e425
Filed by Basic Energy Services, Inc.
Commission File No. 001-32693
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed
filed pursuant to Rule 14a-6 of
the Securities Exchange Act of 1934
Subject Company: Horsepower Holdings, Inc.
Commission File No.: 333-150895
July 1, 2008
To: Restricted Stockholders of Basic Energy Services, Inc.
Re: Proposed merger transaction between Basic Energy Services, Inc. and Grey Wolf, Inc.
You are receiving this notice in connection with the proposed merger transaction between Basic
Energy Services, Inc. (the Company) and Grey Wolf, Inc. (Grey Wolf), which is
scheduled to become effective on or about July 15, 2008. As a holder of outstanding shares of
restricted stock, you should have already received a copy of the proxy statement dated June 10,
2008 relating to the mergers of the Company and Grey Wolf.
Pursuant to Section 2.6(d) of the Agreement and Plan of Merger (the Merger
Agreement) by and among the Company, Grey Wolf and Horsepower Holdings, Inc.
(Holdings), each share of restricted stock that you own shall be converted into the right
to receive 0.9195 shares of Holdings common stock, together with cash in lieu of fractional shares
of Holdings common stock (the Basic Stock Consideration) and an amount in cash equal to
$6.70 (the Basic Cash Consideration and, together with the Basic Stock Consideration, the
Basic Merger Consideration), provided that such shares of Holdings common stock and such
cash payable shall be subject to the same vesting or risk of forfeiture provisions to which your
shares of restricted stock of the Company are subject immediately prior to the effective time of
the merger.
At your election, which must be timely and properly made as described below, you may choose to
receive, instead of the Basic Merger Consideration, for each share of unvested restricted stock of
the Company that you own, a number of shares of Holdings common stock equal to the Basic
Adjustment Fraction (such shares, the Basic Adjusted Stock Consideration), provided that
each such share of Holdings common stock shall be subject to the same vesting or risk of forfeiture
provisions to which your shares of restricted stock of the Company are subject immediately prior to
the effective time of the merger.
Pursuant to the Merger Agreement, the Basic Adjustment Fraction is calculated by dividing
the (x) average closing price of one share of Basic common stock on the NYSE for the five
consecutive day trading period ending on the last trading day immediately preceding the effective
time of the merger by (y) the Notional Surviving Corporation Share Fair Market Value. The
Notional Surviving Corporation Share Fair Market Value is calculated by taking (a) the average
closing price of one share of Basic common stock on the NYSE for the five consecutive day trading
period ending on the last trading day immediately preceding the effective time of the merger,
subtracting (b) the Basic Cash Consideration (which is equal to $6.70) and dividing the result by
(c) the Basic Exchange Ratio (which is equal to 0.9195).
The effect of such an election is to cause you to forego the right to receive the Basic Cash
Consideration in exchange for additional shares of Holdings common stock.
In order to elect to receive the Basic Adjusted Stock Consideration in exchange for your
shares of restricted stock of the Company, your signed and dated election must be received by the
Company no later than Thursday, July 10, 2008, which is three business days prior to the
anticipated date of the special meetings of stockholders of each of the Company and Grey Wolf to
approve the proposed merger. Attached to this notice, is a form of election that you may execute
and return to Jim Tyner, Basic Energy
Services, 500 W. Illinois Ave., 1st Floor, Midland, Texas
79701. If you would like to receive the Basic Merger Consideration in exchange for your shares of
restricted stock of the Company, no further action on your part is required.
If you have any questions regarding the foregoing, please contact Jim Tyner at (432) 620-5500
or by email at jim.tyner@basicenergyservices.com or Joseph Chao at (713) 220-4345 or by email at
jchao@andrewskurth.com.
Forward Looking Statements and Additional Information
This document may include statements herein that are forward-looking statements as defined
by the Securities and Exchange Commission (the SEC). All statements, other than
statements of historical fact, included herein that address activities, events or developments that
Grey Wolf or the Company expect, believe or anticipate will or may occur in the future are
forward-looking statements. These forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially, including required approvals by stockholders,
the possibility that the anticipated benefits from the proposed mergers cannot be fully realized,
the possibility that costs or difficulties related to integration of the two companies will be
greater than expected, the impact of competition and other risk factors included in the reports
filed with the SEC by Grey Wolf and the Company. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of their dates. Except as required by law,
neither Grey Wolf nor the Company intends to update or revise its forward-looking statements,
whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
In connection with the proposed mergers, a registration statement of Holdings has been filed
and declared effective by the SEC. Each of the Company and Grey Wolf has filed a definitive joint
proxy statement/prospectus with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ
THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS AND THESE OTHER MATERIALS
REGARDING THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY,
GREY WOLF, HOLDINGS AND THE PROPOSED TRANSACTION. Investors and security holders may obtain a free
copy of the registration statement and the joint proxy statement/prospectus and other documents
containing information about the Company and Grey Wolf, without charge, at the SECs web site at
www.sec.gov, the Companys web site at www.basicenergyservices.com, and Grey Wolfs web site at
www.gwdrilling.com. Copies of the registration statement and the joint proxy statement/prospectus
and the SEC filings that are incorporated by reference therein may also be obtained for free by
directing a request to either Investor Relations, Basic Energy Services, Inc., (432) 620-5510 or to
Investor Relations, Grey Wolf, Inc., (713) 435-6100.
Participants in the Solicitation
The Company and Grey Wolf and their respective directors, officers and certain other members
of management may be deemed to be participants in the solicitation of proxies from their respective
stockholders in respect of the mergers. Information about these persons can be found in Grey Wolfs
proxy statement relating to its 2008 annual meetings of stockholders as filed with the SEC on April
8, 2008. Information concerning beneficial ownership of the Companys stock by its directors and
certain of its executive officers is included in its Annual Report on Form 10-K/A filed April 29,
2008 and subsequent statements of changes in beneficial ownership on file with the SEC. Additional
information about the interests of such persons in the solicitation of proxies in respect of the
merger are included in the registration statement and the joint proxy statement/prospectus which
was filed with the SEC in connection with the proposed transaction.
2
ELECTION BY RESTRICTED STOCKHOLDER
The undersigned hereby elects to receive, pursuant to Section 2.6(d) of that certain Agreement
and Plan of Merger (the Merger Agreement), dated April 20, 2008, by and among Basic
Energy Services, Inc. (the Company), Grey Wolf, Inc. and Horsepower Holdings, Inc.
(Holdings), a number of shares of Holdings common stock equal to the Basic Adjustment
Fraction (as such term is defined in the Merger Agreement) in exchange for each share of unvested
restricted stock of the Company held by the undersigned, provided that each such share of Holdings
common stock shall be subject to the same vesting or risk of forfeiture provisions to which the
undersigneds shares of restricted stock of the Company are subject immediately prior to the
effective time of the merger.
The undersigned understands and acknowledges that by executing and returning this election to
the Company he or she is foregoing the right to receive 0.9195 shares of Holdings common stock and
an amount in cash equal to $6.70 in exchange for a number of shares of Holdings common stock
calculated in accordance with the Basic Adjustment Fraction as defined in the Merger Agreement.
Date: , 2008