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AGREEMENT AND PLAN OF MERGER
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Among
FIAT S.p.A.,
NEW HOLLAND N.V.,
CASE CORPORATION,
and
FIAT ACQUISITION CORPORATION
Dated as of May 15, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
SECTION 1.01. The Merger..............................................1
SECTION 1.02. Effective Time; Closing.................................2
SECTION 1.03. Effect of the Merger....................................2
SECTION 1.04. Certificate of Incorporation; By-Laws...................2
SECTION 1.05. Directors and Officers of the Surviving Corporation.....2
ARTICLE II
CONVERSION OF SECURITIES IN THE MERGER
SECTION 2.01. Conversion of Capital Stock.............................3
SECTION 2.02. Payment for Shares......................................4
SECTION 2.03. Stock Options and Other Equity Awards...................6
SECTION 2.04. Shares of Dissenting Holders of Company
Common Stock ...........................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries............8
SECTION 3.02. Certificate of Incorporation and By-Laws................9
SECTION 3.03. Capitalization..........................................9
SECTION 3.04. Authority Relative to This Agreement...................10
SECTION 3.05. No Conflict; Required Filings and Consents.............10
SECTION 3.06. Permits; Compliance....................................11
SECTION 3.07. SEC Filings; Financial Statements......................12
SECTION 3.08. Absence of Certain Changes or Events...................13
SECTION 3.09. Employee Benefit Plans; Labor Matters..................13
SECTION 3.10. Contracts; Debt Instruments............................14
SECTION 3.11. Litigation.............................................15
SECTION 3.12. Environmental Matters..................................15
SECTION 3.13. Trademarks, Patents and Copyrights.....................17
SECTION 3.14. Taxes..................................................18
SECTION 3.15. Non-Competition Agreements.............................19
SECTION 3.16. Rights Agreement.......................................19
SECTION 3.17. Board Recommendation...................................19
SECTION 3.18. Insurance..............................................19
SECTION 3.19. Opinion of Financial Advisor...........................20
SECTION 3.20. Brokers................................................20
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIAT,
NEW HOLLAND AND MERGER SUB
SECTION 4.01. Organization and Qualification.........................20
SECTION 4.02. No Conflict; Required Filings and Consents.............21
SECTION 4.03. Absence of Litigation..................................22
SECTION 4.04. Brokers................................................22
SECTION 4.05. No Activities..........................................22
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business by the Company Pending the
Closing................................................22
SECTION 5.02. Notices of Certain Events..............................26
SECTION 5.03. Contractual Consents...................................26
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders' Meeting..................................26
SECTION 6.02. Access to Information; Confidentiality.................27
SECTION 6.03. No Solicitation of Transactions........................28
SECTION 6.04. Employee Benefits Matters..............................29
SECTION 6.05. Directors' and Officers' Indemnification and
Insurance..............................................30
SECTION 6.06. Further Action; Consents; Filings......................32
SECTION 6.07. The Company Rights Plan................................33
SECTION 6.08. Redemption of Series A Cumulative Convertible
Preferred Stock........................................33
SECTION 6.09. Public Announcements...................................33
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party to
Consummate the Merger...................................34
SECTION 7.02. Conditions to the Obligations of the Company............34
SECTION 7.03. Conditions to the Obligations of Fiat, New Holland
and Merger Sub..........................................35
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination.............................................36
SECTION 8.02. Effect of Termination...................................37
SECTION 8.03. Amendment...............................................37
SECTION 8.04. Waiver..................................................38
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SECTION 8.05. Expenses; Alternative Transaction Fee...................38
Page
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements..............................................40
SECTION 9.02. Notices.................................................40
SECTION 9.03. Certain Definitions.....................................41
SECTION 9.04. Severability............................................43
SECTION 9.05. Assignment; Merger Sub; Binding Effect; Benefit.........43
SECTION 9.06. Incorporation of Exhibits...............................43
SECTION 9.07. Specific Performance....................................43
SECTION 9.08. Governing Law...........................................43
SECTION 9.09. Submission to Jurisdiction; Venue.......................44
SECTION 9.10. Headings................................................44
SECTION 9.11. Counterparts............................................44
SECTION 9.12. Entire Agreement........................................44
SECTION 9.13. Waiver of Jury Trial....................................45
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GLOSSARY OF DEFINED TERMS
affiliate S9.03(a)
Agreement Preamble
Alternative Transaction Fee S8.05(b)
beneficial owner S9.03(b)
Blue Sky Laws S3.05(b)(i)
business day S9.03(c)
CERCLA S3.12(c)
Certificate of Merger S1.02
Closing S1.02
Closing Date S1.02
Code S2.02(e)
Company Preamble
Company Benefit Plans S3.09(a)
Company Board Recommendation S3.17
Company Certificates S2.02(a)
Company Common Stock Recitals
Company Disclosure Schedule Article III
Company Material Adverse Effect S3.01
Company Option S2.03(a)
Company Permits S3.06
Company Preferred Stock S2.01(d)
Company SEC Reports S3.07(a)
Company Stock Award S2.03(b)
Company Stock Plans S2.03(a)
Company Stock Unit S2.03(c)
Company Stockholders' Meeting S6.01(a)
Company Subsidiaries S3.01
Competing Transaction S6.03
Confidentiality Agreement S6.02(b)
Contract S3.10(a)
control S9.03(d)
controlled by S9.03(d)
Costs S6.05(d)
Credit S3.07(a)
CSFB S3.19
DGCL Recitals
Dissenting Shares S2.04(a)
Effective Time S1.02
Environmental Claims S3.12(c)
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Environmental Laws S3.12(c)
Environmental Permits S3.12(c)
ERISA S3.09(a)
Exchange Act S3.05(b)(i)
Expenses S8.05(a)
Fiat Preamble
Governmental Entity S3.05(b)
Hazardous Materials S3.12(c)
HSR Act S3.05(b)(i)
Indemnified Parties S6.05(d)
IRS S3.09(a)(i)
knowledge S9.03(e)
Law S3.05(a)(ii)
Letter of Transmittal S2.02(b)
Material Contract S3.10(a)
Merger Recitals
Merger Consideration S2.01(a)
Merger Sub Preamble
New Holland Preamble
New Holland Authorized Agent S9.09
Order S7.01(b)
Paying Agent S2.02(a)
person S9.03(f)
Proxy Statement S6.01(a)
Representatives S6.02(a)
Real Property S3.12(a)(ii)
Rights Agreement S3.16
SEAQ S6.09
Securities Act S3.05(b)(i)
subsidiary(ies) S9.03(g)
Superior Proposal S6.03
Surviving Corporation S1.01
Taxes S3.14
Tax Returns S3.14
Termination Fee S8.05(c)
Third Party Provision S9.05
U.S. GAAP S3.08
under common control with S9.03(d)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 15, 1999 (as amended,
this "Agreement"), by and among FIAT S.p.A., a company organized under the laws
of Italy ("Fiat"), NEW HOLLAND N.V., a corporation organized under the laws of
the Netherlands ("New Holland"), CASE CORPORATION, a Delaware corporation (the
"Company") and FIAT ACQUISITION CORPORATION, a Delaware corporation and a
wholly-owned subsidiary of Fiat ("Merger Sub").
WHEREAS, upon the terms and subject to the conditions of this
Agreement, New Holland or one of its subsidiaries will acquire, pursuant to the
merger (the "Merger") of Merger Sub with and into the Company in accordance with
the General Corporation Law of the State of Delaware ("DGCL"), all the issued
and outstanding shares of common stock, par value $.01 per share, of the Company
(the "Company Common Stock") at a price per share of $55.00, net to the seller
in cash;
WHEREAS, the Board of Directors of the Company has unanimously
approved this Agreement and the Merger and unanimously resolved to recommend
that the stockholders of the Company vote to approve and adopt this Agreement
and the Merger upon the terms and subject to the conditions contained herein;
WHEREAS, this Agreement has been approved and adopted by the Board
of Directors of Fiat, the Board of Managing Directors of New Holland and the
Board of Directors of Merger Sub, and has been approved and adopted by Fiat as
sole stockholder of Merger Sub; and
WHEREAS, it is the intent of Fiat and New Holland to combine the
business operations of New Holland and the Company.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Provided that this Agreement shall not have
been terminated in accordance with Section 8.01, upon the terms and subject to
the conditions set forth in this Agreement, and in accordance with Section 251
of the DGCL, at the Effective Time (as defined in Section 1.02 hereof) Merger
Sub shall be merged with and into the Company. As a result of the Merger, the
separate corporate existence of Merger Sub shall cease and the Company shall be
the surviving corporation of the Merger (the "Surviving Corporation").
2
SECTION 1.02. Effective Time; Closing. Provided that this Agreement
shall not have been terminated in accordance with Section 8.01, as promptly as
practicable after the satisfaction or, if permissible and effected as provided
in Section 8.04, waiver of the conditions set forth in Article VII (or such
other date as may be agreed to in writing by Fiat, New Holland and the Company),
the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware in such form as required by, and executed in accordance
with, Section 251 of the DGCL (the date and time of such filing, or such later
date or time as set forth therein, being the "Effective Time"). Immediately
prior to the filing of the Certificate of Merger, a closing (the "Closing") will
be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York,
New York. The date on which the Closing occurs is referred to in this Agreement
as the "Closing Date".
SECTION 1.03. Effect of the Merger. At the Effective Time, the effect
of the Merger shall be as provided in the DGCL. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of the Company and Merger Sub shall be
vested in the Surviving Corporation, and all debts, liabilities and duties of
the Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 1.04. Certificate of Incorporation; By-Laws. At the Effective
Time, (a) subject to the provisions of (i) Section 2.01(d) and (ii) Section
6.05(a), the Certificate of Incorporation of the Surviving Corporation shall be
amended and restated in its entirety to read as the Certificate of Incorporation
of Merger Sub as in effect immediately prior to the Effective Time and (b) the
By-Laws of Merger Sub as in effect immediately prior to the Effective Time shall
become the By-Laws of the Surviving Corporation.
SECTION 1.05. Directors and Officers of the Surviving Corporation. (a)
The directors of Merger Sub at the Effective Time shall, from and after the
Effective Time, become the directors of the Surviving Corporation until their
successors shall have been elected or appointed or qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-Laws and (b) the officers of
the Company at the Effective Time shall, from and after the Effective Time, be
the officers of the Surviving Corporation until their successors shall have been
elected or appointed or qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-Laws.
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ARTICLE II
CONVERSION OF SECURITIES IN THE MERGER
SECTION 2.01. Conversion of Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of Fiat, New Holland,
Merger Sub, the Company or the holders of any the Company Shares:
(a) each share of Company Common Stock (together with the associated
right to purchase Company Series A Junior Preferred Stock pursuant to the
Rights Agreement (as defined in Section 3.16 hereof)) issued and
outstanding immediately prior to the Effective Time (other than any shares
of Company Common Stock to be cancelled pursuant to Section 2.01(b) hereof
and Dissenting Shares) shall be converted into the right to receive $55.00
in cash (the "Merger Consideration"), payable without interest to the
holder of such share of Company Common Stock, upon surrender of the
Company Certificate that formerly evidenced such share of Company Common
Stock;
(b) each share of Company Common Stock held in the treasury of the
Company and shares of Company Common Stock owned by Fiat or New Holland or
any direct or indirect wholly owned subsidiary of Fiat, New Holland or the
Company shall be cancelled and extinguished without any conversion thereof
and no payment shall be made with respect thereto;
(c) each issued and outstanding share of common stock, par value
$.01 per share, of Merger Sub will be converted into one validly issued,
fully paid and non-assessable share of common stock of the Surviving
Corporation; and
(d) each issued and outstanding share of Company Cumulative
Convertible Second Preferred Stock and Series A Cumulative Convertible
Preferred Stock (collectively, the "Company Preferred Stock") outstanding
immediately prior to the Effective Time shall remain outstanding as a
share of Cumulative Convertible Second Preferred Stock and Series A
Cumulative Convertible Stock, as the case may be, of the Surviving
Corporation, with substantially identical powers and preferences and
special rights as set forth in the certificate of designations for such
Cumulative Convertible Second Preferred Stock and Series A Cumulative
Convertible Stock, as the case may be, except that the holder of such
shares shall, upon any conversion of such shares, be entitled to receive
an amount in cash, without interest, as shall be equal to the product of
the Merger Consideration multiplied by the number of shares of Company
Common Stock such holder would have received had such shares been
converted into shares of Company Common Stock immediately prior to the
Effective Time.
4
SECTION 2.02. Payment for Shares. (a) From and after the Effective
Time, a bank or trust company designated by New Holland and reasonably
acceptable to the Company shall act as paying agent (the "Paying Agent") in
effecting the payment of the Merger Consideration in respect of certificates
(the "Company Certificates") that, prior to the Effective Time, represented
shares of Company Common Stock entitled to payment of the Merger Consideration
pursuant to Section 2.01(a). At the Effective Time Fiat and New Holland shall
cause to be provided to the Paying Agent cash in amounts necessary to pay for
the shares of Company Common Stock pursuant to Section 2.01. Such funds shall be
invested by the Paying Agent as directed by Fiat and New Holland.
(b) Promptly after the Effective Time, the Paying Agent shall mail
to each record holder of the Company Certificates that immediately prior to the
Effective Time represented shares of Company Common Stock (i) letter of
transmittal in customary form (which shall specify that delivery shall be
effected, and risk of loss and title to the Company Certificates shall pass,
only upon delivery of the Company Certificates to the Paying Agent) (the "Letter
of Transmittal") and (ii) instructions for use in surrendering such Company
Certificates in exchange for payment therefor. Upon the surrender of each such
Company Certificate, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the Paying Agent
shall pay the holder of such Company Certificate the Merger Consideration
multiplied by the number of shares of Company Common Stock formerly represented
by such Company Certificate, in consideration therefor, and such Company
Certificate shall forthwith be cancelled. Until so surrendered, each such
Company Certificate (other than Company Certificates representing Dissenting
Shares and Company Certificates representing shares of Company Common Stock
owned by New Holland or any wholly owned subsidiary of New Holland or held in
the treasury by the Company or by any wholly owned subsidiary of the Company)
shall represent solely the right to receive the aggregate Merger Consideration
relating thereto. No interest or dividends shall be paid or accrued on the
Merger Consideration. If the Merger Consideration (or any portion thereof) is to
be paid to any person other than the person in whose name the Company
Certificate formerly representing shares of Company Common Stock surrendered is
registered, it shall be a condition to such right to receive such payment that
the Company Certificate so surrendered shall be properly endorsed or otherwise
be in proper form for transfer and that the person surrendering such Company
Certificate shall pay to the Paying Agent any transfer or other similar taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Company Certificate surrendered, or shall
establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable.
(c) At any time following the six-month anniversary of the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver any funds which had been made available to the Paying Agent and not
disbursed to holders of shares of
5
Company Common Stock (including, without limitation, all interest and
other income received by the Paying Agent in respect of all funds made available
to it), Company Certificates and other documents in its possession relating to
the Merger, and the Paying Agent's duties shall terminate. Thereafter, each
holder of a Company Certificate formerly representing shares of Company Common
Stock may surrender such Company Certificate to the Surviving Corporation and
receive in consideration therefor the aggregate Merger Consideration relating
thereto, without any interest or dividends thereon. Notwithstanding the
foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a share of Company Common Stock for any Merger
Consideration delivered in respect of such share to a public official pursuant
to any abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of any shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Company
Certificates formerly representing shares of Company Common Stock are presented
to the Surviving Corporation or the Paying Agent, they shall be surrendered and
cancelled in return for the payment of the aggregate Merger Consideration
relating thereto, as provided in this Article II, subject to applicable law in
the case of Dissenting Shares. From and after the Effective Time, the holders of
shares of Company Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such shares of Company
Common Stock, except as otherwise provided herein or by applicable law.
(e) The Surviving Corporation shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of Company Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign Tax law. To the extent that amounts are so withheld by
the Surviving Corporation, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of which such deduction and withholding was made
by the Surviving Corporation, except that such treatment shall not apply to any
withholding tax imposed by any foreign jurisdiction.
(f) If any Company Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Company Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond, in such reasonable
amount as the Surviving Corporation may direct, as indemnity against any claim
that may be made against it with respect to such Company Certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed Company
Certificate the Merger Consideration to which the holders thereof are entitled
pursuant to Section 2.01(a).
6
SECTION 2.03. Stock Options and Other Equity Awards. (a) At the
Effective Time, each option to purchase shares of Company Common Stock or stock
appreciation right with respect to Company Common Stock outstanding and
unexercised as of the Effective Time (a "Company Option") granted pursuant to
the Company Outside Directors' Equity Compensation Plan and the Company Equity
Incentive Plan as each has been amended from time to time (collectively, the
"Company Stock Plans") or otherwise granted by the Company other than pursuant
to the Company Stock Plans shall become fully vested and immediately
exercisable. At the Effective Time, each holder of a Company Option shall be
paid in full satisfaction of such Company Option a cash payment in an amount in
respect thereof equal to the product of (i) the excess, if any, of the Merger
Consideration over the exercise price of such Company Option and (ii) the number
of shares of Company Common Stock subject to the Company Option, less any income
or employment tax withholding required under the Code or any provision of state
or local law. The Company shall use its reasonable best efforts to secure from
each holder of a Company Option, prior to the Effective Time, a consent or other
legally binding writing which provides that, in consideration for the payments
to be made pursuant to this Section 2.03(a), such holder shall waive any rights
the holder may have with respect to any Company Option.
(b) At the Effective Time, each restricted stock award and each
performance unit award (a "Company Stock Award") granted pursuant to the Company
Stock Plans or otherwise granted by the Company other than pursuant to the
Company Stock Plans shall become immediately and fully payable or distributable
and the restrictions thereon shall lapse and any performance targets shall be
deemed achieved in full. At the Effective Time, each holder of a Company Stock
Award shall be paid in full satisfaction of such Company Stock Award a cash
payment in an amount in respect thereof equal to the product of (i) the Merger
Consideration and (ii) the number of shares of Company Common Stock subject to
such Company Stock Award (with respect to each Company Award relating to Company
Cumulative Convertible Second Preferred Stock, the holder thereof shall be
entitled to receive a payment in respect of the number of shares of Company
Common Stock that the holder would have received had such Award been converted
into a Company Stock Award in respect of shares of Company Common Stock
immediately prior to the Effective Time), less any income or employment tax
withholding required under the Code or any provision of state or local law.
(c) At the Effective Time, all stock units, share units, stock
equivalent units or phantom options held in the stock subaccounts under the
Company Deferred Compensation Plan or the Company Outside Directors' Equity
Compensation Plan or awarded pursuant to an individual agreement (each a
"Company Stock Unit") shall immediately vest to the extent not yet vested at the
Effective Time and shall be converted into an obligation to pay cash with a
value equal to the product of (i) the Merger Consideration and (ii) the number
of shares of Company Common Stock subject to such Company Stock Unit. The
Company Deferred Compensation
7
Plan will be amended to provide that a participant who maintains a
stock subaccount under such plan may elect within 30 days of the announcement of
a definitive transaction to have the converted value of his or her subaccount
distributed in a lump sum following the effective time of such a transaction or
to have the converted value merged into the participant's cash subaccount under
the Company Deferred Compensation Plan and treated in accordance with the terms
of such plan applicable to cash subaccounts. With respect to the obligation to
pay cash in respect of the conversion of Company Stock Units under the Company
Outside Directors' Equity Compensation Plan or an individual agreement, the
obligation shall be payable or distributable in accordance with the terms of the
agreement, plan or arrangement relating to the Company Stock Unit.
(d) The Company shall take all actions necessary so that the current
offering period under the Company Employee Stock Purchase Plan shall terminate
no later than five business days prior to the Effective Time.
SECTION 2.04. Shares of Dissenting Holders of Company Common Stock.
(a) Notwithstanding any provision of this Agreement to the contrary, shares of
Company Common Stock that are outstanding immediately prior to the Effective
Time and that are held by stockholders who shall not have voted in favor of the
Merger or consented thereto in writing and who shall have demanded properly in
writing appraisal for such shares of Company Common Stock in accordance with
Section 262 of the DGCL (collectively, the "Dissenting Shares") shall not be
converted into or represent the right to receive the Merger Consideration. Such
stockholders shall be entitled to receive payment of the appraised value of such
shares of Company Common Stock held by them in accordance with the provisions of
such Section 262, except that all Dissenting Shares held by stockholders who
shall have failed to perfect or who effectively shall have withdrawn or lost
their rights to appraisal of such Dissenting Shares under such Section 262 shall
thereupon be deemed to have been converted into the right to receive, and to
have become exchangeable for, as of the Effective Time, the Merger
Consideration, without any interest thereon, upon surrender, in the manner
provided in Section 2.02 of this Agreement, of the Company Certificate or the
Company Certificates that formerly evidenced such shares of Company Common
Stock.
(b) The Company shall give New Holland (i) prompt written notice of
any demands for appraisal received by the Company, withdrawals of such demands,
and any other instruments served pursuant to the DGCL and received by the
Company and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under the DGCL. The Company shall not, except
with the prior written consent of New Holland, make any payment with respect to
any demands for appraisal or offer to settle any such demands.
8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule (the "Company
Disclosure Schedule") delivered to Fiat and New Holland on or prior to the date
hereof (it being agreed that the mere inclusion of an item in the Company
Disclosure Schedule as an exception to a representation or warranty shall not be
deemed an admission by the Company that such item represents a material
exception or fact, event or circumstance or that such item is reasonably likely
to result in a Company Material Adverse Effect; it being also agreed that items
disclosed in a particular section of the Company Disclosure Schedule shall be
deemed disclosed only with respect to the corresponding section of this
Agreement), the Company hereby represents and warrants to Fiat and New Holland
that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of
the Company and each subsidiary of the Company (the "Company Subsidiaries") has
been duly organized, and is validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, as the case may be,
and has the requisite power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not, individually or in
the aggregate, have a Company Material Adverse Effect (defined below). Each of
the Company and the Company Subsidiaries is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Company Material Adverse Effect. For purposes of this
Agreement, "Company Material Adverse Effect" means any change in or effect on
the business of the Company and the Company Subsidiaries that is, or is
reasonably likely to be, materially adverse to the business, financial condition
or results of operations of the Company and the Company Subsidiaries taken as a
whole, other than any change, effect, event or occurrence to the extent arising
from or relating to (i) the United States or the global economy or securities
markets in general, (ii) actions taken pursuant to the obligations of the
parties expressly set forth in this Agreement or (iii) the agricultural
equipment and construction equipment manufacturing industries in general;
provided, however, that the Company and the Company Subsidiaries, taken as
whole, are not materially disproportionately affected, as compared to other
persons engaging in such respective industries, by such charge, effect, event or
occurrence.
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SECTION 3.02. Certificate of Incorporation and By-Laws. The copies of
the Company's Certificate of Incorporation and By-Laws that are set forth as
exhibits to the Company's Form 10-K for the year ended December 31, 1998 are
complete and correct copies thereof. Such Certificate of Incorporation and
By-Laws are in full force and effect. The Company is not in violation of any of
the provisions of its Certificate of Incorporation or By-Laws.
SECTION 3.03. Capitalization. The authorized capital stock of the
Company consists of (a) 200,000,000 shares of Company Common Stock, (b)
5,000,000 shares of preferred stock, par value $.01 per share, 1,500,000 shares
of which are designated Company Series A Cumulative Convertible Preferred Stock
and 100,000 shares of which are designated Company Series A Junior Participating
Preferred Stock and (c) 5,000,000 shares of second preferred stock, par value
$.01 per share, 40,000 shares of which are designated Company Cumulative
Convertible Second Preferred Stock. As of April 30, 1999, approximately
74,339,080 shares of Company Common Stock were issued and outstanding, all of
which were validly issued and fully paid and nonassessable, and as of March 31,
1999 (i) approximately 5,108,952 shares of Company Common Stock were held in the
treasury of the Company or by the Company Subsidiaries, (ii) 1,400,000 shares of
Company Common Stock were reserved for issuance upon purchase pursuant to the
Company Employee Stock Purchase Plan, (iii) 12,100,000 shares of Company Common
Stock and 40,000 shares of Company Cumulative Convertible Second Preferred Stock
were reserved for issuance in connection with the Company Equity Incentive Plan,
(iv) 3,402,900 shares of Company Common Stock were issuable upon conversion of
Company Series A Cumulative Convertible Preferred Stock, (v) 85,811 shares of
Company Common Stock were issuable upon conversion of Company Cumulative
Convertible Second Preferred Stock, (vi) 1,500,000 shares of Company Series A
Cumulative Convertible Preferred Stock were issued and outstanding, (vii) 37,500
shares of Company Cumulative Convertible Second Preferred Stock were issued and
outstanding, (viii) 100,000 shares of Company Series A Junior Participating
Preferred Stock were reserved for issuance under the Rights Agreement and (ix)
100,00 shares of Company Common Stock were reserved for issuance in connection
with the Outside Directors' Equity Compensation Plan. From March 31, 1999
through the date hereof, the Company has not issued any additional shares of
capital stock except pursuant to the exercise of outstanding options, restricted
stock awards or the conversion of convertible preferred stock described above.
Except as issued pursuant to the Company Employee Stock Purchase Plan, the
Company Equity Incentive Plan, the Company Rights Agreement or pursuant to
agreements or arrangements described in Section 3.03 of the Company Disclosure
Schedule, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which the Company is a party or
by which the Company is bound relating to the issued or unissued capital stock
of the Company or any Company Subsidiary or obligating the Company or any
Company Subsidiary to issue or sell any shares of capital stock of, or other
equity interests in, the Company or any Company Subsidiary. All shares of
Company Common Stock subject to issuance as aforesaid, upon issuance prior to
the Effective Time on the terms and conditions
10
specified in the instruments pursuant to which they are issuable, will
be duly authorized, validly issued, fully paid and nonassessable. There are no
outstanding contractual obligations of the Company or any Company Subsidiary to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
any capital stock of any Company Subsidiary. Each outstanding share of capital
stock of each Company Subsidiary is duly authorized, validly issued, fully paid
and nonassessable and each such share owned by the Company or another Company
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on the Company's or
such other Company Subsidiary's voting rights, charges and other encumbrances of
any nature whatsoever, except where failure to own such shares free and clear
would not, individually or in the aggregate, have a Company Material Adverse
Effect. There are no material outstanding contractual obligations of the Company
or any Company Subsidiary to provide funds to, or make any investment (in the
form of a loan, capital contribution or otherwise) in, any Company Subsidiary or
any other person, other than obligations arising in the ordinary course of
business, obligations disclosed in the Company SEC Reports (as defined herein)
and guarantees by the Company of any indebtedness of any Company Subsidiary.
SECTION 3.04. Authority Relative to This Agreement. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions (including, without limitation, the Merger) contemplated herein to
be consummated by the Company. The execution and delivery of this Agreement by
the Company and the consummation by the Company of such transactions have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate such transactions (other than the adoption of this
Agreement by the requisite affirmative vote of the stockholders of the Company
as required by the DGCL). This Agreement has been duly and validly executed and
delivered by the Company and (assuming due authorization, execution and delivery
by Fiat, New Holland and Merger Sub) constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the rights of creditors generally and the availability of
equitable remedies. The Company has taken all appropriate actions so that the
restrictions on business combinations contained in Section 203 of the DGCL will
not apply with respect to or as a result of the Merger.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate any provision of the Certificate of Incorporation or By-Laws of the
Company or any equivalent organizational documents of any Company Subsidiary,
(ii) assuming that all consents, approvals, authorizations and other actions
described in Section 3.05(b) have been obtained and all filings and obligations
described in Section 3.05(b) have been made, conflict with or violate any
foreign or domestic law, statute,
11
ordinance, rule, regulation, order, judgment or decree ("Law") applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, or (iii), except as set
forth in Section 3.05(a) of the Company Disclosure Schedule, result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any Company Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults, or other occurrences which would not
reasonably be expected to, individually or in the aggregate, (A) have a Company
Material Adverse Effect nor (B) prevent or materially delay the performance of
this Agreement by the Company.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any domestic or foreign governmental or regulatory authority ("Governmental
Entity"), except (i) for applicable requirements of the Securities Exchange Act
of 1934, as amended (together with the rules and regulations promulgated
thereunder, the "Exchange Act"), the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Securities
Act"), state securities or "blue sky" laws ("Blue Sky Laws"), the NYSE, state
takeover laws, Section 251 of the DGCL the pre-merger notification requirements
of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (the "HSR Act"), the filing of a notification
with the European Commission under Council Regulation (EEC) No. 4064/89 or
similar antitrust filings or notifications in other jurisdictions, filing and
recordation of the Certificate of Merger as required by the DGCL, and as set
forth in Section 3.05(b) of the Company Disclosure Schedule and (ii) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not reasonably be expected to (A)
prevent or materially delay consummation of the Merger or (B) individually or in
the aggregate, have a Company Material Adverse Effect.
SECTION 3.06. Permits; Compliance. Each of the Company and the Company
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
Company Subsidiary to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits would not reasonably be expected to, individually or in the aggregate,
(A) have a Company Material Adverse Effect or (B) prevent or materially delay
the performance of this Agreement by the Company, and, as of the date of this
Agreement, no suspension or cancellation of any of the Company Permits is
pending or, to the actual knowledge of the
12
executive officers of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits would not reasonably be expected to, individually or in the aggregate,
(A) have a Company Material Adverse Effect or (B) prevent or materially delay
the performance of this Agreement by the Company. Neither the Company nor any
Company Subsidiary is in conflict with, or in default or violation of, (i) any
Law applicable to the Company or any Company Subsidiary or by which any property
or asset of the Company or any Company Subsidiary is bound or affected or (ii)
any Company Permits, except for any such conflicts, defaults or violations that
would not reasonably be expected to individually or in the aggregate, (A) have a
Company Material Adverse Effect or (B) prevent or materially delay the
performance of this Agreement by the Company.
SECTION 3.07. SEC Filings; Financial Statements. (a) the Company and
Case Credit Corporation ("Credit") have each filed all forms, reports and
documents required to be filed by them under the Exchange Act since January 1,
1996 through the date of this Agreement (collectively, the "Company SEC
Reports"). The Company SEC Reports (i) were prepared in all material respects in
accordance with the requirements of the Exchange Act and (ii) did not, as of
their respective dates, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. Other than Credit, no Company Subsidiary is subject
to the periodic reporting requirements of the Exchange Act.
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the Company SEC Reports was prepared
in all material respects in accordance with United States generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto) and each presented
fairly, in all material respects, the consolidated financial position of the
Company, Credit and, in the case of the Company, the consolidated Company
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which were not and
are not expected, individually or in the aggregate, to have a Company Material
Adverse Effect).
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Company and the Company Subsidiaries and Credit as of December 31,
1998, including the notes thereto, or in any of the Company SEC Reports, neither
the Company nor any Company Subsidiary (including, without limitation, Credit)
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on a balance
sheet or in notes thereto prepared in accordance with United States generally
accepted accounting principles, except for liabilities or obligations incurred
in the ordinary course of business since December 31, 1998 that would not
reasonably be expected to, individually or in the aggregate, (A) have a Company
Material Adverse Effect or (B) prevent or materially delay the performance of
this Agreement by the Company.
13
SECTION 3.08. Absence of Certain Changes or Events. Since January 1,
1999, except as contemplated by or as disclosed in this Agreement or as
disclosed in any of the Company SEC Reports, the Company and the Company
Subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice and, since such date, there has not been
(a) any change, condition, event or development that has had or would reasonably
be expected to have a Company Material Adverse Effect, (b) any event that could
reasonably be expected to prevent or materially delay the performance of this
Agreement by the Company, (c) any material change by the Company in its
accounting methods, principles or practices (other than as required by United
States generally accepted accounting principles ("U.S. GAAP")), (d) any
declaration, setting aside or payment of any dividend or distribution in respect
of the shares of Company Common Stock or any redemption, purchase or other
acquisition of any of the Company's securities other than the regular quarterly
dividend on each share of Company Common Stock of $.05, or (e) any increase in
the compensation or benefits or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of the
Company or any Company Subsidiary except in the ordinary course of business
consistent with past practice or except as required by applicable Law or
contractual obligations existing as of the date hereof.
SECTION 3.09. Employee Benefit Plans; Labor Matters. (a) With respect
to each material employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), maintained or contributed to by the Company or any Company
Subsidiary, or with respect to which the Company or any Company Subsidiary could
reasonably be expected to incur material liability under section 4069, 4212(c)
or 4204 of ERISA (the "Company Benefit Plans"), the Company will make available
to New Holland, promptly after the date hereof, a true and complete copy (other
than with respect to any multi-employer plan as defined in Section 3(37) of
ERISA) of (i) the most recent annual report (Form 5500) filed with the Internal
Revenue Service (the "IRS"), (ii) such Company Benefit Plan, (iii) each trust
agreement relating to such Company Benefit Plan, (iv) the most recent summary
plan description for each Company Benefit Plan for which a summary plan
description is required, (v) the most recent actuarial report or valuation
relating to a Company Benefit Plan subject to Title IV of ERISA and (vi) the
most recent determination letter, if any, issued by the IRS with respect to any
Company Benefit Plan qualified under section 401(a) of the Code.
(b) With respect to the Company Benefit Plans, no event has occurred
and, to the knowledge of the Company, there exists no condition or set of
circumstances in connection with which the Company or any Company Subsidiary
could reasonably be expected to be subject to any liability under the terms of
such Company Benefit Plans, ERISA, the Code or any other applicable Law which
would have a Company Material Adverse Effect.
14
(c) Neither the Company nor any Company Subsidiary is a party to any
collective bargaining or other labor union contract applicable to persons
employed by the Company or any Company Subsidiary and no collective bargaining
agreement or other labor union contract is being negotiated by the Company or
any Company Subsidiary, except as disclosed in the Company SEC Reports. As of
the date of this Agreement, there is no labor dispute, strike or work stoppage
against the Company or any Company Subsidiary pending or threatened in writing
which may interfere with the respective business activities of the Company or
any Company Subsidiary, except where such dispute, strike or work stoppage would
not reasonably be expected to have a Company Material Adverse Effect. As of the
date of this Agreement, to the knowledge of the Company, none of the Company,
any Company Subsidiary, or their respective representatives or employees, has
committed any unfair labor practices in connection with the operation of the
respective businesses of the Company or any Company Subsidiary, and there is no
charge or complaint against the Company or any Company Subsidiary by the
National Labor Relations Board or any comparable state or foreign agency pending
or threatened in writing, except where such unfair labor practice, charge or
complaint would not reasonably be expected to have a Company Material Adverse
Effect.
(d) Schedule 3.09(d) sets forth a list of (i) all severance and
material employment agreements with officers of the Company and each Company
Subsidiary; (ii) all material severance programs and policies of the Company and
each Company Subsidiary with or relating to its employees; and (iii) all plans,
programs, agreements and other arrangements of the Company and each Company
Subsidiary with or relating to its employees which contain change of control
provisions. Promptly following the date hereof, the Company will make available
to New Holland true and complete copies of the documents listed on Schedule
3.09(d).
(e) No Company Benefit Plan provides retiree medical or retiree life
insurance benefits to any person except as disclosed in the Company SEC Reports.
SECTION 3.10. Contracts; Debt Instruments. (a) All contracts,
agreements, guarantees, leases and executory commitments other than Plans (each,
a "Contract") to which the Company is a party and which involve annual revenues
to the business of the Company in excess of 2.5% of the Company's annual
revenues and all other Contracts that are material to the Company and its
subsidiaries, taken as a whole, (each, a "Material Contract") are valid and
binding obligations of the Company and, to the knowledge of the Company, the
valid and binding obligation of each other party thereto except such Material
Contracts which if not so valid and binding would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Neither the Company nor, to the knowledge of the Company, any other party
thereto is in violation of or in default in respect of, nor has there
15
occurred an event of condition which with the passage of time or giving of
notice (or both) would constitute a default under or permit the termination of,
any such Material Contract except such violations or defaults under or
terminations which, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
(b) Set forth in Section 3.10 of the Company Disclosure Schedule is
a description of any material changes to the amount and material terms of the
indebtedness of the Company and its subsidiaries as described in the notes to
the financial statements incorporated in (i) the Company's Form 10-K for the
year ended December 31, 1998 and (ii) Credit's Form 10-K for the year ended
December 31, 1998.
SECTION 3.11. Litigation. Except as disclosed in the Company SEC
Reports, there is no suit, claim, action, proceeding, arbitration, review or
investigation pending or threatened in writing against the Company or any
Company Subsidiary before any Governmental Entity that, individually or in the
aggregate, is reasonably likely to have a Company Material Adverse Effect.
Except as disclosed in the Company SEC Reports, in the case of any suit, claim,
action, proceeding or investigation relating to any environmental matters
relating to the Company or any Company Subsidiary, there has been no change
since January 1, 1999 in the status of any such matters that would be reasonably
likely to have a Company Material Adverse Effect. Except as disclosed in the
Company SEC Reports, neither the Company nor any Company Subsidiary is subject
to any outstanding Order (as defined below), writ, injunction or decree which,
insofar as can be reasonably foreseen, individually or in the aggregate, would
have a Company Material Adverse Effect.
SECTION 3.12. Environmental Matters (a) Except as would not reasonably
be expected to have a Company Material Adverse Effect:
(i) The Company and the Company Subsidiaries are in compliance with,
and for the past three years have been in compliance with, all applicable
Environmental Laws and all Environmental Permits. All past non-compliance
with Environmental Laws or Environmental Permits has been resolved without
any pending, on-going or future obligation, cost or liability, and there
is no requirement proposed for adoption or implementation under any
Environmental Law or Environmental Permit that is reasonably expected to
have a Material Adverse Effect.
(ii) There are no underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed on
any of the real property owned or leased by the Company or any Company
Subsidiary (the "Real Property") or on any property formerly owned,
leased, used or occupied by the Company or the Company Subsidiaries.
16
(iii) The Company and the Company Subsidiaries have not, and to
their knowledge no other person has, released Hazardous Materials on any
of the Real Property or during its ownership or occupancy of such property
on any property formerly owned, leased, used or occupied by the Company or
the Company Subsidiaries.
(iv) The Company and the Company Subsidiaries are not conducting,
and have not undertaken or completed, any remedial action relating to any
release or threatened release at the Real Property or at any other site,
location or operation, either voluntarily or pursuant to the order of any
Governmental Authority or the requirements of any Environmental Law or
Environmental Permit.
(v) There is no asbestos or asbestos-containing material on any of
the Real Property.
(vi) None of the Real Property is listed or proposed for listing on
the National Priorities List or the Comprehensive Environmental Response,
Compensation and Liability Information System under the federal
Comprehensive Environmental Response, Compensation, and Liability Act or
any analogous federal, state or local list.
(vii) There are no Environmental Claims pending or threatened
against the Company or the Company Subsidiaries or the Real Property, and
to their knowledge there are no circumstances that can reasonably be
expected to form the basis of any such Environmental Claim, including
without limitation with respect to any off-site disposal location
presently or formerly used by the Company or the Company Subsidiaries or
any of their predecessors or with respect to any previously owned or
operated facilities.
(viii) The Company and the Company Subsidiaries can maintain
present production levels in compliance with applicable Environmental Laws
without a material increase in capital or operating expenditures and
without modifying any Environmental Permits or obtaining any additional
Environmental Permits.
(ix) There are no wetlands or any areas subject to any legal
requirement or restriction in any way related to wetlands (including,
without limitation, requirements or restrictions related to buffer or
transition areas or open waters) at or affecting the Real Property.
(b) The Company and the Company Subsidiaries have provided New
Holland with copies of any environmental assessment or audit reports or other
similar studies or analyses relating to the Business, the Real Property or the
Company or the Company Subsidiaries.
17
(c) Except as disclosed in Section 3.12 of the Company
Disclosure Schedule, neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will require any remedial
action or notice to or consent of Governmental Authorities or third parties
pursuant to any applicable Environmental Law or Environmental Permit.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended as of the date hereof.
"Environmental Claims" means any and all actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation, notices of
liability or potential liability, investigations, proceedings, consent orders or
consent agreements relating in any way to any Environmental Law, any
Environmental Permit or any Hazardous Materials.
"Environmental Laws" means any federal, state, local or foreign
statute, law, ordinance, regulation, rule, code or order and any enforceable
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to pollution or
protection of the environment or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials, as in effect as
of the date hereof.
"Environmental Permits" means any permit, approval, identification
number, license and other authorization required under any applicable
Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum products,
by- products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls or (b) any chemical, material or
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.
SECTION 3.13. Trademarks, Patents and Copyrights. Except to the extent
the inaccuracy of any of the following (or the circumstances giving rise to such
inaccuracy), individually or in the aggregate, would not reasonably be expected
to have a Company Material Adverse Effect, the Company and each of the Company
Subsidiaries own or possess adequate licenses or other legal rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, servicemarks, trade secrets, applications for
trademarks and for servicemarks, mask works, know-how and other proprietary
rights and information used or held for use in connection with the business of
the Company and the Company Subsidiaries as currently conducted or as
contemplated to be conducted, and the Company is unaware of any assertion or
claim challenging the validity of any of the foregoing. Neither the Company nor
any of the Company Subsidiaries has infringed or is infringing in any
18
way any patent, patent right, license, trademark, trademark right,
trade dress, trade name, trade name right, service mark, mask work or copyright
of any third party that, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect. To the Company's knowledge,
there are no infringements of any proprietary rights owned by or licensed by or
to the Company or any Company Subsidiary that, individually or in the aggregate,
could reasonably be expected to have a Company Material Adverse Effect.
SECTION 3.14. Taxes. Except as set forth in Section 3.14 of the
Company Disclosure Schedule or as would not, individually or in the aggregate,
have a Company Material Adverse Effect, (a) the Company and the Company
Subsidiaries have timely filed or will timely file all United States federal and
state income and Canadian federal and provincial income Tax Returns and all
other material income Tax Returns and, to the knowledge of the Company, all
other material Tax Returns required to be filed by them with any taxing
authority with respect to Taxes for any period ending on or before the Effective
Time, taking into account any extension of time to file granted to or obtained
on behalf of the Company and the Company Subsidiaries and all such Tax Returns
are complete and correct in all material respects, (b) all material Taxes that
are shown as due on such Tax Returns have been or will be timely paid, (c) as of
the date hereof, no deficiency for any material amount of Tax has been asserted
or assessed in writing by a taxing authority against the Company or any of the
Company Subsidiaries for which there are not adequate reserves, (d) the Company
and the Company Subsidiaries have provided adequate reserves in accordance with
U.S. GAAP in their financial statements for any Taxes that have not been paid,
whether or not shown as being due on any returns, (e) as of the date hereof, the
Company and the Company Subsidiaries have neither extended nor waived any
applicable statute of limitations with respect to United States or Canadian or,
to the knowledge of the Company, other income or franchise Taxes and have not
otherwise agreed to any extension of time with respect to a United States or
Canadian or, to the knowledge of the Company, other income or franchise Tax
assessment or deficiency, (f) none of the Company and the Company Subsidiaries
is a party to any tax sharing agreement or arrangement other than with each
other, (g) as of the date hereof, there are not pending or threatened in writing
any material audits, examinations, investigations, litigation, or other
proceedings in respect of Taxes of the Company or any Company Subsidiary for
which there are not adequate reserves, and (h) to the knowledge of the Company,
no liens for Taxes exist with respect to any of the assets or properties of the
Company or the Company Subsidiaries, except for statutory liens for Taxes not
yet due or payable or that are being contested in good faith. As used in this
Agreement, "Taxes" shall mean any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any taxing authority, including, without limitation: taxes or other
charges on or with respect to income, franchises, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net worth; taxes
or other charges in the nature of excise, withholding, ad
19
valorem, stamp, transfer, value added, or gains taxes and customs duties,
tariffs, and similar charges.
"Tax Returns" shall mean any return, declaration, report, claim for
refund or information return or statement relating to Taxes filed with a taxing
authority, including any schedule or attachment thereto, and including any
amendment thereof.
SECTION 3.15. Non-Competition Agreements. Neither the Company nor any
subsidiary of the Company is a party or is otherwise subject to any agreement
which (a) purports to restrict or prohibit in any material respect any of them
or any corporation affiliated with any of them from, directly or indirectly,
engaging in any business involving the manufacture, marketing, distribution or
sale of farm machinery or construction or any other material business currently
engaged in by the Company or any of its affiliates or (b) would restrict or
prohibit, in any material respect, the Company or any subsidiary of the Company
from engaging in such business.
SECTION 3.16. Rights Agreement. The copy of the Rights Agreement,
dated December 8, 1995, between the Company and First Chicago Trust Company of
New York, as Rights Agent (the "Rights Agreement"), including all amendments and
exhibits thereto, that is set forth as an exhibit to the Company's Form 10-K for
the year ended December 31, 1998 is a complete and correct copy thereof. The
Company will, within 15 days of the date hereof, take all necessary action to
amend the Rights Agreement, a copy of which amendment will be promptly provided
to Fiat and New Holland and their respective Representatives, so that neither
the execution of this Agreement nor the consummation of the Merger will (a)
cause the Rights issued pursuant to the Rights Agreement to become exercisable,
(b) cause Fiat, New Holland Holding N.V., New Holland or Merger Sub to become an
Acquiring Person (as such term is defined in the Rights Agreement) or (c) give
rise to a Distribution Date or a Triggering Event (as each term is defined in
the Rights Agreement).
SECTION 3.17. Board Recommendation. The Board of Directors of the
Company, at a meeting duly called and held, has by unanimous vote of those
directors present (who constituted 100% of the directors then in office) (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and fair to and in the best interests of the
stockholders of the Company, and (ii) resolved to recommend that the holders of
the shares of Company Common Stock approve and adopt this Agreement and the
transactions contemplated herein, including the Merger (the "Company Board
Recommendation").
SECTION 3.18. Insurance. The Company and the Company Subsidiaries have
in effect insurance coverage with reputable insurers or are self-insured, which
in respect of amounts, premiums, types and risks insured, constitutes reasonable
coverage for the risks customarily insured against by companies engaged in the
industries in which the Company and
20
the Company Subsidiaries are engaged and comparable in size and operations to
the Company and the Company Subsidiaries.
SECTION 3.19. Opinion of Financial Advisor. Credit Suisse First Boston
Corporation ("CSFB") has delivered to the Company its written opinion, dated the
date hereof, accompanied by an authorization to include such opinion in the
Proxy Statement to the effect that, as of the date of this Agreement, the Merger
Consideration is fair, from a financial point of view, to the Company's
stockholders. The Company has delivered a signed copy of such written opinion to
Fiat and New Holland.
SECTION 3.20. Brokers. No broker, finder or investment banker (other
than CSFB) is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Company. The Company has heretofore made available
to New Holland a complete and correct copy of all agreements between the Company
and CSFB pursuant to which such firms would be entitled to any payment relating
to the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIAT, NEW HOLLAND
AND MERGER SUB
New Holland hereby severally represents and warrants (only with
respect to matters set forth in Article IV relating to New Holland) to the
Company, and Fiat and Merger Sub hereby jointly and severally represent and
warrant (with respect to all matters set forth in Article IV below) to the
Company, that:
SECTION 4.01. Organization and Qualification. Each of Fiat, New
Holland and Merger Sub has been duly organized and is validly existing and in
good standing under the laws of the jurisdiction of its incorporation. Each of
Fiat, New Holland and Merger Sub has all necessary corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder
and to consummate the Transactions (including, without limitation, the Merger)
contemplated hereby to be consummated by Fiat, New Holland and Merger Sub. The
execution and delivery of this Agreement by Fiat, New Holland and Merger Sub and
the consummation by Fiat, New Holland and Merger Sub of such transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Fiat, New Holland and Merger Sub are
necessary to authorize this Agreement or to consummate such transactions. This
Agreement has been duly authorized and validly executed and delivered by each of
Fiat, New Holland and
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Merger Sub and constitutes (assuming due authorization, execution and delivery
by the Company) a legal, valid and binding obligation of each of Fiat, New
Holland and Merger Sub, enforceable against each of Fiat, New Holland and Merger
Sub in accordance with its terms, subject to bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors generally and
the availability of equitable remedies.
SECTION 4.02. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Fiat, New Holland and Merger Sub
does not, and the performance of this Agreement by Fiat, New Holland and Merger
Sub will not, (i) conflict with or violate any provision of the Certificate of
Incorporation and By-laws of Fiat, New Holland or Merger Sub, (ii) assuming that
all consents, approvals, authorizations and other actions described in Section
4.02(b) have been obtained and all filings and obligations described in Section
4.02(b) have been made, conflict with or violate any Law applicable to Fiat, New
Holland or Merger Sub or by which any property or asset of Fiat, New Holland or
Merger Sub is bound or affected, or (iii) result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or in the case of New Holland or Merger Sub, give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of New
Holland or Merger Sub pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults, or other occurrences which would not
reasonably be expected to, individually or in the aggregate, prevent or
materially delay the performance of this Agreement by either Fiat, New Holland
or Merger Sub.
(b) The execution and delivery of this Agreement by each of Fiat, New
Holland and Merger Sub does not, and the performance of this Agreement by Fiat,
New Holland and Merger Sub will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity, except (i) for applicable requirements of the Exchange Act, the
Securities Act, Blue Sky Laws, the NYSE and state takeover laws, the pre-merger
notification requirements of the HSR Act or the filing of a notification with
the European Commission under Council Regulation (EEC) No. 4064/89 or similar
anti-trust filings or notifications in other jurisdictions and (ii) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not reasonably be expected to prevent
or materially delay consummation of the Merger.
SECTION 4.03. Absence of Litigation. As of the date of this
Agreement, there is no litigation, suit, claim, action, proceeding or
investigation pending or, to the best knowledge of Fiat and New Holland,
respectively, threatened against, Fiat, New Holland or Merger Sub or any of
their respective properties or assets before any court, arbitrator or
administrator, governmental or regulatory authority or body, domestic or
foreign, which seeks to delay or prevent or would result in the material delay
of or would prevent the consummation of any of the transactions contemplated
hereby. Neither Fiat, New Holland nor Merger Sub or any property or asset of
Fiat, New Holland or Merger Sub is subject to any continuing order of, consent
decree,
22
settlement agreement or similar written agreement with, or, to the knowledge
of Fiat and New Holland, as the case may be, continuing investigation
by, any governmental or regulatory authority, domestic or foreign, or any order,
writ, judgment, injunction, decree, determination or award of any governmental
or regulatory authority or any arbitrator which would prevent Fiat, New Holland
or Merger Sub from performing their respective material obligations under this
Agreement or prevent or materially delay the consummation of any of the
transactions contemplated hereby.
SECTION 4.04. Brokers. No broker, finder or investment banker (other
than Lazard Freres & Co. LLC for Fiat and Goldman Sachs & Co. for New Holland)
is entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of Fiat or New
Holland.
SECTION 4.05. No Activities. Merger Sub was formed solely for the
purpose of engaging in the Merger. Except for obligations or liabilities
incurred in connection with its incorporation or organization and the
transactions contemplated by this Agreement, Merger Sub does not have any
obligations or liabilities of any nature (whether accrued, absolute, contingent
or otherwise) and has not engaged in any business activities of any type or kind
whatsoever or entered into any agreements or arrangements with any person.
SECTION 4.06. Financing. At or prior to the Closing Date, Fiat will
cause New Holland or Merger Sub to have, and New Holland or Merger Sub will
have, all of the financing required to consummate the transactions contemplated
by this Agreement.
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business by the Company Pending the Closing
5.01. Conduct of Business by the Company Pending the Closing. The Company agrees
that, between the date of this Agreement and the Effective Time, except as set
forth in Section 5.01 of the Company Disclosure Schedule or as contemplated by
any other provision of this Agreement, unless Fiat shall otherwise agree in
writing, which agreement shall not be unreasonably withheld or delayed, (1) the
businesses of the Company and the Company Subsidiaries shall be conducted only
in, and the Company and the Company Subsidiaries shall not take any action
except in, the ordinary course of business consistent with past practice and (2)
the Company shall use its reasonable best efforts to keep available the services
of such of the current officers, significant employees and consultants of the
Company and the Company Subsidiaries and to preserve the current relationships
of the Company and the Company Subsidiaries with such of the customers,
suppliers and other persons with which the Company or any Company Subsidiary has
significant business relations in order to preserve substantially intact its
business organization. By way of amplification and not limitation, except as set
forth in
23
Section 5.01 of the Company Disclosure Schedule or as contemplated by
any other provision of this Agreement, the Company shall not, and shall neither
(unless required by applicable Laws or stock exchange regulations) cause nor
permit any Company Subsidiaries or any of the Company's affiliates (over which
it exercises control), or any of its or their officers, directors, employees and
agents (in each case, in their capacities as such) to, between the date of this
Agreement and the Effective Time, directly or indirectly, do, or agree to do,
any of the following, without the prior written consent of Fiat, which consent
shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its Certificate of Incorporation
or By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance of,
(i) any shares of capital stock of the Company or any Company Subsidiary
of any class, or securities convertible or exchangeable or exercisable for
any shares of such capital stock, or any options, warrants or other rights
of any kind to acquire any shares of such capital stock, or any other
ownership interest (including, without limitation, any phantom interest),
of the Company or any Company Subsidiary (except for (A) the issuance of
any shares of capital stock issuable pursuant to (I) the exercise of any
Company Options or Company Stock Awards outstanding on the date of this
Agreement, pursuant to the exercise of options under the Company Employee
Stock Purchase Plan or that become outstanding in compliance with Section
5.01(f); (II) the conversion of any shares of the Company Series A
Cumulative Preferred Stock or Cumulative Convertible Second Preferred
Stock, or (B) subject to Section 5.01(f), any securities required by
virtue of the Company Equity Incentive Plan); or (ii) any property or
assets of the Company or any Company Subsidiary, except in all cases in
the ordinary course of business and in a manner consistent with past
practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock, other than (i) any regular quarterly dividend
declared and paid on Company Common Stock or Company Preferred Stock in
accordance with past practice and in the case of Company Common Stock, not
in excess of $.05 per share, and in the case of Company Preferred Stock,
not in excess of the rates required by the terms thereof and (ii)
dividends paid by any of the wholly owned Company Subsidiaries to the
Company and dividends paid by any of the wholly owned Company Subsidiaries
of the Company in the ordinary course of business consistent with past
practice;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
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(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization, person or any
division thereof or any assets, other than acquisitions of assets in the
ordinary course of business consistent with past practice and any other
acquisitions for consideration that are not, in the aggregate, in excess
of $25,000,000; (ii) incur any indebtedness for borrowed money or issue
any debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person for
borrowed money, except for indebtedness for borrowed money incurred in the
ordinary course of business and consistent with past practice or incurred
to refinance outstanding indebtedness for borrowed money existing on the
date of this Agreement (which refinancing shall not increase the aggregate
amount of indebtedness permitted to be outstanding thereunder and shall
not include any covenants that shall be materially more burdensome to the
Company in any material respect or increase costs to the Surviving
Corporation after the Effective Time in any material respect); or other
indebtedness for borrowed money with a maturity of not more than one year
in a principal amount not, in the aggregate, in excess of $20,000,000;
(iii) terminate, cancel or request any material change in, or agree to any
material change in any Material Contract or enter into any contract or
agreement material to the business, results of operations or financial
condition of the Company and the Company Subsidiaries taken as a whole, in
either case other than in the ordinary course of business, consistent with
past practice; (iv) make or authorize any capital expenditure, other than
capital expenditures that are not, in the aggregate, in excess of
$10,000,000 for the Company and the Company Subsidiaries taken as a whole;
or (v) enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under this
Section 6.01(e);
(f) increase the compensation payable or to become payable to its
officers or employees, except for increases in accordance with past
practices in salaries or wages of employees of the Company or any Company
Subsidiary who are not officers of the Company, or grant any rights to
severance or termination pay to, or enter into any employment or severance
agreement with, any director, officer or other employee of the Company or
any Company Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or
employee, except as contemplated by this Agreement or to the extent
required by applicable Law or the terms of a collective bargaining
agreement or a contractual obligation existing on the date hereof;
provided, however, that the Company may grant options, restricted shares,
performance units or other long-term incentive awards to new hires in the
ordinary course of business consistent with past practice;
25
(g) take any action with respect to modifying accounting policies or
procedures, other than actions in the ordinary course of business and
consistent with past practice and as advised by the Company's regular
independent accountants;
(h) waive, release, assign, settle or compromise any material claims
or litigation involving money damages in excess of $2,500,000, except for
claims asserted by the Company or the applicable Company Subsidiary;
(i) make any material Tax election or settle or compromise any
material federal, state, local or foreign income Tax liability, other than
such actions in the ordinary course of business and consistent with past
practice, provided however that the Company shall inform New Holland in
advance of such election or settlement or compromise if such election or
settlement or compromise could have any ongoing material adverse tax
consequence to the Surviving Corporation;
(j) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing;
(k) amend or modify, or propose to amend or modify, the Rights
Agreement, as amended as of the date hereof, except as contemplated in
this Agreement;
(l) except as contemplated by Section 6.03, enter into any
confidentiality agreements or arrangements other than in the ordinary
course of business consistent with past practice;
(m) except as contemplated by Section 6.03, take any action to
exempt or make not subject to any other state takeover law or state law
that purports to limit or restrict business combinations or the ability to
acquire or vote shares, any person or entity (other than Fiat or New
Holland or any of their subsidiaries) or any action taken thereby, which
person, entity or action would have otherwise been subject to the
restrictive provisions thereof and not exempt therefrom;
(n) take any action that will likely result in the representations
and warranties set forth in Article IV becoming false or inaccurate in any
material respect;
(o ) enter into or carry out any other transaction other than in
the ordinary and usual course of business or other than as permitted
pursuant to the other clauses in this Section 5.01; or
26
(p) permit or cause any subsidiary to do any of the foregoing or
agree or commit to do any of the foregoing.
SECTION 5.02. Notices of Certain Events. Each of Fiat and New Holland,
on the one hand, and the Company, on the other hand, shall give prompt notice to
the other of (i) any notice or other communication from any person alleging that
the consent of such person is or may be required in connection with the Merger,
(ii) any notice or other communication from any Governmental Entity in
connection with the Merger, (iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened in writing
against, relating to or involving or otherwise affecting New Holland, the
Company or their subsidiaries that relate to the consummation of the Merger;
(iv) the occurrence of a default or event that, with notice or lapse of time or
both, will become a default under any Material Contract; and (v) any change that
is reasonably likely to result in a Company Material Adverse Effect or is likely
to delay or impede the ability of either Fiat and New Holland, on the one hand,
and the Company, on the other hand, to consummate the transactions contemplated
by this Agreement or to fulfill its obligations set forth herein.
SECTION 5.03. Contractual Consents. Prior to or at the Effective Time
each of the parties hereto shall use its reasonable best efforts to prevent the
occurrence, as a result of the Merger, of the triggering of a change of control
or similar clause or any event which constitutes a default (or an event which
with notice or lapse of time or both would become a default) under any material
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which it or any of its subsidiaries is a party.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders' Meeting. (a) The Company shall, as
promptly as reasonably practicable, submit this Agreement for the approval of
its stockholders at a meeting of stockholders (the "Company Stockholders'
Meeting") and shall use its reasonable best efforts to obtain stockholder
approval and adoption of this Agreement and the Merger including filing with the
SEC preliminary proxy materials relating to the meeting of the holders of shares
of Company Common Stock to be held in connection with the Merger and this
Agreement (together with any amendments thereof or supplements thereto, the
"Proxy Statement"). Such meeting of stockholders shall be held as soon as
practicable following the date hereof.
(b) Subject to the fiduciary duties of the Board of Directors of the
Company, as described in the following proviso, the Proxy Statement shall
include the recommendation of the Board of Directors of the Company to the
stockholders of the Company in favor of approval of the Merger and this
Agreement; provided, however, that the Board of Directors of the
27
Company may, at any time prior to the date of the Company Stockholders'
Meeting, withdraw, modify or change any such recommendation to the
extent that the Board of Directors of the Company determines in good faith after
consultation with independent legal counsel that the failure to so withdraw,
modify or change its recommendation could cause the Board of Directors of the
Company to breach its fiduciary duties to the Company's stockholders under
applicable law.
(c) The information supplied by Fiat and/or New Holland for inclusion
in the Proxy Statement shall not, at (i) the time the Proxy Statement (or any
amendment thereof or supplement thereto), is first mailed to the stockholders of
the Company and (ii) the time of the meeting of stockholders of the Company to
consider the Merger and this Agreement, contain any untrue statement of a
material fact or fail 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. If, at any time prior
to the date of the Company Stockholders' Meeting, any event or circumstance
relating to New Holland, or its officers or directors, is discovered by Fiat or
New Holland that should be set forth in an amendment or a supplement to the
Proxy Statement, Fiat or New Holland, as the case may be, shall promptly inform
the Company. All documents that Fiat or New Holland, as the case may be, is
responsible for filing with the SEC in connection with the Merger or the other
transactions contemplated by this Agreement will comply as to form and substance
in all material aspects with the applicable requirements of the Securities Act
and the Exchange Act.
(d) The information supplied by the Company for inclusion in the Proxy
Statement shall not, at (i) the time the Proxy Statement(or any amendment
thereof or supplement thereto), is first mailed to the stockholders of the
Company and (ii) the time of the meeting of stockholders of the Company to
consider the Merger and this Agreement, contain any untrue statement of a
material fact or fail 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. If, at any time prior
to the date of the Company Stockholders' Meeting, any event or circumstance
relating to the Company or any subsidiary of the Company, or their respective
officers or directors, is discovered by the Company that should be set forth in
an amendment or a supplement to the Proxy Statement, the Company shall promptly
inform Fiat. All documents that the Company is responsible for filing with the
SEC in connection with the Merger or the other transactions contemplated by this
Agreement will comply as to form and substance in all material respects with the
applicable requirements of the Exchange Act.
SECTION 6.02. Access to Information; Confidentiality. (a) Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which the Company or any of its subsidiaries is a party or
pursuant to applicable Law or the regulations or requirements of any stock
exchange or other regulatory organization with whose rules the parties are
required to comply, from the date of this Agreement to the Effective Time, the
Company
28
shall (and shall cause its subsidiaries to): (i) provide to Fiat or New
Holland (and its officers, directors, employees, accountants, consultants, legal
counsel, agents and other representatives, collectively, "Representatives")
reasonable access at reasonable times, upon prior notice to the Company, to the
officers, employees, agents, properties, offices and other facilities of the
Company and its subsidiaries and to the books and records thereof and (ii)
furnish promptly such information concerning the business, properties,
contracts, assets, liabilities, personnel and other aspects of the Company and
its subsidiaries as Fiat or New Holland or their respective Representatives may
reasonably request. No investigation conducted pursuant to this Section 6.02
shall affect or be deemed to modify any representation or warranty made in this
Agreement.
(b) The parties shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under the
Confidentiality Agreement dated May 8, 1999 (the "Confidentiality Agreement")
among Fiat, New Holland and the Company with respect to the information
disclosed pursuant to this Section 6.02.
SECTION 6.03. No Solicitation of Transactions. The Company agrees
that, from and after the date hereof until the earlier of the Effective Time or
the termination of this Agreement in accordance with Article VIII, neither it
nor any Company Subsidiary shall, and that it shall cause its and each Company
Subsidiary's Representatives not to, except as contemplated by this Agreement,
directly or indirectly, initiate, solicit or encourage any inquiries or the
making of any proposal or offer with respect to a merger, reorganization, share
exchange, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving, or any purchase or sale of all or
any significant portion of the assets of the Company and the Company
Subsidiaries, taken as a whole, or 15% or more of the equity securities of the
Company (any such proposal or offer being hereinafter referred to as a
"Competing Transaction"). The Company further agrees that neither it nor any
Company Subsidiaries shall, and that it shall cause its and each Company
Subsidiary's Representatives not to, directly or indirectly, have any discussion
with or provide any confidential information or data relating to the Company or
any Company Subsidiary to any Person relating to a Competing Transaction or
engage in any negotiations concerning a Competing Transaction, or otherwise
facilitate any effort or attempt to make or implement a Competing Transaction or
accept a Competing Transaction; provided, however, that nothing contained in
this Section 6.03(a) shall prevent the Company or the Board of Directors of the
Company from (i) engaging in any discussions or negotiations with, or providing
any information to, any Person in response to an unsolicited written Competing
Transaction by any such Person; or (ii) recommending such an unsolicited written
Competing Transaction to the holders of Company Common Stock if, in any such
case as is referred to in clause (i) or (ii), (A) the Board of Directors of the
Company concludes in good faith (after consultation with independent financial
advisors) that such Competing Transaction would, if consummated, result in a
transaction more favorable to holders of Company Common Stock than the
transaction contemplated by this Agreement (any such
29
more favorable Competing Transaction being referred to in this Agreement as a
"Superior Proposal"), (B) the Board of Directors of the Company
determines in good faith after consultation with independent legal counsel that
such action is necessary for it to act in a manner consistent with its fiduciary
duties under applicable Law, (C) prior to providing any information or data
regarding the Company to any Person or any of such Person's Representatives in
connection with a Superior Proposal by such Person, the Company receives from
such Person an executed confidentiality agreement on terms at least as
restrictive on such Person as those contained in the Confidentiality Agreement
and (D) prior to providing any information or data to any Person or any of such
Person's Representatives or entering into discussions or negotiations with any
Person or any of such Person's Representatives in connection with a Superior
Proposal by such Person, the Company notifies Fiat and New Holland promptly of
the receipt of such Superior Proposal indicating, in connection with such
notice, the name of such Person and attaching a copy of the proposal or offer or
providing a complete written summary thereof. The Company agrees that it shall
keep Fiat and New Holland informed, on a current basis, of the status and terms
of any discussions or negotiations related to such Superior Proposal. The
Company agrees that it will take the necessary steps to promptly inform each
Company Subsidiary and each Representative of the Company or any Company
Subsidiary of the obligations undertaken in this Section 6.03. Effective as of
the date hereof, the Company shall terminate and cause its subsidiaries to
terminate any existing activities, discussions or negotiations with any third
parties that may be ongoing with respect to any Competing Transaction and shall
request that all confidential information previously furnished to any such third
parties be returned promptly.
SECTION 6.04. Employee Benefits Matters. (a) Continuation of Benefits.
Except as contemplated by this Agreement, for a period of 18 months following
the Effective Time, the Surviving Corporation shall maintain employee benefit
plans and arrangements which in the aggregate will provide a similar level
of benefits to active and retired employees of the Company and the Company
Subsidiaries to those provided under the Company employee benefit plans and
arrangements as in effect immediately prior to the Effective Time; provided,
however, that changes may be made to such employee benefit plans and
arrangements to the extent necessary to comply with applicable Law. From and
after the Effective Time, the Surviving Corporation shall honor in accordance
with their terms, the Company Benefit Plans and all existing employment and
severance agreements and severance plans which apply to current or former
employees or directors of the Company or the Company Subsidiaries.
(b) Service Recognition. To the extent that service is relevant for
purposes of eligibility, participation, vesting or benefit accrual under any
employee benefit plan, program or arrangement established, maintained or
contributed to by the Surviving Corporation, employees of the Company and the
Company Subsidiaries shall be credited for service accrued or deemed accrued
prior to the Effective Time with the Company or a Company Subsidiary; provided,
however, that such crediting of service does not result in the duplication of
benefits or an
30
unintended windfall with respect to the accrual of benefits. The
Surviving Corporation shall provide each employee of the Company and the Company
Subsidiaries with credit for any co-payments and deductibles paid prior to the
Effective Time for the calendar year in which the Effective Time occurs, in
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans that such employees are eligible to participate in after the
Effective Time.
SECTION 6.05. Directors' and Officers' Indemnification and Insurance .
(a) The Certificate of Incorporation and By-Laws of the Surviving Corporation
shall contain the provisions regarding liability of directors and
indemnification of directors and officers that are set forth, as of the date of
this Agreement, in the Certificate of Incorporation and the By-Laws,
respectively, of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who at
or at any time prior to the Effective Time were directors, officers, employees,
fiduciaries or agents of the Company.
(b) For a period of six years after the Effective Time, the
Surviving Corporation shall use all reasonable efforts to cause to be maintained
in effect policies of directors' and officers' liability insurance with coverage
in amount and scope at least as favorable as the Company's existing policies
with respect to claims arising from facts or events that occurred prior to the
Effective Time; provided, however, that during such period the Surviving
Corporation shall in no event be required to expend pursuant to this Section
6.05(b) more than an amount per year equal to 200 percent of current premiums
paid by the Company for such insurance, which current premium amount is set
forth in Section 6.05(b) of the Company Disclosure Schedule.
(c) This Section 6.05 is intended to be for the benefit of, and
shall be enforceable by, the indemnified parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
respective successors and assigns.
(d) From and after the Effective Time, the Surviving Corporation
agrees that it shall, and New Holland shall cause the Surviving Corporation to,
indemnify and hold harmless each present and former director and officer of the
Company, determined as of the Effective Time (the "Indemnified Parties"),
against any 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 that the Company would have been permitted under Delaware law and under
the Company's charter documents (as in effect on the date hereof) to indemnify
such Indemnified Parties (and the Surviving Corporation shall, and New Holland
shall cause the Surviving
31
Corporation to, advance expenses as incurred to the fullest extent
permitted under applicable Law; provided that the Indemnified Party to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such Indemnified Party is not entitled to
indemnification); and provided, further, that any determination required to be
made with respect to whether an officer's or director's conduct complies with
the standards set forth under Delaware law and the Company charter documents
shall be made by independent counsel selected by the Surviving Corporation.
(e) To the extent paragraph (d) shall not serve to indemnify and
hold harmless an Indemnified Party, for a period of six years after the date
hereof, the Surviving Corporation shall, and New Holland shall cause the
Surviving Corporation to, subject to the terms set forth herein, indemnify and
hold harmless, to the fullest extent permitted under applicable Law (and the
Surviving Corporation shall, and New Holland shall cause the Surviving
Corporation to advance expenses as incurred to the fullest extent permitted
under applicable Law; provided that the Indemnified Party to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such Indemnified Party is not entitled to indemnification), each
Indemnified Party against any Costs incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to the
transactions contemplated by this Agreement; provided, however, that the
Surviving Corporation shall not be required to indemnify any Indemnified Party
pursuant hereto if it shall reasonably determine that the Indemnified Party
acted in bad faith and not in a manner such Indemnified Party believed to be in
or not opposed to the best interests of the Company.
(f) Any Indemnified Party wishing to claim indemnification under
paragraphs (d) or (e) of this Section 6.05, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify New Holland
thereof, but the failure to so notify shall not relieve New Holland or 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 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 counsel for the Indemnified Parties advises
that there are issues which raise conflicts of interest between New Holland or
the Surviving Corporation and the Indemnified Parties, the Indemnified Parties
may retain counsel satisfactory to them, and the Surviving Corporation shall,
and New Holland shall cause the Surviving Corporation to, pay all reasonable
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received; provided, however, that New Holland and the
Surviving Corporation shall be obligated pursuant to this paragraph (f) to pay
for only one firm
32
of counsel for all Indemnified Parties in any jurisdiction unless the
use of one counsel for such Indemnified Parties would present such counsel with
a conflict of interest, (ii) the Indemnified Parties will cooperate in the
defense of any such matter and (iii) neither New Holland nor the Surviving
Corporation shall be liable for any settlement effected without the prior
written consent of Fiat (which consent shall not be unreasonably withheld); and
provided, further, that neither New Holland 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 final, that the indemnification of such Indemnified Party in the
manner contemplated hereby is prohibited by applicable Law. If such indemnity is
not available with respect to any Indemnified Party, then the Surviving
Corporation shall, and New Holland shall cause the Surviving Corporation to, and
the Indemnified Party shall, each contribute to the amount payable in such
proportion as is appropriate to reflect relative faults and benefits.
(g) 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 or such
consolidation or merger or (ii) shall transfer all or substantially all of its
properties and assets or outstanding voting securities 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 set forth in this Section 6.05.
(h) To the extent that New Holland or Merger Sub fails to make or
cause to be made any of the payments required by Section 6.05, Fiat shall make
such payments.
SECTION 6.06. Further Action; Consents; Filings. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to (i) take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the Merger,
(ii) obtain from Governmental Entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by New
Holland or the Company or any of their subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the Merger, (iii) make all necessary filings, and thereafter make any other
submissions either required or deemed appropriate by each of the parties, with
respect to this Agreement and the Merger required under (A) the Securities Act,
the Exchange Act and any other applicable federal or Blue Sky Laws, (B) the HSR
Act, (C) Council Regulation (EEC) No. 4064/89 and (D) any other applicable Law.
The parties hereto shall cooperate and consult with each other in connection
with the making of all such filings, including by providing copies of all such
documents to the nonfiling party and its advisors prior to filing, and none of
the parties will file any such document if any of the other parties shall have
reasonably objected to the filing of such document. No party to this Agreement
shall consent to
33
any voluntary extension of any statutory deadline or waiting party or
to any voluntary delay of the consummation of the Merger at the behest of any
Governmental Entity without the consent and agreement of the other parties to
this Agreement, which consent shall not be unreasonably withheld or delayed.
Without limiting the foregoing, each of the parties hereto shall, and shall
cause their subsidiaries to, use their reasonable best efforts to obtain (and to
cooperate and coordinate with the other parties to obtain) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity that is required to be obtained in connection with the Merger and to take
all actions reasonably necessary to satisfy any applicable regulatory
requirements relating thereto. Each of the parties shall take promptly, in the
event that any permanent or preliminary injunction or other order is entered or
becomes reasonably foreseeable to be entered in any proceeding that would make
consummation of the transaction contemplated hereby in accordance with the terms
of this Agreement unlawful or that would prevent or delay consummation of the
transaction contemplated hereby, any and all steps necessary to vacate, modify
or suspend such injunction or order so as to permit such consummation prior to
the deadline specified in Section 8.01(b).
SECTION 6.07. The Company Rights Plan. Prior to the Effective Time,
the Company shall take all necessary action to (i) amend the Rights Agreement so
as to accelerate the Final Expiration Date (as such term is used in the Rights
Agreement) to a date which is immediately prior to the Effective Time, and (ii)
ensure that after such acceleration (A) none of the Company, New Holland or
Merger Sub shall have any obligations under the Rights or Rights Agreement and
(B) none of the holders of the Rights shall have any rights under the Rights or
Rights Agreement.
SECTION 6.08. Redemption of Series A Cumulative Convertible Preferred
Stock. The Company shall take all necessary action to (i) prior to the Effective
Time, redeem all of the issued and outstanding shares of Series A Cumulative
Convertible Preferred Stock pursuant to the terms of the Certificate of
Designations therefor and (ii) ensure that after such redemption (A) the Company
shall have no obligations under the Series A Cumulative Convertible Preferred
Stock and (B) none of the holders of the Series A Cumulative Convertible
Preferred Stock shall have any rights under the terms of such Series A
Cumulative Convertible Preferred Stock.
SECTION 6.09. Public Announcements. The initial press release
concerning the Merger shall be a joint press release and, thereafter, New
Holland and the Company shall consult with each other before issuing any press
release or otherwise making any public statements with respect to this Agreement
or any transaction contemplated hereby and shall not issue any such press
release or make any such public statement prior to such consultation, except to
the extent required by applicable Law or the requirements of the NASD, the
Securities Exchange Automated Quotation system ("SEAQ"), or the NYSE, in which
case the issuing party shall use
34
its reasonable best efforts to consult with the other party before issuing any
such release or making any such public statement.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party to
Consummate the Merger. The obligations of Fiat, New Holland, the Company and
Merger Sub to effect the Merger shall be subject to the satisfaction or, if
permitted by applicable Law, waiver prior to the Closing Date of the following
conditions:
(a) this Agreement and the transactions contemplated hereby shall
have been approved and adopted by the stockholders of the Company in
accordance with the DGCL;
(b) no preliminary or permanent injunction, decree or other order
(an "Order") issued by any Governmental Entity or other legal restraint or
prohibition preventing the consummation of the transactions contemplated
by this Agreement shall be in effect, and no Law shall have been enacted
or adopted that enjoins, prohibits or makes illegal consummation of any
of the transactions contemplated hereby.
(c) (i) any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or
been terminated and (ii) the Commission of the European Union shall have
approved the transaction contemplated by this Agreement under Regulation
(EEC) No. 4064/89 of the Council of the European Union.
SECTION 7.02. Conditions to the Obligations of the Company. The
obligations of the Company to effect the Merger is subject to the satisfaction
or, if permitted by applicable Law, waiver prior to the Closing Date of the
following further conditions:
(a) each of the representations and warranties of Fiat, New Holland
and Merger Sub contained in this Agreement shall be true and correct as of
the Effective Time as though made on and as of the Effective Time, except
where any such failure or failures to be so true and correct, in the
aggregate, would not have a material adverse effect on the ability of
Fiat, New Holland or Merger Sub to perform its obligations hereunder, and
except that those representations and warranties that address matters only
as of a particular date shall remain true and correct as of such date,
except where any such failure or failures to be so true and correct, in
the aggregate, would not have a material adverse effect on the ability of
Fiat, New Holland or Merger Sub to perform its obligations
35
hereunder, and the Company shall have received a certificate of the
Chairman, President or Chief Financial Officer of each of Fiat and New
Holland to such effect; and
(b) Fiat, New Holland and Merger Sub shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or
prior to the Effective Time, and the Company shall have received a
certificate of the Chairman, President or Chief Financial Officer of New
Holland to that effect.
SECTION 7.03. Conditions to the Obligations of Fiat, New Holland and
Merger Sub. The obligations of Fiat, New Holland and Merger Sub to effect the
Merger is subject to the satisfaction or, if permitted by applicable Law, waiver
prior to the Closing Date of the following further conditions:
(a) each of the representations and warranties of the Company
contained in this Agreement shall be true and correct as of the Effective
Time, as though made on and as of the Effective Time, except where any
such failure or failures to be so true and correct, individually or in the
aggregate, would not have a Company Material Adverse Effect, and except
that those representations and warranties that address matters only as of
a particular date shall remain true and correct as of such date, except
where any such failure or failures to be so true and correct, individually
or in the aggregate, would not have a Company Material Adverse Effect, and
Fiat and New Holland shall have received a certificate of the Chairman,
President or Chief Financial Officer of the Company to such effect;
(b) the Company shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to
be performed or complied with by it on or prior to the Effective Time, and
Fiat and New Holland shall have received a certificate of the Chairman,
President or Chief Financial Officer of the Company to that effect;
(c) all consents, approvals, waivers and authorizations required to
be obtained to effect the Merger shall have been obtained from all
Governmental Entities, except where the failure to obtain any such
consents, approvals and authorizations would not result in a Company
Material Adverse Effect; and
(d) all consents, approvals, waivers and authorizations (including,
without limitation, waivers of termination rights) of third parties (other
than Governmental Entities), the failure of which to obtain would result
in a Company Material Adverse Effect, shall have been obtained.
36
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite approval and adoption of this Agreement, as follows:
(a) by mutual written consent duly authorized by the Board of
Directors of the Company and the Board of Managing Directors of New
Holland;
(b) by either Fiat or the Company, if the Effective Time shall not
have occurred on or before March 31, 2000; provided, however, that the
right to terminate this Agreement under this Section 8.01(b) shall not be
available to the party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or resulted in, the failure of the
Effective Time to occur on or before such date;
(c) by either Fiat or the Company, if any Order or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall have been entered by any Governmental
Entity or any Law shall have been enacted or adopted that enjoins,
prohibits or makes illegal consummation of any of the transactions
contemplated by this Agreement;
(d) by Fiat, if (i) the Board of Directors of the Company withdraws,
modifies or changes its recommendation of this Agreement in a manner
adverse to New Holland or shall have resolved to do so, (ii) if, after
receiving a bona fide proposal or offer relating to a Competing
Transaction, the Board of Directors of the Company shall have refused to
affirm its recommendation of this Agreement as promptly as practical (but
in any case within 10 business days) after receipt of any written request
from Fiat which request was made on a reasonable basis, (iii) the Board of
Directors of the Company shall have recommended to the stockholders of the
Company a Competing Transaction or shall have resolved to do so, or (iv) a
tender offer or exchange offer for 15% or more of the outstanding shares
of capital stock of the Company is commenced, and the Board of Directors
of the Company fails to recommend against acceptance of such tender offer
or exchange offer by its stockholders (including by taking no position
with respect to the acceptance of such tender offer or exchange offer by
its stockholders);
(e) by Fiat or the Company if this Agreement shall fail to receive
the requisite vote for adoption at the Company Stockholders' Meeting or
any adjournment or postponement thereof;
37
(f) by Fiat, upon a breach or failure to perform in any material
respect (which breach or failure cannot be or has not been cured within 30
days after the giving of notice of such breach or failure) any
representation, warranty, covenant or agreement on the part of the Company
set forth in this Agreement, such that the conditions set forth in Section
7.03 would not be satisfied;
(g) by the Company, upon a breach or failure to perform in any
material respect (which breach or failure cannot be or has not been cured
within 30 days after the giving of notice of such breach or failure) any
representation, warranty, covenant or agreement on the part of Fiat set
forth in this Agreement, such that the conditions set forth in Section
7.02 would not be satisfied; or
(h) by the Company prior to the vote of the stockholders of the
Company on the Merger, if the Board of Directors of the Company shall,
following receipt of advice of independent legal counsel that failure to
so terminate would cause the Board of Directors of the Company to breach
its fiduciary duties under applicable Laws, have withdrawn, modified or
changed its recommendation of the adoption of this Agreement in a manner
adverse to New Holland and, on or prior to such date, any person (other
than New Holland or Fiat) shall have made a public announcement or
otherwise communicated to the Company and its stockholders with respect to
a Competing Transaction; provided, however, that the Company may not
terminate this Agreement pursuant to this subsection (h) until five
business days have elapsed following delivery to Fiat of written notice of
such determination of the Company (which written notice will inform Fiat
of the material terms and conditions of the Competing Transaction);
provided, further, however, that such termination under this Section
8.01(h) shall not be effective until the Company has made payment to Fiat
of the amounts required to be paid pursuant to Section 8.05(b).
SECTION 8.02. Effect of Termination. Except as provided in Section
9.01, in the event of termination of this Agreement pursuant to Section 8.01,
this Agreement shall forthwith become void, there shall be no liability under
this Agreement on the part of Fiat, New Holland, the Company or Merger Sub or
any of their respective officers or directors, and all rights and obligations of
each party hereto shall cease, subject to the remedies of the parties set forth
in Sections 8.05(b), (c) and (d); provided, however, that nothing herein shall
relieve any party from liability for the breach of any of its representations
and warranties or the breach of any of its covenants or agreements set forth in
this Agreement. In the event of termination of this Agreement by either Fiat or
the Company pursuant to Section 8.01 hereof, the terminating party shall give
prompt written notice thereof to the non-terminating party.
SECTION 8.03. Amendment. This Agreement may be amended by mutual
agreement of the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval of
38
this Agreement by the stockholders of the Company, no amendment may be
made that would reduce the amount or change the type of consideration into which
each Company Share shall be converted upon consummation of the Merger. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto. Subject to the foregoing, in the event that the implementation
of the transactions contemplated by this Agreement prove for any reason to be
impracticable, the parties shall use their reasonable best efforts to amend the
method of effecting the business combination between New Holland and the Company
contemplated by this Agreement, including, but not limited to, providing for a
mutually agreeable alternative form of transaction structure to effect such
business combination; provided that no such amendment shall alter the amount or
kind of consideration to be issued to the stockholders of the Company or be
reasonably likely to materially impede or delay consummation of the transactions
contemplated by this Agreement.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any obligation or
other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any agreement or condition
contained herein. Any waiver of a condition set forth in Section 7.01, or any
determination that such a condition has been satisfied, will be effective only
if made in writing by each of the Company, Fiat and New Holland and, unless
otherwise specified in such writing, shall thereafter operate as a waiver (or
satisfaction) of such condition for any and all purposes of this Agreement. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 8.05. Expenses; Alternative Transaction Fee. (a) Except as set
forth in this Section 8.05, all Expenses (as defined below) incurred in
connection with this Agreement and the Merger shall be paid by the party
incurring such expenses, whether or not the Merger is consummated, except that
Fiat and the Company each shall pay one-half of all Expenses relating to
printing, filing and mailing the Proxy Statement and all SEC and other
regulatory filing fees incurred in connection with the Proxy Statement.
"Expenses" as used in this Agreement shall consist of all out-of-pocket expenses
(including, without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement, the preparation, printing, filing and mailing of the Proxy
Statement, the solicitation of stockholder approvals and all other matters
related to the consummation of the Merger.
(b) the Company and Fiat agree that, (i) if Fiat shall terminate
this Agreement pursuant to Section 8.01(d) or (ii) if the Company shall
terminate this Agreement pursuant to Section 8.01(h) or (iii) if (A) the Company
or Fiat shall terminate this Agreement pursuant to Section 8.01(e) due to the
failure of the Company's stockholders to approve and adopt this
39
Agreement and (B) at the time of such failure to so approve and adopt
this Agreement there shall exist a bona fide Competing Transaction (which
Competing Transaction, for purposes only of clause (iii) of this Section
8.05(b), shall have become the subject of a public announcement or any person
shall have publicly announced an intention to make a proposal or offer relating
thereto) with respect to the Company and, within 12 months of the termination of
this Agreement, the Company enters into a definitive agreement with any third
party with respect to a Competing Transaction, then the Company shall pay to
Fiat and New Holland (with one half paid to Fiat and the other half paid to New
Holland) an amount equal $145,000,000 (the "Alternative Transaction Fee").
(c) The Alternative Transaction Fee required to be paid pursuant to
Section 8.05(b)(ii) shall be paid prior to, and shall be a pre-condition to
effectiveness of, termination of this Agreement pursuant to Section 8.01(h). The
Alternative Transaction Fee required to be paid pursuant to Sections 8.05(b)(i)
and 8.05(b)(iii) shall be paid to Fiat and New Holland in three installments,
the first to be paid on the next business day after the termination in an amount
equal to $20,000,000 ($10,000,000 to Fiat and $10,000,000 to New Holland), the
second installment in an amount equal to $52,500,000 ($26,250,000 to Fiat and
$26,250,000 to New Holland) to be paid on the next business day after a
definitive agreement is entered into with a third party with respect to any
Competing Transaction and the remaining $72,500,000 ($36,250,000 to Fiat and
$36,250,000 to New Holland) to be paid on the next business day after such
Competing Transaction is consummated.
(d) Each of Fiat, New Holland and the Company agrees that the
payments provided for in Sections 8.05(b) shall be the sole and exclusive
remedies of the parties upon a termination of this Agreement pursuant to Section
8.01(d), (e), or (h), as the case may be, and such remedies shall be limited to
the payments stipulated in Section 8.05(b); provided, however, that nothing
herein shall relieve any party from liability for the willful breach of any of
its representations and warranties or the breach of any of its covenants or
agreements set forth in this Agreement.
(e) Any payment required to be made pursuant to Section 8.05(b)
shall be made by wire transfer of immediately available funds to an account
designated by the party entitled to receive payment.
(f) In the event that the Company shall fail to pay any Alternative
Transaction Fee when due, the amount of any such Alternative Transaction Fee
shall be increased to include the costs and expenses actually incurred or
accrued by Fiat and New Holland, acting together (including, without limitation,
fees and expenses of one counsel) in connection with the collection under and
enforcement of this Section 8.05.
40
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement and
in any certificate delivered pursuant hereto shall terminate at the Effective
Time or upon the termination of this Agreement pursuant to Section 8.01, as the
case may be, except that the agreements set forth in Articles I and II and
Sections 6.04 and 6.05 and this Article IX shall survive the Effective Time and
those set forth in Sections 6.02(b) and 8.05 and this Article IX shall survive
termination. Each party agrees that, except for the representations and
warranties contained in this Agreement and the respective Disclosure Schedules,
no party hereto has made any other representations and warranties, and each
party hereby disclaims any other representations and warranties made by itself
or any of its officers, directors, employees, agents, financial and legal
advisors or other representatives with respect to the execution and delivery of
this Agreement or the transactions contemplated herein, notwithstanding the
delivery or disclosure to any other party or any party's representatives of any
documentation or other information with respect to any one or more of the
foregoing.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy and facsimile or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
if to Fiat:
Fiat S.p.A.
Via Nizza 250
10126 Torino
Italy
Attention: General Counsel
Telephone: 011-39-011-68-62562
Telecopier: 011-39-011-68-62196
if to New Holland:
New Holland N.V.
World Trade Center
Tower B, 10th Floor
Amsterdam Airport
41
The Netherlands
Attention: General Counsel
Telephone: 011-31-20-446-0429
Telecopier: 011-31-20-446-0436
in each case with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: John A. Marzulli, Jr.
Telephone: (212) 848-8590
Telecopier: (212) 848-7179
if to the Company:
Case Corporation
700 State Street
Racine, WI 53401
Attention: General Counsel
Telephone: (414) 636-0940
Telecopier: (414) 636-5651
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Craig M. Wasserman
Telephone: (212) 403-1000
Telecopier: (212) 403-2000
SECTION 9.03. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person;
42
(b) "beneficial owner" with respect to any shares of capital stock
means a person who shall be deemed to be the beneficial owner of such
shares (i) which such person or any of its affiliates or associates (as
such term is defined in Rule 12b-2 promulgated under the Exchange Act)
beneficially owns, directly or indirectly, (ii) which such person or any
of its affiliates or associates has, directly or indirectly, (A) the right
to acquire (whether such right is exercisable immediately or subject only
to the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of consideration rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding, or (iii) which
are beneficially owned, directly or indirectly, by any other persons with
whom such person or any of its affiliates or associates or person with
whom such person or any of its affiliates or associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting
or disposing of any shares of capital stock;
(c) "business day" means any day on which the principal offices of the
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in The City of New York, USA;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "knowledge" means, with respect to any matter in question, that
the executive officers of New Holland or the Company, as the case may be,
(i) have knowledge of such matter, or (ii) after reasonable due
investigation, should have known of such matter;
(f) "person" means an individual, corporation, company, limited
liability company, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in section 13(d)(3)
of the Exchange Act), trust, association or entity or government,
political subdivision, agency or instrumentality of a government; and
(g) "subsidiary" or "subsidiaries" of any person means any
corporation, limited liability company, partnership, joint venture or
other legal entity of which such person (either alone or through or
together with any other subsidiary) owns, directly or indirectly, more
than 50% of the stock or other equity interests, the holders of which are
43
generally entitled to vote for the election of the board of directors or
other governing body of such corporation or other legal entity.
SECTION 9.04. 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 is not affected in any manner materially 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 a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. Assignment; Merger Sub; Binding Effect; Benefit. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties.
Notwithstanding anything to the contrary contained in this Agreement, Fiat may
transfer the shares of Merger Sub to one of its subsidiaries or a subsidiary of
New Holland prior to the consummation of the Merger. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, except for the provisions
of Sections 6.05 (the "Third Party Provision"), nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement. The Third Party
Provision may be enforced by the beneficiaries thereof.
SECTION 9.06. Incorporation of Exhibits. The Company Disclosure
Schedule and all Exhibits attached hereto and referred to herein are hereby
incorporated herein and made a part of this Agreement for all purposes as if
fully set forth herein.
SECTION 9.07. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 9.08. Governing Law. Except to the extent that the Merger is
mandatorily governed by the DGCL, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State without regard to any
conflicts of laws principles otherwise applicable. No provision of this
Agreement shall be construed to require any of the parties hereto or any of
44
their respective subsidiaries, affiliates, directors, officers, employees or
agents to take any action that would violate any applicable Law.
SECTION 9.09. Submission to Jurisdiction; Venue. The parties hereto
unconditionally and irrevocably agree and consent to the exclusive jurisdiction
of, and service of process and venue in, the United States District Court for
the Southern District of New York and the courts of the State of New York
located in the County of New York, State of New York and waive any objection
with respect thereto, for the purpose of any action, suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby and
further agree not to commence any such action, suit or proceeding except in any
such court. Each party irrevocably waives any objections or immunities to
jurisdiction to which it may otherwise be entitled or become entitled (including
sovereign immunity, immunity to pre-judgment attachment, post-judgment
attachment and execution) in any legal suit, action or proceeding against it
arising out of or relating to this Agreement or the transactions contemplated
hereby which is instituted in any such court. New Holland hereby appoints CT
Corporation, New York, New York, as its authorized agent (the "New Holland
Authorized Agent") upon whom process may be served in any such action arising
out of or relating to this Agreement or the transactions contemplated hereby
which may be instituted in the United States District Court for the Southern
District of New York or the courts of the State of New York by any other party
hereto. Such appointment shall be irrevocable. New Holland agrees to take any
and all action, including the filing of any and all documents and instruments,
that may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the New Holland Authorized Agent and written
notice of such service to New Holland shall be deemed, in every respect,
effective service of process upon New Holland.
SECTION 9.10. 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 9.11. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.12. Entire Agreement. This Agreement (including the Exhibits
and the Company Disclosure Schedule) and the Confidentiality Agreement
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
45
SECTION 9.13. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
46
IN WITNESS WHEREOF, New Holland, the Company and New Holland Merger
have caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
FIAT S.p.A.
By /s/ Paolo Cantarella
Name: Paolo Cantarella
Title: Chief Executive Officer
NEW HOLLAND N.V.
By /s/ Paolo Cantarella
Name: Paolo Cantarella
Title: Director
By /s/ Umberto Quadrino
Name: Umberto Quadrino
Title: Acting Chairman, President &
Chief Executive Officer
CASE CORPORATION
By /s/ Jean-Pierre Rosso
Name: Jean-Pierre Rosso
Title: Chairman & Chief Executive Officer
FIAT ACQUISITION CORPORATION
By /s/ Damien Clermont
Name: Damien Clermont
Title: President