consummated, would result in another corporation, partnership, person, other entity or group (as defined in Section 13(d)(3) of the Exchange Act) becoming the beneficial power of at least 50% or more of the aggregate voting power of all voting securities of BJ; (iii) any sale or other disposition of assets of BJ or any of its subsidiaries in a single transaction or in a series of related transactions if the fair market value of such assets exceeds 50% of the aggregate fair market value of the assets of BJ and its subsidiaries taken as a whole before giving effect to such sale or other disposition; (iv) the adoption by BJ of a plan of liquidation; or (v) the repurchase by BJ or any of its subsidiaries of shares of BJ Common Stock representing at least 50% or more of the aggregate voting power of all voting securities of BJ. Section 11.5 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. Section 11.6 Entire Agreement; Assignment. This Agreement, together with the Senior Executive Termination Agreements, the Warrant Agreement and the Confidentiality Agreements, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof (except for the Senior Executive Termination Agreements, the Warrant Agreement and the Confidentiality Agreements). This Agreement shall not be assigned by operation of law or otherwise, except that BJ and BJ Sub may assign all or any of their respective rights and obligations hereunder to any direct or indirect wholly owned subsidiary or subsidiaries of BJ, provided that no such assignment shall relieve the assigning party of its obligations hereunder if such assignee does not perform such obligations. Section 11.7 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement, except as provided in Section 8.6(e) and, to the limited extent provided for therein, Section 8.8(d). Section 11.8 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Section 11.9 Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Section 11.10 Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. A-40 IN WITNESS WHEREOF, BJ, BJ Sub and Western have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. BJ SERVICES COMPANY By: /s/ J.W. Stewart Name: J.W. Stewart Title: Chairman and President WCNA ACQUISITION CORP. By: /s/ J.W. Stewart Name: J.W. Stewart Title: President THE WESTERN COMPANY OF NORTH AMERICA By: /s/ Sheldon R. Erickson Name: Sheldon R. Erickson Title: Chairman and Chief Executive Officer A-41 EX-2 7 Exhibit 5(b) FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of March 7, 1995, among BJ SERVICES COMPANY ("BJ"), WCNA ACQUISITION CORP., a wholly owned subsidiary of BJ("BJ Sub"), and THE WESTERN COMPANY OF NORTH AMERICA ("Western"), each a Delaware corporation. WHEREAS, BJ,BJ Sub and Western have entered into an Agreement and Plan of Merger, dated as of November 17, 1994 (the "Merger Agreement"); and WHEREAS, pursuant to Section 1.5 of the Merger Agreement, BJ hereby notifies Western of its desire to structure the Merger so that Western merges into BJ and BJ is the Surviving Corporation after the Effective Time; NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the parties hereto agree as follows: ARTICLE I AMENDMENTS 1.1 As of the date hereof, BJ Sub shall cease to be a party +o the Merger Agreement and shall henceforth have no rights or obligations thereunder. 1.2 Sections 1.1, 1.4, 2.1, 2.2, and 8.19 of the Merger Agreement are hereby amended by deleting each reference to "BJ Sub" therein and inserting "BJ" in place thereof. 1.3 Section 1.2 of the Merger Agreement is hereby amended by deleting the words ", BJ Sub" and "cause the Surviving Corporation to" in the first sentence of such section. 1.4 Section 2.3 of the Merger Agreement is hereby amended by (i) deleting the word "The" in the first sentence of such section and inserting the words "Subject to Section 8.16, the" in place thereof and (ii) deleting the reference to "BJ Sub" in the same sentence and inserting "BJ" in place thereof. 1.5 Sections 3.1(a) and 3.1(c) of the Merger Agreement are hereby amended by deleting the references to ", BJ Sub" therein. 1.6 Section 3.1(d) of the Merger Agreement is hereby deleted in its entirety, and the following is inserted in place thereof: "(d) BJ Shares. Each share of common stock, par value $0.10 per share, of BJ("BJ Common Stock") issued and outstanding immediately prior to the Effective Time shall remain outstanding after the Merger and, together with BJ Common Stock issued pursuant to the Merger, thereafter shall constitute all of the common stock of the Surviving Corporation issued and outstanding immediately after the Effective Time." 1.7 Section 3.2(b) of the Merger Agreement is hereby amended by deleting the reference to "$1.00" at the end thereof and inserting in place thereof "$5.00". B-1 1.8 Section 3.4 of the Merger Agreement is hereby amended by deleting the words "Warrant Consideration Value" and inserting in place thereof the words "Warrant Current Market Price". 1.9 Section 3.7 of the Merger Agreement is hereby amended by (i) deleting from the first sentence thereof the words "Neither BJ nor" and capitalizing the first letter of the following word and (ii) inserting the word "not" between the words "shall be" in the same sentence. 1.10 Section 4.2 of the Merger Agreement is hereby amended by deleting from the first sentence thereof the word "without" and inserting the words "$1 per share" after the words "par value" in the same sentence. 1.11 Section 4.4 of the Merger Agreement is hereby amended by (i) deleting from the third sentence thereof the words "each of", "and BJ Sub" and "and of BJ Sub", (ii) deleting from the fifth sentence thereof the words "Neither", "nor BJ Sub" and ", with respect to BJ," and (iii) inserting the word "not" between the words "is subject" in the fifth sentence thereof. 1.12 Section 4.11 of the Merger Agreement is hereby amended by deleting the first sentence of such section and inserting the following in place thereof: "The affirmative vote of the holders of a majority of the outstanding shares of BJ Common Stock entitled to vote thereon is required to approve this Agreement and the issuance of BJ Common Stock and BJ Warrants in the Merger." 1.13 Sections 4.14, 10.1(e), 10.2, and 11.3(a) of the Merger Agreement are hereby amended by deleting the words "or BJ Sub" in each such section. 1.14 Article V of the Merger Agreement is hereby deleted in its entirety. 1.15 Article VI of the Merger Agreement is hereby amended by deleting from the first line thereof the words "and BJ Sub". 1.16 Section 6.4 of the Merger Agreement is hereby amended by (i) deleting from the third sentence thereof the words "each of" and "and BJ Sub" and (ii) deleting from the fifth sentence thereof the words "or BJ Sub". 1.17 Section 8.3 of the Merger Agreement is hereby amended by (i) deleting from the fourth sentence thereof the words "NYSE Rule 312.05" and inserting in place thereof the words "applicable Delaware Corporation Law" and (ii) deleting from the penultimate sentence thereof the words "or NYSE rules, as the case may be,". 1.18 Section 8.6(a) of the Merger Agreement is hereby amended by (i) deleting the words "BJ agrees that it or" and (ii) deleting from the parenthetical at the end of such section the words "BJ or' 1.19 Section 8.6(b) of the Merger Agreement is hereby deleted in its entirety and the following is inserted in place thereof: "(b) Any Indemnified Party wishing to claim indemnification under paragraph (a) of this Section 8.6, upon learning of any such claim, action, suit, proceeding or investigation, shall promptly notify the Surviving Corporation thereof, but the failure to so notify shall not relieve the Surviving Corporation of any liability it may have to such Indemnified Party except to the extent that such failure materially prejudices the Surviving Corporation. In the event of any such claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time), (i) the Surviving Corporation shall have the right to assume the defense thereof (which it shall, in cooperation with the Indemnified Parties, vigorously defend) B-2 and the Surviving Corporation shall not be liable to such Indemnified Parties for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Parties in connection with the defense thereof, except that if the Surviving Corporation elects not to assume such defense or there is a conflict of interest between the Surviving Corporation and the Indemnified Parties, including situations in which there are one or more legal defenses available to the Indemnified Party that are different from or additional to those available to the Surviving Corporation, the Indemnified Parties may retain counsel satisfactory to them, and the Surviving Corporation shall pay all reasonable fees and expenses of such counsel for the Indemnified Parties promptly as statements therefor are received; provided, however, that the Surviving Corporation shall not, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties except to the extent that local counsel, in addition to such parties' regular counsel, is required in order to effectively defend against such action or proceeding, (ii) the Indemnified Parties will cooperate in the defense of any such matter and (iii) the Surviving Corporation shall not be liable for any settlement effected without its prior written consent, and provided, further, that the Surviving Corporation shall not have any obligation hereunder to any Indemnified Party when and if a court of competent jurisdiction shall ultimately determine, and such determination shall have become final, that the indemnification of such Indemnified Party in the manner contemplated hereby is prohibited by applicable law." 1.20 Section 8.8(a) of the Merger Agreement is hereby amended by (i) deleting from clause (ii) of such section the words "BJ, BJ Sub, Western or" and (ii) deleting from clause (iii) of such section the words "BJ, Western or". 1.21 Section 8.8(b) of the Merger Agreement is hereby amended by (i) deleting the words ", and will cause the Surviving Corporation to" and (ii) deleting from the proviso thereof the words "or the Surviving Corporation". 1.22 Section 8.8(c) of the Merger Agreement is hereby amended by (i) deleting the words "or BJ" and (ii) deleting the proviso in such section and inserting the following in place thereof: "provided, however, that employees of the Surviving Corporation who become participants in a defined benefit pension plan that was sponsored by BJ prior to the Effective Time or in a defined benefit pension plan sponsored by the Surviving Corporation which is adopted on or after the Effective Time shall not be given credit for benefit accrual purposes to the extent such credit would result in a duplication of benefits under more than one defined benefit pension plan." 1.23 Section 8.10(b) of the Merger Agreement is hereby amended by deleting the words "or BJ Sub" and "and BJ Sub". 1.24 Section 8.11 of the Merger Agreement is hereby amended by (i) deleting from the fifth sentence of such section the reference to ", BJ Sub" and (ii) deleting from the last sentence of such section the words ", BJ and BJ Sub" and inserting the words "and BJ" in place thereof. 1.25 Section 8.17 of the Merger Agreement is hereby amended by (i) deleting the words "and any shares of common stock of BJ Sub" and "or BJ Sub, respectively," and (ii) deleting the words "either Western or BJ Sub" and inserting the word "Western" in place thereof. 1.26 Section 9.1(g) of the Merger Agreement is hereby amended by (i) deleting the word "affirmative" and inserting in place thereof the word "requisite" and (ii) deleting the words "required by NYSE Rule 312.05". B-3 1.27 Section 9.2(a) of the Merger Agreement is hereby amended by (i) deleting the words "and BJ Sub" where it appears in two places and (ii) deleting the word "their" and inserting the word "its" in Place thereof. 1.28 Section 9.3 of the Merger Agreement is hereby amended by deleting the words "and BJ Sub" from the heading (with a corresponding change to the index) and the first line thereof. 1.29 Section 10.1(j) of the Merger Agreement is hereby amended by inserting between the words "approve the" the words "this Agreement and". 1.30 Section 11.2 of the Merger Agreement is hereby amended by deleting from the first sentence of such section the words ", BJ and BJ Sub" and inserting the words "and BJ' in place thereof. 1.31 Section 11.4(b) of the Merger Agreement is hereby amended by deleting from clause (i) thereof the words "or the Surviving Corporation, as the case may be". 1.32 Section 11.6 of the Merger Agreement is hereby amended by (i) deleting the words "and BJ Sub" and (ii) deleting the words "their respective" and inserting the word "its" in place thereof. 1.33 The form of Warrant Agreement attached as Exhibit A to the Merger Agreement shall be deleted and replaced in its entirety with Amended Exhibit A which is attached as Annex I to this First Amendment. ARTICLE II MISCELLANEOUS 2.1 Terms used in this First Amendment without definition shall have the meanings ascribed to such terms in the Merger Agreement. 2.2 This First Amendment may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 2.3 Except as expressly amended and modified by the terms of this First Amendment, the terms and provisions of the Merger Agreement shall remain in full force and effect 2.4 This First Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. B-4 IN WITNESS WHEREOF, BJ, BJ Sub and Western have caused this First Amendment to be executed as of the date first written above by their respective of officers thereunto duly authorized. BJ SERVICES COMPANY By: /s/ J.W. STEWART Name: J.W. Stewart Title: President and Chief Executive Officer WCNA ACQUISITION CORP. By: /s/ J.W. STEWART Name: J.W. Stewart Title: President THE WESTERN COMPANY OF NORTH AMERICA By: /s/ GRAHAM L. ADELMAN Name: Graham L. Adelman Title: Senior Vice President B-5 Appendix B: Annex I [FORM OF WARRANT AGREEMENT] BJ SERVICES COMPANY and FIRST CHICAGO TRUST COMPANY OF NEW YORK, Warrant Agent Warrant Agreement Dated as of ,1995 [the Closing Date] B-6 Table of Contents Section 1. Certain Definitions Section 2. Appointment of Warrant Agent Section 3. Form of Warrant Certificates Section 4. Countersignature and Registration Section 5. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates Section 6. Exercise of BJ Warrants; Exercise Price; Expiration Date of BJ Warrants Section 7. Cancellation and Destruction of Warrant Certificates Section 8. Reservation and Availability of Shares of BJ Common Stock or Cash Section 9. BJ Common Stock Record Date Section 10. Adjustment of Exercise Price, Number of Shares of BJ Common Stock or Number of BJ Warrants Section 11. Certification of Adjusted Exercise Price or Number of Shares of BJ Common Stock Section 12. Reclassification, Consolidation, Merger, Combination, Sale or Conveyance Section 13. Fractional BJ Warrants and Fractional Shares of BJ Common Stock Section 14. Right of Action Section 15. Agreement of Warrant Certificate Holders Section 16. Warrant Certificate Holder Not Deemed a Stockholder Section 17. Concerning the Warrant Agent Section 18. Merger or Consolidation or Change of Name of Warrant Agent Section 19. Duties of Warrant Agent Section 20. Change of Warrant Agent B-7 Section 21. Issuance of New Warrant Certificates Section 22. Purchase of BJ Warrants by BJ Section 23. Notice of Proposed Actions Section 24. Notices Section 25. Supplements and Amendments Section 26. Successors Section 27. Benefits of this Agreement Section 28. Governing Law Section 29. Counterparts Section 30. Captions B-8 WARRANT AGREEMENT This Agreement, dated as of _, 1995 [the Closing Date], between BJ SERVICES COMPANY, a Delaware corporation ("BJ"), and FIRST CHICAGO TRUST COMPANY OF NEW YORK, a New York limited purpose trust company (the "Warrant Agent"). WITNESSETH WHEREAS, BJ has entered into an Agreement and Plan of Merger, dated as of November 17, 1994, as amended (the "Merger Agreement"), with The Western Company of North America, a Delaware corporation ("Western"), providing for the merger of Western into BJ (the "Merger") pursuant to the terms of the Merger Agreement: and WHEREAS, the Merger Agreement provides that all of the outstanding shares of common stock, par value $.10 per share, of Western, except as provided in the Merger Agreement, shall be converted into, exchanged for and represent the right to receive consideration specified in the Merger Agreement, which consideration is to include warrants (the "BJ Warrants") to purchase BJ Common Stock (as hereinafter defined) upon the terms and subject to the conditions hereinafter set forth: and WHEREAS, BJ wishes the Warrant Agent to act on behalf of BJ, and the Warrant Agent is willing so to act, in connection with the issuance, transfer, exchange and exercise of BJ Warrants: NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated: (a) "BJ Common Stock" shall mean the Common Stock, par value $.10 per share, of B.J. (b) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in New York are authorized or obligated by law or executive order to close. (c) "Close of Business" on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day. (d) "Closing Date" shall have the meaning ascribed to it in the Merger Agreement. (e) "Person" shall mean an individual, corporation, association, partnership, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity. Section 2. Appointment of Warrant Agent. BJ hereby appoints the Warrant Agent to act as agent for BJ in accordance with the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment. BJ may from time to time appoint such Co-Warrant Agents as it may, in its sole discretion, deem necessary or desirable. B-9 Section 3. Form of Warrant Certificates. The Warrant Certificates (together with the form of election to purchase Common Stock and the form of assignment to be printed on the reverse thereof) shall be substantially in the form of Exhibit 1 hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as BJ may deem appropriate and as are not inconsistent with the provisions of this Agreement and the Merger Agreement or as may be required to comply with any law or with any rule or regulation made pursuant thereto, or to conform to usage. Subject to the provisions of Section 21 hereof, the Warrant Certificates, whenever issued, shall be dated the Closing Date and on their face shall entitle the holders thereof to purchase such number of shares of Common Stock as shall be set forth therein at $30 per share (the "Exercise Price"), but the number of such shares and the Exercise Price shall be subject to the adjustments as provided herein. Section 4. Countersignature and Registration. The Warrant Certificates shall be executed on behalf of BJ by its Chairman, its President or a Vice President, either manually or by facsimile signature, and have affixed thereto BJ's seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of BJ, either manually or by facsimile signature. The Warrant Certificate shall be manually countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned. In case any officer of BJ who shall have signed any of the Warrant Certificates shall cease to be such of officer of BJ before countersignature by the Warrant Agent and issuance and delivery by BJ, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificate had not ceased to be such officer of BJ; and any Warrant Certificate may be signed on behalf of BJ by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of BJ to sign such Warrant Certificate, although at the date of the execution of this Warrant Agreement any such person was not such an officer. The Warrant Agent will keep or cause to be kept, at one of its offices in New York City, books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Warrant Certificates, the number of BJ Warrants evidenced on its face by each of the Warrant Certificates and the date of each of the Warrant Certificates. Section 5. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated Destroyed, Lost or Stolen Warrant Certificates. Subject to the provisions of Section 13 hereof, at any time after the close of business on the date hereof, and at or prior to the close of business on the Expiration Date (as such term is hereinafter defined), any Warrant Certificate or Warrant Certificates may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant Certificates, entitling the registered holder to purchase a like number of shares of BJ Common Stock as the Warrant Certificate or Warrant Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Warrant Certificate shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent. Thereupon the Warrant Agent shall countersign and deliver to the person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. BJ may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Warrant Certificates, together with reimbursement to BJ and the Warrant Agent of all reasonable expenses incidental thereto. Upon receipt by BJ and the Warrant Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security in customary form and amount, and reimbursement to BJ and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant B-10 Agent and cancellation of the Warrant Certificate if mutilated, BJ will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the registered holder in lieu of tho Warrant Certificate so lost, stolen, destroyed or mutilated. Section 6. Exercise of BJ Warrants; Exercise Price; Expiration Date of BJ Warrants. (a) Subject to Section 6(c) below, the registered holder of any Warrant Certificate may exercise the BJ Warrants evidenced thereby in whole or in part upon surrender of the Warrant Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Warrant Agent at the principal office of the Warrant Agent in New York City, together with payment of the Exercise Price in immediately available funds for each share of BJ Common Stock as to which the BJ Warrants are exercised, at any time prior to the close of business on , 2000 [fifth anniversary of Closing Date] (the "Expiration Date"). (b) The Exercise Price for each share of BJ Common Stock pursuant to the exercise of BJ Warrants shall initially be $30, subject to adjustment from time to time as provided in Section 10 hereof. The Exercise Price shall be payable in lawful money of the United States of America. (c) Upon receipt of a Warrant Certificate, with the form of election to purchase duly executed, accompanied by payment of the Exercise Price for the shares to be purchased and an amount equal to any applicable tax or governmental charge referred to in Section 8 in cash, or by certified check or bank draft payable to the order of BJ, the Warrant Agent shall thereupon promptly (i) requisition from any transfer agent of the BJ Common Stock certificates for the number of whole shares of BJ Common Stock to be purchased, and BJ hereby irrevocably authorizes its transfer agent to comply with all such requests, (ii) when appropriate, requisition from BJ the amount of cash to be paid in lieu of the issuance of fractional shares and (iii) after receipt of such certificates, cause the same to be delivered to or upon the order of the registered holder of such Warrant Certificate, registered in such name or names as may be designated by such holder, and, when appropriate, after receipt promptly deliver such cash to or upon the order of the registered holder of such Warrant Certificate. Upon receipt by BJ of a Warrant Certificate at the principal office of the Warrant Agent, in proper form for exercise, and payment of the applicable Exercise Price as required hereby, the holder of such Warrant Certificate shall be deemed to be the holder of record of the shares of BJ Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of BJ shall then be closed or that certificates representing such shares of BJ Common Stock shall not then be actually delivered to the holder of such Warrant Certificate. (d) In case the registered holder of any Warrant Certificate shall exercise less than all BJ Warrants evidenced thereby, a new Warrant Certificate evidencing BJ Warrants equivalent to the BJ Warrants remaining unexercised shall be issued by the Warrant Agent to the registered holder of such Warrant Certificate or to his duly authorized assigns, subject to the provisions of Section 13 thereof. Section 7. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to BJ or to any or its agents, be delivered to the Warrant Agent for cancellation or in cancelled form, or, if surrendered to the Warrant Agent, shall be cancelled by it, and no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Warrant Agreement. BJ shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by BJ otherwise then upon the exercise thereof. The Warrant Agent shall deliver all cancelled Warrant Certificates to BJ, or shall, at the written request of BJ, destroy such cancelled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to BJ. Section 8. Reservation and Availability of Shares of BJ Common Stock or Cash. BJ covenants and agrees that it will cause to be reserved and kept available out of its authorized and B-11 unissued shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of BJ Common Stock that will be sufficient to permit the exercise in full of all outstanding BJ Warrants or keep sufficient cash available for payment in lieu of BJ Common Stock. BJ covenants and agrees that it will use its best efforts to cause the BJ Common Stock issuable upon the exercise of the BJ Warrants to be listed on the NYSE (as defined below). In addition, BJ covenants and agrees to use its best efforts to cause the BJ Warrants to be listed on the NYSE. To the extent that the BJ Warrants cannot be listed on the NYSE, BJ shall use its best efforts to cause the BJ Warrants to be listed on the NASDAQ (as defined below). BJ covenants and agrees that it will take all such actions as may be necessary to insure that all shares of BJ Common Stock delivered upon exercise of BJ Warrants shall, at the time of delivery of the certificates for such shares (subject to payment of the Exercise Price as contemplated by Section 6(c)), be duly authorized, validly issued, fully paid and nonassessable. BJ further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing BJ Common Stock upon exercise of the Warrant Certificate. BJ shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for BJ Common Stock in a name other than that of the registered holder of the Warrant Certificate evidencing BJ Warrants surrendered for exercise or to issue or deliver any certificate for shares of BJ Common Stock upon the exercise of any BJ Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the holder of such Warrant Certificate at the time of surrender) or until it has been established to BJ's satisfaction that no such tax or governmental charge is due. Section 9. B.J Common Stock Record Date. Each person in whose name any certificate for shares of BJ Common Stock is issued upon the exercise of BJ Warrants shall for all purposes be deemed to have become the holder of record for the BJ Common Stock represented thereby on, and such certificate shall be dated, the date upon which the Warrant Certificate evidencing such BJ Warrants was duly surrendered and payment of the Exercise Price (and any applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the BJ Common Stock transfer books of BJ are closed, such person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding business day rn which the BJ Common Stock transfer books of BJ are open. Section 10. Adjustment of Exercise Price, Number of Shares of BJ Common Stock or Number of BJ Warrants. The Exercise Price, the number of shares covered by such BJ Warrant and the number of BJ Warrants outstanding are subject to adjustment from time to time as provided in this Section 10. (a) In the event BJ shall at any time after the date of this Agreement (i) declare a dividend on shares of BJ Common Stock payable in shares of any class of capital stock of BJ,(ii) subdivide the outstanding shares of BJ Common Stock into a greater number of shares of BJ Common Stock, (iii) combine the outstanding shares of BJ Common Stock into a smaller number of shares, or (iv) issue any shares of capital stock in a reclassification of shares of the BJ Common Stock including any such reclassification in connection with a consolidation or merger in which BJ is the continuing corporation), the Exercise Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any BJ Warrant exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such BJ Warrant had been exercised immediately prior to such date B-12 and at a time when the BJ Common Stock transfer books of BJ were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision combination or reclassification (b) In case BJ shall fix a record date for the issuance of rights, options or warrants to all holders of BJ Common Stock (such rights, options or warrants not being available to holders of BJ Warrants) entitling them (for a period expiring within 45 calendar days after such date of issue) to subscribe for or purchase BJ Common Stock (or securities convertible into or exercisable or exchangeable for BJ Common Stock), other than Permitted Issuances (as defined below), at a price per share of BJ Common Stock (or having a conversion, exercise or exchange price per share of BJ Common Stock, in the case of a security convertible into or exercisable or exchangeable for BJ Common Stock) less than the Current Market Price (as defined in Section 10(f)) per share of BJ Common Stock on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction of which the numerator shall be the number of shares of BJ Common Stock outstanding on such record date plus the number of shares of BJ Common Stock which the aggregate offering price of the total number of shares of BJ Common Stock so to be offered (or the aggregate initial conversion, exercise or exchange price of the convertible, exercisable or exchangeable securities so to be offered) would purchase at such Current Market Price and of which the denominator shall be the number of shares of BJ Common Stock outstanding on such record date plus the number of additional shares of BJ Common Stock to be offered for subscription or purchase (or into which the convertible, exercisable or exchangeable securities so to be offered are initially convertible, exercisable or exchangeable). In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of BJ, whose determination shall be described in a statement filed with the Warrant Agent. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. For purposes of this paragraph (b), "Permitted Issuances" shall mean any and all issuances of shares of BJ Common Stock or rights, options or warrants entitling the holders thereof to subscribe for or purchase BJ Common Stock (or securities convertible into or exercisable or exchangeable for BJ Common Stock) pursuant to any stock option, stock purchase or other employee or director benefit plan of BJ or any of its subsidiaries approved by stockholders. (c) In case BJ shall fix a record date for the making of a dividend or distribution (other than aggregate cash dividends and distributions not in excess of $.25 per share of BJ Common Stock for the fiscal year ended September 30, 1995, and then $1.50 for each 12-month period thereafter, payable out of retained earnings or earned surplus) to all holders of BJ Common Stock (including any distribution made in connection with a consolidation or merger in which BJ is the continuing corporation) or evidences of indebtedness or assets or subscription rights or warrants (excluding those referred to in Section 10(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction of which the numerator shall be the Current Market Price (as defined in Section 10(f)) per share of BJ Common Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of BJ, whose determination shall be described in a statement filed with the Warrant Agent) of such distribution applicable to one share of BJ Common Stock, and of which the denominator shall be such Current Market Price per share of BJ Common Stock. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (d) In case a tender offer (a "Tender Offer") made by BJ or any of its subsidiaries for all or any portion of the BJ Common Stock shall expire (the "Expiration Time") and the Tender Offer (as amended upon the expiration thereof) shall require the payment to stockholders based on the B-13 acceptance (up to any maximum specified in the terms of the Tender Offer) of Purchased Shares (as defined below) of an aggregate of the cash plus other consideration having a fair market value (as determined by the Board of Directors) as of the Expiration Time of such Tender Offer that combined with the aggregate of the cash plus the fair market value (as determined by the Board of Directors) of consideration payable in respect of any other tender offer (determined as of the Expiration Time of such other tender offer) by BJ or any of its subsidiaries for all or any portion of the BJ Common Stock expiring within the 12 months preceding the expiration of the Tender Offer and in respect of which no adjustment pursuant to this clause (d) has been made exceeds 12.5% of the product of the Current Market Price per share of the BJ Common Stock as of the Expiration Time of the Tender Offer multiplied by the number of shares of BJ Common Stock outstanding (including any tendered shares) at the Expiration Time of the Tender Offer, then, and in each such case, immediately prior to the opening of business on the next Trading Day after the date of the Expiration Time of the Tender Offer, the Exercise Price shall be adjusted so that the same shall equal the price determined by multiplying the Exercise Price immediately prior to close of business on the date of the Expiration Time of the Tender Offer by a fraction (A) the numerator of which shall be equal to (x) the product of (i) the Current Market Price per share of the BJ Common Stock as of the Expiration Time of the Tender Offer and (ii) the number of shares of BJ Common Stock outstanding (including any tendered shares) at the Expiration Time of the Tender Offer less (y) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the Tender Offer) of Purchased Shares (as defined below), and (B) the denominator of which shall be equal to the product of (x) the Current Market Price per share of the BJ Common Stock as of the Expiration Time of the Tender Offer and (y) the number of shares of BJ Common Stock outstanding (including any tendered shares) as of the Expiration Time of the Tender Offer less the number of all shares validly tendered and not withdrawn as of the Expiration Time of the Tender Offer, and accepted for purchase up to any maximum. For purposes of this Section 10, the term "Purchased Shares" shall mean such shares as are deemed so accepted up to any such maximum. (e) If the rights (the "BJ Rights") outstanding under the Stockholder Rights Agreement, dated as of January 12, 1994, as amended, between BJ and First Chicago Trust Company of New York, as amended (the "Rights Agreement"), shall become exercisable for shares of Series Two Junior Participating Preferred Stock, par value $1.00 per share, of BJ ("BJ Preferred Stock") or other property, the Exercise Price and the number of and kind of securities or other property issuable upon exercise of each BJ Warrant shall be appropriately adjusted so that the holder of any BJ Warrant exercised after such time shall be entitled to receive the aggregate number and kind of shares of BJ Preferred Stock or other property which would have been issuable under the BJ Rights that would have been attached to the shares of BJ Common Stock for which such BJ Warrant was exercisable immediately prior to the BJ Rights having become exercisable, upon payment of the same consideration, if any, payable under such BJ Rights for such shares or other property. (f) For the purpose of any computation hereunder, the "Current Market Price" per share of BJ Common Stock (or per BJ Warrant, for purposes of Section 13(a) hereof) on any date shall be deemed to be the average of the daily Closing Prices per share of such BJ Common Stock (or BJ Warrant, as the case may be) for the 20 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date. The "Closing Price" for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, Inc. ("NYSE") or, if such securities are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such securities are listed or admitted to trading or, if such securities are not listed or admitted to trading on any national securities exchange, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ"). If on any such Trading Day or Days such securities are not quoted by any such organization, such Trading Day or Days shall be replaced for purposes of B-14 the foregoing calculation by the requisite Trading Day or Days preceding the commencement of such 20 Trading Day period on which such securities are so quoted. The term "Trading Day" shall mean a day on which the principal national securities exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if such securities are not listed or admitted to trading on any national securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in the State of New York are not authorized or obligated by law or executive order to close. If the BJ Common Stock (or BJ Warrant, as the case may be) is not so listed or traded, the "Current Market Price" per share shall be deemed to be the fair value per share as determined in good faith by the Board of Directors of BJ, whose determination shall be described in a statement filed with the Warrant Agent. For the purpose of any computation hereunder, the "Warrant Merger Price" means the average of the midpoint of the daily high and low trading prices of BJ Warrants, rounded to four decimal places, on a when-issued basis as reported in The Wall Street Journal's New York Stock Exchange Composite Transactions Reports, for each of the first 20 consecutive Trading Days in the period commencing 25 Trading Days prior to the Closing Date or, if the BJ Warrants are not then admitted to trading on the NYSE on a when-issued basis, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such securities are admitted to trading on a when issued basis or, if the BJ Warrants are not admitted to trading on any national securities exchange on a when-issued basis, the average of the high bid and low asked prices in the over-the-counter market, as reported by the NASDAQ, of BJ Warrants on a when-issued basis. If on any such Trading Day or Days the BJ Warrants are not quoted on a when-issued basis by any such organization, the 20 Trading Day period referred to above shall be reduced by the number of such Trading Days on which the BJ Warrants are not so quoted. If the BJ Warrants are not quoted on a when-issued basis on any Trading Day during such 20 Trading Day period, the Warrant Merger Price shall be deemed to be $5.00. (g) No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 10(g) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 10 shall be made to the nearest cent or the nearest ten-thousandth of a share, as the case may be. Notwithstanding the first sentence of this Section 10(g), any adjustment required by this Section 10 shall be made no later than the earlier of (i) three years from the date of the transaction which mandates such adjustment or (ii) the date of the expiration of the right to exercise any BJ Warrant. (h) In the event that at any time, as a result of an adjustment made pursuant to Section 10(a), the holder of any BJ Warrant thereafter exercised shall become entitled to receive any shares of capital stock of BJ other than shares of BJ Common Stock, thereafter the number of such other shares so receivable upon exercise of any BJ Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 10(a) through (d) inclusive, and the provisions of Sections 6, 8, 9 and 12 with respect to the shares of BJ Common Stock shall apply on like terms to any such other shares. (i) All BJ Warrants originally issued by BJ subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of BJ Common Stock purchasable from time to time hereunder upon exercise of the BJ Warrants, all subject to further adjustment as provided herein. (j) Unless BJ shall have exercised its election as provided in Section 10(k), upon each adjustment of the Exercise Price as a result of the calculations made in Section 10(b), each BJ Warrant outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares (calculated to the nearest tenthousandth) obtained by (i) multiplying (x) the number of shares covered by a BJ Warrant immediately prior to such adjustment by (y) the Exercise Price in effect immediately prior to such B-15 adjustment of the Exercise Price and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. (k) BJ may elect on or after the date of any adjustment of the Exercise Price to adjust the number of BJ Warrants, in substitution for any adjustment in the number of shares of BJ Common Stock purchasable upon the exercise of a BJ Warrant. Each of the BJ Warrants outstanding after such adjustment of the number of BJ Warrants shall be exercisable for one share of BJ Common Stock. Each BJ Warrant held of record prior to such adjustment of the number of BJ Warrants shall become that number of BJ Warrants (calculated to the nearest ten-thousandth) obtained by dividing the Exercise Price in effect prior to adjustment of the Exercise Price by the Exercise Price in effect after adjustment of the Exercise Price. BJ shall notify each of the record holders of BJ Warrants of its election to adjust the number of BJ Warrants, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. Such record date may be the date on which the Exercise Price is adjusted or any day thereafter, but shall be at least 10 days later than the date of the public announcement. Upon each adjustment of the number of BJ Warrants pursuant to this Section 10(k), BJ shall, as promptly as practicable, cause to be distributed to holders of record of Warrant Certificates on such record date Warrant Certificates evidencing, subject to Section 13, the additional BJ Warrants to which such holders shall be entitled as a result of such adjustment, or, at the option of BJ, shall cause to be distributed to such holders of record in substitution and replacement for the Warrant Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by BJ, new Warrant Certificates evidencing all the BJ Warrants to which such holders shall be entitled after such adjustment. Warrant Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of BJ, the adjusted Exercise Price) and shall be registered in the names of the holders of record of Warrant Certificates on the record date specified in the public announcement. (l) Irrespective of any adjustment or change in the Exercise Price or the number of shares of BJ Common Stock issuable upon the exercise of the BJ Warrants, the Warrant Certificates theretofore and thereafter issued may continue to express the Exercise Price per share and the number of shares which were expressed upon the initial Warrant Certificates issued hereunder. (m) BJ agrees that it will not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by BJ. Before taking any action that would cause an adjustment reducing the Exercise Price below the then par value, if any, of the shares of BJ Common Stock issuable upon exercise of the BJ Warrants, BJ shall take any corporate action which may, in the opinion of its counsel, be necessary in order that BJ may, at the option of BJ in its sole discretion, either (i) validly and legally issue fully paid and nonassessable shares of such BJ Common Stock or (ii) pay the equivalent amount of cash, at such adjusted Exercise Price. (n) In any case in which this Section 10 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, BJ may elect to defer until the occurrence of such event the issuance to the holder of any BJ Warrant exercised after such record date of the shares of BJ Common Stock and other capital stock of BJ issuable upon such exercise over and above the shares of BJ Common Stock and other capital stock of BJ, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that BJ shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment. (o) Anything in this Section 10 to the contrary notwithstanding, BJ shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this section 10. as and to the extent that it in its sole discretion shall determine to be advisable in B-16 order that any event treated for federal income tax purposes as a distribution of stock or stock rights shall not be taxable to the recipients. Section 11. Certification of Adjusted Exercise Price or Number of Shares of BJ Common Stock. Whenever the Exercise Price or the number of shares of BJ Common Stock issuable upon the exercise of each BJ Warrant is adjusted as provided in Sections 10 or 12,BJ shall (a) promptly prepare a certificate setting forth the Exercise Price as so adjusted and/or the number of shares of BJ Common Stock issuable upon exercise of each BJ Warrant as so adjusted, and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the BJ Common Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Warrant Certificate in accordance with Section 23. Section 12. Reclassification, Consolidation, Merger, Combination, Sale or Conveyance. In case any of the following shall occur while any BJ Warrants are outstanding: (i) any reclassification or change of the outstanding shares of BJ Common Stock (other than a change in par value, or from par value to no par value, or as covered by Section 10(a)), or (ii) any consolidation, merger or combination of BJ with or into another corporation as a result of which holders of BJ Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such BJ Common Stock, or (iii) any sale or conveyance of the property or assets of BJ as, or substantially as, an entirety to any other entity as a result of which holders of BJ Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such BJ Common Stock, then BJ, or such successor corporation or transferee, as the case may be, shall make appropriate provision by amendment of this Agreement or by the successor corporation or transferee executing with the Warrant Agent an agreement so that the holders of the BJ Warrants then outstanding shall have the right at any time thereafter, upon exercise of such BJ Warrants, to receive the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance as would be received by a holder of the number of shares of BJ Common Stock issuable upon exercise of such Warrant immediately prior to such reclassification, change, consolidation, merger, sale or conveyance. If the holders of the BJ Common Stock may elect from choices the kind or amount of securities, cash and other property receivable upon such reclassification, consolidation, merger, combination, sale or conveyance, then for the purpose of this Section 12 the kind and amount of securities, cash and other property receivable upon such reclassification, consolidation, merger, combination, sale or conveyance shall be deemed to be the choice specified by the holder of the BJ Warrant, which specification shall be made by the holder of the BJ Warrant by the later of (A) 15 Trading Days after the holder of the BJ Warrant is provided with a final version of all information required by law or regulation to be furnished to holders of BJ Common Stock concerning such choice, or if no such information is required, 15 Trading Days after BJ notified the holder of the BJ Warrant of all material facts concerning such specification and (B) the last time at which holders of BJ Common Stock are permitted to make their specification known to BJ. If the holder of the BJ Warrant fails to make any specification, the holder's choice shall be deemed to be whatever choice is made by a plurality of holders of BJ Common Stock not affiliated with BJ or any other party to the reclassification, consolidation, merger, combination, sale or conveyance. Such new BJ Warrants shall provide for adjustments which, for events subsequent to the effective date of such new BJ Warrants, shall be as nearly equivalent as may be practicable to the adjustments provided for in Section 10 and this Section 12. The above provisions of this Section 12 shall similarly apply to successive reclassifications, consolidations, mergers, combinations, sales or conveyances. BJ shall mail by first-class mail, postage prepaid, to each registered holder of a BJ Warrant, written notice of the execution of any such amendment or agreement. Any new agreement entered into by the successor corporation or transferee shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in Section 10. The Warrant B-17 Agent shall be under no responsibility to determine the correctness of any provisions contained in such agreement relating either to the kind or amount of securities or other property receivable upon exercise of BJ Warrants or with respect to the method employed and provided therein for any adjustments and shall be entitled to rely upon the provisions contained in any such agreement. The provisions of this Section 12 shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales and conveyances of the kind described above. Section 13. Fractional BJ Warrants and Fractional Shares of B.J Common Stock. (a) BJ shall not be required to issue fractions of BJ Warrants or to distribute Warrant Certificates which evidence fractional BJ Warrants. In lieu of such fractional BJ Warrants, there shall be paid to the persons to whom Warrant Certificates representing such fractional BJ Warrants would otherwise be issuable an amount in cash (without interest) equal to the product of such fraction of a B.J W arrant multiplied by the following: (i) with respect to all fractions of BJ Warrants issued in the Merger, the Warrant Merger Price and (ii) with respect to all the other fractions of BJ Warrants, the Current Market Price per whole BJ Warrant (as defined in Section 10(f)). (b) BJ shall not be required to issue fractions of shares of BJ Common Stock upon exercise of BJ Warrants or to distribute stock certificates which evidence fractional shares of BJ Common Stock. In lieu of fractional shares, there shall be paid to the registered holders of Warrant Certificates at the time such Warrant Certificates are exercised as herein provided an amount in cash (without interest) equal to the product of such fractional part of a share of BJ Common Stock multiplied by the Current Market Price per share of BJ Common Stock (as defined in Section 10(f)). (c) The holder of a BJ Warrant by the acceptance of the BJ Warrant expressly waives his right to receive any fractional BJ Warrant or any fractional share of BJ Common Stock upon exercise of a BJ Warrant. Section 14. Right of Action. All rights of action in respect of this Agreement are vested in the respective registered holders of the Warrant Certificates, and any registered holder of any Warrant Certificate, without the consent of the Warrant Agent or of the holder of any other Warrant Certificate, may, on such holder's own behalf and for such holder's own benefit, enforce and may institute and maintain any suit, action or proceeding against BJ to enforce, or otherwise act in respect of, such holder's right to exercise the BJ Warrants evidenced by such Warrant Certificate in the manner provided in such Warrant Certificate and in this Agreement. Section 15. Agreement of Warrant Certificate Holders. Every holder of a Warrant Certificate by accepting the same consents and agrees with BJ and the Warrant Agent and with every other holder of a Warrant Certificate that: (a) the Warrant Certificates are transferable only on the registry books of the Warrant Agent if surrendered at the principal office of the Warrant Agent, duly endorsed or accompanied by a proper instrument of transfer; and (b) BJ and the Warrant Agent may deem and treat the person in whose name the Warrant Certificate is registered as the absolute owner thereof and of the BJ Warrants evidenced thereby (notwithstanding any notations of ownership or writing on the Warrant Certificates made by anyone other than BJ or the Warrant Agent) for all purposes whatsoever and neither BJ nor the Warrant Agent shall be affected by any notice to the contrary. Section 16. Warrant Certificate Holder Not Deemed a Stockholder. No holder, as such of any Warrant Certificate shall be entitled to vote, receive dividends or distributions on, or he deemed for any purpose the holder of, BJ Common Stock or any other securities of BJ which may at any time be issuable on the exercise or conversion of the BJ Warrants represented thereby, nor shall anything contained herein or in any Warrant Certificate be construed to confer upon the holder of any Warrant B-18 Certificate, as such, any of the rights of a stockholder of BJ or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 24), or to receive dividends or distributions or subscription rights, or otherwise, until the BJ Warrant or BJ Warrants evidenced by such Warrant Certificate shall have been exercised in accordance with the provisions hereof. Section 17. Concerning the Warrant Agent. BJ agrees to pay to the Warrant Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Warrant Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. BJ also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Warrant Agent, for anything done or omitted by the Warrant Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Warrant Certificate or certificate for BJ Common Stock or for other securities of BJ, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons. Section 18. Merger or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be a party, or any corporation succeeding to the corporate trust business of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions of Section 21. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement. In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement. Section 19. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which BJ and the holders of Warrant Certificates. by their acceptance thereof, shall be bound: B-19 (a) The Warrant Agent may consult with legal counsel (who may be legal counsel for BJ), and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. (b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by BJ prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman, President or any Vice President of BJ and by the Treasurer or any Assistant Treasurer or the Secretary of BJ and delivered to the Warrant Agent; and such certificate shall be full authentication to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. (c) The Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct. (d) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by BJ only. (e) The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach by BJ of any covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the number of shares of BJ Common Stock required under the provisions of Sections 10 or 12 or responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of BJ Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of BJ Common Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any shares of BJ Common Stock will, when issued, be duly authorized, validly issued, fully paid and nonassessable. (f) BJ agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing by the Warrant Agent of the provisions of this Agreement. (g) The Warrant Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman or the President or any Vice President or the Secretary of BJ, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. (h) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the BJ Warrants or other securities of BJ or become pecuniarily interested in any transaction in which BJ may be interested, or contract with or lend money to BJ or otherwise act as fully and freely as though it were not Warrant B-20 Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for BJ or for any other legal entity. (i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents. and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to BJ resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof. Section 20. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days' notice in writing mailed to BJ and to each transfer agent of the BJ Common Stock by registered or certified mail, and to the holders of the Warrant Certificates by first-class mail. BJ may remove the Warrant Agent or any successor Warrant Agent upon 30 days' notice in writing, mailed to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the BJ Common Stock by registered or certified mail and to the holders of the Warrant Certificates by first-class mail. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, BJ shall appoint a successor to the Warrant Agent. If BJ shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by BJ), then the registered holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent. Any successor Warrant Agent, whether appointed by BJ or by such a court, shall be a corporation organized and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, BJ shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the BJ Common Stock, and mail a notice thereof in writing to the registered holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 20, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be. Section 21. Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the BJ Warrants to the contrary, BJ may, at its option, issue new Warrant Certificates evidencing BJ Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the several Warrant Certificates made in accordance with the provisions of this Agreement. Section 22. Purchase of BJ Warrants by BJ. BJ shall have the right, except as limited by applicable law or other agreements, to purchase or otherwise acquire BJ Warrants at such time, in such manner and for such consideration as it may deem appropriate. Section 23. Notice of Proposed Actions. In case BJ shall propose (a) to declare a dividend on shares of BJ Common Stock payable in shares of capital stock of any class or to make any other distribution (other than aggregate cash dividends and distributions not in excess of $.25 per share of BJ Common Stock for the fiscal year ended September 30, 1995, and then $1.50 for each 12-month B-21 period thereafter, payable out of retained earnings or earned surplus) to all holders of BJ Common Stock (including any distribution made in connection with a consolidation or merger in which BJ is the continuing corporation), or (b) to offer rights, options or warrants to all holders of BJ Common Stock entitling them to subscribe for or purchase BJ Common Stock (or securities convertible into or exercisable or exchangeable for BJ Common Stock or any other securities), or (c) to offer any shares of capital stock in a reclassification of shares of the BJ Common Stock (including any such reclassification in connection with a consolidation or merger in which BJ is the continuing corporation), or (d) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its subsidiaries to effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or net income of BJ and its subsidiaries (taken as a whole) to, any other Person, or (e) to effect the liquidation, dissolution or winding up of BJ, then, in each such case, BJ shall give to each registered holder of a BJ Warrant, in accordance with Section 24, a notice of such proposed action, which shall specify the record date for the purpose of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of BJ Common Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (a) or (b) above at least 20 days prior to the record date for determining holders of the BJ Common Stock for purposes of such action, and in the case of any such other action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of BJ Common Stock, whichever shall be the earlier. The failure to give notice required by this Section 23 or any defect therein shall not affect the legality or validity of the action taken by BJ or the vote upon any such action. Unless specifically required by Section 10, the Exercise Price, the number of shares of BJ Common Stock covered by each BJ Warrant and the number of BJ Warrants outstanding shall not be subject to adjustment as a result of BJ being required to give notice pursuant to this Section 23. Section 24. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the holder of any Warrant Certificate to or on BJ, (ii) subject to the provisions of Section 20, by BJ or by the holder of any Warrant Certificate to or on the Warrant Agent or (iii) by BJ or the Warrant Agent to the holder of any Warrant Certificate, shall be deemed given (x) on the date delivered, if delivered personally, (y) on the first Trading Day following the deposit thereof with Federal Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, and (z) on the fourth Trading Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), in each case to the parties at the following addresses i or at such other address for a party as shall be specified by like notice): (a) If to BJ, to: BJ Services Company 5500 Northwest Central Drive Houston, Texas 77092 Attention: President (b) If to the Warrant Agent, to: First Chicago Trust Company of New York 525 Washington Boulevard Jersey City, New Jersey 07310 Attention: Joann Gorostiola Assistant Vice President B-22 (c) If to the holder of any Warrant Certificate, to the address of such holder as shown on the registry books of BJ. Section 25. Supplements and Amendments. (a) BJ and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any holders of BJ Warrant Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with regard to matters or questions arising hereunder which BJ and the Warrant Agent may deem necessary or desirable and which shall not adversely affect the interests of the holders of Warrant Certificates. (b) In addition to the foregoing, with the consent of holders of not less than a majority in number of the then outstanding BJ Warrants, BJ and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying in any manner the rights of the holders of the BJ Warrant Certificates; provided, however, that no modification of the terms (including but not limited to the adjustments described in Section 10) upon which the BJ Warrants are exercisable or reducing the percentage required for consent to modification of this Agreement may be made without the consent of the holder of each outstanding BJ Warrant affected thereby. Section 26. Successors. All covenants and provisions of this Agreement by or for the benefit of BJ or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. Section 27. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than BJ, the Warrant Agent and the registered holders of the Warrant Certificates any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of BJ, the Warrant Agent and the registered holders of the Warrant Certificates. Section 28. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof. Section 29. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Section 30. Captions. The caption of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. B-23 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and their respective corporate seals to be hereunder affixed and attested, all as of the day and year first above written. B.J. SERVICES COMPANY By: Name: Title: By: Title: FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Warrant Agent By: Name: Title: B-24 Exhibit 1 to Warrant Agreement [Form of Warrant Certificate] Certificate No. M- Warrants NOT EXERCISABLE AFTER ,2000 Warrant Certificate BJ SERVICES COMPANY This certifies that , or registered assigns, is the registered owner of the number of BJ Warrants set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Warrant Agreement dated as of , 1995 [the Closing Date] (the "Warrant Agreement") between BJ Services Company, a corporation organized under the laws of the State of Delaware ("BJ"), and First Chicago Trust Company of New York, a New York limited purpose trust company (the "Warrant Agent"), to purchase or receive from BJ at any time after , 1995 [the Closing Date] and prior to 5:00 P.M. (New York City time) on , 2000 [fifth anniversary of the Closing Date] at the principal office of the Warrant Agent, or its successors as Warrant Agent, in New York City, the number of shares of common stock, par value $.10 per share, of BJ ("BJ Common Stock") represented hereby to be purchased at $30 per share of BJ Common Stock (the "Exercise Price"), in each case upon presentation and surrender of this Warrant Certificate with the Form of Election to Purchase duly executed. The number of BJ Warrants evidenced by this Warrant Certificate (and the number of shares of BJ Common Stock which may be purchased upon exercise thereof) set forth above and the Exercise Price set forth above are the number and Exercise Price as of , 1995, based on the shares of BJ Common Stock as constituted at such date. As provided in the Warrant Agreement, the Exercise Price and the number of shares of BJ Common Stock which may be purchased upon the exercise of the BJ Warrants evidenced by this Warrant Certificate are subject to modification and adjustment upon the occurrence of certain events. This Warrant Certificate is subject to all of the terms, provisions and conditions of the Warrant Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Warrant Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Warrant Agent, BJ and the holders of the Warrant Certificates. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent. This Warrant Certificate, with or without other Warrant Certificates, upon surrender at the principal office of the Warrant Agent, may be exchanged for another Warrant Certificate or Warrant Certificates of like tenor and date evidencing BJ Warrants entitling the holder to purchase a like aggregate number of shares of BJ Common Stock, in each case as the BJ Warrants evidenced by the Warrant Certificate or Warrant Certificates surrendered shall have entitled such holder to purchase or receive. If this Warrant Certificate shall be exercised in part, the holder hereof shall be entitled to receive upon surrender hereof another Warrant Certificate or Warrant Certificates for the number of BJ Warrants not exercised. B-25 BJ shall make a cash payment in lieu of issuing fractional BJ Warrants or fractional shares of BJ Common Stock, as provided in the Warrant Agreement. No holder of this Warrant Certificate shall be entitled to vote, receive dividends or distributions on, or be deemed for any purpose the holder of, BJ Common Stock or of any other securities of BJ which may at any time be issuable on the exercise hereof, nor shall anything contained in the Warrant Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of BJ or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Warrant Agreement), or to receive dividends or subscription rights, or otherwise, until the BJ Warrant or BJ Warrants evidenced by this Warrant Certificate shall have been exercised as provided in the Warrant Agreement. This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Warrant Agent. WITNESS the facsimile signature of the proper officers of BJ and its corporate seal. Dated as of , 199_. ATTEST: BJ SERVICES COMPANY Secretary By: Name: Title: Countersigned: By Authorized signature B-26 FORM OF ELECTION TO PURCHASE (To be executed if holder desires to exercise the Warrant Certificate.) To First Chicago Trust Company of New York, as Warrant Agent: The undersigned hereby irrevocably elects to exercise BJ Warrants represented by this Warrant Certificate to purchase the shares of BJ Common Stock issuable upon the exercise of such BJ Warrants and requests that Certificates for such shares be issued in the name of and delivered to: Please insert social security or other identifying number (Please Print name and address) If such number of BJ Warrants shall not be all the BJ Warrants evidenced by this Warrant Certificate, a new Warrant Certificate for the balance remaining of such BJ Warrants shall be registered in the name of and delivered to: Please insert social security or other identifying number (Please Print name and address) Dated: Signature (Signature must conform in all respects to name of holder as specified on the face of this Warrant Certificate) Signature Guaranteed: B-27 Annex A to Warrant Agreement ASSIGNMENT FORM (To be executed by the registered holder if such holder desires to transfer the Warrant Certificates) FOR VALUE RECEIVED, hereby sells, assigns and transfers unto Name: (please typewrite or print in block letters) Address: this Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer within the Warrant Certificate the same on the books of the Company, with full power of substitution in the premises. Date ,19 . Signature Signature Guaranteed: Notice The signature to the foregoing assignment must correspond to the name as written upon the face of this Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. B-28 -----END PRIVACY-ENHANCED MESSAGE-----