==========================================================
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INGERSOLL-RAND COMPANY,
CEC ACQUISITION CORP.
AND
CLARK EQUIPMENT COMPANY
Dated as of April 9, 1995
==========================================================
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
----
ARTICLE I THE OFFER . . . . . . . . . . . . . . . . 2
1.01 The Offer . . . . . . . . . . . . . . . . 2
1.02 Company Actions . . . . . . . . . . . . . 4
ARTICLE II THE MERGER AND RELATED MATTERS . . . . . 6
2.01 The Merger . . . . . . . . . . . . . . . 6
2.02 Conversion of Stock . . . . . . . . . . . 7
2.03 Dissenting Stock . . . . . . . . . . . . 8
2.04 Surrender of Certificates . . . . . . . . 9
2.05 Payment . . . . . . . . . . . . . . . . . 10
2.06 No Further Rights of Transfers . . . . . 11
2.07 Stock Option and Other Plans . . . . . . 11
2.08 Certificate of Incorporation of the
Surviving Corporation . . . . . . . . . 13
2.09 By-Laws of the Surviving Corporation . . 13
2.10 Directors and Officers of the Surviving
Corporation . . . . . . . . . . . . . . 13
2.11 Closing . . . . . . . . . . . . . . . . . 14
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . 14
3.01 Representations and Warranties of the
Company . . . . . . . . . . . . . . . . 14
(a) Due Organization, Good Standing and
Corporate Power . . . . . . . . . . 14
(b) Authorization and Validity of
Agreement . . . . . . . . . . . . . 15
(c) Capitalization . . . . . . . . . . . 15
(d) Consents and Approvals; No
Violations . . . . . . . . . . . . 17
(e) Company Reports and Financial
Statements . . . . . . . . . . . . 18
(f) Absence of Other Liabilities . . . . 19
(g) Anticipated Filings . . . . . . . . 20
(i)
(h) Absence of Certain Changes . . . . . 20
(i) Compliance with Laws . . . . . . . . 21
(j) Litigation . . . . . . . . . . . . . 22
(k) Employee Benefit Plans . . . . . . . 22
(l) Taxes . . . . . . . . . . . . . . . 22
(m) Proxy Statement, Schedule 14D-9 and
Schedule 14D-1 . . . . . . . . . . 23
(n) Broker's or Finder's Fee . . . . . . 24
(o) Environmental Laws and Regulations . 25
(p) State Takeover Statutes and
Supermajority Voting Provisions . . 25
(q) Rights Agreement . . . . . . . . . . 25
3.02 Representations and Warranties of Parent
and Purchaser . . . . . . . . . . . . . 26
(a) Due Organization; Good Standing and
Corporate Power . . . . . . . . . . 26
(b) Authorization and Validity of
Agreement . . . . . . . . . . . . . 26
(c) Consents and Approvals; No
Violations . . . . . . . . . . . . 27
(d) Offer Documents, Schedule 14D-9 and
Proxy Statement . . . . . . . . . . 28
(e) Broker's or Finder's Fee . . . . . . 29
(f) Financing . . . . . . . . . . . . . 29
ARTICLE IV TRANSACTIONS PRIOR TO CLOSING DATE . . . . 29
4.01 Access to Information Concerning Prop-
erties and Records . . . . . . . . . . 29
4.02 Confidentiality . . . . . . . . . . . . . 30
4.03 Conduct of the Business of the Company
Pending the Closing Date . . . . . . . 30
4.04 Proxy Statement . . . . . . . . . . . . . 33
4.05 Stockholder Approval . . . . . . . . . . 34
4.06 Reasonable Best Efforts . . . . . . . . . 34
4.07 Guarantee of Performance . . . . . . . . 35
4.08 Notification of Certain Matters . . . . . 35
4.09 HSR Act . . . . . . . . . . . . . . . . . 36
4.10 Employee Benefits . . . . . . . . . . . . 36
4.11 Directors' and Officers' Insurance;
Indemnification . . . . . . . . . . . . 39
4.12 Financing . . . . . . . . . . . . . . . . 41
4.13 Company Board Representation; Section
(ii)
14(f) . . . . . . . . . . . . . . . . 41
4.14 No Amendment to the Rights Agreement . . 42
4.15 Disposition of Litigation . . . . . . . . 42
4.16 Proxy Contests . . . . . . . . . . . . . 43
4.17 No Solicitation of Transactions . . . . . 44
4.18 Postponement of Annual Meeting . . . . . 45
4.19 Sale of VME . . . . . . . . . . . . . . . 45
ARTICLE V CONDITIONS PRECEDENT TO MERGER . . . . . 46
5.01 Conditions Precedent to Obligations of
Parent, Purchaser and the Company . . . 46
(a) Approval of Company's Stockholders . 46
(b) HSR Act . . . . . . . . . . . . . . 46
(c) Injunction . . . . . . . . . . . . . 46
(d) Statutes . . . . . . . . . . . . . . 47
(e) Payment for Common Stock . . . . . . 47
ARTICLE VI TERMINATION AND ABANDONMENT . . . . . . . 47
6.01 Termination . . . . . . . . . . . . . . . 47
6.02 Effect of Termination . . . . . . . . . . 51
ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . 51
7.01 Fees and Expenses . . . . . . . . . . . . 51
7.02 Extension; Waiver . . . . . . . . . . . . 52
7.03 Public Announcements . . . . . . . . . . 53
7.04 Notices . . . . . . . . . . . . . . . . . 53
7.05 Entire Agreement . . . . . . . . . . . . 54
7.06 Binding Effect; Benefit; Assignment . . . 54
7.07 Amendment and Modification . . . . . . . 55
7.08 Further Actions . . . . . . . . . . . . . 55
7.09 Headings . . . . . . . . . . . . . . . . 55
7.10 Counterparts . . . . . . . . . . . . . . 55
7.11 Applicable Law . . . . . . . . . . . . . 55
7.12 Severability . . . . . . . . . . . . . . 55
7.13 "Person" Defined . . . . . . . . . . . . 56
7.14 Knowledge of the Company . . . . . . . . 56
7.15 Non-Survival of Representations,
Warranties and Agreements . . . . . . . 56
Annexes
-------
Annex A Tender Offer Conditions
(iii)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of
April 9, 1995 (this "Agreement"), by and among INGERSOLL-
RAND COMPANY, a New Jersey corporation ("Parent"), CEC
ACQUISITION CORP., a Delaware corporation and a wholly-
owned subsidiary of Parent ("Purchaser"), and CLARK
EQUIPMENT COMPANY, a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors
of Parent, Purchaser and the Company have approved the
acquisition of the Company by Parent;
WHEREAS, Purchaser has outstanding an offer
(such offer as amended pursuant to this Agreement is
hereinafter referred to as the "Offer") to purchase all of
the outstanding shares of Common Stock, $7.50 par value per
share, of the Company (the "Common Stock"; all of the
outstanding shares of Company Common Stock being
hereinafter referred to as "Shares") and the associated
Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement dated as of March 10,
1987, and amended and restated, as of August 14, 1990,
between the Company and Harris Trust & Savings Bank, as
Rights Agent (as so amended and restated, the "Rights
Agreement"), at a purchase price of $77 per Share (and
associated Right) net to the seller in cash, without
interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April
3, 1995, and in the related letter of transmittal;
WHEREAS, in consideration of the Company's
entering into this Agreement, Parent is willing to cause
Purchaser to increase the price to be paid pursuant to the
Offer to $86.00 per Share (and associated Right) (such
amount being hereinafter referred to as the "Offer Price");
WHEREAS, to complete such acquisition, the
respective Boards of Directors of Parent, Purchaser and the
Company, have approved the merger of Purchaser with the
Company (the "Merger"), pursuant to and subject to the
terms and conditions of this Agreement; and
WHEREAS, the Directors of the Company have
unanimously determined that each of the Offer and the
Merger are fair to, and in the best interests of, the
holders of Common Stock, approved this Agreement, the Offer
and the Merger and recommended the acceptance of the Offer
and approval and adoption of this Agreement by the
stockholders of the Company.
NOW, THEREFORE, in consideration of the
premises and of the mutual covenants, representations,
warranties and agreements herein contained, the parties
hereto agree as follows:
ARTICLE I
THE OFFER
1.01 The Offer. (a) Provided that this
---------
Agreement shall not have been terminated in accordance with
Article VI hereof and so long as none of the events set
forth in Annex A hereto (the "Tender Offer Conditions")
shall have occurred and no circumstance shall exist which
would result in a failure to satisfy any of the Tender
Offer Conditions, as promptly as practicable, but in no
event later than the fifth business day after the date of
this Agreement, Purchaser shall amend the Offer (i) to
extend the Offer to May 5, 1995, (ii) to increase the
purchase price offered to $86.00 per share of Common Stock
(and associated Right) and (iii) to modify the conditions
of the Offer to conform to the Tender Offer Conditions.
The obligations of Purchaser to accept for payment and
promptly to pay for any shares of Common Stock tendered
shall be subject only to the Tender Offer Conditions any of
which may be waived; provided, however, that, without the
-------- -------
consent of the Company, Purchaser shall not waive the
condition that there shall have been validly tendered and
not withdrawn prior to the expiration of the Offer a number
of shares of Common Stock which, together with Common Stock
owned by Parent and Purchaser, represent a majority of the
total voting power of all shares of capital stock of the
Company outstanding on a fully diluted basis. The Tender
Offer Conditions are for the sole benefit of Parent and
-2-
Purchaser and may be asserted by Parent and Purchaser
regardless of the circumstances giving rise to any such
Tender Offer Conditions and, subject to the preceding
sentence, may be waived by Parent and Purchaser in whole or
in part. Without the consent of the Company, Purchaser
shall not (i) reduce the number of shares of Company Common
Stock to be purchased in the Offer, (ii) reduce the Offer
Price, (iii) impose conditions to the Offer in addition to
those set forth in Annex A, (iv) change the form of
consideration payable in the Offer or (v) amend any other
term of the Offer (including the Tender Offer Conditions)
in a manner materially adverse to the holders of the Common
Stock. Parent and Purchaser covenant and agree that,
subject to the terms and conditions of this Agreement,
including but not limited to the Tender Offer Conditions,
unless the Company otherwise consents in writing, Purchaser
will accept for payment and pay for Common Stock as soon as
it is permitted to do so under applicable law; provided,
--------
that Purchaser shall have the right, in its sole
discretion, to extend the Offer from time to time for up to
a maximum of 10 additional business days, notwithstanding
the prior satisfaction of the Tender Offer Conditions.
(b) As soon as practicable after the date
hereof, Parent or Purchaser shall file with the Securities
and Exchange Commission (the "Commission") an amendment to
their Tender Offer Statement on Schedule 14D-1 dated
April 3, 1995 with respect to the Offer which will reflect
the existence of this Agreement, amend the conditions to
the Offer in accordance herewith and contain a supplement
to the Offer to Purchase dated April 3, 1995 and related
letter of transmittal (together with any supplements or
amendments thereto, collectively the "Offer Documents").
The Offer Documents will comply in all material respects
with the provisions of applicable federal securities laws.
The information provided and to be provided by the Company,
Parent and Purchaser for use in the Offer Documents shall
not, on the date filed with the Commission and on the date
first published or sent or given to the Company's
stockholders, as the case may be, contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading. Parent,
Purchaser and the Company each agrees promptly to correct
-3-
any information provided by it for use in the Offer
Documents if and to the extent that it shall have become
false or misleading in any material respect and Parent and
Purchaser further agree to take all steps necessary to
cause the Offer Documents as so corrected to be filed with
the Commission and to be disseminated to holders of Common
Stock, in each case as and to the extent required by
applicable federal securities laws.
1.02 Company Actions. (a) The Company
---------------
hereby approves of and consents to the Offer and the Merger
and represents that (i) its Board of Directors (at a
meeting duly called and held on April 9, 1995) has (1)
determined by the unanimous vote of the Directors that each
of the transactions contemplated hereby, including each of
the Offer and the Merger, is fair to, and in the best
interests of, the holders of Common Stock, (2) approved
this Agreement and the transactions contemplated hereby,
including each of the Offer and the Merger and has
determined that the consummation of any thereof will not
constitute a "Change In Control" for purposes of Section
9.2 of the Clark Equipment Company Leveraged Employee Stock
Ownership Plan, (3) resolved to recommend acceptance of the
Offer and the tender of Shares thereunder and approval and
adoption of this Agreement and the transactions
contemplated hereby by the stockholders of the Company, (4)
taken all other action necessary to render (A) Section 203
of the Delaware General Corporation Law, (B) the Rights
Agreement and (C) Article SIXTH, Paragraph 6, of the
Company's Restated Certificate of Incorporation (as to the
Company, the "Certificate of Incorporation") inapplicable
to the Offer and the Merger and the transactions
contemplated hereby and thereby; provided, however, that
-------- -------
such recommendation or other action may be withdrawn,
modified or amended at any time or from time to time if a
majority of the Board of Directors of the Company
determines, in its good faith judgment, based on the
opinion of independent outside legal counsel to the
Company, that failing to take such action would constitute
a breach of such Board's fiduciary obligations under
applicable law; and (ii) CS First Boston Corporation
("First Boston") has delivered to the Board of Directors of
the Company its opinion that the consideration to be
received by the holders of Common Stock (other than Parent
and Purchaser) pursuant to the Offer and the Merger is fair
-4-
to the holders of Common Stock from a financial point of
view. The Company has been authorized by First Boston to
permit, subject to prior review and consent by First Boston
(such consent not to be unreasonably withheld), the
inclusion of such fairness opinion (or a reference thereto)
in the Offer Documents and in the Schedule 14D-9 referred
to below and the Proxy Statement referred to in Section
4.04. The Company hereby consents to the inclusion in the
Offer Documents of the recommendations of the Company's
Board of Directors described in this Section 1.02(a).
(b) The Company hereby agrees to file with
the Commission as soon as practicable after the date hereof
a Solicitation/Recommendation Statement on Schedule 14D-9
pertaining to the Offer (together with any amendments or
supplements thereto, the "Schedule 14D-9") containing the
recommendation described in Section 1.02(a) and to promptly
mail the Schedule 14D-9 to the stockholders of the Company.
The Schedule 14D-9 will comply in all material respects
with the provisions of applicable federal securities laws
and, on the date filed with the Commission and on the date
first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading, except that no
representation is made by the Company with respect to
information supplied by Parent or Purchaser in writing for
inclusion in the Schedule 14D-9. The Company, Parent and
Purchaser each agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false or misleading in any
material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the Commission and disseminated to the
holders of shares of Common Stock, in each case as and to
the extent required by applicable federal securities laws;
provided, however, that such recommendation or other action
-------- -------
may be withdrawn, modified or amended at any time or from
time to time if a majority of the Board of Directors of the
Company determines, in its good faith judgment, based on
the opinion of independent outside legal counsel to the
Company, that failing to take such action would constitute
a breach of such Board's fiduciary obligations under
-5-
applicable law.
(c) In connection with the Offer, the Company
will promptly furnish Purchaser with mailing labels,
security position listings, any non-objecting beneficial
owner lists and any available listing or computer list
containing the names and addresses of the record holders of
the Common Stock as of the most recent practicable date and
shall furnish Purchaser with such additional information
(including, but not limited to, updated lists of holders of
Common Stock and their addresses, mailing labels and lists
of security positions and non-objecting beneficial owner
lists) and such other assistance as Purchaser or its agents
may reasonably request in communicating the Offer to the
Company's record and beneficial stockholders. Subject to
the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Merger,
the Parent, Purchaser and their affiliates, associates,
agents and advisors, shall keep such information
confidential and use the information contained in any such
labels, listings and files only in connection with the
Offer and the Merger and, if this Agreement shall be
terminated, will deliver to the Company all copies of such
information then in their possession.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.01 The Merger. (a) Subject to the terms
----------
and conditions of this Agreement, at the time of the
Closing (as defined in Section 2.11 hereof), a certificate
of merger (the "Certificate of Merger") shall be duly
prepared, executed and acknowledged by Purchaser and the
Company in accordance with Delaware General Corporation Law
and shall be filed on the Closing Date (as defined in
Section 2.11 hereof). The Merger shall become effective
upon the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance
with the provisions and requirements of the Delaware
General Corporation Law. The date and time when the Merger
shall become effective is hereinafter referred to as the
"Effective Time."
-6-
(b) At the Effective Time, Purchaser shall be
merged with and into the Company and the separate corporate
existence of Purchaser shall cease, and the Company shall
continue as the surviving corporation under the laws of the
State of Delaware under the name of "Clark Equipment
Company" (the "Surviving Corporation"). At Parent's
election, the Merger may alternatively be structured so
that (i) the Company is merged with and into Parent,
Purchaser or any other direct or indirect subsidiary of
Parent or (ii) any direct or indirect subsidiary of Parent
other than Purchaser is merged with and into the Company.
In the event of such an election, the parties agree to
execute an appropriate amendment to this Agreement in order
to reflect such election.
(c) From and after the Effective Time, the
Merger shall have the effects set forth in Section 259 of
the Delaware General Corporation Law.
2.02 Conversion of Stock. At the Effective
-------------------
Time:
(a) Each share of Common Stock then issued
and outstanding (other than (i) any shares of Common
Stock which are held by any subsidiary of the Company
or in the treasury of the Company, or which are held,
directly or indirectly, by Parent or any direct or
indirect subsidiary of Parent (including Purchaser),
all of which shall be cancelled and none of which
shall receive any payment with respect thereto and
(ii) shares of Common Stock held by Dissenting
Stockholders (as defined in Section 2.03 hereof))
shall, by virtue of the Merger and without any action
on the part of Purchaser, the Company or the holder
thereof, be cancelled, extinguished and converted into
and represent the right to receive an amount in cash,
without interest, equal to the price paid for each
share of Common Stock pursuant to the Offer (the
"Merger Consideration") payable to the holder thereof
less any required withholding taxes; and
(b) Except as otherwise provided in the next
succeeding sentence, each share of common stock, par
value $.01 per share, of Purchaser then issued and
outstanding shall, by virtue of the Merger and without
-7-
any action on the part of the holder thereof, become
one validly issued, fully paid and nonassessable share
of common stock, $.01 par value, of the Surviving
Corporation.
2.03 Dissenting Stock. Notwithstanding
----------------
anything in this Agreement to the contrary but only to the
extent required by Delaware General Corporation Law, shares
of Common Stock that are issued and outstanding immediately
prior to the Effective Time and are held by holders of
Common Stock who comply with all the provisions of Delaware
law concerning the right of holders of Common Stock to
dissent from the Merger and require appraisal of their
shares of Common Stock ("Dissenting Stockholders") shall
not be converted into the right to receive the Merger
Consideration but shall be entitled to receive such
consideration as may be determined to be due such Dis-
senting Stockholder pursuant to the law of the State of
Delaware; provided, however, that (i) if any Dissenting
-------- -------
Stockholder shall subsequently deliver a written withdrawal
of his or her demand for appraisal (with the written
approval of the Surviving Corporation, if such withdrawal
is not tendered within 60 days after the Effective Time),
or (ii) if any Dissenting Stockholder fails to establish
and perfect his or her entitlement to appraisal rights as
provided by applicable law, or (iii) if within 120 days of
the Effective Time neither any Dissenting Stockholder nor
the Surviving Corporation has filed a petition demanding a
determination of the value of all shares of Common Stock
outstanding at the Effective Time and held by Dissenting
Stockholders in accordance with applicable law, then such
Dissenting Stockholder or Stockholders, as the case may be,
shall forfeit the right to appraisal of such shares and
such shares shall thereupon be deemed to have been
converted into the right to receive, as of the Effective
Time, the Merger Consideration, without interest. The Com-
pany shall give Parent and Purchaser (A) prompt notice of
any written demands for appraisal, withdrawals of demands
for appraisal and any other related instruments received by
the Company, and (B) the opportunity to direct all negoti-
ations and proceedings with respect to demands for apprais-
al. The Company will not, except with the prior written
consent of Parent, voluntarily make any payment with
respect to any demands for appraisal or settle or offer to
settle any demand.
-8-
2.04 Surrender of Certificates.
-------------------------
(a) Concurrently with or prior to the Effective Time,
Parent shall designate a bank or trust company located in
the United States to act as paying agent (the "Paying
Agent") for purposes of making the cash payments con-
templated hereby. As soon as practicable after the
Effective Time, Parent shall cause the Paying Agent to mail
and/or make available to each holder of a certificate
theretofore evidencing shares of Common Stock (other than
those which are held by any subsidiary of the Company or in
the treasury of the Company or which are held directly or
indirectly by Parent or any direct or indirect subsidiary
of Parent (including Purchaser)) a notice and letter of
transmittal advising such holder of the effectiveness of
the Merger and the procedure for surrendering to the Paying
Agent such certificate or certificates which immediately
prior to the Effective Time represented outstanding Common
Stock (the "Certificates") in exchange for the Merger
Consideration deliverable in respect thereof pursuant to
this Article II. Upon the surrender for cancellation to
the Paying Agent of such Certificates, together with a
letter of transmittal, duly executed and completed in
accordance with the instructions thereon, and any other
items specified by the letter of transmittal, the Paying
Agent shall promptly pay to the Person entitled thereto the
Merger Consideration deliverable in respect thereof. Until
so surrendered, each Certificate shall be deemed, for all
corporate purposes, to evidence only the right to receive
upon such surrender the Merger Consideration deliverable in
respect thereof to which such Person is entitled pursuant
to this Article II. No interest shall be paid or accrued
in respect of such cash payments.
(b) If the Merger Consideration (or any
portion thereof) is to be delivered to a Person other than
the Person in whose name the Certificates surrendered in
exchange therefor are registered, it shall be a condition
to the payment of the Merger Consideration that the
Certificates so surrendered shall be properly endorsed or
accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be
proper and that the Person requesting such transfer pay to
the Paying Agent any transfer or other taxes payable by
reason of the foregoing or establish to the satisfaction of
the Paying Agent that such taxes have been paid or are not
-9-
required to be paid.
(c) In the event any Certificate shall have
been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed, the Paying
Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration deliverable
in respect thereof as determined in accordance with this
Article II, provided that, the Person to whom the Merger
--------
Consideration is paid shall, as a condition precedent to
the payment thereof, give the Surviving Corporation a bond
in such sum as it may direct or otherwise indemnify the
Surviving Corporation in a manner satisfactory to it
against any claim that may be made against the Surviving
Corporation with respect to the Certificate claimed to have
been lost, stolen or destroyed.
2.05 Payment. Concurrently with or
-------
immediately prior to the Effective Time, Parent or
Purchaser shall deposit in trust with the Paying Agent cash
in United States dollars in an aggregate amount equal to
the product of (i) the number of shares of Common Stock
outstanding immediately prior to the Effective Time (other
than shares of Common Stock which are held by any sub-
sidiary of the Company or in the treasury of the Company or
which are held directly or indirectly by Parent or any
direct or indirect subsidiary of Parent (including
Purchaser) or a Person known at the time of such deposit to
be a Dissenting Stockholder) and (ii) the Merger Considera-
tion (such amount being hereinafter referred to as the
"Payment Fund"). The Payment Fund shall be invested by the
Paying Agent as directed by Parent in direct obligations of
the United States, obligations for which the full faith and
credit of the United States is pledged to provide for the
payment of principal and interest, commercial paper rated
of the highest quality by Moody's Investors Services, Inc.
or Standard & Poor's Ratings Group or certificates of
deposit, bank repurchase agreements or bankers' acceptances
of a commercial bank having at least $100,000,000 in assets
(collectively, "Permitted Investments") or in money market
funds which are invested in Permitted Investments, and any
net earnings with respect thereto shall be paid to Parent
as and when requested by Parent. The Paying Agent shall,
pursuant to irrevocable instructions, make the payments re-
-10-
ferred to in Section 2.02(a) hereof out of the Payment
Fund. The Payment Fund shall not be used for any other
purpose except as otherwise agreed to by Parent. Promptly
following the date which is three months after the
Effective Time, the Paying Agent shall return to Parent all
cash, certificates and other instruments in its possession
that constitute any portion of the Payment Fund (other than
net earnings on the Payment Fund which shall be paid to
Parent), and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such
Certificate to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws)
receive in exchange therefor the Merger Consideration,
without interest, but shall have no greater rights against
the Surviving Corporation or Purchaser than may be accorded
to general creditors of the Surviving Corporation or
Purchaser under applicable law. Notwithstanding the
foregoing, neither the Paying Agent nor any party hereto
shall be liable to a holder of a Certificate for any Merger
Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
2.06 No Further Rights of Transfers. At and
------------------------------
after the Effective Time, each holder of a Certificate
shall cease to have any rights as a stockholder of the
Company, except for, in the case of a holder of a
Certificate (other than shares to be cancelled pursuant to
Section 2.02(a) hereof and other than shares held by
Dissenting Stockholders), the right to surrender his or her
Certificate in exchange for payment of the Merger
Consideration or, in the case of a Dissenting Stockholder,
to perfect his or her right to receive payment for his or
her shares pursuant to Delaware law if such holder has
validly perfected and not withdrawn his or her right to
receive payment for his or her shares, and no transfer of
shares of Common Stock shall be made on the stock transfer
books of the Surviving Corporation. Certificates presented
to the Surviving Corporation after the Effective Time shall
be cancelled and exchanged for cash as provided in this
Article II. At the close of business on the day of the
Effective Time the stock ledger of the Company with respect
to Common Stock shall be closed.
2.07 Stock Option and Other Plans.
----------------------------
(a) Prior to the Effective Time, the Board of Directors of
-11-
the Company (or, if appropriate, any Committee thereof)
shall adopt appropriate resolutions and take all other
actions necessary to provide for the cancellation, effec-
tive at the Effective Time, of all the outstanding stock
options, stock appreciation rights, limited stock apprecia-
tion rights and performance units (the "Options")
heretofore granted under any stock option, performance unit
or similar plan of the Company (the "Stock Plans").
Immediately prior to the Effective Time, (i) each Option,
whether or not then vested or exercisable, shall no longer
be exercisable but shall entitle each holder thereof, in
cancellation and settlement therefor, to payments in cash
(subject to any applicable withholding taxes, the "Cash
Payment"), at the Effective Time, equal to the product of
(x) the total number of shares of Common Stock subject or
related to such Option, whether or not then vested or exer-
cisable, and (y) the excess of the Merger Consideration
over the exercise price per share of Common Stock subject
or related to such Option, each such Cash Payment to be
paid to each holder of an outstanding Option at the
Effective Time; provided, however, that with respect to any
-------- -------
Person subject to Section 16 of the Exchange Act, any such
amount shall be paid as soon as practicable after the first
date payment can be made without liability to such Person
under Section 16(b) of the Exchange Act, and (ii) each
share of Common Stock previously issued in the form of
grants of restricted stock or grants of contingent shares
shall fully vest. As provided herein, the Stock Plans and
any other plan, program or arrangement (excluding the
Melroe Savings and Investment Plan and the Clark Equipment
Company Savings and Investment Plan (collectively, the
"Savings Plans"), and the Clark Equipment Company Leveraged
Employee Stock Ownership Plan ("the LESOP")) providing for
the issuance or grant of any other interest in respect of
the capital stock of the Company or any subsidiary
(collectively with the Stock Plans, referred to as the
"Stock Incentive Plans") shall terminate as of the Effec-
tive Time; provided, however, that on and after the
-------- -------
Effective Time, the Savings Plans and the LESOP shall not
be required to provide for any investment in the capital
stock of the Surviving Corporation or any subsidiary of the
Surviving Corporation. The Company will take all rea-
sonable steps to ensure that none of the Parent, the Com-
pany or any of their respective subsidiaries is or will be
bound by any Options, other options, warrants, rights or
-12-
agreements which would entitle any Person, other than
Parent or its affiliates, to own any capital stock of the
Surviving Corporation or any of its subsidiaries or to
receive any payment in respect thereof. The Company will
use its reasonable best efforts to obtain all necessary
consents to ensure that after the Effective Time, the only
rights of the holders of Options to purchase shares of
Common Stock in respect of such Options will be to receive
the Cash Payment in cancellation and settlement thereof.
(b) All Stock Plans shall terminate as of
the Effective Time and the Company shall ensure that
following the Effective Time no holder of an Option or any
participant in any Stock Plans shall have any right
thereunder to acquire any capital stock of the Company,
Parent or the Surviving Corporation, except as provided in
the proviso to clause (i) of Section 2.07(a).
2.08 Certificate of Incorporation of the
-----------------------------------
Surviving Corporation. The Certificate of Incorporation of
---------------------
the Company, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation
of the Surviving Corporation until amended in accordance
with applicable law.
2.09 By-Laws of the Surviving Corporation.
------------------------------------
The By-Laws of the Company, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the
Surviving Corporation until amended in accordance with
applicable law.
2.10 Directors and Officers of the Surviving
---------------------------------------
Corporation. At the Effective Time, the directors of
-----------
Purchaser immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation, each of
such directors to hold office in accordance with the appli-
cable provisions of the Certificate of Incorporation and
By-Laws of the Surviving Corporation. At the Effective
Time, the officers of the Company immediately prior to the
Effective Time shall, subject to the applicable provisions
of the Certificate of Incorporation and By-Laws of the
Surviving Corporation, be the officers of the Surviving
Corporation until their respective successors shall be duly
elected or appointed and qualified.
-13-
2.11 Closing. The closing of the Merger (the
-------
"Closing") shall take place as soon as practicable after
the last of the conditions set forth in Article V hereof is
fulfilled or waived (subject to applicable law) at such
place as Parent and the Company shall mutually agree (the
"Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the
-------------------------------------
Company. The Company hereby represents and warrants to
-------
Parent and Purchaser as follows (provided, that from and
--------
after the consummation of the transactions contemplated by
the Stock Purchase Agreement, dated March 5, 1995, by and
among the Company, AB Volvo and Clark-Hurth Components
Marketing Company (the "VME Sale Agreement") the Company
shall be deemed not to make any representation or warranty
for the purpose of this Agreement with respect to its
interest in VME Group, N.V.):
(a) Due Organization, Good Standing and
-----------------------------------
Corporate Power. Each of the Company and its
---------------
subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation and each such
corporation has all requisite corporate power and
authority to own, lease and operate its properties and
to carry on its business as now being conducted except
where the failure to be so organized, existing and in
good standing or to have such power and authority
would not, individually or in the aggregate,
reasonably be expected to have a material adverse
effect on the business, assets, financial condition or
results of operations ("Condition") of the Company and
its subsidiaries taken as a whole; each of the Company
and its subsidiaries is duly qualified or licensed as
a foreign corporation to do business and is in good
standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or
license necessary, except where the failure to be so
qualified or licensed and in good standing would not
-14-
reasonably be expected to have a material adverse
effect on the Condition of the Company and its sub-
sidiaries taken as a whole. The Company has made
available to Parent and Purchaser complete and correct
copies of the Restated Certificate of Incorporation
and By-Laws of the Company and its subsidiaries, in
each case as amended to the date of this Agreement.
(b) Authorization and Validity of Agreement.
---------------------------------------
The Company has full corporate power and authority to
execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the
transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the
Company, and the consummation by it of the
transactions contemplated hereby, have been duly
authorized and approved by its Board of Directors and
no other corporate action on the part of the Company
is necessary to authorize the execution, delivery and
performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby
(other than, with respect to the Merger, the approval
of this Agreement by the holders of a majority of the
shares of Common Stock). This Agreement has been duly
executed and delivered by the Company and is a valid
and binding obligation of the Company.
(c) Capitalization. (i) The authorized
--------------
capital stock of the Company consists of 40,000,000
shares of Common Stock and 3,000,000 shares of
preferred stock, $1.00 par value (the "Preferred
Stock"). As of April 7, 1995, (1) 17,101,396 shares
of Common Stock were issued and outstanding, (2)
97,438 shares of Common Stock were reserved for
issuance pursuant to outstanding Options granted under
the Stock Incentive Plans, (3) no shares of Preferred
Stock were issued and outstanding and (4) 2,093,288
shares of Common Stock were held in the Company's
treasury. All issued and outstanding shares of Common
Stock have been validly issued and are fully paid and
nonassessable, and are not subject to, nor were they
issued in violation of, any preemptive rights. Except
as set forth in this Section 3.01(c)(i) or on Schedule
3.01(c)(i) of the Disclosure Schedule delivered by the
Company to Parent on or prior to the date hereof (the
-15-
"Disclosure Schedule"), (i) there are no shares of
capital stock of the Company authorized, issued or
outstanding and (ii) there are not as of the date
hereof, and at the Effective Time there will not be,
any outstanding or authorized options, warrants,
rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable
securities, or other commitments, contingent or other-
wise, relating to Common Stock or any other shares of
capital stock of the Company, pursuant to which the
Company is or may become obligated to issue shares of
Common Stock, any other shares of its capital stock or
any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of
the capital stock of the Company, and there are no
outstanding obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise
acquire any securities described in this sentence.
Since April 7, 1995, no options to purchase shares of
Company Common Stock have been granted and no shares
of Company Common Stock have been issued. Schedule
3.01(c)(i) sets forth the number of Options and shares
of restricted stock outstanding and, in the case of
the Options, the exercise price therefor. The Company
has no authorized or outstanding bonds, debentures,
notes or other indebtedness the holders of which have
the right to vote (or convertible or exchangeable into
or exercisable for securities having the right to
vote) with the stockholders of the Company or any of
its subsidiaries on any matter.
(ii) Set forth in Schedule 3.01(c)(ii) of the
Disclosure Schedule is a list of all of the Company's
significant subsidiaries (as such term is defined in
the Securities Exchange Act of 1934, as amended).
Except for VME Group N.V. and its subsidiaries, the
Company is, directly or indirectly, the record and/or
beneficial owner of all of the shares of capital stock
of each of the subsidiaries. Except as set forth on
Schedule 3.01(c)(ii), no securities of any of the sub-
sidiaries are or may become required to be issued,
transferred or sold for any reason and all of the out-
standing securities of each subsidiary are validly
issued, fully paid and nonassessable and are owned
free and clear of any claim, lien, encumbrance or
-16-
agreement with respect thereto. No entity in which
the Company owns, directly or indirectly, less than a
50% equity interest is, individually or when taken
together with all such other entities, material to the
business of the Company and its subsidiaries taken as
a whole.
(d) Consents and Approvals; No Violations.
-------------------------------------
Assuming (i) the filings required under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and Regulation (EEC) No.
4064/89 of the European Community, are made and the
waiting periods thereunder have been terminated or
have expired, (ii) the requirements of the Exchange
Act and any applicable state securities, "blue sky" or
takeover law are met, (iii) the filing of the Certifi-
cate of Merger and other appropriate merger documents,
if any, as required by Delaware General Corporation
Law, is made and (iv) approval of the Merger by a
majority of the holders of Common Stock, if required
by Delaware General Corporation Law, is received and
except as disclosed in Schedule 3.01(d) of the
Disclosure Schedule, the execution and delivery of
this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby
will not: (1) violate any provision of the
Certificate of Incorporation, as amended, or By-Laws
of the Company or any of its subsidiaries; (2) violate
any statute, ordinance, rule, regulation, order or
decree of any court or of any governmental or regula-
tory body, agency or authority applicable to the Com-
pany or any of its subsidiaries or by which any of
their respective properties or assets may be bound;
(3) require any filing with, or permit, consent or
approval of, or the giving of any notice to, any
governmental or regulatory body, agency or authority;
or (4) result in a violation or breach of, conflict
with, constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right
of termination, cancellation, payment or acceleration)
under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the
properties or assets of the Company or any of its sub-
sidiaries under, any of the terms, conditions or pro-
visions of any note, bond, mortgage, indenture,
-17-
license, franchise, permit, agreement, lease, fran-
chise agreement or other instrument or obligation to
which the Company or any of its subsidiaries is a
party, or by which it or any of their respective
properties or assets are bound, except for such
filings, permits, consents, approvals or violations
which would not reasonably be expected to have a
material adverse effect on the Condition of the Com-
pany and its subsidiaries, taken as a whole, or would
not individually or in the aggregate reasonably be
expected to prevent or materially delay consummation
of the transactions contemplated by this Agreement.
(e) Company Reports and Financial
-----------------------------
Statements. (i)Since January 1, 1993, the Company has
----------
filed all forms, reports and documents with the
Commission required to be filed by it pursuant to the
federal securities laws and the Commission rules and
regulations thereunder, and except as described in
Schedule 3.01(e) of the Disclosure Schedule, all
forms, reports and documents filed with the Commission
have complied in all material respects with all
applicable requirements of the federal securities laws
and the Commission rules and regulations promulgated
thereunder. The Company has, prior to the date of
this Agreement, made available to Parent true and
complete copies of all forms, reports, registration
statements and other filings filed by the Company with
the Commission since January 1, 1993 (such forms, re-
ports, registration statements and other filings,
together with any exhibits, any amendments thereto and
information incorporated by reference therein, are
sometimes collectively referred to as the "Commission
Filings"). Except as described in Schedule 3.01(e) of
the Disclosure Schedule, as of their respective dates,
the Commission Filings (including but not limited to
any financial statements or schedules included or
incorporated by reference therein) did not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading. Except as described in Schedule 3.01(e)
of the Disclosure Schedule, and except to the extent
revised or superseded by a subsequent filing with the
-18-
Commission, none of the Commission Filings filed by
the Company since December 31, 1994 (excluding any
filings in connection with the transactions
contemplated by this Agreement) and prior to the date
hereof contains any untrue statement of a material
fact or omits to state a material fact required to be
stated or incorporated by reference therein or
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading. Each of the consolidated
balance sheets as of the end of the fiscal years ended
December 31, 1994, 1993 and 1992 and the consolidated
statements of operations, consolidated statements of
stockholders' equity and consolidated statements of
changes in financial position for the fiscal years
ended December 31, 1994, 1993 and 1992 and included in
the Commission Filings and the consolidated pro forma
financial statements of the Company included in its
Current Report on Form 8-K filed with the Commission
as of March 13, 1995 (the "March 13 8-K") were
prepared in accordance with generally accepted
accounting principles (as in effect from time to time)
applied on a consistent basis (except as may be indi-
cated therein or in the notes or schedules thereto)
and fairly present the consolidated financial position
of the Company and its consolidated subsidiaries as of
the dates thereof and the results of their operations
and changes in financial position for the periods then
ended and on a pro forma basis for 1994 in the case of
the March 13 8-K.
(f) Absence of Other Liabilities. Except as
----------------------------
and to the extent set forth on the consolidated
balance sheet of the Company and its subsidiaries at
December 31, 1994, including the notes thereto, and
the pro forma consolidated balance sheet of the
Company and its subsidiaries at March 31, 1995,
including the notes thereto, neither the Company nor
any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute,
contingent or otherwise) which would be required to be
reflected on a balance sheet or in the notes thereto
prepared in accordance with generally accepted
accounting principles, except for liabilities or
obligations incurred in the ordinary course of
-19-
business since December 31, 1994 and as a result of
the acquisition of Club Car, Inc., which would not,
individually or in the aggregate, reasonably be
expected to have a material adverse effect on the
Condition of the Company and its subsidiaries taken as
a whole.
(g) Anticipated Filings. The Company has
-------------------
heretofore furnished to Parent a complete and correct
copy of any amendments or modifications which have not
yet been filed with the Commission to agreements
(including the Rights Agreement), documents or other
instruments which previously had been filed by the
Company with the Commission pursuant to the Securities
Act and the rules and regulations promulgated
thereunder or the Exchange Act and the rules and
regulations promulgated thereunder.
(h) Absence of Certain Changes. Except as
--------------------------
previously disclosed in the Commission Filings or as
otherwise disclosed in Schedule 3.01(h) of the
Disclosure Schedule or as otherwise contemplated by
this Agreement, since December 31, 1994 (i) there has
not been any material adverse change in the Condition
of the Company and its subsidiaries taken as a whole
(without regard, however, to changes in conditions
generally applicable to the industries in which the
Company and its subsidiaries are involved or general
economic conditions); (ii) the businesses of the Com-
pany and each of its subsidiaries have been conducted
only in the ordinary course and in a manner consistent
with past practice; (iii) neither the Company nor any
of its subsidiaries has incurred any material liabili-
ties (direct, contingent or otherwise) or engaged in
any material transaction or entered into any material
agreement outside the ordinary course of business;
(iv) neither the Company nor any of its subsidiaries
has taken any action referred to in Section 4.03
hereof except as permitted thereby; (v) there has not
been any damage, destruction or loss (whether or not
covered by insurance) with respect to any assets of
the Company or any of its subsidiaries which would
reasonably be expected to, individually or in the
aggregate, have a material adverse effect on the
Condition of the Company and its subsidiaries taken as
-20-
a whole, (vi) there has not been any revaluation by
the Company of any of its material assets, including
but not limited to writing down the value of inventory
or writing off notes or accounts receivable other than
in the ordinary course of business, (vii) there has
not been any entry by the Company or any of its
subsidiaries into any commitment or transactions
material to the Company and its subsidiaries taken as
a whole, except for the acquisition of Club Car, Inc.
and the sale of the Company's 50% interest in VME
Group N.V., (viii) there has not been any declaration,
setting aside or payment of any dividends or
distributions in respect of the Shares or any
redemption, purchase or other acquisition of any of
its securities, except for the repurchase of 305,000
Shares under a share repurchase plan announced by the
Company on February 3, 1995, (ix) there has not been
any issuance of any shares of capital stock of the
Company of any of its subsidiaries or any grant or
issuance of any options, calls, warrants, or other
rights, agreements, arrangements or commitments of any
kind or character relating to the issuance of capital
stock of the Company or any of its subsidiaries; (x)
there has not been any increase in 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 agreement
or arrangement, or any other increase in the
compensation payable or to become payable to any
present or former directors, officers or key employees
of the Company or any of its subsidiaries, except for
increases in base compensation in the ordinary course
of business consistent with past practice, or any
employment, consulting or severance agreement or
arrangement entered into with any such present or
former directors, officers or key employees; and (xi)
there has been no change by the Company in accounting
principles, practices or methods.
(i) Compliance with Laws. Except as
--------------------
disclosed in the Commission Filings, the Company and
its subsidiaries are in compliance with all applicable
-21-
laws, regulations, orders, judgments and decrees
except where the failure to so comply would not
reasonably be expected to have a material adverse
effect on the Condition of the Company and its
subsidiaries taken as a whole.
(j) Litigation. Except as disclosed in the
----------
Commission Filings, there is no action, suit,
proceeding at law or in equity, or any arbitration or
any administrative or other proceeding by or before
(or to the best knowledge of the Company any
investigation by) any governmental or other instrumen-
tality or agency, pending, or, to the best knowledge
of the Company, threatened, against or affecting the
Company or any of its subsidiaries, or any of their
properties or rights which would reasonably be
expected to have a material adverse effect on the
Condition of the Company and its subsidiaries taken as
a whole. Except as disclosed in the Commission Fil-
ings, neither the Company nor any of its subsidiaries
is subject to any judgment, order, award or decree
entered in any lawsuit or proceeding which has a
material adverse effect on the Condition of the
Company and its subsidiaries taken as a whole.
(k) Employee Benefit Plans. All "employee
----------------------
benefit plans" ("Employee Plans") 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 and its subsidiaries
are in compliance with the applicable provisions of
ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"), except for instances of non-
compliance that individually or in the aggregate would
not reasonably be expected to have a material adverse
effect on the Condition of the Company and its
subsidiaries taken as a whole.
(l) Taxes. The Company and each of its
-----
subsidiaries, and any consolidated, combined, unitary
or aggregate group for tax purposes of which the
Company or any of its subsidiaries is or has been a
member, has filed or caused to be filed, or will file
or cause to be filed on or prior to the Closing Date
(as defined in Section 2.11), all Tax returns and Tax
-22-
reports which are required to be filed by, or with
respect to, it on or prior to the Closing Date (taking
into account any extension of time to file granted to
or on behalf of the Company or any subsidiary)
(collectively, the "Returns"). Such Returns reflect
accurately all material liability for Taxes for the
periods covered thereby. All material Taxes payable
by, or due from, the Company or any of its
subsidiaries have been fully paid or adequately
disclosed and provided for on the financial statements
of the Company and its subsidiaries in accordance with
generally accepted accounting principles. Except as
set forth in Schedule 3.01(l) of the Disclosure
Schedule, all Taxes (as defined below) shown to be due
and payable on the Returns by or with respect to the
Company or any of its subsidiaries have been, or prior
to the Closing Date will be, paid. Except as dis-
closed on Schedule 3.01(l), (i) no material claim for
unpaid Taxes (x) to the best knowledge of the Company,
has become a lien or encumbrance of any kind against
the property of the Company or any of its subsidiaries
or (y) is being asserted against the Company or any of
its subsidiaries; (ii) no audit of any Return of the
Company or any of its subsidiaries is being conducted
by a Tax authority; and (iii) no extension of the
statute of limitations on the assessment of any Taxes
has been granted by the Company or any of its
subsidiaries and is currently in effect. As used
herein, "Taxes" shall mean any taxes of any kind,
including but not limited to those on or measured by
or referred to as income, gross receipts, capital,
sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance,
stamp, occupation, premium, value added, property or
windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties,
additions to tax or additional amounts imposed by any
governmental authority, domestic or foreign.
(m) Proxy Statement, Schedule 14D-9 and
-----------------------------------
Schedule 14D-1. The definitive proxy statement and
--------------
related materials, if required, to be furnished to the
holders of Common Stock in connection with the Merger
pursuant to Section 4.04 hereof (together with any
-23-
amendments or supplements thereto, the "Proxy
Statement") will comply as to form in all material
respects with the Exchange Act and the rules and
regulations thereunder. Notwithstanding the
foregoing, no representation or warranty is made with
respect to any information with respect to Parent or
Purchaser or its officers, directors or affiliates
provided to the Company by Parent or Purchaser in
writing for inclusion in the Proxy Statement. The
Proxy Statement will not, at the date such information
is supplied, at the time of the stockholders' meeting
referred to in Section 4.05 hereof and at the Effec-
tive Time, contain any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstance under
which they are made, not misleading or necessary to
correct any statement in any earlier communication
with respect to the solicitation of proxies for such
stockholders' meeting which has become false or
misleading. None of the information in the Schedule
14D-9 or supplied by the Company in writing for
inclusion in the Offer Documents or any amendment or
supplement to any thereof, at the respective times the
Schedule 14D-9 or such amendment or supplement is
filed with the Commission, will contain any untrue
statement of a material fact or omit to state a
material fact necessary in order to make the
statements made, in light of the circumstances under
which they are made, not misleading. Notwithstanding
the foregoing, no representation or warranty is made
with respect to any information with respect to Parent
or Purchaser or its officers, directors or affiliates
provided to the Company by Parent or Purchaser in
writing for inclusion in the Schedule 14D-9. The
Schedule 14D-9 will comply as to form in all material
respects with the Exchange Act and the rules and
regulations thereunder.
(n) Broker's or Finder's Fee. Except for
------------------------
First Boston (whose fees and expenses will be paid by
the Company in accordance with the Company's agreement
with such firm, a true and correct copy of which has
been previously delivered to Parent by the Company),
no agent, broker, Person or firm acting on behalf of
-24-
the Company is, or will be, entitled to any fee,
commission or broker's or finder's fees from any of
the parties hereto, or from any Person controlling,
controlled by, or under common control with any of the
parties hereto, in connection with this Agreement or
any of the transactions contemplated hereby.
(o) Environmental Laws and Regulations.
----------------------------------
Except as disclosed in the Commission Filings or in
Schedule 3.01(o) of the Disclosure Schedule, the
Company and its subsidiaries are in material
compliance with all applicable federal and state laws
and regulations, as in effect on the date hereof,
relating to the protection of the environment (collec-
tively, "Environmental Laws"), except for violations,
of Environmental Laws that, individually or in the
aggregate, would not reasonably be expected to have a
material adverse effect on the Condition of the
Company and its subsidiaries, taken as a whole.
(p) State Takeover Statutes and
---------------------------
Supermajority Voting Provisions. The Board of
-------------------------------
Directors of the Company has approved the Offer, the
Merger and this Agreement and such approval is
sufficient to render inapplicable to the Offer, the
Merger, this Agreement and the other transactions
contemplated by this Agreement, the provisions of
Section 203 of the Delaware General Corporation Law
and of the supermajority stockholder voting
requirements of paragraph (6) of Article SIXTH of the
Company's Certificate of Incorporation.
(q) Rights Agreement. The Company and the
----------------
Board of Directors of the Company have taken all
necessary action so that none of the execution of this
Agreement, the making of the Offer, the acquisition of
shares of Common Stock pursuant to the Offer or the
consummation of the Merger will (i) cause any Rights
issued pursuant to the Rights Agreement to become
exercisable, (ii) cause Parent, Purchaser or any of
their Affiliates (as defined in the Rights Agreement)
or Associates (as defined in the Rights Agreement) to
be an Acquiring Person (as defined in the Rights
Agreement) or (iii) give rise to a Distribution Date
or a Triggering Event (as each such term is defined in
-25-
the Rights Agreement). The Company has delivered to
Parent a complete and correct copy of the Rights
Agreement as amended and supplemented to the date of
this Agreement.
3.02 Representations and Warranties of Parent
----------------------------------------
and Purchaser. Each of Parent and Purchaser represents and
-------------
warrants to the Company as follows:
(a) Due Organization; Good Standing and
-----------------------------------
Corporate Power. Parent is a corporation duly
---------------
organized, validly existing and in good standing under
the laws of the State of New Jersey and has all
requisite corporate power and authority to own, lease
and operate its properties and to carry on its
business as now being conducted except where the
failure to be so organized, existing and in good
standing or to have such power or authority, would
not, individually or in the aggregate, reasonably be
expected to prevent or materially delay consummation
of the transactions contemplated by this Agreement.
Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware and has all requisite corporate
power and authority to own, lease and operate its
properties and to carry on its business as now being
conducted except where the failure to be so organized,
existing and in good standing or to have such power or
authority would not, individually or in the aggregate,
reasonably be expected to prevent or materially delay
consummation of the transactions contemplated by this
Agreement.
(b) Authorization and Validity of Agreement.
---------------------------------------
Each of Parent and Purchaser has full corporate power
and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Parent
and Purchaser, and the consummation by each of them of
the transactions contemplated hereby, have been duly
authorized and approved by the respective Boards of
Directors of Parent and Purchaser. No other corporate
action on the part of either of Parent or Purchaser is
necessary to authorize the execution, delivery and
-26-
performance of this Agreement by each of Parent and
Purchaser and the consummation of the transactions
contemplated hereby (other than, with respect to the
Merger, the approval of this Agreement by the sole
stockholder of Purchaser, if required by Delaware
General Corporation Law). This Agreement has been
duly executed and delivered by each of Parent and
Purchaser and is a valid and binding obligation of
each of Parent and Purchaser.
(c) Consents and Approvals; No Violations.
-------------------------------------
Assuming (i) the filings required under the HSR Act
and Regulation (EEC) No. 4064/89 of the European
Community, are made and the waiting periods thereunder
have been terminated or have expired, (ii) the
requirements of the Exchange Act and any applicable
state securities, "blue sky" or takeover law are met,
(iii) the filing of the Certificate of Merger and
other appropriate merger documents, if any, as re-
quired by Delaware General Corporation Law is made and
(iv) approval of this Agreement by the sole stock-
holder of Purchaser if required by Delaware General
Corporation Law, the execution and delivery of this
Agreement by Parent and Purchaser and the consummation
by Parent and Purchaser of the transactions con-
templated hereby will not: (1) violate any provision
of the Certificate of Incorporation or By-Laws of
Parent or Purchaser; (2) violate any statute, ordin-
ance, rule, regulation, order or decree of any court
or of any governmental or regulatory body, agency or
authority applicable to Parent or Purchaser or by
which either of their respective properties or assets
may be bound; (3) require any filing with, or permit,
consent or approval of, or the giving of any notice
to, any governmental or regulatory body, agency or
authority; or (4) result in a violation or breach of,
conflict with, constitute (with or without due notice
or lapse of time or both) a default (or give rise to
any right of termination, cancellation, or
acceleration) under, or result in the creation of any
lien, security interest, charge or encumbrance upon
any of the properties or assets of the Parent,
Purchaser or any of their subsidiaries under, any of
the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, franchise, permit,
-27-
agreement, lease, or other instrument or obligation to
which Parent or Purchaser or any of their subsidiaries
is a party, or by which they or their respective
properties or assets are bound except for such
filings, permits, consents, approvals or violations,
which would not, individually or in the aggregate,
reasonably be expected to prevent or materially delay
consummation of the transactions contemplated by this
Agreement.
(d) Offer Documents, Schedule 14D-9 and
-----------------------------------
Proxy Statement. The Offer Documents will comply as
---------------
to form in all material respects with the Exchange Act
and the rules and regulations thereunder. The Offer
Documents, will not, at the time such Offer Documents
are filed with the Commission or are first published,
sent or given to the Company's stockholders, as the
case may be, contain any untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not mislead-
ing or necessary to correct any statement in any
earlier Offer Documents which has become false or
misleading. If at any time prior to the expiration or
termination of the Offer any event occurs which should
be described in an amendment or supplement to the
Schedule 14D-1 or any amendment or supplement thereto,
Purchaser will file and disseminate, as required, an
amendment or supplement which complies in all material
respects with the Exchange Act and the rules and
regulations thereunder and any other applicable laws.
None of the information in the Offer Documents or
supplied or to be supplied by Parent and/or Purchaser
in writing for inclusion in the Proxy Statement and/or
the Schedule 14D-9 of the Company or any amendment or
supplement to any thereof, at the respective times the
Offer Documents or the Schedule 14D-9, such amendment
or supplement, is filed with the Commission or, with
respect to the Proxy Statement, at the time such Proxy
Statement is first mailed to stockholders, at the time
of the Company's stockholders' meeting or at the
Effective Time, will contain any untrue statement of a
material fact or omit to state a material fact neces-
sary in order to make the statements made, in light of
-28-
the circumstances under which they are made, not mis-
leading. Notwithstanding the foregoing, no represent-
ation or warranty is made with respect to any informa-
tion with respect to the Company or its officers,
directors and affiliates provided to Parent or
Purchaser by the Company in writing for inclusion in
the Offer Documents.
(e) Broker's or Finder's Fee. Except for
------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated
(whose fees and expenses as financial advisor to
Parent and Purchaser will be paid by Parent or
Purchaser in accordance with the Parent's agreement
with such firm), no agent, broker, Person or firm
acting on behalf of Parent or Purchaser is, or will
be, entitled to any fee, commission or broker's or
finder's fees from any of the parties hereto, or from
any Person controlling, controlled by, or under common
control with any of the parties hereto, in connection
with this Agreement or any of the transactions
contemplated hereby.
(f) Financing. Parent has a commitment to
---------
provide the financing for, and shall provide Purchaser
with, the funds necessary to consummate the Offer and
the Merger and the transactions contemplated thereby
in accordance with the terms hereof and thereof.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING DATE
4.01 Access to Information Concerning Prop-
--------------------------------------
erties and Records. During the period commencing on the
------------------
date hereof and ending on the Closing Date, the Company
shall, and shall cause each of its subsidiaries and other
agents to, upon reasonable notice, afford Parent and
Purchaser, and their respective counsel, accountants,
consultants and other authorized representatives who agree
to be bound by the Parent Confidentiality Agreement
(defined below), reasonable access during normal business
hours (to the extent feasible without undue interference
with or disruption to the operation of the Company, or any
of its business units) to the employees, properties,
-29-
offices, plants and other facilities and to all books and
records of the Company and its subsidiaries in order that
they may have the opportunity to make such investigations
as they shall desire of the affairs of the Company and its
subsidiaries. The Company shall furnish promptly to Parent
and Purchaser (a) a copy of each report, schedule,
registration statement and other document filed by it or
its subsidiaries during such period pursuant to the
requirements of Federal or state securities laws and (b)
all other information concerning its or its subsidiaries'
business, properties and personnel as Parent and Purchaser
may reasonably request. The Company agrees to cause its
officers and employees to furnish such additional financial
and operating data and other information and respond to
such inquiries as Parent and Purchaser shall from time to
time reasonably request.
4.02 Confidentiality. Information obtained
---------------
by Parent and Purchaser pursuant to Section 4.01 hereof
shall be subject to the provisions of the Confidentiality
Agreement between the Company and Parent dated April 9,
1995 (the "Parent Confidentiality Agreement").
4.03 Conduct of the Business of the Company
--------------------------------------
Pending the Closing Date. The Company agrees that, except
------------------------
as permitted, required or specifically contemplated by, or
otherwise described in, this Agreement or otherwise
consented to or approved in writing by Parent, during the
period commencing on the date hereof and ending on the
Closing Date:
(a) The Company and each of its subsidiaries
will conduct their respective operations only
according to their ordinary and usual course of
business consistent with past practice and, except for
actions taken in the ordinary course of business, will
use their reasonable best efforts to preserve intact
their respective business organization, keep available
the services of their officers and employees and
maintain satisfactory relationships with licensors,
suppliers, distributors, clients and others having
business relationships with them;
(b) Neither the Company nor any of its
subsidiaries (other than VME Group, N.V.) shall (i)
-30-
make any change in or amendment to its Certificate of
Incorporation or By-Laws (or comparable governing
documents); (ii) issue or sell any shares of its
capital stock (other than in connection with the
exercise of Options outstanding on the date hereof) or
any of its other securities (including but not limited
to stock appreciation rights or phantom stock), or
issue any securities convertible into, or options,
warrants or rights to purchase or subscribe to, or
enter into any arrangement or contract with respect to
the issuance or sale of, any shares of its capital
stock or any of its other securities, or make any
other changes in its capital structure; (iii) sell or
pledge or agree to sell or pledge any stock owned by
it in any of its subsidiaries; (iv) declare, pay, set
aside or make any dividend or other distribution or
payment with respect to, or split, combine, redeem or
reclassify, purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock; (v) other
than in the ordinary course of business consistent
with past practice, transfer, lease, license,
guarantee, sell, mortgage, pledge, dispose of,
encumber or subject to any lien, any material assets
or incur or modify any indebtedness other than any
indebtedness incurred in connection with the
acquisition of Club Car, Inc. or other liability or
issue any debt securities or assume, guarantee or
endorse or otherwise as an accommodation become
responsible for the obligations of any person; (vi)
make any tax election or settle or compromise any
material tax liability; (vii) except as may be
required as a result of a change in law or in
generally accepted accounting principles, make any
material change in its method of accounting; (viii)
(A) acquire (by merger, consolidation or acquisition
of stock or assets) any corporation, partnership or
other business organization or division thereof; (B)
enter into any contract or agreement other than in the
ordinary course of business consistent with past
practice that would be material to the Company and its
subsidiaries taken as a whole; (C) to the extent not
included in the Company's capital budget for 1995
previously approved by the Company's Board of
Directors, for 150 days after the date of this
Agreement, authorize any single capital expenditure in
-31-
excess of $1.5 million or capital expenditures of $10
million in the aggregate; or (D) enter into or
materially amend any contract, agreement, commitment
or arrangement with respect to any of the matters set
forth in this Section 4.03(b)(viii); (ix) except to
the extent required under existing employee and
director benefit plans, agreements or arrangements as
in effect on the date of this Agreement, increase the
compensation or fringe benefits of any of its
directors, officers or employees, except for increases
in salary or wages of employees of the Company or its
subsidiaries who are not officers of the Company in
the ordinary course of business in accordance with
past practice, or grant any severance or termination
pay not currently required to be paid under existing
severance plans or enter into any employment, con-
sulting or severance agreement or arrangement with any
present or former director, officer or other employee
of the Company or any of its subsidiaries (other than
employment contracts with the individuals listed on
Schedule 4.03(b)(ix) of the Disclosure Schedule), or
establish, adopt, enter into or amend or terminate 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 directors, officers or employees; (x) adopt a plan
of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization
or other reorganization of the Company or any of its
subsidiaries not constituting an inactive subsidiary
(other than the Merger); (xi) pay, discharge or
satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent
or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected
or reserved against in the financial statements of the
Company or incurred in the ordinary course of business
and consistent with past practice; or (xii) agree, in
writing or otherwise, to take any of the foregoing
actions. Notwithstanding anything contained in this
Agreement to the contrary, the Company shall be
permitted in anticipation of, or otherwise with
-32-
respect to, a change in control of the Company, as de-
fined in the agreement between Leo J. McKernan and the
Company, dated November 12, 1992 (a "Change in
Control"), to fully fund, through the Clark Equipment
Company Supplemental Executive Retirement Trust and/or
the Clark Equipment Company Deferred Benefit Trust,
(collectively, "the Rabbi Trusts"), all amounts
payable, or which may become payable, to employees of
the Company and its subsidiaries upon a Change in
Control (including additional amounts (up to a maximum
of $23 million) required to be paid to such employees
to gross up such payments for any income or other
taxes incurred with respect thereto); provided,
--------
however, in no event shall such additional amounts be
-------
contributed to either of such Rabbi Trusts until the
Company has obtained the consents referred to in
Section 4.10(f) hereof from all participants (other
than retired participants) of the Clark Equipment
Company Supplemental Retirement Income Plan for
Certain Executives; and
(c) The Company shall not, and shall not
permit any of its subsidiaries other than VME Group,
N.V. to, (i) take any action, engage in any
transaction or enter into any agreement which would
cause any of the representations or warranties set
forth in Section 3.01 hereof to be untrue as of the
Closing Date, or (ii) purchase or acquire, or offer to
purchase or acquire, any shares of capital stock of
the Company.
4.04 Proxy Statement. If stockholder
---------------
approval of the Merger is required by law, as promptly as
practicable after the consummation of the Offer, the
Company will prepare and file a preliminary Proxy Statement
with the Commission and will use its reasonable best
efforts to have it cleared by the Commission. Parent,
Purchaser and the Company will cooperate with each other in
the preparation of the Proxy Statement; without limiting
the generality of the foregoing, each of Parent and
Purchaser will furnish to the Company the information
relating to it required by the Exchange Act to be set forth
in the Proxy Statement. The Company, Parent and Purchaser
each agree to use its reasonable best efforts, after
consultation with the other parties hereto, to respond
-33-
promptly to any comments made by the Commission with
respect to the Proxy Statement and any preliminary version
thereof filed by it and cause such Proxy Statement to be
mailed to the Company's stockholders at the earliest
practicable time.
4.05 Stockholder Approval. (a) Promptly
--------------------
after the consummation of the Offer, if required by
Delaware General Corporation Law in order to consummate the
Merger, the Company, acting through its Board of Directors,
shall, in accordance with applicable law and the Company's
Restated Certificate of Incorporation and By-laws duly
call, give notice of and convene a meeting of the holders
of Common Stock for the purpose of voting upon this
Agreement and the Merger and the Company agrees that this
Agreement and the Merger shall be submitted at such
meeting. The Company shall use its reasonable best efforts
to solicit from its stockholders proxies and, subject
always to the fiduciary obligations of the Company's
directors under applicable law, shall take all other action
necessary and advisable, to secure the vote of stockholders
required by applicable law to obtain the approval for this
Agreement and the Merger. Subject always to the fiduciary
obligations of the Company's directors under applicable
law, the Company agrees that it will include in the Proxy
Statement the recommendation of its Board of Directors that
holders of Common Stock approve and adopt this Agreement
and approve the Merger. Parent and Purchaser will cause
all shares of Common Stock owned by them and their sub-
sidiaries to be voted in favor of the approval and adoption
of this Agreement and the Merger.
(b) Notwithstanding the foregoing, in the
event that Purchaser shall acquire at least 90% of the
outstanding Company Common Stock, the Company agrees, at
the request of Purchaser, subject to Article V, to take all
necessary and appropriate action to cause the Merger to
become effective as soon as reasonably practicable after
such acquisition, without a meeting of the Company's
stockholders, in accordance with Section 253 of the
Delaware General Corporation Law.
4.06 Reasonable Best Efforts. Subject to the
-----------------------
terms and conditions provided herein, each of the Company,
Parent and Purchaser shall, and the Company shall cause
-34-
each of its subsidiaries to, cooperate and use their
respective reasonable best efforts to take, or cause to be
taken, all appropriate action, and to make, or cause to be
made, all filings necessary, proper or advisable under
applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement,
including but not limited to cooperation in the preparation
and filing of the Offer Documents, the Schedule 14D-9, the
Proxy Statement, any required filings under the HSR Act,
Regulation (EEC) No. 4064/89 of the European Community or
other foreign filings and any amendments to any thereof,
and including, without limitation, their respective
reasonable best efforts to obtain, prior to the Closing
Date, all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental
authorities and parties to contracts with the Company and
its subsidiaries as are necessary for consummation of the
transactions contemplated by this Agreement and to fulfill
the conditions to the Offer and the Merger. In case at any
time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party
to this Agreement shall use their reasonable best efforts
to take all such necessary action.
4.07 Guarantee of Performance. Parent hereby
------------------------
guarantees the performance by Purchaser of its obligations
under this Agreement and the obligations of the Surviving
Corporation pursuant to Sections 4.10 and 4.11 hereof.
4.08 Notification of Certain Matters. The
-------------------------------
Company shall give prompt notice to Parent and Purchaser,
and Parent and Purchaser shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any
event the occurrence, or non-occurrence, of which would be
reasonably likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in
any material respect and (ii) any failure of the Company,
Parent or Purchaser, as the case may be, to comply with or
satisfy any covenants, condition or agreement to be
complied with or satisfied by it hereunder or, in the case
of Parent and Purchaser, under the financing arrangements
with respect to the Offer and the Merger. Each of the
Company, Parent and Purchaser shall give prompt notice to
the other parties of any notice or other communication from
-35-
any third party alleging that the consent of such third
party is or may be required in connection with the
transactions contemplated by this Agreement.
4.09 HSR Act. The Company shall, no later
-------
than the close of business on April 13, 1995, file a
Notification and Report Form under the HSR Act with the
Federal Trade Commission (the "FTC") and the Antitrust
Division of the Department of Justice (the "Antitrust
Division"). The Company and Parent shall use their
reasonable best efforts to respond as promptly as
practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or
documentation.
4.10 Employee Benefits. (a) Parent agrees
-----------------
that, during the period commencing at the Effective Time
and ending on December 31, 1996, the employees of the
Company and its subsidiaries (other than those employees
covered by a collective bargaining agreement) will continue
to be provided with employee benefit plans which in the
aggregate are substantially comparable to those currently
provided by the Company and its subsidiaries to such em-
ployees (other than plans involving or related to the
securities of the Company except the Savings Plans (as in
effect on April 3, 1995 and disregarding the effect of the
transactions contemplated herein on such plans)).
Employees covered by collective bargaining agreements shall
be provided with such benefits as shall be required under
the terms of any applicable collective bargaining
agreement.
(b) Parent hereby unconditionally agrees to
cause the Surviving Corporation to honor and continue to
perform, without modification, all benefit obligations
(including, without limitation, benefits payable (i)
pursuant to the Clark Equipment Company Supplemental
Executive Retirement Plan and the Clark Equipment Company
Supplemental Retirement Income Plan for Certain Executives,
(ii) pursuant to the Company's Directors Retirement Plan
and the health care plan set forth in Schedule 4.10(b)(ii)
of the Disclosure Schedule and (iii) to employees who shall
have retired from the Company and its subsidiaries before
the Effective Time), contracts and agreements (including,
but not limited to, employment, consulting and severance
-36-
obligations, contracts and agreements, but excluding any
Stock Plans) of the Company or any of its subsidiaries
authorized by the Company or any of its subsidiaries on or
prior to the date of this Agreement which apply to any cur-
rent or former employee or current or former director of
the Company or any of its subsidiaries. Parent agrees for
itself and its subsidiaries that after the Effective Time
the Surviving Corporation or its subsidiaries will pay all
amounts provided under all contracts and agreements of the
Company and its subsidiaries and all benefit obligations of
the Company and its subsidiaries, including, without
limitation, the change in control agreements entered into
between the Company and its subsidiaries and their officers
(the "Change in Control Agreements") (or honor the
provisions of the Change in Control Agreements in the case
where no payment by the Surviving Corporation or its
subsidiaries is required) conditioned on a change in
control of the Company, in accordance with the terms of
such Change in Control Agreements (or will cause any
related trusts to make such payments in the case of funded
plans). A true and complete list of such benefit
obligations, contracts and agreements containing "change in
control" provisions is attached as Schedule 4.10(b) of the
Disclosure Schedule. Notwithstanding anything in this
Section 4.10 to the contrary, nothing herein shall prevent
Parent or the Surviving Corporation from terminating the
employment of any person.
(c) For purposes of all employee benefit
plans, programs and arrangements maintained by or
contributed to by Parent and its subsidiaries (including,
without limitation, the Surviving Corporation), Parent
shall, or shall cause its subsidiaries to, cause each such
plan, program or arrangement to treat the prior service
with the Company and its subsidiaries of each person who is
an employee of the Company or its subsidiaries immediately
prior to the Effective Time (a "Clark Employee") (to the
same extent such service is recognized under analogous
plans, programs or arrangements of the Company or its
subsidiaries prior to the Effective Time) as service
rendered to Parent or its subsidiaries, as the case may be,
for purposes of eligibility to participate and for all
benefits and vesting thereunder; provided, however, that
-------- -------
any benefits provided under the Parent Plans (as defined
below) shall be reduced by benefits in respect of the same
-37-
years of service under analogous plans, programs and
arrangements maintained by or contributed to by the
Company, the Surviving Corporation or their subsidiaries.
(d) Each Clark Employee who becomes an
employee of Parent or any of its subsidiaries (other than
the Surviving Corporation and its subsidiaries) following
the Effective Time (each a "Continued Employee") shall be
entitled, as an employee of Parent or of any of its
subsidiaries (other than the Surviving Corporation and its
subsidiaries), to participate in whatever employee benefit
plans, as defined in Section 3(3) of ERISA, or whatever
nonqualified employee benefit or deferred compensation
plans, stock option, bonus or incentive plans or other
employee benefit or fringe benefit programs, that may be in
effect generally for employees of Parent or its
subsidiaries from time to time ("Parent Plans") if such
Continued Employee shall be eligible for participation
therein and otherwise shall not be participating in a
similar plan which continues to be maintained by the
Surviving Corporation and its subsidiaries. Parent or
Parent's subsidiaries shall cause their respective tax-
qualified defined benefit pension plans in which any
Continued Employee will become a participant on or after
the Effective Time to be amended to recognize, for purposes
of vesting, eligibility and benefit accrual thereunder,
each Clark Employee's compensation and term of service with
the Company and its subsidiaries to the same extent
recognized under analogous plans of the Company and its
subsidiaries prior to the Effective Time; provided,
--------
however, that any benefits under such plans shall be
-------
reduced by benefits in respect of the same years of service
under analogous plans, programs and arrangements maintained
by or contributed to by the Company, the Surviving
Corporation or their subsidiaries. Subject to the
provisions hereof, Continued Employees will be eligible to
participate on the same basis as similarly situated
employees of Parent or its subsidiaries. All such
participation shall be subject to such terms of such plans
as may be in effect from time to time.
(e) Notwithstanding anything to the contrary
in the Clark Equipment Company Supplemental Executive
Retirement Plan ("SERP 1"), the Clark Equipment Company
Supplemental Executive Retirement Trust ("SERP 1 Trust"),
-38-
the Clark Equipment Company Supplemental Retirement Income
Plan for Certain Executives ("SERP 2") or the Clark
Equipment Company Deferred Benefit Trust ("SERP 2 Trust"),
the terms (i) "committee," as used in the SERP 1 Trust and
SERP 2 Trust, (ii) "Administrator," as used in the SERP 1
and SERP 2, (iii) "Chief Executive Officer" as used in
Section 2.3 of the SERP 1 and SERP 2, and (iv) "Company" as
used in Section 4.2 of the SERP 1 and SERP 2, shall in each
instance mean, at all times on and after the Effective
Time, the Parent's benefits committee.
(f) As soon as practicable after the date
hereof, the Company shall use its best efforts to obtain
the requisite consents of all participants and
beneficiaries of the Rabbi Trusts so that the Company may
amend the Clark Equipment Company Supplemental Executive
Retirement Plan and the Clark Equipment Company
Supplemental Retirement Income Plan for Certain Executives
to permit either the Parent, the Company or any of their
respective subsidiaries to a one-time withdrawal of assets
from the Rabbi Trusts to the extent such assets exceed 100%
of the "Plan benefit value" (as such term is used in
Section 3 of each of the Clark Equipment Company
Supplemental Executive Retirement Plan and the Clark
Equipment Company Supplemental Retirement Income Plan for
Certain Executives), such funding level to be first
certified by the actuary for the Company's tax-qualified
Plan. After such withdrawal, the right to withdraw amounts
from either such Rabbi Trust shall continue as in effect
prior to the amendments contemplated hereby.
4.11 Directors' and Officers' Insurance;
-----------------------------------
Indemnification. (a) The certificate of incorporation and
---------------
the by-laws of the Surviving Corporation shall contain
provisions with respect to indemnification and exculpation
from liability no less favorable than those set forth in
the Company's certificate of incorporation and by-laws on
the date of this Agreement, 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
adversely affect the rights thereunder of individuals who
on or prior to the Effective Time were directors, officers,
employees or agents of the Company, unless such
modification is required by law.
-39-
(b) The Company shall, regardless of whether
or not the Merger is consummated, and for six years from
the Effective Time, the Surviving Corporation shall either
(x) maintain in effect the Company's current directors' and
officers' liability insurance covering those persons who
are currently covered on the date of this Agreement by the
Company's directors' and officers' liability insurance
policy (the "Indemnified Parties"); provided, however, that
-------- -------
in no event shall Parent be required to expend in any one
year an amount in excess of 175% of the annual premiums
currently paid by the Company for such insurance which the
Company represents to be $697,500 for the twelve month
period ending March 25, 1996; and; provided further, that
----------------
if the annual premiums of such insurance coverage exceed
such amount, the Surviving Corporation shall be obligated
to obtain a policy with the greatest coverage available for
a cost not exceeding such amount; provided further, that
----------------
the Surviving Corporation may substitute for such Company
policies, policies with at least the same coverage
containing terms and conditions which are no less
advantageous and provided that said substitution does not
result in any gaps or lapses in coverage with respect to
matters occurring prior to the Effective Time or (y) cause
the Parent's, directors' and officers' liability insurance
then in effect to cover those persons who are covered on
the date of this Agreement by the Company's directors' and
officers' liability insurance policy with respect to those
matters covered by the Company's directors' and officers'
liability policy.
(c) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section, upon
learning of any such claim, action, suit, proceeding or in-
vestigation, shall promptly notify Parent thereof. In the
event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the
Effective Time), (i) Parent or the Surviving Corporation
shall have the right, from and after the purchase of shares
of Common Stock pursuant to the Offer, to assume the
defense thereof and Parent 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,
(ii) the Indemnified Parties will cooperate in the defense
of any such matter and (iii) Parent shall not be liable for
-40-
any settlement effected without its prior written consent;
and provided further that Parent shall not have any
----------------
obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine,
and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law.
4.12 Financing. Pursuant to the commitment
---------
letter received by Parent from the Chase Manhattan Bank
(National Association), Parent shall provide Purchaser with
the funds necessary to consummate the Offer and the Merger
and the transactions contemplated hereby in accordance with
the terms hereof.
4.13 Company Board Representation; Section
-------------------------------------
14(f). (a) Promptly upon the purchase by Purchaser of
-----
Shares pursuant to the Offer, and from time to time
thereafter, Purchaser shall be entitled to designate up to
such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as shall
give Purchaser representation on the Board of Directors
equal to the product of the total number of directors on
such Board (giving effect to the directors elected pursuant
to this sentence) multiplied by the percentage that the
aggregate number of shares of Company Common Stock
beneficially owned by Purchaser or any affiliate of
Purchaser bears to the total number of shares of Company
Common Stock then outstanding, and the Company shall, at
such time, promptly take all action necessary to cause
Purchaser's designees to be so elected, including either
increasing the size of the Board of Directors or securing
the resignations of incumbent directors or both. At such
times, the Company will use its best efforts to cause
persons designated by Purchaser to constitute the same
percentage as is on the Board of (i) each committee of the
Board, (ii) each board of directors of each domestic
subsidiary of the Company and (iii) each committee of each
such board, in each case only to the extent permitted by
law. Until Purchaser acquires a majority of the
outstanding shares of Company Common Stock on a fully
diluted basis, the Company shall use its reasonable best
efforts to ensure that all the members of the Board and
such boards and committees as of the date hereof who are
not employees of the Company shall remain members of the
-41-
Board and such boards and committees.
(b) The Company's obligations to appoint
designees to its Board of Directors shall be subject to
Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly take
all actions required pursuant to Section 14(f) and Rule
14f-1 in order to fulfill its obligations under this
Section 4.13 and shall include in the Schedule 14D-9 or a
separate Rule 14f-1 information statement provided to
stockholders such information with respect to the Company
and its officers and directors as is required under Section
14(f) and Rule 14f-1 to fulfill its obligations under this
Section 4.13. Parent or Purchaser will supply to the
Company and be solely responsible for any information with
respect to either of them and their nominees, officers,
directors and affiliates required by Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of
Purchaser's designees pursuant to this Section 4.13 and
prior to the Effective Time, any amendment of this
Agreement or the Certificate of Incorporation or By-Laws of
the Company, any termination of this Agreement by the
Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of
Purchaser or waiver of any of the Company's rights
hereunder, and any other consent or action by the Board of
Directors hereunder, will require the concurrence of a
majority of the directors of the Company then in office who
are neither designated by Purchaser nor are employees of
the Company.
4.14 No Amendment to the Rights Agreement.
------------------------------------
The Company covenants and agrees that it will not amend the
Rights Agreement, except as expressly contemplated by this
Agreement.
4.15 Disposition of Litigation. (a) The
-------------------------
Company agrees to dismiss without prejudice Clark Equipment
---------------
Company v. Ingersoll-Rand Company, Civil Action Docket
---------------------------------
No. 95 CIV 2130 (CSH) (S.D.N.Y. 1995). The Company agrees
that it will not settle any litigation currently pending,
or commenced after the date hereof, against the Company or
any of its directors by any stockholder of the Company
-42-
relating to the Offer or this Agreement, without the prior
written consent of Parent.
(b) The Company will not voluntarily
cooperate with any third party which has sought or may
hereafter seek to restrain or prohibit or otherwise oppose
the Offer or the Merger and will cooperate with Parent and
Purchaser to resist any such effort to restrain or prohibit
or otherwise oppose the Offer or the Merger.
4.16 Proxy Contests. (a) Parent and
--------------
Purchaser hereby agree to withdraw and rescind and shall
promptly cause to be withdrawn and rescinded (i) the
notice, dated April 3, 1995, pursuant to Article II Section
10 of the Company's By-Laws and (ii) the Schedule 14A filed
with the Commission, in each case, relating to the
nomination of the persons named in such notice for election
to the Company's Board of Directors at the Annual Meeting
of the Company's Stockholders.
(b) From and after the date hereof until the
earlier of (i) the Effective Time and (ii) the termination
of this Agreement, neither Parent nor Purchaser nor any of
their affiliates or associates (as such terms are defined
in Rule 12b-2 promulgated under the Exchange Act) will,
except as otherwise expressly permitted or required by this
Agreement, directly or indirectly, alone or through or with
others, in any manner
(i) solicit, make, or in any way participate in,
directly or indirectly, any "solicitation" of
"proxies" (as such terms are used in the proxy rules
of the Securities and Exchange Commission promulgated
pursuant to Section 14(a)-11 of the Exchange Act) from
the stockholders of the Company, become a
"participant" in any "election contest" (as such terms
are defined or used in Rule 14(a)-11 under the
Exchange Act) with respect to the Board of Directors
of the Company, solicit or execute any written consent
in lieu of a meeting of holders of voting securities
except to support the nominees or directors of the
Board of Directors of the Company or any affiliate
thereof or call or seek to have called any meeting of
the stockholders of the Company or any affiliate
thereof;
-43-
(ii) except as otherwise provided herein, otherwise
seek election to or seek to place a representative on
the Board of Directors of the Company or any affiliate
thereof, or seek the removal of any member of the
Board of Directors of the Company or any affiliate
thereof.
4.17 No Solicitation of Transactions. The
--------------------------------
Company, its affiliates and their respective officers,
directors, employees, representatives and agents shall
immediately cease any existing discussions or negotiations,
if any, with any parties conducted heretofore with respect
to any acquisition or exchange of all or any material
portion of the assets of, or any equity interest in, the
Company or any of its subsidiaries (except pursuant to the
VME Sale Agreement) or any business combination with the
Company or any of its subsidiaries. The Company, its
subsidiaries, directors, employees, representatives and
agents may, directly or indirectly, furnish information and
access, in each case only in response to a request for such
information or access to any person made after the date
hereof which was not initiated, solicited or knowingly
encouraged by the Company or any of its affiliates or any
of its or their respective officers, directors, employees,
representatives or agents after the date hereof (with
respect to confidential information, pursuant to appro-
priate confidentiality agreements), and may participate in
discussions and negotiate with such entity or group con-
cerning any merger, sale of assets, sale of shares of
capital stock or similar transaction (including an exchange
of stock or assets) involving the Company or any subsidiary
or division of the Company, if such entity or group has
submitted a bona fide proposal to the Board relating to any
such transaction and if a majority of the Board of
Directors of the Company determines, in its good faith
judgment, based on the opinion of independent outside legal
counsel to the Company, that failing to take such action
would constitute a breach of such Board's fiduciary
obligations under applicable law. The Company shall
promptly notify Parent if any proposal or offer, or any
inquiry or contact with any person with respect thereto, is
made and shall, in any such notice to Parent, indicate in
reasonable detail the identity of the offeror and the terms
and conditions of any proposal or offer, or any such
inquiry or contact. The Company shall keep Parent
-44-
promptly advised of all developments which could reasonably
be expected to culminate in the Board of Directors
withdrawing, modifying or amending its recommendation of
the Offer, the Merger and other transactions contemplated
by this Agreement. Except as set forth in this Section
4.17, neither the Company or any of its affiliates, nor any
of its or their respective officers, directors, employees,
representatives or agents, shall, directly or indirectly,
knowingly encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any
information to, any corporation, partnership, person or
other entity or group (other than Parent and Purchaser, any
affiliate or associate of Parent and Purchaser, or any
designees of Parent or Purchaser) concerning any merger,
sale of assets, sale of shares of capital stock or similar
transactions (including an exchange of stock or assets)
involving the Company or any subsidiary or division of the
Company; provided, that nothing in this Section 4.17 shall
--------
prevent the Company or the Board from taking, and
disclosing to the Company's stockholders, a position
contemplated by Rules 14d-9 and 14e-2 promulgated under the
Exchange Act with regard to any tender offer or from making
such disclosure to the Company's stockholders which, as
advised in an opinion of counsel, is required under appli-
cable law; provided further, that the Board shall not
----------------
recommend that the stockholders of the Company tender their
Shares in connection with any such tender offer unless the
Board by a majority vote determines in its good faith
judgment based on the opinion of independent outside legal
counsel to the Company, that failing to take such action
would constitute a breach of the Board's fiduciary duty
under applicable law.
4.18 Postponement of Annual Meeting. The
------------------------------
Company shall as soon as possible indefinitely postpone its
annual meeting of stockholders currently scheduled for May
9, 1995, and shall take no action unless compelled by legal
process to reschedule such annual meeting or to call a
special meeting of stockholders of the Company except in
accordance with this Agreement unless and until this
Agreement has been terminated in accordance with its terms.
4.19 Sale of VME. The Company shall use its
-----------
reasonable best efforts to take or cause to be taken all
such action necessary (i) to consummate the transactions
-45-
contemplated by the VME Sale Agreement (which agreement is
described in the Company's Current Report on Form 8-K filed
with the Commission on March 6, 1995) prior to completion
of the Offer, including selling its 50% interest in VME
Group N.V. for cash proceeds of not less than $573 million,
or (ii) failing such consummation, to prevent cancellation
or termination of the VME Sale Agreement, amendment thereof
in a manner that would reasonably be expected to have a
material adverse effect on the Company, or any other event
which shall cause the VME Sale Agreement to no longer
remain in full force and effect.
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.01 Conditions Precedent to Obligations of
--------------------------------------
Parent, Purchaser and the Company. The respective
---------------------------------
obligations of Parent and Purchaser, on the one hand, and
the Company, on the other hand, to effect the Merger are
subject to the satisfaction or waiver (subject to
applicable law) at or prior to the Effective Time of each
of the following conditions:
(a) Approval of Company's Stockholders. To
----------------------------------
the extent required by applicable law, this Agreement
and the Merger shall have been approved and adopted by
holders of a majority of the Common Stock of the
Company in accordance with applicable law (if required
by applicable law) and the Company's Certificate of
Incorporation and By-Laws;
(b) HSR Act. Any waiting period (and any
-------
extension thereof) under the HSR Act applicable to the
Merger shall have expired or been terminated;
(c) Injunction. No preliminary or permanent
----------
injunction or other order shall have been issued by
any court or by any governmental or regulatory agency,
body or authority which prohibits the consummation of
the Offer or the Merger and the transactions
contemplated by this Agreement and which is in effect
at the Effective Time, provided, however, that, in the
-------- -------
case of any such decree, injunction or other order,
-46-
each of the parties shall have used reasonable best
efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any
decree, injunction or other order that may be entered;
(d) Statutes. No statute, rule, regulation,
--------
executive order, decree or order of any kind shall
have been enacted, entered, promulgated or enforced by
any court or governmental authority which prohibits
the consummation of the Offer or the Merger or has the
effect of making the purchase of the Common Stock
illegal; and
(e) Payment for Common Stock. Purchaser
------------------------
shall have accepted for payment and paid for the
shares of Common Stock tendered pursuant to the Offer;
provided, that the foregoing will not be a condition
--------
to Parent's and Purchaser's obligation to consummate
the Merger if Purchaser's failure to purchase Shares
of Common Stock violates the terms of the Offer.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Termination. This Agreement may be
-----------
terminated and the transactions contemplated hereby may be
abandoned, at any time prior to the Effective Time, whether
before or after approval of the Merger by the Company's
stockholders:
(a) by mutual written consent of the
Company, on the one hand, and of Parent and Purchaser,
on the other hand;
(b) by either Parent, on the one hand, or
the Company, on the other hand, if any governmental or
regulatory agency located or having jurisdiction
within the United States or any country or economic
region in which either the Company or Parent, directly
or indirectly, has material assets or operations shall
have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or
-47-
otherwise prohibiting the acceptance for payment of,
or payment for, shares of Common Stock pursuant to the
Offer or the Merger and such order, decree or ruling
or other action shall have become final and
nonappealable; provided, that Parent shall, if
--------
necessary to prevent the taking of such action, or the
enaction, enforcement, promulgation, amendment,
issuance or application of any statute, rule, regula-
tion, legislation, interpretation, judgment, order or
injunction, offer to accept an order to divest such of
the Company's or Parent's assets and businesses as may
be necessary to forestall such injunction or order and
to hold separate such assets and business pending such
divestiture, but only if the amount of such assets and
businesses is not material to the assets or profit-
ability of Parent and its subsidiaries taken as a
whole;
(c) by Parent, on the one hand, or the
Company, on the other hand, if due to an occurrence or
circumstance which would result in a failure to
satisfy any of the Tender Offer Conditions, Purchaser
shall have failed to pay for Shares pursuant to the
Offer on or prior to the Outside Date, unless such
failure has been caused by or results from the failure
of the party seeking to terminate this Agreement to
perform in any material respect any of its respective
covenants or agreements contained in this Agreement.
As used herein, the term "Outside Date" shall mean the
latest (not to exceed 150 days) of (A) 60 days
following the date hereof, (B) the date on which
either the applicable waiting period under the HSR Act
shall have expired or been terminated or the final
terms of a consent decree between Parent and the Anti-
trust Division of the Department of Justice (the
"Antitrust Division") (the "Consenting Parties"), with
respect to the Offer and the Merger have been agreed
to by the Consenting Parties, or an order of a Federal
District Court adjudging that the Merger does not vio-
late the Federal antitrust laws shall have been issued
or the Antitrust Division shall have otherwise author-
ized the Parent to acquire Shares pursuant to the
Offer, or (C) 10 business days following the
conclusion of any ongoing proceedings before the
European Commission in connection with its review of
-48-
the transactions contemplated hereby or any similar
delay pursuant to any other material antitrust or
competitive law or regulation;
(d) by Parent, on the one hand, or the
Company, on the other hand, if the Offer is terminated
or expires in accordance with its terms without
Purchaser having purchased any Common Stock thereunder
due to a failure of any of the conditions set forth in
Annex A hereto to be satisfied, unless such
termination or expiration has been caused by or
results from the failure of the party seeking to
terminate this Agreement to perform in any material
respect any of its respective covenants or agreements
contained in this Agreement;
(e) by the Company, if the Board of
Directors of the Company determines that a proposal
for a Third Party Acquisition is a Superior Proposal
and a majority of the Board of Directors of the
Company determines, in its good faith judgment, based
on the opinion of independent legal outside counsel to
the Company, that a failure to terminate this
Agreement would constitute a breach of such Board's
fiduciary obligations under applicable law; provided,
--------
that any such termination by the Company under this
clause (e) shall not be effective until the Company
has made payment of the full fee and expense
reimbursement required by Section 7.01(a) hereof;
(f) prior to the consummation of the Offer,
by the Company, if (i) any of the representations and
warranties of Parent or Purchaser contained in this
Agreement were untrue or incorrect in any material
respect when made or have since become, and at the
time of termination remain, incorrect in any material
respect, or (ii) Parent or Purchaser shall have
breached or failed to comply in any material respect
with any of their respective obligations under this
Agreement, which breach shall not have been cured
prior to the earlier of (A) 10 days following notice
of such breach and (B) two business days prior to the
date on which the Offer expires; or
(g) by Parent prior to the purchase of
-49-
Shares pursuant to the Offer, if (i) there shall have
been a breach of any representation or warranty on the
part of the Company contained in this Agreement which
would reasonably be expected to have a material
adverse effect on the Condition of the Company and its
subsidiaries taken as a whole or which would
reasonably be expected to prevent (or materially
delay) the consummation of the Offer, (ii) there shall
have been a breach of any covenant or agreement on the
part of the Company contained in this Agreement which
would reasonably be expected to have a material
adverse effect on the Condition of the Company and its
subsidiaries taken as a whole or which would
reasonably be expected to prevent (or materially
delay) the consummation of the Offer, which shall not
have been cured prior to the earlier of (A) 10 days
following notice of such breach and (B) two business
days prior to the date on which the Offer expires,
(iii) the Board shall have withdrawn or modified
(including by amendment of the Schedule 14D-9) in a
manner adverse to Purchaser its approval or
recommendation of the Offer, this Agreement or the
Merger and shall not have reinstated such approval or
recommendation within three business days thereof,
shall have approved or recommended another offer or
transaction, or shall have resolved to effect any of
the foregoing, or (iv) the Minimum Condition (as
defined in Annex A) shall not have been satisfied by
the expiration date of the Offer and on or prior to
such date (A) any person (other than Parent or
Purchaser) shall have made a proposal or public
announcement or communication to the Company with re-
spect to a Third Party Acquisition at a price in
excess of $86.00 per Share or (B) any person
(including the Company or any of its affiliates or
subsidiaries), other than Parent or any of its
affiliates, shall have become the beneficial owner of
more than 20.0% of the Shares.
"Third Party Acquisition" shall mean the
occurrence of any of the following events: (i) the
acquisition of the Company by merger, tender offer or
otherwise by any person other than Parent, Purchaser or any
affiliate thereof (a "Third Party"); (ii) the acquisition
by a Third Party of 20.0% or more of the assets of the
-50-
Company and its subsidiaries, taken as a whole; (iii) the
acquisition by a Third Party of more than 20.0% of the
outstanding Shares; (iv) the adoption by the Company of a
plan of liquidation or the declaration or payment of an
extraordinary dividend; or (v) the repurchase by the
Company or any of its subsidiaries of 20.0% or more of the
outstanding Shares.
"Superior Proposal" shall mean a bona fide
proposal made by a Third Party to acquire all of the
outstanding shares of the Company pursuant to a tender
offer or a merger, or to purchase all or substantially all
of the assets of the Company, on terms which a majority of
the members of the Board of Directors of the Company
determines in its good faith reasonable judgment (based on
the advice of its financial and legal advisors) to be more
favorable to the Company and its stockholders than the
transactions contemplated hereby.
6.02 Effect of Termination. In the event of
---------------------
the termination of this Agreement pursuant to Section 6.01,
this Agreement shall forthwith become void and there shall
be no liability on the part of any party hereto except as
set forth in Sections 4.02, 7.01 and 7.15; provided,
--------
however, that nothing herein shall relieve any party from
-------
liability for any breach hereof.
ARTICLE VII
MISCELLANEOUS
7.01 Fees and Expenses. (a) If:
-----------------
(i) Parent terminates this Agreement pursuant
to Section 6.01(g)(iv)(A) hereof, and within twelve
months thereafter:
(A) the Company enters into an agreement
with respect to a Third Party Acquisition, or
a Third Party Acquisition occurs, involving
any party (or any affiliate or associate
thereof) (x) with whom the Company (or its
agents) had any discussions with respect to a
Third Party Acquisition, (y) to whom the
-51-
Company (or its agents) furnished information
with respect to or with a view to a Third
Party Acquisition or (z) who had submitted a
proposal or expressed any interest publicly or
to the Company in a Third Party Acquisition,
in the case of each of clauses (x), (y) and
(z) prior to such termination; or
(B) the Company enters into an agreement
with respect to a Third Party Acquisition, or
a Third Party Acquisition occurs, that
contemplates a direct or indirect
consideration (or implicit valuation) for
Shares (including the value of any stub
equity) in excess of $86.00 per Share; or
(ii) the Company terminates this Agreement
pursuant to Section 6.01(e) hereof or Parent
terminates this Agreement pursuant to Section
6.01(g)(iii) or 6.01(g)(iv)(B) hereof;
then the Company shall pay to Parent and Purchaser, within
one business day following the execution and delivery of
such agreement or such occurrence, as the case may be, or
simultaneously with any termination contemplated by Section
7.01(a)(ii) above, a fee, in cash, of $35 million,
provided, however, that the Company in no event shall be
-------- -------
obligated to pay more than one such fee with respect to all
such agreements and occurrences and such termination.
(b) Except as otherwise specifically provided
herein, all costs and expenses incurred in connection with
this Agreement and the consummation of the transactions
contemplated hereby shall be paid by the party incurring
such costs and expenses.
7.02 Extension; Waiver. Subject to Section
-----------------
4.13, at any time prior to the Effective Time, the parties
hereto, by action taken by or on behalf of the respective
Boards of Directors of the Company, Parent or Purchaser,
may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii)
waive any inaccuracies in the representations and
warranties contained herein by any other applicable party
or in any document, certificate or writing delivered
-52-
pursuant hereto by any other applicable party or (iii)
waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any party
to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such
party.
7.03 Public Announcements. The Company, on
--------------------
the one hand, and Parent and Purchaser, on the other hand,
agree to consult promptly with each other prior to issuing
any press release or otherwise making any public statement
with respect to the Offer, the Merger and the other trans-
actions contemplated hereby, and shall not issue any such
press release or make any such public statement prior to
such consultation and review by the other party of a copy
of such release or statement, unless required by applicable
law or any listing agreement with a securities exchange.
7.04 Notices. All notices, requests,
-------
demands, waivers and other communications required or
permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given if
delivered in person or mailed, certified or registered mail
with postage prepaid, or sent by telex, telegram or
telecopier, as follows:
(a) if to the Company, to it at:
Clark Equipment Company
100 North Michigan Street
P.O. Box 7008
South Bend, Indiana 46634
Attention: Bernard D. Henely, Esq.
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York 10036
Attention: William F. Wynne, Jr., Esq.
(b) if to either Parent or Purchaser, to it
at:
-53-
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Attention: Patricia Nachtigal, Esq.
with an additional copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Robert L. Friedman, Esq.
or to such other Person or address as any party shall
specify by notice in writing to each of the other parties.
All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the
date of delivery unless if mailed, in which case on the
third business day after the mailing thereof except for a
notice of a change of address, which shall be effective
only upon receipt thereof.
7.05 Entire Agreement. This Agreement, the
----------------
Disclosure Schedule, the Parent Confidentiality Agreement
and the annex and other documents referred to herein or
delivered pursuant hereto, collectively contain the entire
understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior
agreements and understandings, oral and written, with
respect thereto.
7.06 Binding Effect; Benefit; Assignment.
-----------------------------------
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior
written consent of the other parties, except that Parent
and Purchaser may assign all or any of their respective
rights and obligations hereunder, other than those set
forth in Section 4.07, to any direct or indirect wholly-
owned subsidiary or subsidiaries of Parent, provided that
--------
no such assignment shall relieve the assigning party of its
obligations hereunder if such assignee does not perform
such obligations. Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the
-54-
parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except for Section
4.11, which is intended to be for the benefit of the
persons referred to therein, and may be enforced by such
persons.
7.07 Amendment and Modification. Subject to
--------------------------
Section 4.13 and applicable law, this Agreement may be
amended, modified and supplemented in writing by the
parties hereto in any and all respects before the Effective
Time (notwithstanding any stockholder approval of the
Merger), by action taken by the respective Boards of
Directors of Parent, Purchaser and the Company or by the
respective officers authorized by such Boards of Directors,
provided, however, that after any such stockholder
-------- -------
approval, no amendment shall be made which by law requires
further approval by such stockholders without such further
approval.
7.08 Further Actions. Each of the parties
---------------
hereto agrees that, subject to its legal obligations, it
will use its reasonable best efforts to fulfill all
conditions precedent specified herein, to the extent that
such conditions are within its control, and to do all
things reasonably necessary to consummate the transactions
contemplated hereby.
7.09 Headings. The descriptive headings of
--------
the several Articles and Sections of this Agreement are
inserted for convenience only, do not constitute a part of
this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
7.10 Counterparts. This Agreement may be
------------
executed in several counterparts, each of which shall be
deemed to be an original, and all of which together shall
be deemed to be one and the same instrument.
-55-
7.11 Applicable Law. This Agreement and the
--------------
legal relations between the parties hereto shall be
governed by and construed in accordance with the laws of
the State of Delaware, without regard to the conflict of
laws rules thereof.
7.12 Severability. If any term, provision,
------------
covenant or restriction contained in this Agreement is held
by a court of competent jurisdiction or other authority to
be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants
and restrictions contained in this Agreement shall remain
in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely
as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the
fullest extent possible.
7.13 "Person" Defined. "Person" shall mean
----------------
and include an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, a
group and a government or other department or agency
thereof.
7.14 Knowledge of the Company. As to any
------------------------
matter represented herein as being within the Company's
knowledge, to the knowledge or best knowledge of the
Company or any equivalent limitation, such knowledge shall
be deemed to exist only if the matter is within the actual
knowledge of the Chief Executive Officer or any Vice
President of the Company.
7.15 Non-Survival of Representations,
--------------------------------
Warranties and Agreements. The representations, warranties
-------------------------
and agreements in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement
pursuant to Section 6.01 as the case may be, except that
the agreements set forth in Article II, Section 4.07,
Section 4.10, Section 4.11 and Article VII shall survive
-56-
the Effective Time indefinitely and those set forth in
Section 4.02 and Article VII shall survive termination
indefinitely.
-57-
IN WITNESS WHEREOF, each of Parent, Purchaser
and the Company have caused this Agreement to be executed
by their respective officers thereunto duly authorized, all
as of the date first above written.
INGERSOLL-RAND COMPANY
By /s/ James E. Perrella
---------------------------
Name: James E. Perrella
Title: President and Chief
Executive Officer
CEC ACQUISITION CORP.
By /s/ Thomas McBride
---------------------------
Name: Thomas McBride
Title: President
CLARK EQUIPMENT COMPANY
By /s/ Leo J. McKernan
---------------------------
Name: Leo J. McKernan
Title: Chairman, President
and Chief Executive Officer
ANNEX A
-------
to
Agreement and
Plan of Merger
--------------
The capitalized terms used in this Annex A shall
have the meanings set forth in the Agreement to which it is
annexed, except that the term "Merger Agreement" shall be
deemed to refer to the Agreement to which this Annex A is
appended.
-----------------------------------------------------------
Notwithstanding any other provision of the Offer,
Purchaser shall not be required to accept for payment or
subject to any applicable rules and regulations of the
Commission, including Rule 14e-1c under the Exchange Act
(relating to Purchaser's obligation to pay for or return
tendered shares promptly after termination or withdrawal of
the Offer), pay for any shares of Common Stock tendered and
may terminate or amend the Offer in accordance with the
Merger Agreement and may postpone the acceptance of, and
payment for, shares of Common Stock, if (i) there shall not
have been validly tendered and not withdrawn prior to the
expiration of the Offer a number of shares of Common Stock
which, together with Common Stock owned by Parent and
Purchaser, represent a majority of the total voting power
of all shares of capital stock of the Company outstanding
on a fully diluted basis (the "Minimum Condition"), (ii)
subject to the proviso contained in paragraph (a) below,
any appli-
ANNEX A
Page 2
cable waiting period under the HSR Act or under any
applicable foreign statutes or regulations in a
jurisdiction where Parent or the Company, directly or
indirectly, has material operations or a material amount of
assets shall not have expired or been terminated or (iii)
at any time on or after the date of the Merger Agreement
and at or before the time of payment for any such shares of
Common Stock (whether or not any shares of Common Stock
have theretofore been accepted for payment or paid for
pursuant to the Offer) any of the following shall occur:
(a) there shall be any action taken, or any stat-
ute, rule, regulation, legislation, interpretation, judg-
ment, order or injunction enacted, enforced, promulgated,
amended, issued or deemed applicable to the Offer, by any
legislative body, court, government or governmental,
administrative or regulatory authority or agency,
domestic or foreign, other than the routine application
of the waiting period provisions of the HSR Act to the
Offer or to the Merger, that would reasonably be expected
to: (i) make illegal or otherwise prohibit or materially
delay consummation of the Offer or the Merger or seek to
obtain material damages or make materially more costly
the making of the Offer, (ii) prohibit or materially
limit the ownership or operation by Parent or Purchaser
of all or any material portion of the business or assets
of the Company or any of its subsidiaries taken as a
whole or compel Parent or Purchaser to dispose of or hold
separately all or any material portion of the business or
assets of Parent or Purchaser or the Company or any of
its subsidiaries taken as a whole, or seek to impose any
material limitation on the ability of Parent or Purchaser
to conduct its business or own such assets, (iii) impose
material limitations on
ANNEX A
Page 3
the ability of Parent or Purchaser effectively to
acquire, hold or exercise full rights of ownership of the
shares of Common Stock, including, without limitation,
the right to vote any shares of Common Stock acquired or
owned by Purchaser or Parent on all matters properly
presented to the Company's stockholders, or (iv) require
divestiture by Parent or Purchaser of any shares of
Common Stock; provided, that Parent shall, if necessary
--------
to prevent the taking of such action, or the enaction,
enforcement, promulgation, amendment, issuance or
application of any statute, rule, regulation,
legislation, interpretation, judgment, order or injunc-
tion, offer to accept an order to divest such of the
Company's or Parent's assets and businesses as may be
necessary to forestall such injunction or order and to
hold separate such assets and business pending such
divestiture, but only if the amount of such assets and
businesses is not material to the assets or profitability
of Parent and its subsidiaries taken as a whole;
(b) there shall have occurred any development that
has, or would reasonably be expected to have, a material
adverse effect on the business, assets, financial
condition or results of operations of the Company and its
subsidiaries taken as a whole;
(c) there shall have occurred (i) any general sus-
pension of trading in, or limitation on prices for,
securities on the New York Stock Exchange, (ii) any
decline in the Standard & Poor's 500 in excess of 25%
measured from the close of business on the trading day
next preceding the date of the Merger Agreement, (iii) a
declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iv)
any material limitation by any U.S., federal or state
government or governmental, administrative or regulatory
authority or agency on the extension of credit by banks
or other lending institutions, or (v) a commencement or
escalation of a war or armed hostilities or other
national or international calamity directly or indirectly
involving the United States and having a material adverse
effect on the business, assets, financial condition or
results of operations of the Company and its subsidiaries
taken as a whole or materially
ANNEX A
Page 4
adversely affecting (or materially delaying) the consummation
of the Offer;
(d)(i) it shall have been publicly disclosed or
Purchaser shall have otherwise learned that beneficial
ownership (determined for the purposes of this paragraph
as set forth in Rule 13d-3 promulgated under the Exchange
Act) of more than 20.0% of the outstanding Shares has
been acquired by any corporation (including the Company
or any of its subsidiaries or affiliates), partnership,
person or other entity or group (as defined in Section
13(d)(3) of the Exchange Act), other than Parent or any
of its affiliates, or (ii) (A) the Board of Directors of
the Company or any committee thereof shall have withdrawn
or modified in a manner adverse to Parent or Purchaser
the approval or recommendation of the Offer, the Merger
or the Merger Agreement, or approved or recommended any
takeover proposal or any other acquisition of Shares
other than the Offer and the Merger, (B) any corporation,
partnership, person or other entity or group shall have
entered into a definitive agreement or an agreement in
principle with the Company with respect to a tender offer
or exchange offer for any Shares or a merger,
consolidation or other business combination with or
involving the Company or any of its subsidiaries, or (C)
the Board of Directors of the Company or any committee
thereof shall have resolved to do any of the foregoing;
(e) any of the representations and warranties of
the Company set forth in the Merger Agreement that are
qualified as to materiality shall not be true and
correct, or any such representations and warranties that
are not so qualified shall not be true and correct in any
respect which would reasonably be expected to have a
material adverse effect on the business, assets, results
of operations or financial condition of the Company and
its subsidiaries taken as a whole, in each case as if
such representations and warranties were made at the time
of such determination except as to any such
representation or warranty which speaks as of a specific
date, which must be untrue or incorrect in the foregoing
respects as of such specific date;
ANNEX A
Page 5
(f) the Company shall have failed to perform in any
material respect any obligation or to comply in any
material respect with any agreement or covenant of the
Company to be performed or complied with by it under the
Merger Agreement;
(g)(x) the Company shall not have consummated the
sale of its 50% interest in VME Group N.V. for cash
proceeds of not less than $573 million and (y) the
definitive agreement to sell such interest to AB Volvo
of Sweden described in the Company's Current Report on
Form 8-K filed with the Commission on March 6, 1995
shall have been cancelled or terminated, or shall have
been amended in a manner that is materially adverse to
the Company, or shall otherwise no longer remain in
full force and effect; or
(h) the Merger Agreement shall have been terminated
in accordance with its terms;
which, in the reasonable judgment of Purchaser, in any such
case and regardless of the circumstances giving rise to any
such condition, makes it inadvisable to proceed with such
acceptance for payment or payment.
The foregoing conditions (including those set forth
in clauses (i)-(iii) above) are for the sole benefit of
Purchaser and may be asserted by Purchaser, or may be
waived by Purchaser, in whole or in part at any time and
from time to time in its sole discretion. The failure by
Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and
each such right shall
ANNEX A
Page 6
be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by Purchaser
concerning the events described in this Annex A will be
final and binding upon all parties.