Adams Resources & Energy (AE) 8-KAdams Resources & Energy, Inc. Completes Acquisition of Phoenix Oil and Firebird Bulk Carriers

On August 12, 2022, GulfMark Asset Holdings, LLC (“GulfMark Holdings”), a Texas limited liability company and subsidiary of Adams Resources & Energy, Inc., a Delaware corporation (the “Company” or “Adams”), as buyer and each of Scott Bosard, Trey Bosard and Tyler Bosard as sellers (collectively, the “Sellers”), entered into a purchase agreement (the “Purchase Agreement”) to acquire all of the equity of Firebird Bulk Carriers, Inc., a Texas corporation (“Firebird”), and Phoenix Oil, Inc., a Texas corporation (“Phoenix”), for a purchase price of approximately $32.4 million in cash and $500,000 in shares of common stock of the Company. Firebird is an interstate bulk motor carrier of crude oil, condensate, fuels, oils and other petroleum products, and Phoenix recycles and repurposes off-specification fuels, lubricants, crude oil and other chemicals from producers in the United States.

Pursuant to the Purchase Agreement, the purchase price is subject to customary post-closing adjustment provisions, including an earn-out payable to Sellers to the extent the earnings before interest, taxes, depreciation and amortization (EBITDA) of Phoenix exceeds a specified threshold during the 12 full calendar months after the closing date. The Purchase Agreement contains customary representations and warranties of GulfMark Holdings and Sellers and indemnification provisions under which GulfMark Holdings, on the one hand, and the Sellers, on the other, have agreed to indemnify each other against certain liabilities. Neither the Company, GulfMark Holdings nor any of their affiliates had any material relationships with any of the Sellers at the time they entered into the Purchase Agreement.

The description of the Purchase Agreement contained in this Item 1.01 does not purport to be complete and is qualified in its entirety by the full text of the Purchase Agreement, a copy of which is filed herewith as Exhibit 2.1, and incorporated by reference herein.

The representations, warranties and covenants contained in the Purchase Agreement have been made solely for the purpose of such agreement and as of specific dates, for the benefit of the parties to the Purchase Agreement. In addition, such representations, warranties and covenants (i) may have been qualified by confidential disclosures exchanged between the parties, (ii) are subject to materiality qualifications contained in the Purchase Agreement which may differ from what may be viewed as material by investors, and (iii) have been included in the Purchase Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters of facts. Accordingly, the Purchase Agreement has been filed as an exhibit hereto to provide investors with information regarding the terms of the Purchase Agreement, and not to provide investors with any other factual information regarding the parties, their respective businesses, or the actual conduct of their respective businesses during the period prior to the consummation of the transactions contemplated by the Purchase Agreement. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of actual facts or circumstances, and the subject matter of representations and warranties may change after the date as of which such representations or warranties were made. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

On August 11, 2022, the Company and GulfMark Holdings, GulfMark Energy, Inc. (“GulfMark Energy”) and Service Transport Company (“Service Transport”), each a wholly owned subsidiary of the Company, as borrowers (collectively, the “Borrowers” and each individually, a “Borrower”) entered into a Limited Waiver Agreement and Amendment No. 1 to the Credit Agreement (“Amendment No. 1”) with the subsidiary guarantors of the Borrowers and Wells Fargo Bank, National Association, as administrative agent and issuing lender, and the other lenders party thereto (collectively, the “Lenders”).

Pursuant to the terms of Amendment No. 1, the parties agreed to increase the borrowing capacity under the existing credit agreement to a total of $60.0 million (increased from $40.0 million) and extend the maturity date to August 11, 2025. Amendment No. 1 also waives certain specific non-financial events of default that existed under

From time to time, certain of the Lenders, their affiliates and/or their predecessors have provided commercial banking, investment banking and other financial advisory services to Adams or its subsidiaries. The Lenders and their affiliates may, from time to time in the future, engage in transactions with and perform services for Adams and its subsidiaries in the ordinary course of business.

The description of Amendment No. 1 contained in this Item 1.01 does not purport to be complete and is qualified in its entirety by the full text of Amendment No. 1, a copy of which is filed herewith as Exhibit 10.1, and incorporated by reference herein.

On August 12, 2022, Trey Bosard, age 40, entered into an employment agreement (the “Employment Agreement”) to serve as the President of Phoenix in connection with the acquisition of Phoenix by GulfMark Holdings. Mr. Bosard joined Phoenix in 2009 and served in various positions of increasing responsibilities, most recently as Vice President.

Pursuant to the terms of the Employment Agreement, Mr. Bosard will receive a base salary of $130,000, a restricted stock unit grant of approximately $500,000 vesting in partial installments on each of the first three anniversaries of the grant date, cash performance-based bonuses, a vehicle and cell-phone allowance and certain other benefits, including the right to participate in other employee benefits programs. The restricted stock award was granted as an inducement award pursuant to Section 711(a) of the NYSE American Company Guide and is not being made under the Company’s amended and restated 2018 Long Term Incentive Plan.

The description of the Employment Agreement contained in this Item 1.01 does not purport to be complete and is qualified in its entirety by the full text of the Employment Agreement, a copy of which is filed herewith as Exhibit 10.2, and incorporated by reference herein.

In the event of a Qualifying Termination, the Participant shall receive the following compensation, subject to certain exceptions as described more fully in the Plan:

The foregoing description of the Plan is not complete and is qualified in its entirety by reference to the full text of the Plan, which is attached hereto as Exhibit 10.3, to this Current Report on Form 8-K and is incorporated herein by reference.

In connection with closing the transactions set forth in the Purchase Agreement, the Company issued a press release on August 15, 2022, a copy of which is filed herewith as Exhibit 99.1, and incorporated by reference herein.

The Company intends to file the financial statements required by Item 9.01(a), in accordance with Rule 3-14 of Regulation S-X, by amendment to this Current Report on Form 8-K no later than 71 calendar days following the date that this Current Report on Form 8-K is required to be filed.

The Company intends to file the pro forma financial information required by Item 9.01(b) by amendment to this Current Report on Form 8-K no later than 71 calendar days following the date that this Current Report on Form 8-K is required to be filed.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.