Boots & Coots Sued Over Restricted Stock Grants - 29 April 2010, Bloomberg.com, By Phil Milford

http://bit.ly/cBdYdW

April 29 (Bloomberg) -- Boots
& Coots Inc., the oil well
firefighter being bought by Halliburton
Co. for more than
$240 million, was sued by an investor who contends some company
officials wrongly stand to gain a windfall in the deal.

Boots & Coots on March 1 awarded some executives
restricted
stock grants at $1.88 a share, and the stock may be sold at the
Halliburton offering price of $3 a share, stockholder Herbert
Silverberg said yesterday in a Delaware Chancery Court lawsuit
in Wilmington.

The suit was filed “for the benefit of the company,”
“and seeks to disgorge the restricted stock awarded by the
board to themselves,” as well as damages, according to the
complaint.

Halliburton, an energy services engineering company, said
April 9 it would a pay 28 percent premium for Boots & Coots in
cash and stock to add firefighting services. Both companies are
based in Houston.

When directors approved the grants, “they were in the
process of negotiating the proposed merger” and knew the grants
“would immediately vest” and “dramatically increase in value
(from $1.88 to $3 per share) in a very short time” when the
company changed control, Silverberg claims.

In a restricted stock plan, an employee may pay the
purchase price for the grant and sell it when it vests, in this
case when Boots & Coots is sold.

Restricted Stock

Each non-employee director was granted $60,000 of
restricted stock by the board, and Jerry Winchester,
the chief
executive officer, was granted 306,630 shares, according to
court papers.

The company has also been sued in state court in Texas by
shareholders who cite “grossly inadequate consideration” that
“underestimates the true value” of Boots & Coots, and ask a
judge to halt the buyout, according to court papers and a
company report
April 16 to the U.S. Securities
and Exchange
Commission.

Jennifer Tweeton,
a spokeswoman for Boots & Coots, didn’t
respond to e-mail and voice-mail messages seeking comment.

Edward “Coots”
Matthews, who died on March 31 at 86,
founded the company in 1978 along with Asger “Boots”
Hansen.
They previously had worked with Red
Adair, famous for his
firefighting skills and portrayed in the 1968 movie
“Hellfighters,”
starring John Wayne.

Boots & Coots was unchanged at $2.94 at 4 p.m. in New York
Stock Exchange composite trading. The shares have risen
78 percent this year. Halliburton fell $1.75 to $31.60.

The case is Silverberg v. Swanson and Boots & Coots,
CA5441, Delaware Chancery Court (Wilmington).

To contact the reporter on this story:
Phil Milford
in Wilmington, Delaware,
at pmilford@bloomberg.net.

Last Updated: April 29, 2010 16:15 EDT