<PAGE> 1
As filed with the Securities and Exchange Commission on December 20, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AGCO CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE 3523 58-1960019
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification Number)
Incorporation or Organization) Classification Code Number)
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4205 RIVER GREEN PARKWAY
DULUTH, GA 30096
(770) 813-9200
(Address, Including Zip Code, and Telephone Number, Including
Area Code of Registrant's Principal Executive Offices)
STEPHEN D. LUPTON
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
4205 RIVER GREEN PARKWAY
DULUTH, GA 30096
(770) 813-9200
(Address, Including Zip Code, and Telephone Number,
Including Area Codes of Agent For Service) With Copies to:
W. BRINKLEY DICKERSON, JR. MICHAEL W. SCHLEY
TROUTMAN SANDERS LLP LARKIN, HOFFMAN, DALY & LINDGREN, LTD.
600 PEACHTREE STREET NE, SUITE 5200 1500 WELLS FARGO PLAZA
ATLANTA, GEORGIA 30308 7900 XERXES AVENUE SOUTH
(404) 885-3000 BLOOMINGTON, MINNESOTA 55431
(952) 835-3800
Approximate date of commencement of proposed sale to the public: As soon as
possible after the effectiveness of this Registration Statement and the
satisfaction or waiver of all other conditions to the merger (the "merger") of
Agri Acquisition Corp., a wholly owned subsidiary of AGCO Corporation, and
Ag-Chem Equipment Co., Inc. pursuant to the Agreement and Plan of Merger dated
as of November 20, 2000, described in the proxy statement/prospectus.
If the securities being registered on this form are to be offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, please check the following box. [ ]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]_____
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]_____
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CALCULATION OF REGISTRATION FEE
===================================================================================================================================
TITLE OF EACH CLASS OF SECURITIES PROPOSED MAXIMUM PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED AMOUNT TO BE PRICE PER SHARE OFFERING PRICE (4) REGISTRATION FEE
REGISTERED
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Common Stock (1), Subscription 11,800,000 (3) $98,884,000 $26,105.38
Rights (1) and Preferred Stock
Purchase Rights (2)
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Total $98,884,000 $26,105.38
===================================================================================================================================
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The footnotes to this calculation are contained on the following page.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
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FOOTNOTES TO CALCULATION OF REGISTRATION FEE
(1) The number of shares being registered includes (a) a maximum of
11,800,000 shares of AGCO common stock that may become issuable to holders of
Ag-Chem common stock (i) by virtue of the merger or (ii) pursuant to the
subscription right set forth in Section 3.02(c) of the merger agreement and (b)
the associated preferred stock purchase rights attached to the AGCO common
stock.
(2) The AGCO preferred share purchase rights initially are attached to and
trade with the shares of AGCO common stock being registered hereby. Value
attributable to such rights, if any, is reflected in the market price of the
associated common stock.
(3) Omitted in accordance with Rule 457(o).
(4) Estimated solely for the purpose of calculating the registration fee
required by Section 6(b) of the Securities Act and calculated in accordance with
Rule 457(o).
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SPECIAL MEETING OF THE SHAREHOLDERS OF
AG-CHEM EQUIPMENT CO., INC.
January ___, 2001
Ag-Chem logo
YOUR VOTE IS VERY IMPORTANT
--------------------------
Dear Shareholder,
You are cordially invited to attend a special meeting of shareholders
of Ag-Chem Equipment Co., Inc. to be held at Ag-Chem's corporate headquarters at
5720 Smetana Drive, Minnetonka, Minnesota, 55453 on _____, February __, 2001, at
3:00 p.m., local time, to consider and vote upon a proposed merger between
Ag-Chem Equipment Co., Inc. and a subsidiary of AGCO Corporation. This merger
and other related matters are more fully described in the accompanying proxy
statement/prospectus.
In general, in the merger you will receive a combination of cash and
common stock of AGCO having a value of $25.80 for each share of Ag-Chem that you
hold. I encourage you to vote in favor of the transaction.
A special committee of the board of directors of Ag-Chem unanimously
approved the merger agreement and recommend that you vote FOR the merger and the
related transactions. The full board unanimously ratified this approval.
Regardless of whether you plan to attend the meeting, please take the
time to complete and mail the enclosed proxy card to Ag-Chem. Returning your
proxy does NOT deprive you of your right to attend the meeting and to vote your
shares in person, should you choose to do so. YOUR VOTE IS VERY IMPORTANT.
We appreciate your interest in Ag-Chem and your consideration of this
matter.
Sincerely,
A.E. McQuinn
Chairman and Chief Executive Officer
PLEASE SEE "RISK FACTORS - FACTORS RELATING TO THE MERGER" BEGINNING ON PAGE
_____ OF THIS DOCUMENT FOR A DESCRIPTION OF CERTAIN RISKS ASSOCIATED WITH THE
TRANSACTION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORS HAVE APPROVED THE TRANSACTION, THE COMMON STOCK TO BE ISSUED IN THE
TRANSACTION, OR THE FAIRNESS OF THE TRANSACTION, OR DETERMINED IF THIS DOCUMENT
IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This proxy statement/prospectus is dated January __, 2001, and is first
being mailed to shareholders on or about January __, 2001.
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AG-CHEM EQUIPMENT CO., INC.
---------------------
NOTICE OF SPECIAL MEETING OF AG-CHEM SHAREHOLDERS
------------------------
FEBRUARY _______, 2001
AT 3:00 P.M.
To Ag-Chem Shareholders:
Notice is hereby given that a special meeting of shareholders of
Ag-Chem Equipment Co., Inc. will be held on February ____, 2001, at 3:00 p.m.
local time at Ag-Chem's corporate headquarters at 5720 Smetana Drive,
Minnetonka, Minnesota 55343, for the following purposes:
1. To consider and vote upon a proposal to adopt the Agreement
and Plan of Merger dated as of November 20, 2000, among
Ag-Chem Equipment Co. Inc., AGCO Corporation, and Agri
Acquisition Corp.
2. To transact any other business that properly comes before the
special meeting.
These items of business are described in the attached proxy
statement/prospectus. Only holders of record of Ag-Chem common stock at the
close of business on January ____, 2001, the record date, are entitled to vote
at the Special Meeting of Ag-Chem Shareholders. You may vote in person at the
Ag-Chem special meeting even if you have returned a proxy.
By Order of the Board of Directors of
AG-CHEM EQUIPMENT CO., INC.
A.E. McQuinn
Chairman and Chief Executive Officer
Minnetonka, Minnesota
January , 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED STAMPED
ENVELOPE.
Ag-Chem Equipment Co., Inc. AGCO Corporation
Proxy Statement Prospectus
<PAGE> 5
TABLE OF CONTENTS
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PAGE
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<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MERGER..........................................
SUMMARY.........................................................................
RISK FACTORS....................................................................
AG-CHEM SPECIAL MEETING.........................................................
INFORMATION ABOUT OUR COMPANIES.................................................
THE MERGER......................................................................
OPINION OF AG-CHEM'S FINANCIAL ADVISOR..........................................
MATERIAL PROVISIONS OF THE MERGER AGREEMENT AND RELATED AGREEMENTS..............
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION..........................
DIRECTORS AND EXECUTIVE OFFICERS OF AGCO FOLLOWING THE MERGER...................
STOCK OWNERSHIP OF AGCO.........................................................
INTERESTS OF CERTAIN PERSONS IN THE MERGER......................................
COMPARISON OF SHAREHOLDER RIGHTS................................................
WHERE YOU CAN FIND MORE INFORMATION.............................................
EXPERTS.........................................................................
LEGAL MATTERS...................................................................
FUTURE SHAREHOLDER PROPOSALS....................................................
OTHER MATTERS...................................................................
APPENDICES......................................................................
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APPENDICES
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Appendix A: Agreement and Plan of Merger
Appendix B: Voting Agreement
Appendix C: Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act
Appendix D: Opinion of Goldsmith, Agio, Helms Securities, Inc.
Appendix E: Form of Affiliate Letter
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QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: WHAT WILL I RECEIVE IN EXCHANGE FOR MY SHARES OF AG-CHEM COMMON STOCK?
A: You will receive a combination of cash and shares of AGCO common stock
with a value of $25.80 per Ag-Chem share. The exact combination of cash
and AGCO common stock will be determined shortly prior to closing and
will depend upon the trading price of AGCO common stock on the NYSE.
Q: HOW WILL THE FORM OF THE CONSIDERATION TO BE PAID TO AG-CHEM
SHAREHOLDERS CHANGE IF THE AGCO TRADING PRICE CHANGES?
A: The higher the trading price of AGCO common stock, the fewer shares
of AGCO common stock Ag-Chem shareholders will receive in the merger.
The amount of cash per share also may vary depending upon the price per
share of AGCO common stock if an adjustment is necessary for the merger
to be treated as a tax-free exchange under the federal income tax laws.
For example, if the trading price of AGCO common stock falls below
approximately $8.38 (or such higher price as is necessary to obtain
opinions as to the status of the merger as a Section 368(a)
reorganization), AGCO has the option of using any combination of cash
and AGCO common stock, up to a maximum of 11,800,000 shares, to provide
the $25.80 value per share. In addition, if AGCO issues less than
11,800,000 AGCO shares in the merger and the merger is structured as a
"reverse merger," each Ag-Chem shareholder will have the right to
subscribe for a pro rata portion (based on his or her ownership
interest in Ag-Chem) of a number of AGCO shares equal to the difference
between the number of shares issued in the merger and 11,800,000
shares.
Q: WHEN AND HOW CAN I LEARN THE FINAL FORM OF THE CONSIDERATION TO BE
PAID?
A: As soon as the final form of the consideration is known, AGCO and
Ag-Chem will issue a press release.
Q: WHAT DO I NEED TO DO TO GET MY CASH AND SHARES OF AGCO COMMON STOCK?
A: Ag-Chem will send to you a letter of transmittal and return envelope.
The letter of transmittal will contain instructions for exchanging your
shares. Do not send in your stock certificates until you are instructed
to do so.
Q: WHEN DO THE COMPANIES EXPECT TO COMPLETE THE MERGER?
A: We are working to complete the merger as quickly as possible. We hope
to complete the merger in the first quarter of 2001. However, we cannot
assure you that we will complete the merger by then.
Q: WHAT SHAREHOLDER APPROVALS ARE REQUIRED TO APPROVE THE MERGER?
A: The approval of the Ag-Chem shareholders is needed to consummate the
merger. This requires the affirmative vote of the holders of a majority
of the voting power of the outstanding shares of Ag-Chem common stock.
Alvin E. McQuinn, Ag-Chem's Chairman and Chief Executive Officer, holds
shares representing approximately 60% of the voting power of the
outstanding shares of Ag-Chem and has agreed to vote 19.9% of the total
shares outstanding in favor of the merger agreement. He has also
indicated his intent to vote his remaining shares in favor of the
merger.
If the price per share of AGCO common stock falls below $6.10, AGCO may
elect to seek the approval of its shareholders to issue the shares
necessary to complete the merger, as required by NYSE rules. Such
issuance must be approved by holders of a majority of the AGCO shares
entitled to vote on such a matter.
Q: WHO IS ENTITLED TO VOTE?
A: Holders of record of Ag-Chem common stock at the close of business on
January ___, 2001, may vote on the merger. If you own shares on the
record date through a bank, broker or other
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<PAGE> 7
record holder, you will need to instruct the record holder how to vote
your shares and you may vote in person at the special meeting only if
you obtain a proxy from the record holder with respect to your shares.
Q: WHEN AND WHERE IS THE AG-CHEM SPECIAL MEETING?
A: Ag-Chem will hold its special meeting on February __, 2001, at 3:00
p.m., local time, at Ag-Chem's corporate headquarters at 5720 Smetana
Drive, Minnetonka, Minnesota 55453.
Q: WHAT DO I NEED TO DO NOW?
A: After carefully reading and considering the information contained in
this proxy statement/prospectus, please respond by completing, signing
and dating your proxy card and/or voting instructions and returning the
same in the enclosed postage paid envelope. Please vote as soon as
possible.
Q: WHAT IF I DON'T VOTE?
A: If you are an Ag-Chem shareholder and you don't vote your shares or you
abstain, or if your shares are held by a brokerage firm, bank or other
nominee who abstains or does not vote them, your shares will have the
effect of a vote against the merger. If you respond and do not indicate
your voting preference, Ag-Chem will count your proxy as a vote in
favor of the merger.
Q: CAN I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY OR VOTING
INSTRUCTIONS?
A: Yes. You can change your vote at any time before your proxy is voted at
the Ag-Chem special meeting. You can do this in one of three ways:
- You can revoke your proxy;
- You can submit a new proxy; or
- If you are a holder of record, you can attend the applicable
special meeting and vote in person.
If you choose either of the first two methods, you must submit your
notice of revocation or your new proxy, as appropriate, to the
secretary of Ag-Chem before the special meeting. If you hold your
shares through an account at a brokerage firm or bank, you should
contact your brokerage firm or bank to change your vote.
Q: WHOM SHOULD I CALL IF I HAVE QUESTIONS?
A: If you have questions about the merger or how to submit your proxy, or
if you need additional copies of this joint proxy statement/ prospectus
or the enclosed proxy card or voting instructions, you should contact:
John Retherford, Senior Vice President and Chief Financial Officer
Ag-Chem Equipment Co., Inc.
5720 Smetana Drive
Minnetonka, Minnesota 55343
(952) 933-9006
Q: HOW MANY SHARES OF AGCO COMMON STOCK WILL BE OUTSTANDING AFTER THE
MERGER?
A: Assuming an AGCO price per share of $___ (the closing price on January
__, 2001), there will be approximately 71 million shares of AGCO common
stock outstanding, approximately [16.5%] of which will be held by
former shareholders of Ag-Chem.
Q: WHAT DIVIDENDS WILL I RECEIVE FROM MY AGCO STOCK IN THE FUTURE?
A: AGCO historically has paid a regular dividend of $.01 per share per
quarter. However, there can be no assurance that this dividend practice
will be continued.
Q: WHERE WILL THE SHARES OF AGCO COMMON STOCK BE LISTED?
A: The shares of AGCO common stock will be listed on the New York Stock
Exchange under the trading symbol "AG."
Q: WHAT ARE THE TAX CONSEQUENCES TO AG-CHEM SHAREHOLDERS OF THE MERGER?
A: The receipt of AGCO common stock in the merger may or may not be
tax-free to the
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shareholders of Ag-Chem for U.S. federal income tax purposes depending
upon the closing price of AGCO common stock immediately prior to the
effective date of the merger and depending on the structure of the
merger. However, even if the merger is tax-free, Ag-Chem shareholders
will recognize gain equal to the lesser of (i) the fair market value of
AGCO common stock plus the amount of cash received, less such
shareholder's tax basis in the Ag-Chem stock surrendered, or (ii) the
amount of cash received. Ag-Chem shareholders will be taxed on cash
received in lieu of fractional shares and cash received pursuant to the
exercise of appraisal rights.
Q: ARE AG-CHEM SHAREHOLDERS ENTITLED TO APPRAISAL RIGHTS?
A: Yes. Under Minnesota law, which governs Ag-Chem and the rights of its
shareholders, Ag-Chem shareholders who comply with Sections 302A.471
and 302A.473 of the Minnesota Business Corporation Act are entitled to
dissenters' rights of appraisal for their shares in lieu of the merger
consideration. A copy of these Sections is attached as Appendix C.
Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER
VOTE MY SHARES FOR ME?
A: Your broker will vote your shares only if you provide instructions on
how to vote. You should follow the directions provided by your broker
regarding how to instruct your broker to vote your shares.
Q: WILL AGCO ISSUE FRACTIONAL SHARES OF AGCO COMMON STOCK AS MERGER
CONSIDERATION?
A: No. AGCO will not issue fractional shares in the merger. As a result,
the total number of shares of AGCO common stock that each Ag-Chem
shareholder will receive in the merger will be rounded down to the
nearest whole number and each Ag-Chem shareholder will receive a cash
payment for the value of any remaining fraction of a share of AGCO
common stock that he or she otherwise would receive, if any.
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SUMMARY
Summarized below is selected basic information regarding the proposed merger of
AGCO and Ag-Chem. Because it is just a summary, it does not contain all of the
information regarding the merger. To understand the merger more fully, and for a
more complete description of the legal terms of the merger, you should read
carefully this entire document. The page references included parenthetically
will direct you to more complete descriptions of the topics presented in this
summary. The agreement and plan of merger is included as Appendix A to this
document. It is the legal document that governs the merger, and you are
encouraged to read it.
THE COMPANIES (SEE PAGE ___)
AGCO CORPORATION
4205 RIVER GREEN PARKWAY
DULUTH, GEORGIA 30096
- AGCO manufactures and distributes agricultural equipment and related
replacement parts throughout the world.
- AGCO sells a full range of agricultural equipment, including tractors,
combines, hay tools, sprayers, forage equipment and implements.
- AGCO's products are widely recognized in the agricultural equipment
industry and are marketed under the following brand names:
AGCO(R)Allis, Massey Ferguson(R), Hesston(R), White, GLEANER(R), New
Idea(R), AGCOSTAR(R), Tye(R), Farmhand(R), Glencoe(R), Fendt,
Spra-Coupe(R) and Willmar(R).
- AGCO distributes its products through a combination of approximately
8,200 independent dealers and distributors, associates and licensees.
- In addition, AGCO provides retail financing in North America, the
United Kingdom, France, Germany, Spain and Brazil through its finance
joint ventures with Cooperateive Centrale Raiffeisen-Boerenleenbank
B.A.
- AGCO had approximately $2.3 billion in assets as of December 31, 1999,
and in 1999 had revenues of $2.4 billion.
AG-CHEM EQUIPMENT CO., INC.
5720 SMETANA DRIVE
MINNETONKA, MINNESOTA 55343
- Ag-Chem manufactures and distributes off-road equipment primarily for
use in fertilizing agricultural crops, the application of crop
protection chemicals to crops, and to a lesser extent, industrial waste
treatment applications and other industrial uses.
- Ag-Chem generates a majority of its consolidated revenues from the sale
of self-propelled, three- and four-wheeled vehicles and related
equipment for use in the application of liquid and dry fertilizers and
crop protection chemicals.
- Ag-Chem manufactures equipment for use both prior to planting crops
("pre-emergence") and after crops emerge from the ground
("post-emergence").
- Ag-Chem sells a majority of its products directly to the end-users of
the equipment, which include fertilizer dealers, farm cooperatives,
large growers, municipalities, waste disposal contractors and mining
and construction companies.
- Ag-Chem had approximately $156 million in assets as of September 30,
2000, and in fiscal 2000 had revenues of approximately $299 million.
THE MERGER (SEE PAGE ___)
The merger agreement provides that AGCO will acquire Ag-Chem and all of
the outstanding Ag-Chem common stock in exchange for a combination of cash and
shares of AGCO common stock. The value of this combination is $25.80 per share
of Ag-Chem common stock.
As long as the closing price of AGCO common stock on the trading day
immediately prior to the effective date of the merger is equal to or greater
than $8.38 (or such higher price as is necessary to obtain opinions as to the
status of the merger as a Section 368(a) reorganization), the merger will be a
"forward merger" in which Ag-Chem would merge with and into Agri Acquisition
Corp., a newly-formed wholly-owned subsidiary of AGCO, with Agri Acquisition
Corp. being the surviving corporation.
If the closing price of AGCO common stock on the trading day
immediately prior to the effective date of the merger is less than $8.38 (or
such higher price as may be necessary to obtain opinions as to the status of the
merger as a Section 368(a) reorganization), then the merger will be a "reverse
merger" in which Agri Acquisition Corp. would merge with and into Ag-Chem, with
Ag-Chem being the surviving corporation. The
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<PAGE> 10
purpose of this alternate structure is to avoid the substantial corporate level
tax that would result if the merger were to be structured as a forward merger
and were to fail to satisfy the requirements for a tax-free reorganization under
Section 368(a) of the Internal Revenue Code.
Because the value of the shares of AGCO common stock for purposes of
determining whether the merger will be a forward or reverse merger will not be
determined until the effective date of the merger, you will not know at the time
of the Ag-Chem special meeting whether the forward merger structure or the
reverse merger structure will be used. The structure of the merger will affect
the tax consequences of the merger to Ag-Chem shareholders.
The merger agreement is attached hereto as Appendix A. You should read
the merger agreement, as it is the legal document that governs the merger.
VOTING AGREEMENT (SEE PAGE ___)
When AGCO and Ag-Chem entered into the merger agreement, AGCO required
Alvin E. McQuinn, the founder, Chairman and Chief Executive Officer of Ag-Chem,
acting in his individual capacity as a shareholder, to enter into a voting
agreement, under which McQuinn and a trust controlled by Mr. McQuinn, among
other things:
- agreed to appear, in person or by proxy, for the purpose of obtaining a
quorum at any meeting of the shareholders of Ag-Chem at which matters
relating to the merger are considered;
- agreed to vote shares beneficially held by him representing 19.9% of
the total outstanding Ag-Chem common stock in favor of adoption of the
merger agreement, and although he is not obligated to vote the
remaining shares of Ag-Chem held by him in favor of adoption, he has
indicated he intends to do so;
- granted to AGCO an irrevocable proxy to vote shares owned by him
representing 19.9% of the total outstanding Ag-Chem common stock in
favor of adoption of the merger agreement;
- agreed to acquire up to an aggregate of 7,000,000 shares of AGCO common
stock, either in connection with the merger, the AGCO subscription
right made available to Ag-Chem shareholders or both if the merger is a
reverse merger; and
- if Ag-Chem terminates the merger agreement with AGCO and completes a
merger or other transaction with another party within one year, agreed
to pay AGCO an amount equal to the difference between $25.80 and any
higher price received for Ag-Chem shares in the transaction, multiplied
by 19.9% of the outstanding Ag-Chem shares.
The Voting Agreement is attached hereto as Appendix B.
WHAT HOLDERS OF AG-CHEM COMMON STOCK WILL RECEIVE (SEE PAGE ___)
If the merger is completed, Ag-Chem shareholders will receive a
combination of cash and AGCO common stock having a value of $25.80 in exchange
for each share of Ag-Chem common stock. No fractional shares of AGCO common
stock will be issued. Instead, Ag-Chem shareholders will receive cash in payment
for any fractional shares based on the average closing price of AGCO common
stock for the ten trading days immediately prior to the effective date of the
merger. Ag-Chem shareholders will not receive interest on any cash payments
received in the merger.
Ag-Chem shareholders should not send in their stock certificates until
instructed to do so.
LISTING OF AGCO COMMON STOCK (SEE PAGE ___)
The shares of AGCO common stock issued in connection with the merger
will be listed on the New York Stock Exchange under the ticker symbol "AG."
MATERIAL FEDERAL INCOME TAX CONSEQUENCES (SEE PAGE ___)
The tax consequences resulting from the acquisition will differ
depending on whether the forward merger structure or the reverse merger
structure is used. Since the structure of the merger will depend on the closing
price of AGCO common stock on the trading day immediately prior to the effective
date of the merger, you will not know at the time of the Ag-Chem special meeting
which structure will be used.
IF THE MERGER IS A FORWARD MERGER:
The merger is intended to qualify as a reorganization under Section
368(a) of the Internal Revenue Code. In that case, generally:
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- an Ag-Chem shareholder will not recognize loss, but will recognize gain
to the extent of the lesser of (i) the fair market value of AGCO common
stock plus the amount of cash received, less such shareholder's tax
basis in the Ag-Chem stock surrendered, or (ii) the amount of cash
received. Ag-Chem shareholders will be taxed on cash received in lieu
of fractional shares and cash received pursuant to the exercise of
appraisal rights.
- the tax basis of AGCO common stock received by an Ag-Chem shareholder
in the merger will be the same as the tax basis of the Ag-Chem common
stock exchanged for the AGCO common stock decreased by the amount of
cash received in the exchange for such AGCO common stock and increased
by the amount of gain recognized by the Ag-Chem shareholder upon such
exchange.
- the holding period of the AGCO common stock received in the merger
generally will include the holding period of the Ag-Chem common stock
exchanged for the AGCO common stock assuming the Ag-Chem stock is held
as a capital asset at the effective time of the merger.
IF THE MERGER IS A REVERSE MERGER:
The merger will not qualify as a reorganization under Section 368(a) of
the Internal Revenue Code, but rather will be treated as a sale of Ag-Chem
stock, fully taxable to Ag-Chem shareholders. In that case, generally:
- an Ag-Chem shareholder will recognize gain or loss equal to the
difference between the sum of the fair market value of the AGCO stock
and the amount of cash received in the merger (including cash received
for fractional shares and pursuant to the exercise of dissenters'
rights), and the tax basis in the shares of Ag-Chem common stock
surrendered in the exchange.
- the tax basis of AGCO common stock received by Ag-Chem shareholders in
the merger will be equal to the fair market value of the AGCO common
stock at the time of the merger.
- the holding period of such stock will begin at the time such stock is
received.
AGCO SUBSCRIPTION RIGHT
Under no circumstances is AGCO obligated to issue more than 11,800,000
shares of AGCO common stock in the merger. However, if AGCO issues less than
11,800,000 AGCO shares in the merger and the merger is structured as a reverse
merger, each Ag-Chem shareholder will have the right to subscribe for a pro rata
portion (based on his or her ownership interest in Ag-Chem) of a number of AGCO
shares equal to the difference between the number of shares issued in the merger
and 11,800,00 shares. The per share purchase price for the AGCO subscription
right is the lesser of $8.38 or 105% of the average closing price of AGCO common
stock for the ten trading days prior to the effective date of the merger.
OWNERSHIP OF AGCO FOLLOWING THE MERGER (SEE PAGE ___)
Assuming an AGCO price per share of $____ (the closing price on January
__, 2001), Ag-Chem shareholders will own approximately [16.5%] of AGCO's
outstanding shares of common stock following the merger. Assuming such price,
A.E. McQuinn will own approximately [9.8%] of AGCO's common stock following the
merger.
EXECUTIVE OFFICERS AND DIRECTORS OF AGCO AND THE SURVIVING CORPORATION AFTER THE
MERGER (SEE PAGE ___)
The executive officers and directors of AGCO will not change as a
result of the merger, except that AGCO has agreed to use its reasonable best
efforts to appoint Alvin E. McQuinn to its board of directors if Mr. McQuinn
acquires 7,000,000 shares of AGCO common stock in connection with the merger
and/or any subscription right offered by AGCO to Ag-Chem shareholders. The
directors and executive officers of the surviving corporation in the merger,
whether it is Ag-Chem or Agri Acquisition Corp., will be determined by AGCO.
AG-CHEM'S REASONS FOR THE MERGER
In reaching the decision to approve the merger, the special committee
of the Ag-Chem board (and the Ag-Chem board, in reaching the decision to ratify
the special committee's approval) consulted with Goldsmith Agio Helms, its
financial advisor, with Maslon Edelman Borman & Brand, LLP, counsel to the
special committee, with Larkin, Hoffman, Daly & Lindgren, Ltd., counsel to
Ag-Chem, and with Ag-Chem senior management, and considered a number of factors,
including the following:
3
<PAGE> 12
- The merger should increase the ability of Ag-Chem, as a subsidiary of
AGCO, to further commercialize its site-specific applications;
- Ag-Chem should benefit from synergies related to production of its
products;
- AGCO's international distribution network should provide increased
opportunity for marketing of Ag-Chem's products;
- AGCO's domestic distribution network should provide an increased
ability to compete by marketing Ag-Chem's products to customers to whom
Ag-Chem has not traditionally made significant sales;
- AGCO's ability to finance sales of Ag-Chem's equipment through AGCO
Finance should enhance the ability to market Ag-Chem's products
and to obtain a higher return on sales of such products;
- Use of AGCO's network to distribute parts and services after the merger
is likely to result in lower costs than Ag-Chem's current parts and
service operation;
- The combined purchasing power of Ag-Chem and AGCO should help lower the
cost of production of Ag-Chem's products;
- AGCO has more financial resources to fund the research and development
for Ag-Chem's site-specific products and other operating expenses;
- Ag-Chem has unused manufacturing capacity in its Jackson, Minnesota,
plant which could be used by AGCO in the event AGCO requires additional
capacity;
- The combination of AGCO and Ag-Chem should result in administrative and
regulatory cost savings related to being a publicly-held company;
- The fact that the merger will likely be conducted in a manner that will
be partially tax-free to most Ag-Chem shareholders;
- The opinion of Goldsmith Agio Helms that the merger consideration to be
received pursuant to the merger agreement is fair from a financial
point of view to the shareholders of Ag-Chem;
- The fact that the price per share to be received by Ag-Chem
shareholders is fixed and is higher than the price at which Ag-Chem's
common stock has traded in the public market in the recent past;
- The fact that the market for AGCO common stock is larger and better
established than the market for Ag-Chem common stock;
- The financial condition, cash flows and results of operations of
Ag-Chem and AGCO, both on a historical and projected basis;
- The opportunity for Ag-Chem shareholders to participate, as holders of
AGCO common stock, in a much larger, more diversified organization; and
- The information provided by, and discussions with, Ag-Chem's senior
management and financial advisor concerning each of Ag-Chem's and
AGCO's businesses, assets, management and prospects.
The Ag-Chem special committee and the Ag-Chem board have each
unanimously determined that the merger agreement and the transactions
contemplated by the merger agreement, including the merger, are advisable and
fair to and in the best interests of Ag-Chem and its shareholders and both the
special committee and the board recommend that Ag-Chem shareholders vote to
approve and adopt the merger agreement and the transactions contemplated by the
merger agreement, including the merger, at the Ag-Chem special meeting.
RISK FACTORS (SEE PAGE ___)
YOU ARE URGED TO CONSIDER THE RISK FACTORS DESCRIBED ELSEWHERE IN THE
PROXY STATEMENT/PROSPECTUS IN DECIDING WHETHER TO VOTE IN FAVOR OF THE PROPOSAL
TO ADOPT THE MERGER AGREEMENT.
INTERESTS OF CERTAIN PERSONS IN THE MERGER (SEE PAGE ___)
Under the merger agreement, certain employees of Ag-Chem may be paid
severance or termination payments equal to one or two times their current base
salaries, as the case may be, if they are terminated by
4
<PAGE> 13
AGCO within one year following the effective date of the merger. Additionally,
participants in Ag-Chem's phantom stock bonus plan will receive an amount in
cash equal to approximately $13.86 for each unit held in the plan, or an
aggregate of $1,178,100.
ACCOUNTING TREATMENT OF THE MERGER (SEE PAGE ___)
AGCO expects the merger to be treated as a purchase for accounting and
financial reporting purposes, which means that AGCO will include Ag-Chem's
operating results in its financial statements only from the consummation of the
merger.
TERMINATION OF THE MERGER AGREEMENT (SEE PAGE ___)
AGCO and Ag-Chem may agree at any time prior to the merger to terminate
the merger agreement, even if the Ag-Chem shareholders have adopted the merger
agreement.
Also, AGCO or Ag-Chem may terminate the merger agreement if:
- a court or governmental authority issues a nonappealable final order,
decree or ruling prohibiting the merger;
- the approval of a court or governmental authority required for
consummation of the merger is denied in a nonappealable, final order,
decree or ruling;
- the other party acts in material breach of the merger agreement;
- the merger is not completed by June 30, 2001; or
- the merger agreement is not adopted by the Ag-Chem shareholders at the
special meeting.
Ag-Chem also may terminate the merger agreement if:
- Ag-Chem's board, after receipt of a superior proposal to acquire
Ag-Chem from another person and after consultation with outside legal
counsel and financial advisors, determines in the good faith exercise
of its fiduciary duties to Ag-Chem shareholders, that termination of
the merger agreement would be required by applicable law; or
- the average closing price of AGCO common stock for the ten trading days
ending on the trading day immediately prior to the effective date of
the merger is less than $6.10 and AGCO determines to seek approval of
its stockholders to issue more than 11,800,000 shares of AGCO common
stock in the merger, but only within three business days of notice from
AGCO that AGCO intends to do so (or if AGCO fails to make an Issuance
Election within the time specified in the merger agreement).
AGCO also may terminate the merger agreement if:
- AGCO common stock's average closing price for the ten trading days
ending on the trading day immediately prior to the closing date is less
than $6.10; or
- Ag-Chem's board fails to recommend the merger, withdraws its approval
or recommendation of the merger, or approves, endorses or recommends an
acquisition proposal from another person.
TERMINATION FEE (SEE PAGE ___)
If the merger agreement is terminated by AGCO because Ag-Chem's board
fails to recommend the merger, withdrew its approval or recommendation of the
merger, or approved, endorsed or recommended an acquisition proposal from
another person, Ag-Chem must pay AGCO $10,000,000.
If the merger agreement is terminated by Ag-Chem because its board,
after receipt of a superior acquisition proposal, determined in the good faith
exercise of its fiduciary duties to the shareholders of Ag-Chem that they would
be required to terminate the merger agreement under applicable law, Ag-Chem must
pay AGCO $10,000,000 in order to terminate the merger agreement.
If the merger agreement is terminated by AGCO or Ag-Chem because
Ag-Chem shareholders do not approve the merger agreement at the special meeting,
Ag-Chem must pay AGCO $10,000,000 in order to terminate the merger agreement.
AG-CHEM'S RECOMMENDATION TO ITS SHAREHOLDERS (SEE PAGE ____)
The special committee of the board of directors has unanimously voted
to approve the merger and all
5
<PAGE> 14
related transactions. The full board unanimously ratified this approval and both
urge Ag-Chem shareholders to vote "FOR" the merger.
THE SPECIAL MEETING OF AG-CHEM SHAREHOLDERS (SEE PAGE ____)
Record Date. The special meeting of Ag-Chem shareholders will be held
3:00 p.m. local time, at Ag-Chem's corporate headquarters at 5720 Smetana Drive,
Minnetonka, Minnesota, 55453 on February __, 2001.
Votes Required. At the special meeting, Ag-Chem shareholders will be
asked to vote to adopt the merger agreement and approve the merger with AGCO.
Adoption of the merger agreement requires the favorable vote of a majority of
the outstanding shares of Ag-Chem common stock. It is not expected that the vote
of AGCO shareholders will be required to approve the merger.
Voting Procedure. You can vote at the special meeting if you owned
Ag-Chem common stock as of the close of business on January __, 2001. As of that
date, directors and executive officers of Ag-Chem owned approximately [61%] of
the outstanding shares of Ag-Chem common stock and have indicated that they will
vote in favor of the merger agreement and the merger. If you do not vote your
shares of Ag-Chem common stock and do not give instructions to your broker as to
how to vote, the effect will be the same as a vote against the merger agreement
and the merger.
DIVIDENDS (SEE PAGE ___)
AGCO historically has paid a regular dividend of $.01 per share per
quarter. However, there can be no assurance that this dividend practice will be
continued.
APPRAISAL AND DISSENTERS' RIGHTS (SEE PAGE ___)
Shareholders of Ag-Chem who follow certain procedural requirements will
be entitled to receive cash in the amount of the fair value of their shares
instead of the cash and shares of AGCO common stock to be issued pursuant to the
merger agreement. The fair value of shares of Ag-Chem common stock would be
determined pursuant to Minnesota law.
ANY AG-CHEM SHAREHOLDER WHO WISHES TO EXERCISE DISSENTERS' RIGHTS MUST
NOT VOTE IN FAVOR OF THE MERGER AGREEMENT AND MUST COMPLY WITH ALL OF THE
PROCEDURAL REQUIREMENTS PROVIDED BY MINNESOTA LAW. A COPY OF THE DISSENTERS'
RIGHTS STATUTE, SECTIONS 302A.471 AND 302A.473, IS ATTACHED AS APPENDIX C TO
THIS DOCUMENT. WE ENCOURAGE YOU TO READ THE STATUTE CAREFULLY AND TO CONSULT
WITH LEGAL COUNSEL IF YOU DESIRE TO EXERCISE YOUR DISSENTERS' RIGHTS.
OPINION OF AG-CHEM'S FINANCIAL ADVISOR (SEE PAGE ____)
Goldsmith Agio Helms delivered an opinion to Ag-Chem's special
committee and board of directors that, as of the date thereof and subject to the
qualifications described in its opinion, the consideration to be received by the
Ag-Chem shareholders in the merger is fair, from a financial point of view, to
the Ag-Chem shareholders. The amount of consideration to be received was
determined through negotiations between Ag-Chem and AGCO and not pursuant to
recommendations of Goldsmith Agio Helms.
The complete opinion of Goldsmith Agio Helms is attached as Appendix D.
We urge you to read it in its entirety.
REGULATORY MATTERS (SEE PAGE ____)
We have made filings and taken other actions necessary to obtain
approvals from certain regulatory authorities, including antitrust authorities,
in connection with the merger. The initial filings under the Hart-Scott-Rodino
Antitrust Improvements Act were made on December 12, 2000, and the waiting
period under that Act will expire on January 11, 2001, unless extended by a
request for additional information. We expect to obtain all other necessary
regulatory approvals before the Ag-Chem special meeting. However, it is not
certain that we will obtain all required regulatory approvals by that date. Any
approvals that we receive may be subject to conditions that could be detrimental
to AGCO or Ag-Chem.
FINANCING THE MERGER (SEE PAGE ___)
AGCO anticipates that the cash consideration to be paid in the merger
will be funded through its revolving credit facility.
6
<PAGE> 15
MATERIAL DIFFERENCES IN THE RIGHTS OF SHAREHOLDERS (SEE PAGE ___)
The rights of AGCO stockholders are governed by Delaware corporate law,
AGCO's certificate of incorporation and AGCO's bylaws, while the rights of
Ag-Chem's shareholders are governed by Minnesota corporate law, Ag-Chem's
articles of incorporation and Ag-Chem's bylaws. Significant differences exist
between Delaware and Minnesota corporate laws and the governing documents of
each company.
7
<PAGE> 16
COMPARATIVE MARKET PRICES (SEE PAGES ___)
Ag-Chem's common stock trades on the Nasdaq National Market System
("Nasdaq") under the ticker symbol "AGCH." AGCO's common stock trades on the New
York Stock Exchange ("NYSE") under the ticker symbol "AG." The following table
sets forth, for the periods indicated, the high and low sales prices for
Ag-Chem's and AGCO's common stock for each quarter within the last two fiscal
years, as reported on the Nasdaq and the NYSE respectively.
<TABLE>
<CAPTION>
At or for the Year Ended At or for the Year Ended For the Year Ending
September 30, 1999 September 30, 2000 September 30, 2001
------------------ ------------------ ------------------
(current through January [ ],
2001)
High Low High Low High Low
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
AG-CHEM
First Quarter 13 9 1/2 14 1/2 9 1/4
Second Quarter 15 5/8 10 10 5/8 8 5/16
Third Quarter 12 3/16 9 3/4 8 3/4 5 1/4
Fourth Quarter 10 3/4 8 1/2 12 3/4 6 3/4
</TABLE>
<TABLE>
<CAPTION>
At or for the Year Ended At or for the Year Ended For the Year Ending
December 31, 1999 December 31, 2000 December 31, 2001
----------------- ----------------- -----------------
(current through (current through January [ ],
December 18, 2000) 2001)
High Low High Low High Low
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
AGCO
First Quarter 8 9/16 6 1/16 13 7/8 10 1/16
Second Quarter 12 15/16 6 5/16 14 3/8 10 9/16
Third Quarter 13 1/2 8 11/16 13 1/16 10
Fourth Quarter 14 1/8 9 15/16 11 13/16 9 11/16
</TABLE>
8
<PAGE> 17
AGCO CORPORATION
SELECTED HISTORICAL FINANCIAL DATA
The following selected historical financial data of AGCO Corporation as
of and for each of the years ended December 31, 1995 through 1999 set forth
below have been derived from AGCO's audited consolidated financial statements.
The financial data as of September 30, 2000 and 1999, and for the nine-month
periods then ended, have been derived from AGCO's unaudited condensed
consolidated financial statements which include, in management's opinion, all
adjustments, consisting of normal recurring adjustments, necessary to present
fairly the results of operations and financial position of AGCO for the periods
and dates presented. This data should be read in conjunction with the respective
audited and unaudited consolidated financial statements of AGCO, including the
notes to those financial statements and AGCO's "Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained in its Form
10-K for the year ended December 31, 1999, and Form 10-Q for the quarter ended
September 30, 2000, incorporated in this proxy statement/prospectus by
reference. All amounts are in millions, except for per share data.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS
Net sales $ 2,413.3 $2,941.4 $3,224.4 $2,317.5 $2,068.4
Gross profit 356.4 537.3 666.8 470.3 440.7
Income from operations 57.7 170.5 319.1 211.9 220.6
Net income (loss) (11.5) 60.6 168.7 125.9 129.1
Net income (loss) per common share-diluted $ (0.20) $ 0.99 $ 2.71 $ 2.20 $ 2.31
Weighted average shares outstanding-diluted 58.7 61.2 62.1 57.4 56.6
Dividends declared per common share $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.02
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
2000 1999
---- ----
<S> <C> <C>
Net sales $1,677.0 $1,815.6
Gross profit 271.3 287.2
Income from operations 49.8 83.1
Net income (loss) (4.2) 15.8
Net income (loss) per common share-diluted $ (0.07) $ 0.27
Weighted average shares outstanding-diluted 59.1 59.6
Dividends declared per common share $ 0.03 $ 0.03
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Working capital $ 733.9 $ 1,029.9 $ 884.3 $ 750.5 $ 661.5
Total assets 2,273.2 2,750.4 2,620.9 2,116.5 1,628.6
Long-term debt 691.7 924.2 727.4 567.1 415.9
Stockholders' equity 829.1 982.1 991.6 774.6 588.9
Book value per share 13.92 16.50 15.75 13.53 11.65
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30,
-------------------
2000 1999
---- ----
<S> <C> <C>
Working capital $ 584.2 $ 938.6
Total assets 2,056.3 2,470.7
Long-term debt 582.3 850.7
Stockholders' equity 774.8 868.5
Book value per share 13.00 14.59
</TABLE>
9
<PAGE> 18
The selected historical financial data for AGCO reflects the following items
which you should consider in making period to period comparisons:
- Amounts presented for Income from operations, Net income (loss) and Net
income (loss) per common share-diluted include nonrecurring expenses of
$24.5 million, $40.0 million, $18.2 million, $22.3 million and $6.0
million for the years ended December 31, 1999, 1998, 1997, 1996 and
1995, respectively, and $19.5 for the nine months ended September 30,
2000. The effect of these nonrecurring charges reduced net income per
common share on a diluted basis by $0.26, $0.41, $0.19, $0.25 and $0.07
for the years ended December 31, 1999, 1998, 1997, 1996 and 1995,
respectively, and $0.05 for the nine months ended September 30, 2000.
For additional information regarding these changes, see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Nonrecurring Expenses" contained in AGCO's Form 10-K for
the year ended December 31, 1999, and its Form 10-Q for the quarter
ended September 30, 2000.
- Amounts for the years ended December 31, 1996 and 1997 under Net income
(loss) per common share-diluted and Weighted average shares
outstanding-diluted include extraordinary losses for the write-off of
unamortized debt costs related to the refinancing of AGCO's revolving
credit facility, net of taxes, of $2.1 million, or $0.03 per share, in
1997 and $3.5 million, or $0.06 per share, in 1996.
- AGCO sold a 51% joint venture interest in its retail finance
subsidiary, Agricredit-North America, effective November 1, 1996.
Accordingly, Agricredit-North America is reflected on the equity basis
of accounting for the year ended December 31, 1996, and all subsequent
periods. For comparative purposes, the table also reflects
Agricredit-North America on the equity basis of accounting for the year
ended December 31, 1995. If the Company's 100% interest in
Agricredit-North America were reflected on a consolidated basis for the
year ended December 31, 1995, total revenues would be $2,125.0 million,
total assets would be $2,162.9 million, and long-term debt would be
$568.9 million.
- Net income per common share - diluted, Weighted average shares
outstanding - diluted and Dividends declared per common share have been
restated for all periods to reflect all stock splits.
- The amount under Long-term debt as of December 31, 1995, includes $37.6
million of AGCO's 6.5% Convertible Subordinated Debentures, which was
subsequently converted into common stock during 1996.
- Book value per share represents Stockholders' equity divided by common
shares outstanding as of the end of the period.
10
<PAGE> 19
AG-CHEM EQUIPMENT CO., INC.
SELECTED HISTORICAL FINANCIAL DATA
The following selected historical financial data of Ag-Chem as of and
for each of the fiscal years ended September 30, 1996 through 2000 set forth
below have been derived from Ag-Chem's audited consolidated financial
statements. This data should be read in conjunction with the audited
consolidated financial statements of Ag-Chem, including the notes to those
financial statements and the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" incorporated in this proxy
statement/prospectus by reference. All amounts are in millions, except for per
share data. Book value per share represents stockholders' equity divided by
common shares outstanding as of the end of the period.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS
Net sales $298.8 $292.7 $322.1 $318.2 $280.2
Gross profit 66.4 78.0 87.2 85.6 79.8
Income (loss) from operations (0.1) 7.7 13.2 16.6 18.5
Net income (loss) (1.4) 3.4 6.8 7.6 9.7
Net income (loss) per common share (0.15) 0.35 0.71 0.78 1.01
Weighted average shares outstanding 9.6 9.6 9.7 9.7 9.7
Dividends declared per common share 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30,
-------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Working capital $ 52.8 $ 66.3 $ 76.2 $ 53.5 $ 47.9
Total assets 155.7 189.9 188.2 188.0 185.6
Long-term debt, net of current installments 23.9 44.3 59.9 45.4 43.3
Stockholders' equity 71.7 73.2 70.4 63.9 57.3
Book value per share 7.48 7.63 7.30 6.61 5.91
</TABLE>
11
<PAGE> 20
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following selected unaudited pro forma combined financial data is
based on the historical financial statements of AGCO and Ag-Chem, adjusted to
give effect to the merger of Ag-Chem with AGCO's wholly-owned subsidiary. The
pro forma combined financial data is derived from the unaudited pro forma
combined financial information included elsewhere in this prospectus. This
pro forma combined financial data should be read in conjunction with the notes
to the unaudited pro forma financial information. The pro forma combined
financial data was prepared to illustrate the estimated effects of the
acquisition of Ag-Chem, including acquisition-related debt and equity
transactions and certain assumptions. The pro forma results of operations data
for the year ended December 31, 1999 and the nine months ended September 30,
2000 give effect to the acquisition of Ag-Chem as if the acquisition had
occurred as of January 1, 1999. The pro forma balance sheet data give effect to
the acquisition of Ag-Chem as if the acquisition had occurred as of September
30, 2000. The pro forma combined financial data does not purport to represent
AGCO's results of operations or financial position for any future period or as
of any date. All amounts are in millions, except for per share data.
<TABLE>
<CAPTION>
PRO FORMA COMBINED
----------------------------------------
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------------ ------------
<S> <C> <C>
OPERATING RESULTS
Net Sales $ 1,917.1 $ 2,711.2
Gross profit 323.6 433.0
Income from operations 51.8 63.8
Net loss (12.0) (21.0)
Net loss per common share-diluted $ (0.17) $ (0.30)
Weighted average shares outstanding-diluted 70.9 70.5
Dividends declared per common share $ 0.03 $ 0.04
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA
COMBINED
-------------------
AS OF SEPTEMBER 30,
2000
-------------------
<S> <C>
BALANCE SHEET DATA
Working capital $ 660.5
Total assets 2,404.2
Long-term debt 758.4
Stockholders' equity 892.1
Book value per share 12.50
</TABLE>
12
<PAGE> 21
RISK FACTORS
IN DECIDING WHETHER TO APPROVE THE MERGER, YOU SHOULD CONSIDER THE
FOLLOWING RISKS RELATED TO THE MERGER AND TO YOUR INVESTMENT IN AGCO FOLLOWING
THE MERGER. YOU SHOULD CONSIDER CAREFULLY THESE RISKS ALONG WITH THE OTHER
INFORMATION IN THIS DOCUMENT AND THE DOCUMENTS TO WHICH WE HAVE REFERRED YOU.
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS
This document contains numerous forward-looking statements about the
financial condition, results of operations, cash flows, dividends, financing
plans, business strategies, operating efficiencies or synergies, capital and
other expenditures, competitive positions, growth opportunities for existing
products, plans and objectives of management, markets for stock of AGCO and
other matters. The words "estimate," "project," "intend," "expect," "believe,"
"forecast" and similar expressions are intended to identify these
forward-looking statements, but some of these statements use other phrasing. In
addition, any statement in this document that is not a historical fact is a
"forward-looking statement." Except as required by law, AGCO and Ag-Chem
expressly disclaim any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date of
this document or to reflect the occurrence of unanticipated events. Such
forward-looking statements, wherever they occur in this document, are
necessarily estimates reflecting the best judgment of the senior management of
AGCO and/or Ag-Chem and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the
forward-looking statements. In addition to the specific factors listed on the
following pages, important factors that could cause actual results to differ
materially from those suggested by the forward-looking statements are described
in the documents that are incorporated by reference into this document and also
include:
- an inability to fully realize, or to realize within the
anticipated time frame, the expected cost savings, strategic
benefits, revenue enhancements or synergies from the merger;
- intensified competitive pressures in the industries in which
AGCO and Ag-Chem compete;
- greater than expected costs or difficulties related to the
integration of Ag-Chem's businesses with the businesses of
AGCO;
- changes in general economic and/or capital market conditions,
or in the agricultural equipment industry in particular, that
adversely affect AGCO's or Ag-Chem's operations;
- failure to obtain required approvals and consents or to
otherwise satisfy the conditions to consummation of the
merger; and
- legislative or regulatory requirements or changes that
adversely affect AGCO's and/or Ag-Chem's businesses.
In addition, there can be no assurance that:
- all of the factors affecting AGCO and Ag-Chem's businesses
have been correctly identified and assessed;
- the publicly available and other information, upon which the
analysis contained in this document is based, is complete or
correct;
- the analysis contained in this document is correct; or
- the strategies, which are based in part on this analysis, will
be successful.
13
<PAGE> 22
Accordingly, you should not rely on the accuracy of predictions
contained in forward-looking statements.
FACTORS RELATING TO THE MERGER
WHETHER YOU WILL RECEIVE SHARES OF AGCO COMMON STOCK AS PART OF THE MERGER
CONSIDERATION IS BASED ON THE MARKET VALUE OF AGCO COMMON STOCK.
If the closing price of AGCO's common stock on the trading day
immediately preceding the effective date of the merger exceeds $8.38 (or such
higher price as may be necessary to obtain opinions as to the status of the
merger as a Section 368(a) reorganization), the merger will be a forward merger
and you will receive as part of the merger consideration AGCO common stock. If,
however, the closing price does not exceed $8.38 (or such higher price as may be
necessary to obtain opinions as to the status of the merger as a Section 368(a)
reorganization) , the merger will not be a forward merger, but a reverse merger.
In the event of a reverse merger, AGCO may elect to issue any number of shares
of AGCO common stock (not in excess of 11,800,000) as part of the merger
consideration, or AGCO may elect to issue no shares of AGCO common stock as part
of the merger consideration.
We cannot predict market prices for AGCO common stock; therefore we
cannot predict whether you will receive shares of AGCO common stock as part of
the merger consideration. We encourage you to obtain current market quotations
of the AGCO common stock which is listed on the New York Stock Exchange under
the symbol "AG."
THERE IS NO GUARANTEE THAT ANY ISSUANCE OF AGCO COMMON STOCK TO YOU AS PART OF
THE MERGER CONSIDERATION WILL BE TAX-FREE.
You will not know whether, for U.S. federal income tax purposes, any
issuance of AGCO common stock in the merger will be a taxable event to you at
the time you vote at the Ag-Chem special meeting.
AGCO and Ag-Chem intend, if possible, for the merger to be a forward
merger and to qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code. If the merger so qualifies, then any holders of
Ag-Chem common stock who receive AGCO common stock will not recognize a gain or
loss for U.S. federal income tax purposes as a result of the merger, except for
gain to the extent of cash received as part of the merger consideration,
including cash received in lieu of fractional shares or because of the exercise
of appraisal or dissenters' rights.
There can be no assurance that the conditions will occur that are
necessary for the merger to be a Section 368(a) reorganization. If the merger is
not a Section 368(a) reorganization or if the merger is structured as a reverse
merger (for any reason), then any issuance of AGCO common stock to Ag-Chem
shareholders will be a taxable event for Ag-Chem shareholders.
The completion of the merger as a Section 368(a) reorganization is
conditioned on, among other things, the receipt by Ag-Chem of an opinion from
KPMG LLP, independent certified public accountants to Ag-Chem and the receipt by
AGCO of an opinion from Troutman Sanders LLP, counsel for AGCO, that the merger
will qualify as a Section 368(a) reorganization. An opinion represents the
opinion-giver's best judgment and is not binding on the Internal Revenue
Service. There can be no assurance that following the merger the Internal
Revenue Service will not challenge the qualification of the merger as a Section
368(a) reorganization.
See "Material Provisions of The Merger Agreement- Material Federal
Income Tax Consequences" on page ___.
AGCO MAY ENCOUNTER DIFFICULTIES IN INTEGRATING AG-CHEM AS A WHOLLY-OWNED
SUBSIDIARY.
The merger will convert Ag-Chem, which previously operated
independently, into a wholly-owned subsidiary of AGCO. AGCO expects to realize
strategic and other benefits as a result of the transaction, including, among
other things, expansion of AGCO's product line, access to Ag-Chem's advanced
crop management technology, cost savings, operating efficiencies, revenue
enhancements and other synergies. However, it is
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impossible to predict with certainty whether, or to what extent, these benefits
will be realized or whether AGCO will be able to integrate Ag-Chem in a timely
and effective manner.
BECAUSE OF INTEGRATION CHALLENGES, THE VALUE OF AGCO COMMON STOCK MAY DECLINE.
The integration of Ag-Chem as a wholly-owned subsidiary of AGCO will
require significant attention from management. This diversion of management
attention and any other difficulties associated with this integration could have
a material adverse effect on the revenues, the levels of expenses and the
operating results of AGCO after the transaction and cause the value of AGCO's
common stock to decline.
DIRECTORS, OFFICERS AND EMPLOYEES OF AG-CHEM MAY HAVE INTERESTS THAT ARE
DIFFERENT FROM OR IN ADDITION TO YOUR INTERESTS AS A SHAREHOLDER, INCLUDING
CERTAIN SEVERANCE BENEFITS.
When considering the recommendation of the board of directors of
Ag-Chem, you should be aware that some directors, officers and employees of
Ag-Chem may have interests in the transaction that are different from, or in
addition to, your interests as shareholders. These competing interests primarily
consist of certain severance benefits provided to certain directors, officers
and employees of Ag-Chem pursuant to the merger agreement. In the event that
certain of those individuals are terminated without "cause" or quits for "good
reason" within one year following the effective time of the merger, they will be
entitled to certain cash severance benefits equal to one or two times their
annual base salary, as the case may be. In addition, if the merger is
consummated and Alvin E. McQuinn has acquired at least 7,000,000 shares of AGCO
common stock, AGCO has agreed to use its reasonable best efforts to increase the
size of its board of directors and appoint Mr. McQuinn as a member. See
"Interests of Certain Persons in the Merger" on page __.
FACTORS RELATING TO AGCO AFTER THE TRANSACTION
ALVIN E. MCQUINN WILL BECOME A SUBSTANTIAL STOCKHOLDER OF AGCO AND MAY NOT ACT
CONSISTENTLY WITH THE INTERESTS OF THE OTHER AGCO STOCKHOLDERS.
Following the merger, Alvin E. McQuinn will be AGCO's largest single
stockholder, owning approximately [9.8]% of AGCO's common stock. While Mr.
McQuinn's ownership interest will result in his being a significant AGCO
stockholder, his AGCO ownership interest will represent a reduction from his
position, which he has held for over thirty years, as a holder of approximately
60% of Ag-Chem's outstanding stock. There can be no assurance that Mr. McQuinn's
interests will be aligned with the interests of other AGCO stockholders. See
"Principal Stockholders" on page __.
COMPLIANCE WITH ENVIRONMENTAL LAWS MAY INCREASE AGCO'S COSTS.
AGCO's operations and products are subject to increasingly stringent
environmental laws and regulations in the countries in which AGCO operates. Such
regulations govern, among other things, emissions into the air, discharges into
water, the use, handling and disposal of hazardous substances, waste disposal
and the remediation of soil and groundwater contamination. AGCO regularly
expends significant resources to comply with regulations concerning the
emissions levels of its manufacturing facilities and the emissions levels of its
equipment products.
LABOR MATTERS COULD IMPAIR AGCO'S ABILITY TO ACHIEVE COST SAVINGS.
A majority of AGCO's employees at its manufacturing facilities, both
domestically and internationally, are represented by collective bargaining
agreements with expiration dates ranging from 2000 to 2002. In Europe, AGCO's
employees are protected by various worker protection laws which afford
employees, through local and central works councils, rights of consultation with
respect to specific matters involving their employers' business and operations,
including the downsizing or closure of facilities and employment terminations.
These laws and the collective bargaining agreements to which AGCO is subject
could impair AGCO's flexibility in streamlining existing manufacturing
facilities and in restructuring its combined businesses. The acquisition of
Ag-Chem also may provide the labor unions representing employees at some of
AGCO's facilities with opportunities to expand into currently non-union
facilities.
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AGCO'S FINANCIAL RESULTS ARE HEAVILY DEPENDENT UPON THE AGRICULTURAL INDUSTRY.
AGCO's success is heavily dependent upon the vitality of the
agricultural industry. Historically, the agricultural industry, including the
agricultural equipment business, has been cyclical and subject to a variety of
economic, governmental and weather conditions. Sales of agricultural equipment
generally are related to the health of the agricultural industry, which is
affected by farm income, farm land values, farm cash receipts and farm profits,
all of which reflect levels of commodity prices, acreage planted, crop yields,
demand, government policies and government subsidies. Sales are also influenced
by economic conditions, interest rate and exchange rate levels and the
availability of financing. Weather conditions can also affect farmers' buying
decisions. During previous economic downturns in the farm sector, the
agricultural equipment business experienced a general decline in sales and
profitability, and AGCO expects its business to remain subject to similar market
fluctuation in the future.
THE AGRICULTURAL EQUIPMENT INDUSTRY IS HIGHLY SEASONAL.
The agricultural equipment business is highly seasonal, with farmers
traditionally purchasing agricultural equipment in the Spring and Fall in
conjunction with the major planting and harvesting seasons. AGCO's net sales and
income from operations have historically been the lowest in the first quarter
and have increased in subsequent quarters as dealers increase inventory in
anticipation of increased retail sales in the third and fourth quarters.
AGCO FACES INTENSE COMPETITION.
The agricultural equipment business is highly competitive, particularly
in North America, Europe and Latin America. AGCO competes with several large
national and international companies which, like AGCO, offer a full line of
agricultural equipment, as well as with numerous short-line and specialty
manufacturers and suppliers of farm equipment products. In certain markets,
regional competitors with significant market share in a single country or group
of countries also compete with AGCO. Some of AGCO's competitors, including Deere
& Co. and CNH Global, are substantially larger than AGCO and have greater
financial and other resources at their disposal. There can be no assurance that
these competitors will not substantially increase the resources devoted to the
development and marketing, including discounting, of products competitive with
those of AGCO.
AGCO'S OPERATIONS MAY BE ADVERSELY AFFECTED BY DOMESTIC AND FOREIGN GOVERNMENTAL
REGULATION OF AGRICULTURAL PRODUCTS.
Domestic and foreign political developments and government regulations
and policies directly affect the agricultural industry in the United States and
abroad and indirectly affect the agricultural equipment business in which AGCO
operates. The application or modification of existing laws, regulations or
policies or the adoption of new laws, regulations, trade agreements or policies
adversely affecting the agricultural industry could have an adverse effect on
AGCO's business.
AGCO'S INTERNATIONAL OPERATIONS EXPOSE IT TO A NUMBER OF FOREIGN RISKS,
INCLUDING FOREIGN CURRENCY AND EXCHANGE RATE RISK.
AGCO currently purchases a portion of its tractors and other equipment
from foreign suppliers and derives a majority of its revenues in foreign
countries. In addition, AGCO has significant manufacturing operations in foreign
countries. The production costs, profit margins and competitive position of AGCO
are affected by the strength of the currencies in countries where it
manufactures or purchases goods relative to the strength of the currencies in
countries where its products are sold. AGCO's results of operations and
financial position may be adversely affected by fluctuations in foreign
currencies and by translations of the financial statements of AGCO's foreign
subsidiaries from local currencies into U.S. dollars. AGCO is exposed to adverse
effects of fluctuations in the relevant local currency and translations of the
financial statements of AGCO's subsidiaries from the local currency into U.S.
dollars. AGCO's international operations are also subject to various risks that
are not present in domestic operations, including restrictions on dividends and
restrictions on the repatriation of funds.
Additionally, trends abroad such as farm consolidations may affect the
agricultural equipment market.
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Foreign developing markets may present special risks, such as unavailability of
financing, inflation, slow economic growth, changes in currency relationships or
price controls.
AG-CHEM SPECIAL MEETING
Ag-Chem is furnishing this proxy statement/prospectus in connection
with the solicitation of proxies by the Ag-Chem board of directors relating to
the merger agreement and the transactions contemplated by the merger agreement.
Ag-Chem is first sending this proxy statement/prospectus to shareholders of
Ag-Chem on or about January ___, 2001. You should read this proxy statement/
prospectus carefully before voting your shares.
DATE, TIME AND PLACE
The special meeting for Ag-Chem is scheduled to be held as follows:
February __,2001
3:00 p.m., local time
5720 Smetana Drive, Minnetonka, Minnesota
55453
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING
At the meeting, we will ask Ag-Chem shareholders to consider and vote
upon adoption of the merger agreement and the approval of the merger. Ag-Chem
shareholders also will vote upon any other business that may properly come
before the Ag-Chem special meeting or any adjournment or postponement of that
meeting.
RECORD DATE FOR THE SPECIAL MEETING; STOCK ENTITLED TO VOTE; QUORUM
The Ag-Chem board of directors has fixed the close of business on
January ___, 2001, as the record date for determining the Ag-Chem shareholders
entitled to notice of and to vote at the Ag-Chem special meeting. On January
___, 2001, there were 9,579,868 shares of Ag-Chem common stock outstanding held
by approximately _____ holders of record.
APPRAISAL AND DISSENTERS' RIGHTS
Shareholders of Ag-Chem who follow certain procedural requirements will
be entitled to receive cash in the amount of the fair value of their shares
instead of the shares of AGCO common stock and the cash to be issued and paid
pursuant to the merger. The fair value of shares of Ag-Chem common stock would
be determined pursuant to Minnesota law.
Any Ag-Chem shareholder who wishes to exercise dissenters' rights must
not vote in favor of the merger agreement and must comply with all of the
procedural requirements imposed by Minnesota law. A copy of the dissenters'
rights statute, Sections 302A.471 and 302A.473, is attached as Appendix C to
this document. We encourage you to read the statute carefully and to consult
with legal counsel if you desire to exercise your dissenters' rights.
COST OF SOLICITATION
Ag-Chem will pay the expenses incurred in connection with the printing
and mailing of this proxy statement/prospectus. Ag-Chem also will request banks,
brokers and other intermediaries holding shares of Ag-Chem common stock
beneficially owned by others to send this proxy statement/prospectus to, and
obtain proxies from, the beneficial owners and will reimburse the holders for
their reasonable expenses in so doing. Solicitation of
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proxies by mail may be supplemented by telephone, telegram and other electronic
means, advertisements and personal solicitation by the directors, officers or
employees of Ag-Chem. No additional compensation will be paid to directors,
officers or employees for such solicitation.
AG-CHEM SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES WITH
THEIR PROXY CARDS AND/OR VOTING INSTRUCTIONS. FOR INFORMATION REGARDING WHAT TO
DO WITH AG-CHEM SHARE CERTIFICATES, AG-CHEM SHAREHOLDERS SHOULD REVIEW "MATERIAL
PROVISIONS OF THE MERGER AGREEMENT--CONVERSION OF SHARES" ON PAGE ____.
INFORMATION ABOUT OUR COMPANIES
AGCO
AGCO is a leading manufacturer and distributor of agricultural
equipment and related replacement parts throughout the world. AGCO sells a full
range of agricultural equipment, including tractors, combines, hay tools,
sprayers, forage equipment and implements. AGCO's products are widely recognized
in the agricultural equipment industry and are marketed under the following
brand names: AGCO(R) Allis, Massey Ferguson(R), Hesston(R), White, GLEANER(R),
New Idea(R), AGCOSTAR(R), Tye(R), Farmhand(R), Glencoe(R), Fendt, Spra-Coupe(R)
and Willmar(R). AGCO distributes its products through a combination of
approximately 8,200 independent dealers and distributors, associates and
licensees. In addition, AGCO provides retail financing in North America, the
United Kingdom, France, Germany, Spain and Brazil through its finance joint
ventures with Cooperateive Centrale Raiffeisen-Boerenleenbank B.A. AGCO was
organized in June 1990 by an investment group formed by management to acquire
the successor to the agricultural equipment business of Allis-Chalmers, a
company which began manufacturing and distributing agricultural equipment in the
early 1900s. Since its formation in June 1990, AGCO has grown substantially
through a series of 17 acquisitions for consideration aggregating approximately
$1.4 billion. These acquisitions have allowed AGCO to broaden its product line,
expand its dealer network and establish strong market positions in several new
markets throughout North America, South America, Western Europe and the rest of
the world. AGCO has achieved significant cost savings and efficiencies from its
acquisitions by eliminating duplicate administrative, sales and marketing
functions, rationalizing its dealer network, increasing manufacturing capacity
utilization and engineering common product platforms for certain products. In
addition, AGCO is focusing its efforts on long-term growth and profit
improvement initiatives including developing new and innovative products,
expanding and strengthening its distribution network, reducing product costs,
maintaining a flexible horizontal production strategy, and utilizing efficient
asset management.
AG-CHEM
Ag-Chem manufactures and distributes off-road equipment primarily for
use in fertilizing agricultural crops, the application of crop protection
chemicals to crops, and, to a lesser extent, industrial waste treatment
applications and other industrial uses. Ag-Chem was incorporated in Minnesota in
1963.
Ag-Chem's mission is to position itself as a leading, state-of-the-art
manufacturer of agricultural application equipment, with an emphasis on
"Site-Specific Agriculture" through its SOILTEQ products, specifically
SOILECTION(R) and other high-tech hardware and software product offerings. In
order to achieve this goal, Ag-Chem has implemented a business strategy that is
focused on customer service and training. In addition to its 17 parts and
service centers, Ag-Chem provides customers with service by offering an
organization of field service repair personnel who are stationed at various
locations throughout the country. Because Ag-Chem believes customer training in
site-specific technology is of paramount importance, Ag-Chem operates a
Technology & Education Center in Jackson, Minnesota to meet the specialized
training needs of its customers. Unlike most of its competitors which sell
through distributors, Ag-Chem sells a majority of its products directly to
end-users of the equipment, which include fertilizer dealers, farm cooperatives,
large growers, municipalities, waste disposal contractors and mining and
construction companies. This distribution strategy enables Ag-Chem to maintain
close ties with its customers.
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THE MERGER
GENERAL
Ag-Chem is furnishing this document to its shareholders in connection
with the solicitation of proxies by the Ag-Chem board of directors for use at
the Ag-Chem special meeting. At the special meeting, which will be held on
February __, 2001, Ag-Chem shareholders will be asked to adopt the merger
agreement.
The merger agreement provides that AGCO will acquire all of the
outstanding Ag-Chem common stock in exchange for a combination of cash and AGCO
common stock.
A copy of the merger agreement is attached as Appendix A to this
document. You should read the merger agreement, as it is the legal document that
governs the merger.
BACKGROUND OF THE MERGER
Ag-Chem, prior to May 30, 2000, had begun exploring the possibility of
a merger with, sale to, or other arrangement with one or more other participants
in the agricultural equipment market. Ag-Chem had undertaken this exploration
based in part on its belief that certain aspects of its business, particularly
its technology business, might grow more quickly if owned by, licensed to, or
partnered with others who had greater financial resources, a full equipment line
and broader domestic and international distribution than Ag-Chem. In connection
with such exploration, Ag-Chem engaged Goldsmith Agio Helms to act as Ag-Chem's
financial advisor to assist in Ag-Chem's analysis and consideration of various
financial alternatives available to Ag-Chem with respect to a possible sale of
Ag-Chem.
In late May 2000, Robert J. Ratliff, Executive Chairman of the board
of directors of AGCO, contacted A.E. McQuinn, Chairman of the Board and Chief
Executive Officer of Ag-Chem and expressed an interest in learning more about
Ag-Chem's business. On May 30, 2000, Ag-Chem made a presentation regarding
Ag-Chem, generally, and regarding SOILTEQ, at its executive offices in
Minnetonka, Minnesota, to Mr. Ratliff, John M. Shumejda, AGCO's President and
Chief Executive Officer , and Norman L. Boyd, AGCO's Vice President for
Corporate Development. This presentation was made by Mr. McQuinn, Mary M.
Jetland, Ag-Chem's Senior Vice President for SOILTEQ, and John C. Retherford,
Ag-Chem's Senior Vice President and Chief Financial Officer, and certain other
employees of Ag-Chem and was attended by a representative of Goldsmith Agio
Helms. At the same meeting, AGCO made a presentation about its history, its
growth strategy, its prior acquisitions, and similar matters. The next day,
Messrs. Ratliff, Boyd and Shumejda of AGCO, accompanied by Mr. McQuinn and Ms.
Jetland and the representative of Goldsmith Agio Helms, toured Ag-Chem's
Jackson, Minnesota plant. No merger negotiations resulted directly from the May
meetings although each of Ag-Chem and AGCO was aware that the other had some
interest in a possible transaction or arrangement.
In late July, after Ag-Chem had conducted discussions with other
candidates about a variety of possible transactions, Goldsmith Agio Helms, at
Ag-Chem's request, delivered a confidential memorandum about Ag-Chem to AGCO.
Between delivery of that memorandum and late August, Goldsmith Agio
Helms had several informal discussions by telephone with representatives of AGCO
and officers of Ag-Chem about the information provided about Ag-Chem, inclusion
or exclusion of various aspects of Ag-Chem's business in a possible transaction
and possible structures and financial terms of such a transaction.
On August 30, Messrs. Ratliff and Boyd of AGCO, together with Stephen
D. Lupton, AGCO's Senior Vice President and General Counsel, met with Messrs.
McQuinn and Retherford and Ms. Jetland and representatives of Goldsmith Agio
Helms at Goldsmith Agio Helms's offices in Minneapolis. Ag-Chem presented
information about itself which was more detailed than had been presented at the
late-May meeting. There was also significant discussion regarding potential
synergies that might result from a business combination between AGCO and Ag-Chem
and significant discussion about Ag-Chem's financial information and forecasts.
Although there was some discussion about a range of per share prices for
Ag-Chem's common stock presented previously by AGCO, and the nature of
consideration which might be given for Ag-Chem's common stock, there was no
agreement or negotiations on price or any terms. AGCO and Ag-Chem did agree to
continue discussions. Over the next month, a
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number of informal discussions, primarily by telephone, some through Goldsmith
Agio Helms, took place focusing on a number of topics, including the price that
AGCO might be willing to pay for Ag-Chem, which portions of Ag-Chem's business
might be included in an acquisition and the nature of consideration that might
be given by AGCO.
On September 25, another meeting took place at the offices of Goldsmith
Agio Helms in Minneapolis. Messrs. McQuinn and Retherford, Ms. Jetland and
DeWalt Willard, a director of Ag-Chem, participated on behalf of Ag-Chem and
Messrs. Ratliff, Boyd, and Lupton participated on behalf of AGCO.
Representatives of Goldsmith Agio Helms also participated in these discussions,
as did Ag-Chem's legal advisors Larkin, Hoffman, Daly & Lindgren, Ltd., and
AGCO's legal advisors, Troutman Sanders LLP. AGCO made a presentation about,
among other things, AGCO's financial condition, operating results, business
outlook, possible structures for an acquisition, possible synergies that might
result from such a combination, possible strategies for integration of Ag-Chem's
business into AGCO and analyses of pro-forma and projected financial information
which had been prepared by AGCO. Although no agreement was reached regarding
price or terms, AGCO and Ag-Chem authorized representatives of AGCO and AGCO's
law firm to conduct certain "due diligence" inquiries on AGCO's behalf.
During the first week of October, representatives of AGCO visited
Ag-Chem's law firm to conduct inquiries and review information about Ag-Chem,
its business, and certain other matters. After several days, Ag-Chem
discontinued furnishing due diligence information to AGCO because Ag-Chem had
come to believe it unlikely that an agreement would be reached with AGCO and
more likely that an agreement would be reached with another potential acquirer.
The next week, Mr. Ratliff of AGCO recontacted A.E. McQuinn. Mr. Ratliff
indicated that AGCO had continued studying the information provided by Ag-Chem
and had concluded that there was a higher likelihood of creating synergies than
AGCO had initially contemplated and that, as a result, AGCO would likely be
willing to pay a higher price per share than had previously been discussed.
On October 19, Mr. McQuinn, Ms. Jetland and representatives of
Goldsmith Agio Helms, on behalf of Ag-Chem, and Messrs. Ratliff, Shumejda and
Boyd, on behalf of AGCO, met at Ag-Chem's offices to discuss price and terms.
During this meeting, there was a general agreement on a price of $26.00 per
Ag-Chem share although the nature of the consideration to be given and several
other material terms, including a potential reduction in price related to
Ag-Chem's anticipated payment of bonuses to certain employees, were yet to be
resolved. AGCO and Ag-Chem authorized their law firms to begin preparing drafts
of the agreements related to a proposed transaction and, as a result, a first
draft of a merger agreement was distributed to Ag-Chem directors late in the
week of November 6th.
The Ag-Chem board met on Monday, November 13, 2000. At this meeting,
Ag-Chem's law firm made a presentation regarding the Ag-Chem board's
responsibility. Goldsmith Agio Helms made a presentation regarding the history
of negotiations and pending issues in the negotiations and presented its oral
opinion, which after certain changes to the merger agreement were agreed to by
AGCO and Ag-Chem, was confirmed orally and, thereafter, in writing, to the
effect that, as of the date thereof and subject to the assumptions, procedures
and limitations set forth therein, the proposed merger consideration to be
received pursuant to the merger agreement by the holders of Ag-Chem common stock
is fair to the Ag-Chem shareholders from a financial point of view. The board
then appointed a special committee of the board of directors comprised of G.
Waddy Garrett, Al Giese, and DeWalt Willard, whom the board determined to be all
of the disinterested directors as contemplated by Minnesota Statutes, Section
302A.673. The special committee was given the authority to approve and authorize
Ag-Chem's entering into a merger with AGCO or such other party as it deemed
appropriate, pursuant to such terms and conditions as the special committee
deemed to be in the best interest of Ag-Chem.
On November 13, 2000, the special committee also engaged independent
legal counsel to advise it regarding the negotiations with AGCO and regarding
its responsibilities. Also on November 13, the special committee met with its
independent legal counsel, Maslon Edelman Borman & Brand, LLP, and Goldsmith
Agio Helms, to discuss the proposed merger agreement. At this meeting, the
special committee's independent legal counsel made a presentation regarding the
special committee's responsibilities under Minnesota law.
Negotiations between Ag-Chem and AGCO continued, both in person in
Minneapolis and by telephone, and the Ag-Chem special committee continued to
meet, throughout the week of November 13th. Multiple drafts of the proposed
merger agreement were exchanged but there was not final agreement on price and
terms until
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November 17. The Ag-Chem special committee approved and adopted the merger
agreement on November 17 and the Ag-Chem board ratified such approval on the
following day. Ag-Chem and AGCO executed the merger agreement on Sunday,
November 19, effective as of Monday November 20. Ag-Chem and AGCO each issued
press releases before the markets opened on Monday November 20th announcing the
merger agreement.
AG-CHEM'S REASONS FOR THE MERGER
Ag-Chem's special committee and board of directors have each
unanimously determined that the merger is advisable and in the best interests of
Ag-Chem and its shareholders and have approved and adopted the merger, the
merger agreement and the transactions contemplated thereby. In reaching the
determination that the merger is advisable and in the best interests of Ag-Chem
and its shareholders, the Ag-Chem special committee and board considered a
number of factors, which included (but did not consist exclusively of) the
following:
- The merger should increase the ability of Ag-Chem, as a
subsidiary of AGCO, to further commercialize its site-specific
applications. Ag-Chem has attempted to position itself as the
state-of-the-art manufacturer of agricultural application
equipment, with an emphasis on site-specific agriculture
through its SOILTEQ products, specifically SOILECTION(R)and
other high-tech hardware and software product offerings.
Although the SOILTEQ aspect of Ag-Chem's business has grown
more slowly than Ag-Chem had hoped, Ag-Chem continues to
believe in the future of this product line. Although Ag-Chem
has been, and is, a leader in site-specific agriculture, over
the past few years, other companies, some with greater
financial, marketing, and other resources than Ag-Chem, have
entered this marketplace. Ag-Chem has become particularly
concerned that Deere & Co. and CNH Global have begun to market
site-specific agricultural equipment. Both Deere & Co. and CNH
Global have greater access to capital, broader name
recognition and larger distribution networks than Ag-Chem,
each of which has placed Ag-Chem at a competitive
disadvantage. AGCO has indicated that it intends to continue
to pursue Ag-Chem's site specific agriculture strategy and
that it views the segments of the agricultural equipment
industry served by Ag-Chem as major growth segments of the
industry. Joining with AGCO will give Ag-Chem the opportunity
to more broadly market its site-specific agricultural products
and services to a wider range of customers.
- Ag-Chem should benefit from synergies related to production of
its products. Ag-Chem and AGCO both produce products for
various aspects of the agriculture industry. Many of such
products use similar technologies, both in their design and in
their production. The combination of Ag-Chem's and AGCO's
design and production functions should increase Ag-Chem's
ability to efficiently produce its products.
- AGCO's international distribution network should provide
increased opportunity for marketing of Ag-Chem's products.
While Ag-Chem has traditionally marketed its products in the
United States, more recently, it has expanded its marketing
efforts in Europe. European sales accounted for less than 10%
of Ag-Chem's sales in the fiscal year ended September 30,
2000. Ag-Chem derives little sales revenue from the sale of
its products in South America. AGCO has a well-established
distribution network in Europe and South America, which should
provide new outlets for sales of Ag-Chem's products.
- AGCO's domestic distribution network should provide an
increased ability to compete by marketing Ag-Chem's products
to customers to whom Ag-Chem has not traditionally made
significant sales. Ag-Chem's and AGCO's products have
traditionally been marketed to differing segments of the
agriculture industry. The merger should provide an opportunity
to increase sales of Ag-Chem's products because AGCO has
access to, and history with, customers in a portion of the
agriculture industry (large farmers) not traditionally served
by Ag-Chem.
- AGCO's ability to finance sales of Ag-Chem's equipment,
through AGCO Finance, should both enhance the ability to
market Ag-Chem's products and to obtain a higher return on
sales of such products. Traditionally, Ag-Chem has provided
financing to its customers related to purchases of Ag-Chem's
products through financing arrangements with third-party
lenders such as banks. Although
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such financing has been an essential element of Ag-Chem's
ability to market its products, it has not been a significant
source of revenues for Ag-Chem. AGCO, through its AGCO Finance
subsidiary, obtains financing from the sale of debt
securities, provides such financing and administers such
financing arrangements. AGCO's ability to provide such
financing services to purchasers of Ag-Chem's equipment should
provide more revenue after the merger is completed.
- Use of AGCO's network to distribute parts and service after
the merger is likely to result in lower costs than Ag-Chem's
current parts and service operation. AGCO's parts and service
network is more effective and economical than Ag-Chem's
because AGCO has a broader network of equipment dealers
servicing its equipment and AGCO's parts distribution network
is more centrally based. These efficiencies should allow
Ag-Chem, after the merger, to improve the contribution of its
parts and service network to the profitability of the combined
companies.
- The combined purchasing power of Ag-Chem and AGCO should help
lower the cost of production of Ag-Chem's products. AGCO is a
much larger company than Ag-Chem and, as such, is often able
to purchase parts, supplies and services at more competitive
prices and rates than Ag-Chem. Access to such purchasing power
should increase the operating margins of Ag-Chem's products.
- AGCO's financial resources are better able to fund the
research and development for Ag-Chem's site-specific products
and other operating expenses. Although Ag-Chem, from the
beginning of its September 30, 1999 fiscal year, through
October 31, 2000, has operated with a cumulative positive cash
flow from operations of $46.8 million, a significant portion
of such cash flow has been related to Ag-Chem's reduction in
receivables and inventory. Ag-Chem's focus on, and investment
in, site-specific agriculture has reduced cash flow available
to fund operations and such lower receivables and inventory
levels have hindered Ag-Chem's ability to obtain new financing
to fund expansion and growth. Ag-Chem believes its ability to
obtain financing has been negatively affected by the market
for companies engaged in the agriculture industry. Ag-Chem
believes AGCO's access to capital markets should enhance the
ability to fund research and development for site-specific
products and other operating expenses.
- Ag-Chem has unused manufacturing capacity in its Jackson,
Minnesota, plant which could be used by AGCO in the event AGCO
requires additional capacity. Ag-Chem built a substantial
expansion of its Jackson, Minnesota plant in 1995 as it was
substantially expanding sales of its Rogator line of
equipment. Downturns in the agricultural economy generally
have led to slower expansion of production at such plant than
had been anticipated. During the fiscal year ended September
30, 2000, such plant operated at approximately 60% of
capacity. Ag-Chem believes that such plant could achieve a
much higher percentage of productivity as a result of
increased production of agricultural equipment products due to
the marketing efficiencies related to Ag-Chem described above.
- The combination of AGCO and Ag-Chem should result in
administrative and regulatory cost savings related to being a
publicly-held company. AGCO should be able to reduce and/or
eliminate certain operating costs related to duplicative
administrative and regulatory requirements (e.g. costs of
complying with the periodic reporting requirements of the
Securities and Exchange Commission and auditing costs).
- The fact that the merger will likely be conducted in a manner
that will be partially tax-free to most Ag-Chem shareholders.
As discussed in "Material Provisions of the Merger
Agreement--Material Federal Income Tax Consequences" on page
___, it is likely that the merger will be conducted in such a
manner that Ag-Chem shareholders will receive both AGCO shares
and cash and, to the extent Ag-Chem shareholders receive AGCO
shares, the merger will likely be tax free to such
shareholders. However, the merger will be taxable to such
shareholders to the extent of the lesser of (i) the fair
market value of the AGCO common stock plus the amount of cash
received, less the shareholder's basis in the Ag-Chem common
stock or (ii) the amount of cash received. Although the
Ag-Chem special committee and board considered this factor,
each also concluded that if, ultimately, the merger does not
qualify as partially tax-free, nonetheless, the other factors
identified by the Ag-Chem special
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committee and the board justify completion of the merger on a
taxable basis.
- The opinion of Goldsmith Agio Helms that the merger
consideration to be received pursuant to the merger agreement
is fair from a financial point of view to the shareholders of
Ag-Chem. The opinion, dated November 18, 2000, to the special
committee and the board, of Goldsmith Agio Helms stated that,
as of that date and based upon and subject to the matters
described in the opinion, the per share consideration which is
to be received in the merger by the Ag-Chem shareholders was
fair, from a financial point of view, to such holders. The
full text of Goldsmith Agio Helms' written opinion, which sets
forth the assumptions made, procedures followed, matters
considered and limitations on the review undertaken by
Goldsmith Agio Helms, is attached as Appendix D to this proxy
statement/prospectus. In addition, the opinion is discussed in
more detail below under the caption "Opinion of Ag-Chem's
Financial Advisor."
- The fact that the price per share to be received by Ag-Chem
shareholders is fixed and is in excess of the price at which
Ag-Chem's common stock has traded in the public market in the
recent past and the fact that the market for AGCO's common
stock is larger and better established. Ag-Chem's common stock
has been traded in the Nasdaq National Market System since
April 24, 1995. The highest closing bid price at which it has
traded since that date is $31.75 on October 9, 1995. The
volume of Ag-Chem shares has been relatively low since that
date with average weekly trading volumes of 39,909 shares
since such date and 36,496 shares during the 52 weeks prior to
entering into the merger agreement. AGCO's common stock has
been traded on the New York Stock Exchange since [ ] and its
average weekly trading volume during the 52 weeks prior to
entering into the merger agreement has been [ ] shares. The
agreed-upon price of $25.80 per share of Ag-Chem common stock
was $14.30 (124%) over the price at which Ag-Chem common stock
had closed on Friday, November 17, 2000, the last trading day
before the merger agreement was executed and announced.
The foregoing discussion of the information and factors discussed by
the Ag-Chem special committee and board is not meant to be exhaustive but
includes all material factors considered by the Ag-Chem special committee and
board. Neither the Ag-Chem special committee nor the Ag-Chem board found it
practicable to quantify, rank or otherwise attach any relative weight to the
various factors. In addition, the Ag-Chem special committee and board did not
reach any specific conclusion with respect to each of the factors considered, or
any aspect of any particular factor, but conducted an overall analysis of these
factors, including discussions with Ag-Chem's management and legal and financial
advisors. The Ag-Chem board did not believe that the negative factors were
sufficient, individually or in the aggregate, to outweigh the potential
advantages of the merger. As a result of its consideration of the foregoing, the
Ag-Chem special committee and board determined that the merger, the merger
agreement and the transactions contemplated thereby are advisable and fair to
and in the best interests of Ag-Chem and its shareholders and approved and
adopted the merger, the merger agreement and the transactions contemplated
thereby. In addition, individual members of the Ag-Chem special committee and
board may have given different weight to different information and factors.
RECOMMENDATION OF THE AG-CHEM BOARD REGARDING THE MERGER
The Ag-Chem special committee and the Ag-Chem board have each
unanimously determined that the merger agreement and the transactions
contemplated by the merger agreement, including the merger, are advisable and
fair to and in the best interests of Ag-Chem and its shareholders and both the
special committee and the board recommend that Ag-Chem shareholders vote to
approve and adopt the merger agreement and the transactions contemplated by the
merger agreement, including the merger, at the Ag-Chem special meeting.
In considering the recommendation of the Ag-Chem special committee and
board of directors with respect to the merger agreement, you should be aware
that some directors and officers of Ag-Chem may have certain interests in the
merger that are different from, or are in addition to, the interests of Ag-Chem
shareholders generally. See "Interests of Certain Persons in the Merger."
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FINANCING THE MERGER
AGCO anticipates that the total amount of cash necessary to complete
the merger will be approximately $150 million, including expenses related to the
merger and amounts required to pay off certain indebtedness of Ag-Chem. AGCO
expects to fund the cash consideration and cash costs of the merger through
borrowings under its revolving credit facility.
ACCOUNTING TREATMENT OF THE MERGER
AGCO expects the merger to be treated as a purchase for accounting and
financial reporting purposes, which means that AGCO will include Ag-Chem's
operating results in its financial statements only from the consummation of the
merger.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain federal income tax consequences
of the merger and the exchange by the holders of Ag-Chem common stock of such
shares for the merger consideration. This discussion applies only to those
Ag-Chem shareholders, if any, who hold their shares as a capital asset. This
discussion does not address all aspects of taxation that may be relevant to
particular shareholders in light of their personal investment or tax
circumstances, or to certain types of Ag-Chem shareholders (including insurance
companies, financial institutions, broker-dealers, foreign corporations, persons
who receive stock through the exercise of stock options or otherwise as
compensation for services rendered, tax-exempt organizations, holders who held
their stock as part of a hedge, appreciated financial position, straddle or
conversion transaction and persons who are not citizens or residents of the
United States) subject to special treatment under the federal income tax laws,
nor does it discuss any state, local or foreign tax considerations. Accordingly,
each Ag-Chem shareholder is urged to consult his or her own tax advisor as to
the specific tax consequences of the merger to such shareholder, including the
applicable federal, state, local and foreign tax consequences of the merger.
As discussed below, the tax consequences of the merger will differ,
depending on the structure of the merger. For more information regarding the
considerations that will determine the structure of the merger, see "Material
Provisions of the Merger Agreement--General" on page ___. Neither AGCO nor
Ag-Chem has requested or will receive a ruling from the Internal Revenue Service
(the "Service") as to the federal income tax consequences of the merger. The
following discussion is based upon the Internal Revenue Code, the regulations
thereunder, administrative rulings and practices by the Service, and judicial
authority, in each case existing at the time of this discussion, all of which is
subject to change, possibly retroactively.
Forward merger. AGCO and Ag-Chem both intend that the merger will occur
as a forward merger and a reorganization under Section 368(a) of the Internal
Revenue Code. However, as discussed below, if the merger occurs as a reverse
merger, the merger will be a taxable transaction to the Ag-Chem shareholders. If
the merger is structured as a forward merger, a condition to the consummation of
the merger is the receipt by AGCO of an opinion from Troutman Sanders LLP, and
the receipt by Ag-Chem of an opinion from KPMG LLP, both dated the effective
date of the merger, relating to certain federal income tax consequences of the
merger. Such opinions will be based upon certain representations of facts
provided by AGCO, Ag-Chem, Agri Acquisition Corp. and certain shareholders of
Ag-Chem. Such representations of fact have not and will not be independently
verified by Troutman Sanders LLP or KPMG LLP. Such opinions will also be based
upon the Internal Revenue Code, regulations thereunder, administrative rulings
and practice by the Service, and judicial authority, in such case existing at
the time such opinion is delivered. Any change in applicable law or pertinent
facts could affect the continuing validity of such opinions. In addition, such
tax opinions will not be binding on the Service, and there can be no assurance,
and none is hereby given, that the Service will not take a position which is
contrary to one or more positions reflected in the tax opinions, or that such
opinions will be upheld by the courts if challenged by the Service. Based on the
foregoing, it is anticipated that the tax opinion of KPMG LLP will state: (a)
the merger will constitute a reorganization within the meaning of Section 368(a)
of the Code, and (b) that accordingly, (i) no gain or loss will be recognized by
Ag-Chem as a result of the merger and (ii) no gain or loss will be recognized by
a shareholder of Ag-Chem who receives the merger consideration in exchange for
shares of Ag-Chem common stock, except to the extent of shareholder realized
gain for the cash portion of the merger consideration and cash received in lieu
of fractional shares interests.
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Tax Consequences of Reorganization. If the merger qualifies as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, it is anticipated the following tax consequences will occur:
- an Ag-Chem shareholder who receives a combination of AGCO
common stock and cash in exchange for his or her Ag-Chem
common stock in the merger will recognize gain equal to the
lesser of (i) the fair market value of the AGCO common stock
plus the amount of cash received, less his or her basis in the
Ag-Chem common stock surrendered, or (ii) the amount of cash
received;
- an Ag-Chem shareholder will not recognize a loss with respect
to his or her Ag-Chem Stock surrendered;
- the tax basis of the AGCO common stock received in the merger
by an Ag-Chem shareholder (including any fractional share
interest) will be the same as the tax basis of the Ag-Chem
common stock exchanged for such AGCO common stock, decreased
by the amount of cash received in the exchange for such AGCO
common stock and increased by the amount of gain recognized by
the Ag-Chem shareholder upon such exchange;
- the holding period for long-term capital gains purposes for
the AGCO common stock received in the merger by an Ag-Chem
shareholder will include the holding period of such
shareholder in the Ag-Chem common stock exchanged for such
AGCO common stock, provided the Ag-Chem common stock is held
as a capital asset at the effective time of the merger; and
- an Ag-Chem shareholder who exercises dissenters' rights of
appraisal with respect to Ag-Chem common stock and who
receives payment for that stock in cash should recognize gain
or loss measured by the difference between the amount of cash
received and the shareholders' tax basis in such stock.
Tax Consequences of a Reverse Merger. If the merger is structured as a
reverse merger, it is anticipated that
- an Ag-Chem shareholder who exchanges his or her Ag-Chem common
stock for AGCO common stock and/or cash will recognize gain or
loss equal to the fair market value of the AGCO common stock
plus cash received, less his or her basis in the Ag-Chem
common stock surrendered;
- the tax basis of the AGCO common stock received by an Ag-Chem
shareholder in the merger will be equal to the fair market
value of the AGCO common stock at the time of the merger; and
- the holding period of any stock received will begin at the
time such stock is received.
Reporting Requirements and Backup Withholding. Each shareholder
receiving AGCO common stock as a result of the acquisition will be required to
retain records and file with the shareholder's federal income tax return a
statement containing facts relating to the acquisition.
Backup withholding at the rate of 31% may apply with respect to
payments unless the recipient (a) is a corporation or comes within certain other
exempt categories and, when required, demonstrates this fact or (b) provides a
correct taxpayer identification number, certifies as to no loss of exemption
from backup withholding and otherwise complies with applicable requirements of
the backup withholding rules. A shareholder who does not provide AGCO with his
or her correct taxpayer identification number may have to pay penalties imposed
by the Service. Any amounts withheld under the backup withholding rules may be
allowed as a refund or a credit against the shareholder's federal income tax
liability provided that any required information is furnished to the Service.
AGCO will report to shareholders of AGCO and to the Service the amount of
"reportable payments" and any amount withheld with respect to AGCO common stock
received during each calendar year.
THE DISCUSSION ABOVE AND THE TAX OPINIONS ADDRESS THE MATERIAL FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGER TO HOLDERS NOT COVERED BY SPECIAL RULES,
BUT DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL
FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER. THE DISCUSSION IS BASED ON
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CURRENTLY EXISTING PROVISIONS OF THE INTERNAL REVENUE CODE, EXISTING AND
PROPOSED TREASURY REGULATIONS THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS AND
COURT DECISIONS. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND ANY SUCH CHANGE
COULD AFFECT, RETROACTIVELY, THE CONTINUING VALIDITY OF THIS DISCUSSION. IN
ADDITION, THE DISCUSSION ABOVE AND THE TAX OPINIONS DO NOT ADDRESS TAX
CONSEQUENCES WHICH MAY VARY WITH, OR ARE CONTINGENT ON, INDIVIDUAL
CIRCUMSTANCES. MOREOVER, THIS DISCUSSION AND THE TAX OPINIONS DO NOT ADDRESS ANY
NON-INCOME TAX OR ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE MERGER.
THIS DISCUSSION AND THE TAX OPINIONS DO NOT ADDRESS THE TAX CONSEQUENCES OF ANY
TRANSACTION OTHER THAN THE MERGER. YOU ARE STRONGLY URGED TO CONSULT WITH YOUR
TAX ADVISOR TO DETERMINE THE PARTICULAR UNITED STATES FEDERAL, STATE, LOCAL OR
FOREIGN INCOME OR OTHER TAX CONSEQUENCE OF THE MERGER TO YOU.
REGULATORY MATTERS
The merger is subject to a number of regulatory filings and/or
approvals that are described below. While AGCO and Ag-Chem believe that they
will be able to obtain any required regulatory approvals, AGCO and Ag-Chem
cannot predict whether such regulatory approvals will be obtained within the
time frame contemplated by the merger agreement or on conditions that would not
be detrimental to AGCO, Ag-Chem, or the combined company, or whether such
approvals will be obtained at all.
Antitrust. Transactions such as the merger are reviewed by the United
States Department of Justice and the United States Federal Trade Commission to
determine whether they comply with applicable antitrust law. Under the
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (HSR Act), and the rules promulgated thereunder, the merger cannot be
completed until AGCO and Ag-Chem file premerger Notification and Report Forms
with the Antitrust Division of the United States Department of Justice and the
Federal Trade Commission and a required waiting period has expired or been
terminated. On December 12, 2000, both of AGCO and Ag-Chem filed the
Notification and Report Forms. The required waiting period will expire at
midnight on January 11, 2001, unless extended by a request for additional
information.
At any time before or after the merger is completed, the United States
Department of Justice, the Federal Trade Commission or any state could take
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the merger or seeking divestiture of
substantial assets of AGCO or Ag-Chem or their subsidiaries. Private parties may
also seek to take legal action under the antitrust laws under some
circumstances.
Foreign Regulatory Filings. AGCO and Ag-Chem each conduct business in a
number of foreign countries and jurisdictions. In connection with the merger,
the laws of certain of those foreign countries and jurisdictions may require the
filing of information with, or the obtaining of the approval of, governmental
authorities in such countries and jurisdictions. On December 11, 2000, AGCO and
Ag-Chem made a premerger notification filing in Brazil. AGCO and Ag-Chem intend
to make regulatory filings in Argentina and other countries that may require
such filings.
AGCO and Ag-Chem can give no assurance that the required regulatory
approvals described above will be received or, if received, the timing and the
terms and conditions of the regulatory approvals or whether conditions will be
imposed.
APPRAISAL AND DISSENTERS' RIGHTS
THE FOLLOWING SUMMARY OF THE APPLICABLE PROVISIONS OF SECTIONS 302A.471
AND 302A.473 OF THE MINNESOTA BUSINESS CORPORATION ACT (THE "MBCA") IS NOT
INTENDED TO BE A COMPLETE STATEMENT OF SUCH PROVISIONS AND IS QUALIFIED IN ITS
ENTIRETY, BY REFERENCE TO SUCH SECTIONS, THE FULL TEXTS OF WHICH ARE ATTACHED AS
APPENDIX C TO THIS DOCUMENT. THESE SECTIONS SHOULD BE REVIEWED CAREFULLY BY ANY
AG-CHEM SHAREHOLDER WHO WISHES TO EXERCISE DISSENTERS' RIGHTS OR WHO WISHES TO
PRESERVE THE RIGHT TO DO SO, SINCE FAILURE TO COMPLY WITH THE STATUTORY
PROCEDURES SUMMARIZED BELOW WILL RESULT IN THE LOSS OF DISSENTERS' RIGHTS. ANY
HOLDER WHO FORFEITS HIS OR HER DISSENTERS' RIGHTS BY FAILURE TO FOLLOW THESE
PROCEDURES WILL THEN RECEIVE THE MERGER CONSIDERATION DESCRIBED IN THIS DOCUMENT
UPON COMPLETION OF THE MERGER.
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The merger agreement constitutes a plan of merger for which shareholder
approval is required under the MBCA. Under Sections 302A.471 and 302A.473 of the
MBCA, holders of Ag-Chem common stock will have the right, by fully complying
with the applicable provisions of Sections 302A.471 and 302A.473, to dissent
with respect to the merger and to obtain payment in cash of the "fair value" of
their shares of Ag-Chem common stock after the merger is completed. The term
"fair value" means the value of the shares of Ag-Chem common stock immediately
before the effective time.
All references in Sections 302A.471 and 302A.473 and in this summary to
a "shareholder" are to a record holder of the shares of Ag-Chem common stock as
to which dissenters' rights are asserted. A person having beneficial ownership
of shares of Ag-Chem common stock that are held of record in the name of another
person, such as a broker, nominee, trustee or custodian, must act promptly to
cause the record holder to follow the steps summarized below properly and in a
timely manner in order to perfect whatever dissenters' rights such beneficial
owner may have.
Shareholders of record who desire to exercise their dissenters' rights
under the MBCA must satisfy all of the following conditions:
- BEFORE the Ag-Chem special meeting, deliver a written notice
of intent to demand fair value for shares to the Secretary of
Ag-Chem, 5720 Smetana Drive, Minnetonka, Minnesota,
55343-9688, Fax number (952) 933-8799. The written demand
should specify the shareholder's name and mailing address, the
number of shares owned and that the shareholder intends to
demand the value of his or her shares. This written demand
must be in addition to and separate from any proxy or vote
against the merger. Voting against, abstaining from voting or
failing to vote on the merger does not constitute a demand for
appraisal within the meaning of the MBCA.
- Ag-Chem shareholders that elect to exercise their dissenters'
rights under the MBCA must not vote for adoption of the merger
agreement. A shareholder's failure to vote against the merger
agreement will not constitute a waiver of dissenters' rights.
However, if a shareholder returns a signed proxy but does not
specify a vote against adoption of the merger or direction to
abstain, the proxy will be voted for adoption of the merger
agreement, which will have the effect of waiving that
shareholder's dissenters' rights.
- Ag-Chem shareholders may not assert dissenters' rights as to
less than all of the shares registered in such holder's name
except where certain shares are beneficially owned by another
person but registered in such holder's name. If a record
owner, such as a broker, nominee, trustee or custodian, wishes
to dissent with respect to shares beneficially owned by
another person, such shareholder must dissent with respect to
all of such shares and must disclose the name and address of
the beneficial owner on whose behalf the dissent is made. A
beneficial owner of shares of Ag-Chem common stock who is not
the record owner of such shares may assert dissenters' rights
as to shares held on such person's behalf, provided that such
beneficial owner submits a written consent of the record owner
to Ag-Chem at or before the time such rights are asserted.
After adoption of the merger agreement and approval of the merger and
the other transactions contemplated thereby, by the shareholders at the Ag-Chem
special meeting, the surviving corporation will send a written notice to each
shareholder who filed a written demand for dissenters' rights. The notice will
contain the following information:
- the address to which the shareholder must send a demand for
payment and the stock certificates in order to obtain payment
and the date by which they must be received;
- a form to be used to certify the date on which the
shareholder, or the beneficial owner on whose behalf the
shareholder dissents, acquired the shares or an interest in
them and to demand payment; and
- a copy of Section 302A.471 of the MBCA and a copy of this
summary describing the procedures to be
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followed in asserting dissenters' rights.
In order to receive fair value for his or her shares, a dissenting
shareholder must, within 30 days after the date the notice from the surviving
corporation was given, send his or her stock certificates, and all other
information specified in the notice, to the address identified in such notice. A
dissenting shareholder will retain all rights as a shareholder until the
effective time of the merger. After a valid demand for payment and the related
stock certificates and other information are received, or after the effective
time of the merger, whichever is later, the surviving corporation will remit to
each dissenting shareholder who has complied with statutory requirements the
amount that the surviving corporation estimates to be the fair value of such
shareholder's shares, with interest commencing five days after the effective
time of the merger at a rate prescribed by statute. Remittance will be
accompanied by the surviving corporation's closing balance sheet and statement
of income for a fiscal year ending not more than 16 months before the effective
time, together with the latest available interim financial data, an estimate of
the fair value of the shareholder's shares and a brief description of the method
used to reach the estimate, a brief description of the procedure to be followed
if such holder is demanding supplemental payment and copies of Sections 302A.471
and 302A.473 of the MBCA.
If the dissenting shareholder believes that the amount remitted by the
surviving corporation is less than the fair value of such holder's shares, plus
interest, the shareholder may give written notice to the surviving corporation
of such holder's own estimate of the fair value of the shares, plus interest,
within 30 days after the mailing date of the remittance, and demand payment of
the difference. Such notice must be delivered to the executive offices of the
surviving corporation. A shareholder who fails to give such written notice
within this time period is entitled only to the amount remitted by the surviving
corporation.
Within 60 days after receipt of a demand for supplemental payment, the
surviving corporation must either pay the shareholder the amount demanded or
agreed to by such shareholder after discussion with the surviving corporation or
petition a court for the determination of the fair value of the shares, plus
interest. The petition must name as parties all shareholders who have demanded
supplemental payment and have not reached an agreement with the surviving
corporation. The court, after determining that the shareholder or shareholders
in question have complied with all statutory requirements, may use any valuation
method or combination of methods it deems appropriate to use, whether or not
used by the surviving corporation or the dissenting shareholder, and may appoint
appraisers to recommend the amount of the fair value of the shares. The court's
determination will be binding on all Ag-Chem shareholders who properly exercised
dissenters' rights and did not agree with the surviving corporation as to the
fair value of the shares. Dissenting shareholders are entitled to judgment for
the amount by which the court-determined fair value per share, plus interest,
exceeds the amount per share, plus interest, remitted to the shareholders by the
surviving corporation. The shareholders shall not be liable to the surviving
corporation for any amounts paid by the surviving corporation which exceed the
fair value of the shares as determined by the court, plus interest. The costs
and expenses of such a proceeding, including the expenses and compensation of
any appraisers, will be determined by the court and assessed against the
surviving corporation, except that the court may, in its discretion, assess part
or all of those costs and expenses against any shareholder whose action in
demanding supplemental payment is found to be arbitrary, vexatious or not in
good faith. The court may award fees and expenses to an attorney for the
dissenting shareholders out of the amount, if any, awarded to such shareholders.
Fees and expenses of experts or attorneys may also be assessed against any
person who acted arbitrarily, vexatiously or not in good faith in bringing the
proceeding.
The surviving corporation may withhold the remittance of the estimated
fair value, plus interest, for any shares owned by any person who was not a
shareholder or who is dissenting on behalf of a person who was not a beneficial
owner on November 20, 2000, the date on which the proposed merger was first
announced to the public. The surviving corporation will forward to any such
dissenting shareholder who has complied with all requirements in exercising
dissenters' rights the notice and all other materials sent after shareholder
approval of the merger to all shareholders who have properly exercised
dissenters' rights, together with a statement of the reason for withholding the
remittance and an offer to pay the dissenting shareholder the amount listed in
the materials if the shareholder agrees to accept that amount in full
satisfaction. The shareholder may decline this offer and demand payment by
following the same procedure as that described for demand of supplemental
payment by shareholders who owned their shares as of such date. Any shareholder
who did not own shares on such date and who fails properly to demand payment
will be entitled only to the amount offered by the surviving corporation. Upon
proper demand by
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any such shareholder, rules and procedures applicable in connection with receipt
by the surviving corporation of the demand for supplemental payment given by a
dissenting shareholder who owned shares on such date will also apply to any
shareholder properly giving a demand but who did not own shares of record or
beneficially on such date, except that any such shareholder is not entitled to
receive any remittance from the surviving corporation until the fair value of
the shares, plus interest, has been determined pursuant to such rules and
procedures.
Shareholders considering exercising dissenters' rights should bear in
mind that the fair value of their shares determined under Sections 302A.471 and
302A.473 of the MBCA could be more than, the same as or, in certain
circumstances, less than the consideration they would receive pursuant to the
merger agreement if they do not seek appraisal of their shares. A dissenting
shareholder is entitled to judgment in cash for the amount, if any, that the
court's determination of the fair value exceeds the amount, if any, remitted by
the surviving corporation. In the event the amount remitted to the dissenting
shareholder exceeds the court's fair-value determination, the dissenting
shareholder is not liable for such difference and is entitled to retain the
greater remitted amount.
Cash received pursuant to the exercise of dissenters' rights may be
subject to federal or state income tax. See "Material Provisions of The Merger
Agreement--Material Federal Income Tax Consequences."
FEDERAL SECURITIES LAWS CONSEQUENCES; STOCK TRANSFER RESTRICTIONS
Unless you are an affiliate, shares of AGCO common stock received in
the merger will be freely transferable. The definition of affiliate is complex
and depends on specific facts, but generally encompasses directors, senior
officers, 10% shareholders and any other person with the power to direct the
management and policies of AGCO as well as those entities that are controlled by
AGCO and its subsidiaries, including, after the merger, Ag-Chem. The Securities
Act of 1933 and Securities Act Rules 144 and 145 restrict the ability of
affiliates to resell their shares of AGCO common stock. The merger agreement
requires Ag-Chem to use best efforts to obtain written agreements with its
affiliates to the effect that they will not sell or otherwise dispose of their
shares in violation of the Securities Act or these rules.
Shareholders who are affiliates of Ag-Chem or AGCO may not sell shares
of AGCO common stock received in the merger except (a) pursuant to an effective
registration statement under the Securities Act, (b) in compliance with an
exemption from the registration requirements of the Securities Act or (c) in
compliance with Rule 144 and Rule 145 of the Securities Act. Generally, those
rules permit resales of stock received in a registered offering by an affiliate
of Ag-Chem or AGCO as long as AGCO has complied with certain reporting
requirements and the selling shareholder complies with certain volume and manner
of sale restrictions set forth in Rule 144 and Rule 145.
OPINION OF AG-CHEM'S FINANCIAL ADVISOR
On March 3, 2000, Ag-Chem retained Goldsmith, Agio, Helms & Lynner,
Ltd. and its affiliated company Goldsmith, Agio, Helms Securities, Inc.
(collectively, "Goldsmith Agio Helms") to act as its financial advisor to assist
Ag-Chem in its analysis and consideration of various financial alternatives
available to Ag-Chem with respect to a possible sale of Ag-Chem. Goldsmith Agio
Helms is a nationally recognized investment banking firm, which as a customary
part of its business is engaged in the valuation of businesses and securities in
connection with mergers and acquisitions, private placements, and valuations for
corporate and other purposes. Ag-Chem selected Goldsmith Agio Helms based on
Goldsmith Agio Helms's qualifications, expertise, and reputation in investment
banking, and more specifically, in mergers and acquisitions.
On November 13, 2000, Goldsmith Agio Helms presented to the Ag-Chem
special committee and the rest of the board Goldsmith Agio Helms's oral opinion,
which, after certain changes to the merger agreement were agreed to by AGCO and
Ag-Chem, was confirmed orally and, thereafter, in writing, to the effect that,
as of the date thereof, and subject to the assumptions, procedures, and
limitations set forth therein, the proposed merger consideration to be received
pursuant to the merger agreement by the holders of Ag-Chem common stock is fair
to the Ag-Chem shareholders from a financial point of view.
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Pursuant to a letter agreement with Ag-Chem dated March 3, 2000,
Goldsmith Agio Helms was entitled to a fee of $225,000 after delivering its
opinion. Upon consummation of the merger, Goldsmith Agio Helms is entitled to
total cash compensation of One and Fifteen Hundredths Percent (1.15%) of the
merger consideration, or approximately $2,842,347, assuming consideration paid
for Ag-Chem common stock of $247,160,594. Goldsmith Agio Helms received monthly
retainers of $15,000 per month for a period of six months following its
engagement by Ag-Chem. The aggregate total of the retainers received by
Goldsmith Agio Helms was capped at $90,000. These retainers, but not the
$225,000 fee for the opinion, will be credited against the total fee to be paid
at closing. Ag-Chem has agreed to reimburse Goldsmith Agio Helms for reasonable
out-of-pocket expenses, including, but not limited to, fees and expenses of
counsel, and to indemnify Goldsmith Agio Helms for liabilities and expenses
arising out of the merger or transactions in connection therewith. The fees and
expenses of counsel are not to exceed $15,000, and all fees, disbursements, and
expenses are not to exceed $40,000 without the prior written consent of Ag-Chem.
The terms of the fee agreement with Goldsmith Agio Helms, which are customary in
transactions of this nature, were negotiated at arm's length between Ag-Chem and
Goldsmith Agio Helms, and the Ag-Chem board was aware of such arrangement.
The type and amount of merger consideration payable pursuant to the
merger was determined through negotiation between Ag-Chem and AGCO. Although
Goldsmith Agio Helms provided financial advice to Ag-Chem during the course of
the negotiations, Goldsmith Agio Helms did not recommend the amount of the
merger consideration or the payment or other terms thereof, and the decision to
enter into the merger agreement was solely that of Ag-Chem's special committee
and board of directors. Goldsmith Agio Helms's opinion as to the fairness of the
merger consideration from a financial point of view was only one of many factors
considered by the special committee and the board of directors in making their
determination to recommend adoption of the merger agreement.
A copy of Goldsmith Agio Helms's opinion, which sets forth the
assumptions made, matters considered, and limits on the review taken, is
attached as Appendix D to this proxy statement and is incorporated by reference.
You are urged to, and should, read the Goldsmith Agio Helms opinion in its
entirety. The description of the Goldsmith Agio Helms opinion set forth in this
proxy statement is qualified in its entirety by reference to the full text of
such opinion. Goldsmith Agio Helms's opinion is rendered for the benefit and use
of the special committee and the board of directors of Ag-Chem in connection
with the special committee's and the board's consideration of the merger and
does not constitute a recommendation to any holder of Ag-Chem common stock as to
how such shareholder should vote with respect to the merger.
In arriving at its opinion, Goldsmith Agio Helms undertook such
reviews, analyses and inquiries as it deemed necessary and appropriate under the
circumstances. Among other things, Goldsmith Agio Helms:
- reviewed a draft of the merger agreement in the form provided
to it and assumed that the final form of the merger agreement
would not vary in any regard that would be material to
Goldsmith Agio Helms's analysis;
- analyzed financial and other information that was publicly
available relating to AGCO;
- analyzed financial and other information that was publicly
available relating to Ag-Chem;
- analyzed certain internal financial and operating data of
Ag-Chem that had been made available to Goldsmith Agio Helms
by Ag-Chem;
- visited certain facilities of Ag-Chem and discussed with
management of Ag-Chem the financial condition, operating
results, business outlook, and prospects of Ag-Chem;
- discussed with management of AGCO the financial condition,
operating results, business outlook and prospects of AGCO,
including information relating to certain strategic,
financial, and operational benefits anticipated from the
merger;
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- analyzed the valuations of publicly traded companies that
Goldsmith Agio Helms deemed comparable to Ag-Chem;
- performed a discounted cash flow analysis of Ag-Chem as a
stand alone entity based on financial projections that Ag-Chem
management provided to Goldsmith Agio Helms;
- analyzed the financial terms of certain transactions Goldsmith
Agio Helms deemed comparable to the merger that recently have
been effected within the agricultural equipment market;
- analyzed the premiums paid in recent mergers and acquisitions
of publicly traded companies with transaction values ranging
from $200 to $500 million;
- analyzed the historical exchange ratios of Ag-Chem and AGCO
common stock over a twelve-month period; and
- reviewed the common stock trading histories of Ag-Chem and
AGCO common stock over the last several years.
In arriving at its opinion, Goldsmith Agio Helms relied upon and
assumed the accuracy, completeness, and fairness of the financial statements and
other information furnished by, or publicly available relating to, Ag-Chem or
AGCO, or otherwise made available to Goldsmith Agio Helms, and relied upon and
assumed that the representations and warranties of Ag-Chem and AGCO contained in
the merger agreement were true and correct. Goldsmith Agio Helms was not engaged
to, and did not attempt to, or assume responsibility to, verify independently
such information. Goldsmith Agio Helms further relied upon assurances by Ag-Chem
that the information provided to Goldsmith Agio Helms had a reasonable basis,
and with respect to projections and other business outlook information,
reflected the best available estimates, and that Ag-Chem was not aware of any
information or fact that would make the information provided to Goldsmith Agio
Helms incomplete or misleading. Goldsmith Agio Helms assumed that Ag-Chem and
AGCO will perform all of the covenants and agreements to be performed by each
under the merger agreement and that the conditions to the merger will be
satisfied and that the merger will be consummated on a timely basis in the
manner contemplated by the merger agreement. In arriving at its opinion,
Goldsmith Agio Helms did not perform any appraisals or valuations of specific
assets or liabilities of Ag-Chem or AGCO and expressed no opinion regarding the
liquidation value of Ag-Chem or AGCO or any of their respective assets. The
Goldsmith Agio Helms opinion is based upon the information available to
Goldsmith Agio Helms and the facts and circumstances as they existed and were
subject to evaluation on the date of the opinion; events occurring after the
date of the opinion could materially affect the assumptions used in preparing
the opinion. However, Goldsmith Agio Helms has no obligation to update, revise,
or reaffirm its opinion.
Goldsmith Agio Helms relied, with respect to legal and accounting
matters related to the merger agreement, on the advice of Ag-Chem's legal and
accounting advisors. Goldsmith Agio Helms made no independent investigation of
any legal or accounting matters that may affect Ag-Chem and assumed the
correctness of the legal and accounting advice provided to Ag-Chem, its board of
directors, and the special committee. Goldsmith Agio Helms did not opine on, nor
did its opinion consider, the tax consequences of the merger, including tax
consequences to any holder of Ag-Chem common stock. Goldsmith Agio Helms was not
asked to, nor did it, express an opinion as to the relative merits of the merger
as compared to any alternative business strategies that might exist for Ag-Chem,
the effect of any other transaction in which Ag-Chem might engage, or the form
of the merger agreement or the terms contained therein. Furthermore, Goldsmith
Agio Helms expressed no opinion as to the prices at which Ag-Chem or AGCO stock
may trade following the date of its opinion or following consummation of the
merger. Goldsmith Agio Helms's opinion was rendered as of the date thereof, and
Goldsmith Agio Helms did not express any opinion as to whether, on or about the
effective time of the merger, the merger consideration will be fair, from a
financial point of view, to Ag-Chem's shareholders.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. The summary
of the Goldsmith Agio Helms analyses set forth below does not purport to be a
complete description of the analyses performed by Goldsmith Agio Helms in
arriving at its opinion or of the presentation by Goldsmith Agio Helms to
Ag-Chem's board of directors and the special committee. In
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arriving at its opinion, Goldsmith Agio Helms did not attribute any particular
weight to any analysis or factor considered by it, but rather considered the
results of its analyses as a whole. Accordingly, Goldsmith Agio Helms believes
that its analyses and the summary set forth below must be considered as a whole
and that selecting portions of its analyses, or of the summary, without
considering all factors and analyses, could create an incomplete view of the
processes underlying its analyses.
The analyses performed by Goldsmith Agio Helms (and summarized below)
are not necessarily indicative of actual values or actual future results, which
may be significantly more or less favorable than suggested by such analyses.
Additionally, analyses relating to the values of businesses do not purport to be
appraisals or to reflect the prices at which businesses or securities actually
may be sold.
Discounted Cash Flow Analysis. Goldsmith Agio Helms performed a
discounted cash flow analysis based on the unlevered discounted cash flow of the
projected five-year financial performance of Ag-Chem prepared by Ag-Chem
management. Ag-Chem's weighted average cost of capital for purposes of this
analysis was calculated to be approximately 11.2 percent. Terminal values were
calculated by applying both an earnings before interest, taxes, depreciation and
amortization ("EBITDA") multiple of 6.0x to the projected EBITDA of Ag-Chem in
fiscal year 2005 and by applying a five percent perpetual growth rate to the
projected free cash flow in fiscal year 2005. Based on this analysis, Ag-Chem's
implied per share equity values ranged from $13.60 to $15.75. Discounted cash
flow analysis is a widely-used valuation methodology but it relies on numerous
assumptions, including assets and earnings growth rates, terminal values, and
discount rates. This analysis is not necessarily reflective of the actual value
of Ag-Chem.
Analysis of Publicly Traded Comparable Companies. Goldsmith Agio
Helms's analyzed selected historical financial, operating, and stock market data
of Ag-Chem, AGCO, and other publicly traded companies that Goldsmith Agio Helms
deemed to be comparable to Ag-Chem. The four companies (collectively, the
"Comparable Companies") deemed by Goldsmith Agio Helms to be reasonably
comparable to Ag-Chem in terms of products and services offered, markets served,
and business prospects were:
- Deere & Co.;
- Alamo Group, Inc.;
- Gehl Company; and
- CTB International Corporation.
Although Ag-Chem and AGCO were included in the analysis for reference
purposes, they were not included in any calculation of implied multiples for
purposes of Goldsmith Agio Helms's analysis.
No company utilized in Goldsmith Agio Helms's comparable company
analysis is identical to Ag-Chem. Accordingly, an analysis of the results of the
foregoing necessarily involves complex considerations and judgments concerning
the differences in financial and operating characteristics of Ag-Chem and other
factors that could affect the public trading value of the comparable companies
to which they are being compared.
Goldsmith Agio Helms examined certain publicly available financial data
of the Comparable Companies, including the ratio of enterprise value (equity
value plus total debt, including preferred stock, less cash and cash
equivalents) to latest-12-month ("LTM") revenue, EBITDA, and earnings before
interest and taxes ("EBIT"). In addition, Goldsmith Agio Helms examined the
ratio of equity value to LTM net income for each of the Comparable Companies.
This analysis showed that the Comparable Companies had a multiple
represented by the ratio of enterprise value to LTM revenue ranging from 0.4x to
1.5x, with a mean of 0.8x and a median of 0.7x, compared with 1.0x for Ag-Chem
based on a transaction enterprise value of $293,734,594 (equity value of
$247,160,594 at $25.80 per share plus $46,574,000 of outstanding debt); a
multiple represented by the ratio of enterprise value to LTM EBIT ranging from
3.6x to 14.6x, with a mean of 8.7x and a median of 8.4x, compared with 34.7x for
Ag-Chem based on
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a transaction enterprise value of $293,734,594; a multiple represented by the
ratio of enterprise value to LTM EBITDA ranging from 3.1x to 10.3x, with a mean
of 6.3x and a median of 6.0x, compared with 18.9x for Ag-Chem based on a
transaction enterprise value of $293,734,594; and a multiple represented by the
ratio of equity value to net income ranging from 3.5x to 23.0, with a mean of
12.3x and a median of 11.3x, compared with 129.0x for Ag-Chem based on a
transaction enterprise value of $293,734,594.
By applying the median ratios derived from Goldsmith Agio Helms's
comparable company analysis to Ag-Chem's estimated operating results for its
fiscal year ended September 30, 2000, Ag-Chem's implied range of equity value
per share was calculated to be $2.32 to $20.41.
Analysis of Selected Merger and Acquisition Transactions. Goldsmith
Agio Helms compared the proposed merger with selected comparable merger and
acquisition transactions. No transaction analyzed in Goldsmith Agio Helms's
comparable transaction analysis is identical to the merger. Accordingly, an
analysis of the results of the foregoing necessarily involves complex
considerations and judgments concerning differences in financial and operating
characteristics of Ag-Chem and other factors that could affect the acquisition
value of the companies to which Ag-Chem is being compared.
Goldsmith Agio Helms performed an analysis of nine merger and
acquisition transactions involving agricultural machinery companies that
occurred between November, 1992 and November, 1999. The nine merger and
acquisition transactions considered were:
- AGCO's acquisition of Massey-Ferguson Ltd. - North American
Distribution Business (Varity Corporation);
- AGCO's acquisition of Allied Products Corporation - White/New
Idea Farm Equipment Division;
- AGCO's acquisition of Massey-Ferguson Group Ltd. (Varity
Corporation);
- M&W Gear Company's acquisition of Alamo Group, Inc.;
- The acquisition of Lindsay Manufacturing Co. by an investor
group;
- Varity Corporation's acquisition of Lucas Industries PLC;
- AGCO's acquisition of Xaver Fendt GmbH and Co.;
- The acquisition of Gehl Company by an investor group; and
- New Holland's acquisition of Case Corp.
For the nine merger and acquisition transactions analyzed, the multiple
represented by the ratio of enterprise value to LTM revenue ranged from 0.4x to
1.7x, with a mean of 0.9x and a median of 0.8x, compared with a multiple
represented by the ratio of enterprise value to revenue of 1.0x for Ag-Chem
based on an enterprise value of $293,734,594. The multiple represented by the
ratio of enterprise value to LTM EBIT ranged from 8.0x to 16.0x, with a mean of
11.9x and a median of 11.8x, compared with a multiple represented by the ratio
of enterprise value to LTM EBIT of 34.7x for Ag-Chem based on an enterprise
value of $293,734,594. The multiple represented by the ratio of enterprise value
to LTM EBITDA ranged from 6.9x to 10.6x with a mean of 8.9x and a median of
9.1x, compared to a multiple represented by the ratio of enterprise value to LTM
EBITDA of 18.9x for Ag-Chem based on an enterprise value of $293,734,594. By
applying the median ratios derived from the Comparable Transaction Analysis to
Ag-Chem's estimated operating results for the fiscal year ended September 30,
2000, Ag-Chem's range of implied equity value per share was calculated to be
$5.55 to $19.75.
Acquisition Premiums Analysis. Goldsmith Agio Helms analyzed the
premiums paid for 270 recent mergers and acquisitions of publicly traded
companies with enterprise values ranging from $200 to $500 million executed
between January 1, 1998 and November 8, 2000. The mean and the median premium
paid over the targets'
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stock prices four weeks before the announcement date, one week before the
announcement date, and one day before the announcement date were 39.6 percent
and 46.9 percent, 31.3 percent and 37.1 percent, and 26.9 percent and 31.4
percent, respectively. The per share price to be paid to Ag-Chem shareholders by
AGCO of $25.80 represents a premium of 129.3 percent over Ag-Chem's share price
as of close on November 8, 2000.
Historical Exchange Ratio Analysis. Goldsmith Agio Helms analyzed the
historical exchange ratio determined by comparing Ag-Chem's Common Stock price
and AGCO's Common Stock price over a twelve-month period. During the twelve
month period ended November 8, 2000, the exchange ratio reached a high of 1.23
and a low of 0.48. The mean exchange ratio for this period was 0.79 and the
median was 0.77. This compares to an implied exchange ratio of 2.27, which is
based on the $25.80 share price to be paid to Ag-Chem shareholders and a stock
price of $11.35 for AGCO, which represents the highest of the 5, 10, 15, 20, and
30 day averages of AGCO's closing prices and the 5, 10, 15, 20 and 30 day
averages of the average of AGCO's daily high and low prices for such periods
ending on November 8, 2000.
Common Stock Trading History. Goldsmith Agio Helms's analysis of
Ag-Chem's and AGCO's Common Stock trading history consisted of historical
analyses of the trading prices and volumes of Ag-Chem and AGCO and the relative
performance of Ag-Chem, AGCO, and the S&P 500 Index. Goldsmith Agio Helms's
analysis considered the high and low closing prices for Ag-Chem and AGCO over
the one-year and three-year periods ended November 8, 2000. On November 15,
1999, Ag-Chem's Common Stock reached a one-year high closing price of $13.94 and
on June 1, 2000, reached a one-year low closing price of $6.13. On July 1, 1998,
Ag-Chem's Common Stock reached a three year high closing price of $19.06 and on
June 1, 2000 reached a three year low closing price of $6.13. On May 16, 2000,
AGCO's Common Stock reached a one-year high closing price of $14.16 and on
September 20, 2000, reached a one year low closing price of $10.06. On January
5, 1998, AGCO's common stock reached a three-year high closing price of $30.47
and on October 5, 1998, reached a three-year low closing price of $6.09.
Goldsmith Agio Helms also analyzed the volume of shares traded at
various prices. For Ag-Chem's Common Stock, the volume-weighted average price
for the twelve months ending on November 8, 2000 was $9.88. For AGCO, the
volume-weighted average price for the twelve months ending November 8, 2000 was
$11.91.
MATERIAL PROVISIONS OF THE MERGER AGREEMENT AND RELATED AGREEMENTS
The following summarizes the material terms of the merger agreement, a
copy of which is attached as Appendix A to this document and is incorporated
into this document by reference. You should read the merger agreement in its
entirety for a more complete description of the terms and conditions of the
merger.
GENERAL
In the merger, AGCO will acquire all of the outstanding Ag-Chem common
stock in exchange for a combination of shares of AGCO common stock and cash with
a value of $25.80 per share of Ag-Chem common stock.
Forward merger. As long as the closing price of AGCO common stock on
the trading day immediately prior the effective date of the merger is equal to
or greater than $8.38 (or such higher price as may be necessary to obtain
opinions as to the status of the merger as a Section 368(a) reorganization), the
merger is intended to qualify as a reorganization for purposes of Section 368(a)
of the Internal Revenue Code and will have a forward structure. This means that
Ag-Chem will merge with and into Agri Acquisition Corp., a wholly-owned
subsidiary of AGCO formed solely for this purpose, and, following the effective
time of the merger, the separate corporate existence of Ag-Chem will cease and
Agri Acquisition Corp. will be the surviving corporation and continue to exist
as a Delaware corporation.
Reverse merger. However, if the closing price of shares of AGCO common
stock on the day immediately prior to the effective date of the merger is less
than $8.38 (or such higher price as may be necessary to obtain opinions as to
the status of the merger as a Section 368(a) reorganization), then the merger
will not be a Section
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368(a) reorganization and will have a reverse structure. This means that Agri
Acquisition Corp., a newly-formed wholly-owned subsidiary of AGCO formed solely
for this purpose, will merge with and into Ag-Chem and, following the effective
time of the merger, the separate corporate existence of Agri Acquisition Corp.
will cease and Ag-Chem will be the surviving corporation and continue to exist
as a Minnesota corporation.
Measuring Date. The value of the shares of AGCO common stock for
purposes of determining whether the merger will be a forward merger or a reverse
merger will be measured based on the closing price of AGCO common stock on the
trading day immediately prior to the effective date of the merger. Therefore, we
will not know at the time of the Ag-Chem shareholder meeting whether the forward
merger structure or the reverse merger structure will be used. The structure of
the merger will affect the tax consequences of the merger to Ag-Chem
shareholders.
The purpose of this alternate structure is to avoid the substantial
corporate level tax that will result if the merger were to be structured as a
forward merger and were to fail to satisfy the requirements for a Section 368(a)
reorganization.
Tax Consequences to Ag-Chem Shareholders. If the forward merger
structure is used and the merger qualifies as a reorganization under Section
368(a) of the Internal Revenue Code, any gain you realize will only be
recognized to the extent of cash you receive in exchange for your shares of
Ag-Chem stock or cash received in lieu of fractional shares of AGCO stock. You
will not be entitled to recognize any loss.
If the reverse merger structure is used, however, you will be taxed on
all gain realized, regardless of the form of consideration that you receive in
exchange for your shares of Ag-Chem stock, and you will be entitled to recognize
any realized loss. Details of the tax consequences of the merger to you are more
fully described under "Material Federal Income Tax Consequences."
Regardless of the structure, upon completion of the merger, Ag-Chem
shareholders who do not exercise their right of appraisal will receive the
merger consideration in exchange for their Ag-Chem shares (described more fully
under "What You Will Receive; The Merger Consideration").
CLOSING; EFFECTIVE TIME
The merger will be effective when both (1) the articles of merger are
filed with the Minnesota Secretary of State and all other filings or recordings
required by the Minnesota Business Corporation Act are made and (2) the
certificate of merger is filed with the Delaware Secretary of State and all
other filings or recordings required by the Delaware General Corporations Law
are made. Alternatively, the merger will be effective at any later date or time
set forth in the articles of merger or in the certificate of merger.
DIRECTORS AND OFFICERS OF SURVIVING CORPORATION AFTER THE MERGER
The directors of the surviving corporation will be determined by AGCO.
The officers of the surviving corporation after the merger will be the
officers of Ag-Chem as comprised immediately before the effective time of the
merger. These officers will remain officers until the earlier of their
resignation, removal or otherwise ceasing to be an officer or until their
respective successors are duly elected and qualified, as the case may be.
WHAT YOU WILL RECEIVE; THE MERGER CONSIDERATION
Three Possible Merger Structures. Regardless of the merger structure,
the merger consideration you will receive for each of your Ag-Chem shares has a
value of $25.80. You will receive this as a combination of cash and stock
depending upon the structure of the merger. The structure of the merger will be
determined based upon the closing price of AGCO shares on the trading day
immediately prior to the effective date of the merger (the "Share Price").
However, the price of AGCO shares used for computing the number of shares of
AGCO common stock you will actually receive in the merger is different. That
price equals the average closing price of AGCO shares for
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the ten trading days immediately prior to the effective date of the merger (the
"Average Price").
- If the Share Price is at least $8.38 (or such higher price as
is necessary to obtain opinions as to the status of the merger
as a Section 368(a) reorganization), for each share of Ag-Chem
common stock you will receive a number of AGCO shares that has
a value of $12.90 divided by the Average Price or you will
receive 1.23175 shares of AGCO common stock (whichever is
lesser).
- If the Share Price is less than $8.38 (or such higher price as
is necessary to obtain opinions as to the status of the merger
as a Section 368(a) reorganization), AGCO may elect to pay you
a combination of cash and AGCO common stock in any ratio AGCO
chooses (as long as AGCO does not issue more than 11,800,000
AGCO shares in the merger) that will provide the value of
$25.80. In lieu of either of these options, AGCO may elect to
defer the effective time of the merger for a period up to
thirty days, and if, during that period, the Share Price goes
back up to $8.38 or higher, the merger will be effected as a
forward merger and in exchange for your Ag-Chem shares you
will receive the combination of cash and stock described in
the paragraph above.
- If the Average Price is less than $6.10, AGCO may elect to
terminate the merger agreement, in which case you will
continue to hold your Ag-Chem shares unaffected, or AGCO may
elect to proceed with the merger, in which case you will
receive any portion of cash and stock as AGCO may choose that
will provide a value of $25.80 (as long as AGCO does not issue
more than 11,800,000 shares in the merger). In addition, AGCO
may utilize the "Issuance Election" described below. If AGCO
makes an "Issuance Election," or fails to make such an
election within the period provided in the merger agreement,
Ag-Chem may terminate the merger agreement.
AGCO Subscription Right. If AGCO elects to issue less than 11,800,000
shares of AGCO common stock under the second or third merger structures above,
you will have subscription rights to subscribe to your pro rata portion of a
number of AGCO shares equal to the difference between the number of AGCO shares
issued in the merger and 11,800,000 AGCO shares, based on your proportionate
ownership of Ag-Chem shares. The shares subject to this AGCO subscription right
may be purchased at a price of $8.38 per share or at a per share price equal to
the 105% of the average closing price of AGCO common stock in the ten day period
prior to the effective date of the merger of (whichever is less). This is
designed to prevent possible dilution of your interest in the surviving
corporation.
Issuance Election. Under no circumstances is AGCO obligated to issue
more than 11,800,000 of its shares to complete the merger. However, if the
Average Price is less than $6.10, AGCO may elect to seek its stockholders'
approval to issue more than 11,800,000 shares in the merger. If AGCO so elects,
Ag-Chem has a right to terminate the merger agreement for a period of three days
from the time it receives notice of AGCO's election. If Ag-Chem does not so
terminate, and AGCO obtains the requisite stockholder approval to issue more
than 11,800,000 AGCO shares in the merger, then AGCO is obligated to issue the
minimum number of AGCO shares necessary to effect the merger as a forward
merger, and you will receive for each share of Ag-Chem common stock a number of
AGCO shares equal to $10.32 divided by the Average Price. Cash will make up any
remaining balance owed to you so that you receive the value of $25.80.
Fractional Shares. Under no circumstances is AGCO obligated to issue
any fractional shares in the merger. Therefore, in place of any fractional AGCO
shares, AGCO will pay an amount in cash (without interest) for each fractional
share determined by multiplying the fraction by the Average Price.
We cannot predict the market prices for the AGCO common stock and we
encourage you to obtain current market quotations of the AGCO common stock,
which is listed on the New York Stock Exchange under the symbol "AG."
Regardless of the structure, upon completion of the merger, Ag-Chem
shareholders who do not exercise appraisal or dissenters' rights under the MBCA
will receive merger consideration having a value of $25.80 per share in exchange
for their Ag-Chem shares.
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CONVERSION OF SHARES
At the effective time of the merger, each share of Ag-Chem common
stock, excluding shares to the extent that appraisal or dissenters' rights are
exercised, will cease to be outstanding and will be converted into the right to
receive the merger consideration described above.
CONVERSION OF PHANTOM SHARES
In connection with the merger, participants in Ag-Chem's phantom stock
bonus plan will receive $13.86 in cash per phantom stock unit, estimated to be
an aggregate of $1,178,100.
EXCHANGE OF STOCK CERTIFICATES
Soon after the effective date of the merger, either AGCO or an exchange
agent will mail you a letter of transmittal and instructions for exchanging your
Ag-Chem stock certificates for the merger consideration described above. Only
after you surrender your Ag-Chem stock certificates, together with the executed
letter of transmittal, will you be entitled to receive the merger consideration
described above. The exchange agent is SunTrust Bank, Atlanta.
If you have not complied with the exchange procedure within six months
after the effective time of the merger, you will have to look to AGCO for
delivery of any AGCO common stock or cash deliverable in exchange for your
Ag-Chem shares.
AGCO will not pay you any cash or any dividends or other distributions
it has declared until you have exchanged your Ag-Chem stock certificates.
Following surrender of any Ag-Chem certificates you may hold, AGCO will pay you,
without interest, any amount of cash owed to you as part of the merger
consideration or for any fractional shares, and any dividends or other
distributions declared by AGCO, to which you are entitled.
If your Ag-Chem stock certificates are lost, stolen, or destroyed
before the closing of the merger, you must submit an affidavit of that fact to
the exchange agent and AGCO and, if required by AGCO, you must post a bond in a
reasonable amount as determined by AGCO as indemnity against any potential claim
regarding the lost certificates. In exchange for lost, stolen or destroyed stock
certificates, after you have made the affidavit and posted the bond, AGCO or the
exchange agent will issue to you any shares of AGCO common stock and cash to
which you are entitled.
REPRESENTATIONS AND WARRANTIES
In the merger agreement, both Ag-Chem and AGCO make customary
representations and warranties relating to various aspects of their respective
businesses and other matters, including, among other things:
- corporate organization,
- capitalization,
- ownership and organization of subsidiaries,
- corporate power and authority to consummate the merger,
- compliance with laws,
- absence of certain changes or events,
- SEC filings and financial statements,,
- litigation matters,
- regulatory approvals,
- no brokers, and
- authorization of the merger.
Ag-Chem has given additional representations and warranties relating to, among
other things:
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- tax matters
- environmental matters,
- intellectual property,
- fairness opinion regarding the merger consideration that may
be payable in the merger,
- employee benefit matters,
- inapplicability of Minnesota take-over laws,
- title to properties, and
- insurance matters.
AGCO has given additional representations and warranties relating to, among
other things:
- issuance and registration of any new stock for the merger, and
- obtaining adequate financing for the merger.
COVENANTS
The following summarizes important pre-closing covenants in the merger
agreement. From the date of the merger agreement until the closing of the
merger, Ag-Chem and its current subsidiaries have agreed to continue to operate
their respective businesses according to their ordinary and usual course of
business, conduct its business in material compliance with all applicable laws
and regulations and use its reasonable best efforts to preserve intact its
business and assets and maintain existing relations with its customers,
suppliers, and employees and business associates with limited exceptions.
Ag-Chem has also agreed that it will not, without the prior written consent of
AGCO:
- amend its articles of incorporation or bylaws, or adopt a
shareholder rights plan
- declare, set aside or pay dividends on or make other
distributions on any of its stock, except for intercompany
dividends from subsidiaries,
- adjust, split, combine, repurchase, redeem or otherwise
acquire, any shares of its capital stock or other securities
of Ag-Chem or its subsidiaries,
- merge or consolidate with any other entity or make any new
acquisition of assets pursuant to which Ag-Chem shareholders
would receive any consideration in exchange for or in addition
to their existing shares of Ag-Chem stock,
- sell all or substantially all of its assets, business or
properties, other than sales of goods and services to
distributors and customers in the ordinary course of business,
- take any action knowing that it would, or is reasonably likely
to, prevent the merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Internal Revenue
Code,
- issue, pledge, dispose of or encumber any capital stock, or
issue any rights or options to acquire capital stock or
securities convertible into or exchangeable for capital stock,
- incur indebtedness outside the ordinary and usual course of
business, consistent with past practice, or incur indebtedness
under its short and long term line of credit loan agreements
in excess of $55,000,000 in the aggregate,
- enter into or amend any employment, severance, retention,
termination or similar agreement, other than ordinary course
annual salary or wage rate increases and other than new
consulting arrangements not in excess of $100,000 in the
aggregate relating to existing SOILTEQ initiatives,
38
<PAGE> 47
- enter into, adopt or amend in any material respect any
employee benefit or similar plan,
- pay any special bonus or special remuneration to any of its
directors or officers,
- implement or adopt any change in accounting practices, except
as required by accounting principles generally accepted in the
United States or SEC rules,
- enter into or terminate any contract or agreement, except in
the ordinary course of business, that may involve any amount
in excess of $200,000,
- make any material new tax election, settle any material tax
audit or proceedings or file any material amended tax return,
- pay, discharge, or settle any claims other than settlements
with customers related to Ag-Chem's September 8, 2000 safety
recall or settlements not in excess of $100,000, or
- make any capital expenditures in excess of $500,000 in the
aggregate in any fiscal quarter.
From the date of the merger agreement until the effective time of the
merger both Ag-Chem and AGCO have agreed to:
- use their reasonable best efforts to cause the merger to be
consummated,
- obtain any necessary shareholder approvals,
- prepare and cooperate in the preparation of any filings with
the Securities and Exchange Commission, the New York Stock
Exchange, or other filings associated with the merger,
- agree on the initial press release with respect to the merger,
and to consult the other party prior to the release of any
additional releases or statements,
- give the other access to all of their respective properties,
books, contracts, commitments and records and to furnish
information concerning their businesses, properties and
personnel, subject to the restrictions and for the purposes
set forth in the merger agreement,
- give prompt notice to the other of any fact event or
circumstance that would cause or constitute a material breach
of any of its representations, warranties, covenants or
agreements,
- use their best efforts to do all things necessary, proper or
advisable to consummate the merger, including obtaining all
necessary consents, governmental approvals and the like, and
- use their best efforts to do all things necessary, proper or
advisable to cause the merger to be a tax-free reorganization.
DIRECTOR AND OFFICER INDEMNIFICATION
ACGO has agreed to indemnify (and advance expenses as incurred) the
present and former directors and officers of Ag-Chem and its subsidiaries
against all costs or expenses (including reasonable attorneys' fees) incurred in
connection with any claim arising out of occurrences at or prior to the
effective time of the merger to the fullest extent that Ag-Chem is permitted to
indemnify its directors and officers under the Ag-Chem bylaws, articles of
incorporation, and the laws of the State of Minnesota. AGCO has further agreed
that for six years after the effective time of the merger, directors and
officers liability insurance policies will be maintained covering persons
39
<PAGE> 48
indemnified by Ag-Chem. AGCO will not be required to incur an annual premium in
excess of 150% of the annual premium paid by Ag-Chem. If equivalent insurance
coverage is not obtainable, AGCO will use reasonable best efforts to obtain the
comparable coverage available for such amount.
AFFILIATE AGREEMENTS
Ag-Chem will provide AGCO with a list of those persons who are or are
likely to be "affiliates" at the time of the Ag-Chem special meeting of
shareholders within the meaning of the rules of the Securities and Exchange
Commission. Ag-Chem will use its best efforts to cause each affiliate to deliver
an executed affiliate agreement to AGCO prior to the mailing of the proxy
statement/prospectus. Under these agreements, each Ag-Chem affiliate will agree
not to dispose of his or her shares of AGCO common stock received in the merger
except pursuant to an effective registration statement or in compliance with the
rules of the Securities and Exchange Commission. AGCO will be entitled to place
appropriate legends on the certificates evidencing any AGCO common stock to be
received by the Ag-Chem affiliates pursuant to the terms of the merger
agreement, and to issue appropriate stop transfer instructions to the transfer
agent for the AGCO common stock, consistent with the terms of the affiliate
agreements.
EMPLOYEE BENEFIT MATTERS
AGCO has agreed to waive most exclusions or waiting periods, to credit
any co-payments and deductibles paid and to recognize service of Ag-Chem
employees for purposes of eligibility to participate in any existing AGCO
benefit plan in which an Ag-Chem employee is eligible to participate after the
merger, but only to the extent that such exclusions, waiting periods,
co-payments and deductibles were recognized under the analogous Ag-Chem benefit
plan and will not result in duplication of benefits. This, however, does not
mean that AGCO is required to provide for the participation of any Ag-Chem
employee in any existing AGCO benefit plan.
APPOINTMENT OF ALVIN E. MCQUINN TO AGCO BOARD OF DIRECTORS
AGCO has agreed to use reasonable best efforts to appoint Alvin E.
McQuinn to the AGCO board of directors at the first meeting of AGCO's board of
directors following the effective date of the merger, if Mr. McQuinn, in
connection with the merger and/or any AGCO subscription right made available to
Ag-Chem shareholders, acquires an aggregate of 7,000,000 shares of AGCO common
stock.
CONDITIONS TO OBLIGATIONS TO EFFECT THE MERGER
The obligations of Ag-Chem and AGCO to complete the merger are subject to
satisfaction or waiver of the following conditions:
- approval of the merger agreement by the requisite vote of
Ag-Chem shareholders and, if necessary, approval of any
additional share issuance by the requisite vote of AGCO
stockholders;
- the absence of any law, order or other legal restraint
prohibiting completion of the merger;
- the receipt of any required approvals from government entities
or regulatory bodies and the expiration of all related
statutory waiting periods;
- the conditional approval for listing on the New York Stock
Exchange of the shares of AGCO common stock to be issued in
the merger, subject to official notice of issuance; and
- the declaration of the effectiveness of this registration
statement on Form S-4 by the Securities and Exchange
Commission, and the absence of any stop order suspending the
effectiveness.
In addition to the above, the obligation of Ag-Chem to complete the merger
is subject to the satisfaction or waiver of the following conditions:
40
<PAGE> 49
- material performance by AGCO of all obligations required to be
performed by it under the merger agreement at or prior to the
effective time of the merger;
- the accuracy of the representations and warranties of AGCO in
the merger agreement as of the date of the merger agreement
except as would not have a materially adverse effect on
Ag-Chem or consummation of the merger;
- in the event the merger is a forward merger, the receipt by
Ag-Chem of an opinion of KPMG LLP, dated the effective date of
the merger to the effect that, on the basis of facts,
representations and assumptions set forth in the opinion, the
merger will be treated as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code and,
accordingly (1) no gain or loss will be recognized by Ag-Chem,
and (2) no gain or loss will be recognized by any shareholder
of Ag-Chem who receives shares of AGCO stock in the merger
except to the extent of shareholder realized gain for the cash
portion of any merger consideration and cash received in lieu
of fractional share interests;
- the absence of any action by a governmental authority that is
reasonably likely to succeed in seeking to prohibit completion
of the merger or to impose substantial penalties as a result
of the merger; and
- the receipt by Ag-Chem of a fairness opinion from Ag-Chem's
financial advisor, Goldsmith Agio Helms, in a form acceptable
to Ag-Chem.
In addition to the above, the obligation of AGCO to complete the merger is
subject to the satisfaction or waiver of the following conditions:
- the material performance by Ag-Chem of all obligations
required to be performed by them under the merger agreement at
or prior to the effective time of the merger;
- the accuracy of certain of the representations and warranties
of Ag-Chem in the merger agreement as of the date of the
merger agreement except as would not have a materially adverse
effect on AGCO or consummation of the merger; and
- in the event the merger is a forward merger, the receipt by
AGCO of an opinion of Troutman Sanders LLP, counsel to AGCO
and Agri Acquisition Corp., dated the effective date of the
merger to the effect that, on the basis of the facts,
representations and assumptions set forth in the opinion, the
merger will be treated as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code and,
accordingly no gain or loss will be recognized by AGCO, Agri
Acquisition Corp. and Ag-Chem.
FRUSTRATION OF CLOSING CONDITIONS
Neither AGCO nor Ag-Chem may rely on the failure to satisfy any of the
above conditions if the failure was caused by such party's failure to use
reasonable best efforts to cause the merger to be consummated.
NO SOLICITATION
Ag-Chem has agreed that it will not, and will not permit any of its
subsidiaries, officers, employees, attorneys, accountants, agents or other
representatives to:
- solicit, initiate or encourage, or take any other actions
designed to facilitate, any inquiries or the making of any
proposal which constitutes an "acquisition proposal,"
- participate in any discussions or negotiations regarding any
"acquisition proposal,"
- provide any information or data with respect to Ag-Chem to any
person in connection with an
41
<PAGE> 50
"acquisition proposal," or
- grant any waiver or release under any standstill or similar
agreement with respect to the Ag-Chem's common stock.
Ag-Chem has also agreed to cease any existing discussions or
negotiations with any parties regarding any "acquisition proposal" or that could
reasonably be expected to lead to any Acquisition Proposal.
An "acquisition proposal" excludes the proposed merger with AGCO and
includes any offer, proposal, inquiry or indication of interest regarding
- a merger, reorganization or consolidation, or any similar
business combination or transaction, involving Ag-Chem (other
than mergers, reorganizations, consolidations or similar
business combinations or transactions involving solely Ag-Chem
and/or one or more of Ag-Chem's wholly-owned subsidiaries),
- a direct or indirect purchase or other acquisition (including
by way of merger, consolidation, share exchange, tender or
exchange offer involving any Ag-Chem subsidiary of or
securities issued by any Ag-Chem subsidiary) of more than 15%
of the consolidated assets of Ag-Chem and its subsidiaries,
- a purchase or other acquisition (including by way of merger,
consolidation, share exchange, tender or exchange offer or
otherwise) of beneficial ownership of securities representing
more than 10% of the voting power of Ag-Chem, or
- any transaction substantially similar to the foregoing
transactions.
Notwithstanding the foregoing, if Ag-Chem's board of directors
reasonably determines, after consultation with its financial advisors and
outside legal counsel, that it has received an "acquisition proposal" that may
reasonably lead to a "superior proposal," Ag-Chem may furnish information and
access to the person submitting the "superior proposal" pursuant to
confidentiality agreements with terms no less restrictive than its
confidentiality agreement with AGCO, and Ag-Chem may participate in discussions
and negotiate with the person making the "superior proposal."
A "superior proposal" means any bona fide written acquisition proposal
made by a third party that did not result from a violation of the merger
agreement and which a majority of the Ag-Chem board of directors determines in
good faith (based on the advice of its financial advisor and the advice of
outside legal counsel), within 45 days from the date of the merger agreement, to
represent superior value, from a financial point of view, to Ag-Chem's
shareholders as compared to the merger with AGCO (taking into account, among
other things, all legal, financial, regulatory and other aspects of the proposal
and the identity of the person making the proposal).
Ag-Chem has agreed to promptly advise AGCO in writing of the terms of
any acquisition proposal and the identity of the person making the proposal.
Additionally, Ag-Chem has agreed to keep AGCO fully informed on a current basis
of the status of any acquisition proposal and promptly provide AGCO with copies
of all material correspondence and other written material sent or provided to
Ag-Chem from any third party in connection with any acquisition proposal or sent
or provided by Ag-Chem in connection with any acquisition proposal.
TERMINATION OF THE MERGER AGREEMENT
Rights to Terminate. At any time before the effective time of the
merger, the merger agreement may be terminated and the merger abandoned as
follows:
- by the mutual written consent of Ag-Chem and AGCO; and
- by either Ag-Chem or AGCO if:
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<PAGE> 51
- the parties have not completed the merger by June 30, 2001,
unless the failure to close the merger by that time has been
caused by the knowing action or inaction of the party seeking
to terminate the merger agreement; or
- there has been a material breach by the other party of any
representation, warranty or covenant listed in the merger
agreement, and it is not cured within thirty calendar days
from the time the breaching party is given written notice of
such breach;
- any court or other governmental authority has denied required
approval for completion of the merger by final non-appealable
action;
- any court or other governmental authority has issued a
required approval that contains a final non-appealable
condition, restriction or requirement that would reasonably be
expected to have a material adverse effect on AGCO or Ag-Chem;
or
- Ag-Chem does not obtain the vote of Ag-Chem shareholders at
the Ag-Chem special meeting required for adoption of the
merger agreement;
- by AGCO if:
- prior to the Ag-Chem special meeting, (1) Ag-Chem enters into
a written agreement regarding a superior proposal (2) Ag-Chem
amends, conditions, qualifies, withdraws or modifies in a
manner adverse to AGCO its approval and recommendation of the
merger and merger agreement, or proposes to do so, (3)
approves or recommends any superior proposal, or proposes to
do so or (4) resolves to do any of the foregoing; or
- the price of AGCO shares calculated based on the average
closing price for the ten trading days ending the day before
the effective date of the merger falls to below $6.10 and AGCO
does not elect to seek its shareholders' approval to issue
more than 11,800,000 shares to complete the merger;
- by Ag-Chem if:
- Ag-Chem's board of directors determines, after consultation
with legal counsel, in the exercise of the Ag-Chem board of
director's good faith judgment as to fiduciary duties to the
Ag-Chem shareholders, that it is required by applicable law to
terminate the merger agreement because Ag-Chem has received a
superior proposal and AGCO has not responded within five
business days with a written proposal that matches or is more
favorable than the superior proposal (from a financial point
of view);
- for three days after the date Ag-Chem receives notice from
AGCO that AGCO has elected to seek approval from the AGCO
stockholders to issue more than 11,800,000 shares in the
merger; or
- if (1) the price of AGCO common stock on the trading day
immediately prior to the effective date of the merger is less
than $6.10, (2) AGCO does not terminate the merger agreement
and (3) AGCO does not elect to seek approval of the AGCO
stockholders to issue more than 11,800,000 AGCO shares in the
merger within three days.
Effect of Termination. If the parties terminate the merger agreement and
abandon the merger prior to the effective time of the merger, the merger
agreement will become void and have no effect, without any liability on the part
of any of the parties to the merger agreement or their directors, officers or
agents, except that termination of the
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<PAGE> 52
merger agreement will not relieve any party from liability for any termination
fees and expenses or for any willful breach of the merger agreement.
Termination Fee. As a condition to effectiveness of termination of the
merger agreement, Ag-Chem will pay AGCO a termination fee of $10,000,000 on the
same day as termination of the merger agreement if:
- Ag-Chem or AGCO terminates the agreement and abandons the
merger because the approval of the merger by Ag-Chem's
shareholders is not obtained;
- AGCO terminates the agreement and abandons the merger because
Ag-Chem enters into a written agreement, or Ag-Chem's board
resolves to enter into a written agreement, to pursue an
acquisition proposal or a superior proposal from a party other
than AGCO; or
- Ag-Chem terminates the agreement and abandons the merger
because, after consultation with legal counsel and in the good
faith exercise of the Ag-Chem board of directors' fiduciary
duties to the Ag-Chem's shareholders, the Ag-Chem board of
directors determines that termination of the merger agreement
is required by law as a result of a superior proposal from a
party other than AGCO.
AGCO may defer its right to payment of the termination fee from time to
time and for any period of time it elects. However, AGCO has the right to
recover any actual costs it may incur if Ag-Chem fails to pay the termination
fee when due under the merger agreement, including fees and expenses of counsel.
AMENDMENT
The merger agreement may be amended or supplemented in writing before
or after the effective date of the merger by Ag-Chem or by AGCO except as
otherwise provided by law. However, after the Ag-Chem shareholders approve the
merger, there may not be any change to the merger agreement which changes the
amount or type of consideration into which Ag-Chem's common stock would be
converted.
WAIVER
At any time prior to the completion of the merger, either AGCO or
Ag-Chem may:
- extend the time for the performance of any of the obligations
or other acts of the other;
- waive any inaccuracies in the representations and warranties
of the other contained in the merger agreement or other
documents contemplated pursuant to the merger; and
- waive compliance by the other with any of the agreements or
conditions contained in the merger agreement which may legally
be waived.
Any extension or waiver will be valid only if set forth in a written
instrument specifically referring to the merger agreement and signed on behalf
of the party granting the extension or waiver.
VOTING AGREEMENT
As a condition to entering into the merger agreement, AGCO required
that, concurrently with the merger agreement, a voting agreement be entered into
by and among Alvin E. McQuinn, the Alvin E. McQuinn Revocable Trust and AGCO.
The Alvin E. McQuinn Revocable Trust is a trust that is controlled by Mr.
McQuinn and that, as of the date of the merger agreement, held 5,634,148 shares
of Ag-Chem stock, representing approximately 59% of the voting power of the
outstanding Ag-Chem common stock. The voting agreement applies only to 1,906,393
shares of this stock, representing approximately 19.9% of the voting power of
the outstanding Ag-Chem common stock. As to these shares, Mr. McQuinn and the
Alvin E. McQuinn Revocable Trust agreed to:
- revoke any previous proxies relating to the 1,906,393 Ag-Chem
shares subject to the voting agreement;
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<PAGE> 53
- vote for the adoption of the merger agreement, the merger and
any transactions contemplated thereby;
- vote against any acquisition proposal or superior proposal or
other action likely to adversely affect the merger; and
- grant AGCO an irrevocable proxy to vote the 1,906,393 Ag-Chem
shares in accordance with the terms of the voting agreement.
Mr. McQuinn and the Alvin E. McQuinn Revocable Trust also agreed that
they will not:
- transfer any of the 1,906,393 Ag-Chem shares;
- grant any proxies with respect to these shares;
- enter into any contract or agreement or take any other action
with respect to these shares which would constitute a
violation of the voting agreement or which would materially
impede the merger and any transactions contemplated thereby;
- enter into any tender or exchange offer or otherwise sell or
encumber or cause to be sold or encumbered any of these shares
of Ag-Chem stock;
- acquire any additional shares of Ag-Chem stock (with limited
exceptions);
- exercise any rights which may arise in connection with the
merger to demand appraisal of any of these shares; or
- take any other action that would in any way restrict, limit or
interfere with the performance of the obligations under the
voting agreement or which would otherwise diminish the
benefits of the voting agreement to AGCO.
Additional terms to the voting agreement provide:
- In the event that Mr. McQuinn or the Alvin E. McQuinn
Revocable Trust obtains additional shares of Ag-Chem stock in
connection with a stock dividend, stock split,
recapitalization or like transaction, or otherwise becomes the
beneficial owner of any additional shares of Ag-Chem stock,
any such additional shares will be subject to the provisions
of the voting agreement.
- In the event that Mr. McQuinn or the Alvin E. McQuinn
Revocable Trust becomes entitled to, in connection with the
merger, subscribe to a number of AGCO shares, Mr. McQuinn and
the Alvin E. McQuinn will subscribe to the maximum number of
shares for which they are eligible as long as the sum of those
shares in the aggregate, when combined with all of the other
AGCO shares owned by Mr. McQuinn and the Alvin E. McQuinn
Revocable Trust, does not exceed 7,000,000 shares.
- In the event that the merger agreement is terminated in such a
way that AGCO is entitled to be paid the $10,000,000
termination fee by Ag-Chem, and within twelve months of
termination of the merger agreement Ag-Chem is acquired in a
transaction that would have constituted an acquisition
proposal or superior proposal, then Mr. McQuinn and the Alvin
E. McQuinn Revocable Trust will pay to AGCO 100% of the
consideration received by them in excess of $25.80 for each of
1,906,393 shares of Ag-Chem common stock subject to the voting
agreement.
The voting agreement terminates on the earlier of the effective date of the
merger or the termination of the merger agreement in accordance with its terms.
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<PAGE> 54
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial information is
based on the historical financial statements of AGCO and Ag-Chem, adjusted to
give effect to the merger.
The pro forma combined financial statements were prepared to illustrate
the estimated effects of the merger, including acquisition-related debt and
equity transactions and certain other assumptions. The pro forma combined
statements of income data for the year ended December 31, 1999 and nine months
ended September 30, 2000 give effect to the merger, as if the merger had
occurred as of January 1, 1999. The pro forma combined balance sheet data give
effect to the merger as if it had occurred as of September 30, 2000. The pro
forma adjustments are described in the accompanying notes. The pro forma
adjustments are based upon available information and certain assumptions that
AGCO's management believes are reasonable. The pro forma financial statements do
not purport to represent AGCO's results of operations or financial condition for
any future period or as of any date. The pro forma financial statements should
be read in conjunction with the historical consolidated financial statements of
AGCO and Ag-Chem and the notes thereto and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" contained in its Form 10-K for
the year ended December 31, 1999, and Form 10-Q for the quarter ended September
30, 2000 all of which are incorporated in this proxy statement/prospectus by
reference.
The merger will be accounted for under the purchase method of
accounting. Under purchase accounting, the total purchase cost and fair value of
liabilities assumed will be allocated to the tangible and intangible assets and
liabilities of Ag-Chem based upon their respective fair values as of the closing
of the merger based on preliminary valuations and other studies which are not
yet available. A preliminary allocation of the purchase cost has been made to
major categories of assets and liabilities in the accompanying pro forma
consolidated financial information based on estimates. The actual allocation of
purchase cost and the resulting effect on income from operations may differ
materially from the pro forma amounts included herein. Except as explained in
notes 2 and 3 to the Unaudited Pro Forma Combined Balance Sheet, AGCO has
assumed that the current recorded book value of Ag-Chem's assets, including
patents, trademarks, and property, plant and equipment, and liabilities are
equal to their current fair value. Once AGCO has access to Ag-Chem's detailed
asset records, AGCO will make an allocation of the purchase price to these
assets based on detailed valuations that may change the amount of currently
recorded book values of Ag-Chem's assets and liabilities thereby changing the
amount of goodwill reflected in these pro forma financial statements. In
addition, AGCO will review the estimated remaining lives of the assets, which
may affect the resulting depreciation and amortization relating to these assets,
and accordingly, may effect net earnings and the pro forma results of operations
included herein.
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<PAGE> 55
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1999
(in millions, except per share data)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AGCO AG-CHEM ADJUSTMENTS COMBINED
--------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Net sales $ 2,413.3 $ 297.9 $ $ 2,711.2
Cost of sales 2,056.9 221.3 2,278.2
--------- --------- ---------- ----------
Gross profit 356.4 76.6 433.0
Selling, general and administrative expenses 229.6 70.5 (8.3) (1) 291.8
Engineering expenses 44.6 -- 8.3 (1) 52.9
Nonrecurring expenses 24.5 -- 24.5
--------- --------- ---------- ----------
Income from operations 57.7 6.1 -- 63.8
Interest and financing expense, net 57.6 6.4 11.3 (2) 75.3
Other expense/(income), net 32.3 (2.7) 4.1 (3) 34.4
0.5 (4)
0.2 (5)
--------- --------- ---------- ----------
Income (loss) before income taxes and equity in net
earnings of affiliates (32.2) 2.4 (16.1) (45.9)
Income tax expense (benefit) (10.2) 0.7 (4.8) (6) (14.3)
--------- --------- ---------- ----------
Income (loss) before equity in net earnings of
affiliates (22.0) 1.7 (11.3) (31.6)
Equity in net earnings of affiliates 10.5 -- 0.1 (5) 10.6
--------- --------- ----------- ----------
Net income (loss) $ (11.5) $ 1.7 $ (11.2) $ (21.0)
========== ========= ========== ==========
Net income (loss) per common share:
Basic $ (0.20) $ (0.30)
Diluted $ (0.20) $ (0.30)
Weighted average number of common and common
equivalent shares outstanding:
Basic 58.7 11.8 (7) 70.5
Diluted 58.7 11.8 (7) 70.5
</TABLE>
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<PAGE> 56
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(in millions, except per share data)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AGCO AG-CHEM ADJUSTMENTS COMBINED
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 1,677.0 $ 240.1 $ $ 1,917.1
Cost of sales 1,405.7 187.8 1,593.5
--------- --------- --------- ---------
Gross profit 271.3 52.3 323.6
Selling, general and administrative expenses 168.3 50.3 (9.2)(1) 209.4
Engineering expenses 33.7 -- 9.2 (1) 42.9
Nonrecurring expenses 19.5 -- 19.5
--------- --------- --------- ---------
Income from operations 49.8 2.0 -- 51.8
Interest and financing expense, net 50.8 3.6 8.5 (2) 62.9
Other expense / (income), net 22.8 (2.6) 3.1 (3) 24.7
0.4 (4)
1.0 (5)
--------- --------- --------- ---------
Income (loss) before income taxes and equity in net
earnings of affiliates (23.8) 1.0 (13.0) (35.8)
Income tax expense (benefit) (11.5) 0.4 (4.0)(6) (15.1)
--------- --------- --------- ---------
Income (loss) before equity in net earnings of
affiliates (12.3) 0.6 (9.0) (20.7)
Equity in net earnings of affiliates 8.1 -- 0.6 (5) 8.7
--------- --------- --------- ---------
Net income (loss) $ (4.2) $ 0.6 $ (8.4) $ (12.0)
========= ========= ========= =========
Net income (loss) per common share:
Basic $ (0.07) $ (0.17)
Diluted $ (0.07) $ (0.17)
Weighted average number of common and common
equivalent shares outstanding:
Basic 59.1 11.8 (7) 70.9
Diluted 59.1 11.8 (7) 70.9
</TABLE>
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<PAGE> 57
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
(1) To reclassify Ag-Chem's engineering expenses from selling, general, and
administrative expenses to a separate line item to conform with AGCO's
presentation.
(2) To reflect the increase in interest expense with respect to borrowings
expected to be incurred in connection with the cash portion of the merger
consideration, assuming that the market price of the AGCO common stock is
$9.9375 (see Note 6 to the Unaudited Pro Forma Combined Balance Sheet) at
an assumed average interest rate of 8.4% which is the current incremental
borrowing rate under AGCO's revolving credit facility. The actual interest
rate related to such debt may differ from 8.4%. Accordingly, for every
0.125% variance in the interest rate, annual interest expense will vary by
approximately $0.2 million.
(3) To reflect the increase in goodwill amortization from the preliminary
purchase price allocation of the net assets acquired in the merger assuming
a 40-year amortization period (see Note 4 to the Unaudited Pro Forma
Combined Balance Sheet).
(4) To reflect the increase in depreciation expense from adjusting certain
Ag-Chem office buildings to estimated market value.
(5) To reclassify the equity in net earnings of Ag-Chem's unconsolidated joint
ventures from other income to equity in net earnings in affiliates on an
after-tax basis to conform with AGCO's presentation.
(6) To reflect an income tax provision for the net pro-forma adjustments.
(7) To adjust the weighted average shares outstanding for shares issued in
connection with the common stock portion of the merger consideration. This
adjustment is based on the market price of AGCO common stock of $9.9375 as
of December 15, 2000. In the event the price of AGCO common stock differs
at the closing date, the number of shares issued as consideration in the
merger may differ from the number of shares included in the pro forma
adjustment.
49
<PAGE> 58
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(in millions)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AGCO AG-CHEM (1) ADJUSTMENTS COMBINED
-------- ----------- ------------ --------
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 4.0 $ -- $ 4.0
Accounts and notes receivables, net 518.7 17.5 536.2
Inventories, net 604.2 89.3 12.2 (2) 705.7
Other current assets 88.3 6.2 94.5
-------- -------- -------- --------
Total current assets 1,215.2 113.0 12.2 1,340.4
Property, plant and equipment 297.9 38.6 14.1 (3) 350.6
Investments in affiliates 90.1 1.8 91.9
Other assets 165.7 1.4 167.1
Intangible assets, net 287.4 0.9 165.9 (4) 454.2
-------- -------- -------- --------
Total assets 2,056.3 155.7 192.2 2,404.2
======== ======== ======== ========
Accounts payable 221.9 12.0 233.9
Accrued expenses 389.5 17.7 1.2 (5) 408.4
Other current liabilities 19.6 30.4 (17.3)(6) 37.6
4.9 (2)
-------- -------- -------- --------
Total current liabilities 631.0 60.1 (11.2) 679.9
Long-term debt 582.3 23.9 152.2 (6) 758.4
Postretirement health care benefits 28.8 -- 28.8
Other noncurrent liabilities 39.4 -- 5.6 (3) 45.0
-------- -------- -------- --------
Total liabilities 1,281.5 84.0 146.6 1,512.1
-------- -------- -------- --------
Common stock 0.6 0.1 (0.1)(7) 0.7
0.1 (8)
Additional paid-in capital 427.0 1.1 (1.1)(7) 544.2
117.2 (8)
Retained earnings 615.8 70.9 (70.9)(7) 615.8
Unearned compensation (1.8) -- (1.8)
Accumulated other comprehensive income (266.8) (0.4) 0.4 (7) (266.8)
-------- -------- -------- --------
Total stockholders' equity 774.8 71.7 45.6 892.1
-------- -------- -------- --------
Total liabilities and stockholders' equity $2,056.3 $ 155.7 $ 192.2 $2,404.2
======== ======== ======== ========
</TABLE>
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<PAGE> 59
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(1) Represents the consolidated balance sheet of Ag-Chem as of September 30,
2000. Certain accounts have been reclassified to conform with AGCO's
presentation.
(2) To restate Ag-Chem inventories to its estimated fair value by eliminating
Ag-Chem's LIFO reserves and to establish a deferred tax liability related
to the adjustment.
(3) To adjust certain Ag-Chem office buildings to estimated fair value based on
current appraisals obtained by Ag-Chem and to establish a deferred tax
liability related to the adjustment.
(4) To reflect goodwill from the preliminary purchase price allocation of the
net assets acquired related to the merger as follows:
<TABLE>
<S> <C>
Purchase cost ($25.80 X 9,579,868 Ag-Chem common
shares outstanding as of December 15, 2000) $ 247.2
Estimated transaction fees and expenses 5.0
---------
Total purchase price 252.2
Actual book value of Ag-Chem net assets at
September 30, 2000 (71.7)
Increase inventory to fair market value (12.2)
Increase property, plant and equipment to estimated
fair market value (14.1)
Recognition of deferred tax liabilities related to
adjustments to inventories and property, plant and
equipment 10.5
Recognition of a liability related to Ag-Chem's
phantom stock bonus plan 1.2
---------
Adjusted book value of net assets acquired (86.3)
--------
Estimated goodwill $ 165.9
=========
</TABLE>
(5) To recognize a liability related to Ag-Chem's phantom stock bonus plan
which is payable upon closing of the merger.
(6) To reflect the following:
<TABLE>
<S> <C>
Repayment of Ag-Chem short-term debt from proceeds
of AGCO's long-term revolving credit facility $ 17.3
Increase in outstanding borrowings on AGCO's revolving
credit facility in connection with the cash portion of the
merger consideration $ 134.9
--------
$ 152.2
</TABLE>
This adjustment is based on the stock price of AGCO common stock of
$9.9375 as of December 15, 2000. In the event the price of AGCO common
stock differs at the closing date, the cash portion of the
consideration may differ from the amount included as borrowings in the
pro forma balance sheet.
(7) To reflect the elimination of Ag-Chem's historical stockholders' equity.
(8) To reflect the issuance of 11,800,000 shares of AGCO common stock in
connection with the common stock portion of the merger consideration. This
adjustment is based on the market price of AGCO common stock of $9.9375 as
of December 15, 2000. In the event the price of AGCO common stock differs
at the closing date, the number of shares issued as consideration in the
merger may differ from the number of shares included in the pro forma
adjustment.
51
<PAGE> 60
UNAUDITED COMPARATIVE PER SHARE DATA
Summarized below is the per share information for AGCO and Ag-Chem on a
historical, pro forma combined and pro forma equivalent basis for the periods
and as of the dates indicated below. This data should be read in conjunction
with the Unaudited Pro Forma Combined Financial Information, the Selected
Historical Financial Data for AGCO and Ag-Chem and the Selected Unaudited Pro
Forma Combined Financial Data included elsewhere in this prospectus. The pro
forma information does not purport to represent AGCO's results of operations or
financial position for any future period or as of any date. The pro forma
equivalent data is derived from the product of the pro forma combined data
multiplied by the exchange ratio of the common stock portion of the merger
consideration of 1.2317 shares of AGCO common stock for each share of Ag-Chem
common stock. This exchange ratio is based on the market price of AGCO common
stock as of December 15, 2000 of $9.9375. In the event the price of AGCO common
stock differs at the closing date, the exchange ratio may differ from the ratio
used in the pro forma equivalent data below. The pro forma equivalent data is
derived only from the common stock portion of the merger consideration, and
therefore, is not calculated based on the entire consideration that Ag-Chem
shareholders will receive.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED AS OF
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1999 2000 2000
------------ ------------- -------------
<S> <C> <C> <C>
Net income (loss) per common share:
AGCO $(0.20) $(0.07)
AGCO pro forma combined (0.30) (0.17)
Ag-Chem 0.18 0.06
Ag-Chem pro forma equivalent (0.37) (0.21)
Dividends per common share:
AGCO 0.04 0.03
AGCO pro forma combined 0.04 0.03
Ag-Chem -- --
Ag-Chem pro forma equivalent 0.05 0.04
Book value per share:
AGCO $13.00
AGCO pro forma combined 12.50
Ag-Chem 7.48
Ag-Chem pro forma equivalent 15.40
</TABLE>
52
<PAGE> 61
DIRECTORS AND EXECUTIVE OFFICERS OF AGCO FOLLOWING THE MERGER
The executive officers and directors of AGCO will not change as a
result of the merger, except that AGCO has agreed to use its reasonable best
efforts to appoint Alvin E. McQuinn to its board of directors if Mr. McQuinn
acquires 7,000,000 shares of AGCO common stock in connection with the merger
and/or any subscription right offered by AGCO to Ag-Chem shareholders.
STOCK OWNERSHIP OF AGCO
The following table contains information about the beneficial ownership of
AGCO common stock, on a pro forma basis as if the transaction has been completed
as a forward merger, by the persons and entities listed based on (1) their
ownership of AGCO common stock as of January __, 2001 and (2) their ownership of
Ag-Chem common stock as of January __, 2001. With respect to the persons and
entities listed in the table, the pro forma beneficial ownership of AGCO common
stock listed for each person includes shares of common stock of AGCO to be
issued in exchange for the shares of Ag-Chem common stock held by such person or
entity based upon a price of $___ per share of AGCO common stock (the closing
price on January __, 2001). Unless otherwise indicated, to our knowledge, each
person or entity listed below has sole voting and investment power over their
shares of common stock.
The following table also contains information about the beneficial
ownership of AGCO and Ag-Chem common stock of:
- Each person known to own beneficially more than 5% of the outstanding
shares of each of AGCO or Ag-Chem common stock, based upon such
person's most recently filed Schedule 13D or 13G;
- All executive officers of AGCO;
- Each director of each of AGCO and Ag-Chem; and
- All directors and executive officers of each of AGCO and Ag-Chem as a
group.
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<PAGE> 62
<TABLE>
<CAPTION>
PRO FORMA
AGCO AG-CHEM BENEFICIAL OWNERSHIP
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP OF AGCO
-----------------------------------------------------------------------------------
COMMON COMMON COMMON
NAME OF BENEFICIAL OWNER STOCK(6)(7)(8) PERCENT(9) STOCK PERCENT STOCK PERCENT
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Forstmann-Leff Associates, LLC
590 Madison Avenue
New York, New York 10022 .................. 6,362,851(1) 10.7% -- -- 6,362,851(1) %
Franklin Resources, Inc. ......................
777 Mariners Island Boulevard
San Mateo, California 94404 ............... 4,472,700(2) 7.5 -- -- 4,472,700(2)
Mellon Financial Corporation
One Mellon Center
Pittsburgh, Pennsylvania 15258 ............ 3,692,243(3) 6.2 -- -- 3,692,243(3)
Same Deutz-Fahr S.p.A
Vidale Francesco Cassani n. 14
24047 Treviglio (Bg), Italy ............... 3,150,000(4) 5.3 -- -- 3,150,000(4)
Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109 .............. -- -- 589,000(5) 6.1
AGCO Directors and Executive Officers
Robert J. Ratliff (10) ........................ 791,952 1.3 -- -- 791,952
W. Wayne Booker ............................... -- * -- -- -- *
Henry J. Claycamp ............................. 23,548 * -- -- 23,548 *
Wolfgang Deml ................................. 1,500 * -- -- 1,500 *
Gerald B. Johanneson .......................... 10,000 * -- -- 10,000 *
Anthony D. Loehnis ............................ 4,500 * -- -- 4,500 *
Curtis E. Moll ................................ 1,000 * -- -- 1,000 *
David E. Momot ................................ -- * -- -- -- *
John M. Shumejda .............................. 362,093 * -- -- 362,093 *
Henk Visser ................................... 1,000 * -- -- 1,000 *
Wolfgang Sauer ................................ 2,500 * -- -- 2,500 *
Norman L. Boyd ................................ 56,500 * -- -- 56,500 *
Aaron D. Jones ................................ 52,200 * -- -- 52,200 *
Stephen D. Lupton ............................. 30,000 * -- -- 30,000 *
Donald R. Millard ............................. -- * -- -- -- *
Dexter E. Schaible ............................ 39,755 * -- -- 39,755 *
Edward R. Swingle ............................. 186,728 * -- -- 186,728 *
Adri Verhagen ................................. 19,900 * -- -- 19,900 *
</TABLE>
54
<PAGE> 63
<TABLE>
<CAPTION>
Ag-Chem Directors and Executive Officers
<S> <C> <C> <C> <C> <C>
Alvin E. McQuinn (11) ......................... -- -- 5,644,148 58.9 9.8
Donald D. Pottinger ........................... -- -- 440 * *
John C. Retherford (12) ....................... -- -- 87,600 * *
Mary M. Jetland (13) .......................... -- -- 51,900 * *
Steve M. Koep ................................. -- -- 1,800 * *
Robert L. Hoffman (14) ........................ -- 5,458,498 57.0
G. Waddy Garrett (15) ......................... -- -- 22,000 * *
A.J. (Al) Giese (16) .......................... -- -- 3,300 * *
DeWalt J. Willard, Jr ......................... -- -- 10,000 * *
Executive officers and directors of AGCO as a
group (18 persons) ........................... 1,642,800 2.8 -- -- 1,642,800
Executive officers and directors of Ag-Chem as
a group (9 persons) .......................... -- -- 5,826,388 60.8
</TABLE>
--------------
*Less than 1%.
(1) Based on the Amendment No. 1 to Schedule 13G filed on May 31,
2000, by Forstmann-Leff Associates, LLC ("FLA"), an investment
adviser, FLA Asset Management, LLC, an investment adviser and
subsidiary of FLA, FLA Advisers LLC, an investment adviser
whose managing members constitute a majority of the executive
committee of the board of managers of FLA, and Stamford
Advisers, LLC, an investment advisor and indirect subsidiary
of FLA.
(2) Based on the Amendment No. 4 to Schedule 13G filed on May 11,
2000, by Franklin Resources, Inc. ("FRI"), Templeton Global
Advisors Limited, an investment adviser and subsidiary of FRI,
Mr. Charles B. Johnson, a principal shareholder of FRI, and
Rupert H. Johnson, Jr., a principal shareholders of FRI.
(3) Based upon Schedule 13G filed with the Securities and Exchange
Commission on January 27, 2000.
(4) Based upon Schedule 13G filed with the Securities and Exchange
Commission on September 20, 2000.
(5) Based on the Schedule 13G filed on February 11, 2000, by
Wellington Management Company, LLP, an investment adviser and
its wholly-owned subsidiary, Wellington Trust Company, N.A., a
holding company (collectively "Wellington"). Represents the
total number of shares owned which may be deemed beneficially
held as of December 31, 1999, by Wellington in its capacity as
an investment adviser which are held of record by clients of
Wellington.
(6) Includes shares of AGCO common stock which may be purchased
upon exercise of options which are exercisable as of January
___, 2000, or become exercisable within 60 days thereafter,
for the following individuals: Mr. Ratliff -- 9,000; Mr.
Claycamp -- 1,000; Mr. Johanneson -- 5,000; Mr. Moll -- 1,000;
Mr. Visser - 1,000; Dr. Sauer - 1,000; Mr. Boyd -- 5,200; Mr.
Jones -- 7,200; Mr. Lupton -- 12,000; Mr. Schaible -- 17,255;
Mr. Verhagen -- 2,400; executive officers and directors as a
group -- 62,055.
(7) Includes unvested restricted shares of AGCO's common stock
earned under the AGCO Long-Term Incentive Plan by the
following individuals: Mr. Shumejda -- 42,167; Mr. Boyd --
14,667; Mr. Jones - 18,333; Mr. Lupton -- 13,333; Mr. Schaible
-- 9,167; Mr. Swingle -- 14,667; Mr. Verhagen -- 11,666; all
executive officers and directors as a group -- 158,833.
(8) Includes restricted shares of AGCO's common stock earned under
the AGCO Director Plan by the following individuals: Mr.
Claycamp -- 3,000; Mr. Deml -- 1,500; Mr. Johanneson -- 3,000;
Mr. Loehnis -- 1,500; Dr. Sauer -- 1,500; all executive
officers and directors as a group -- 10,500.
(9) Any securities not outstanding which are subject to options
which are exercisable as of December 18, 2000, or become
exercisable within 60 days thereafter are deemed outstanding
for the purpose of computing the percentage of outstanding
securities of the class owned by any person holding such
securities but are not deemed outstanding for the purpose of
computing the percentage of the class owned by any other
person. Based on 59,589,428 shares of AGCO common stock
outstanding on December 18, 2000.
(10) Includes [2,742] shares of AGCO common stock owned by Mr.
Ratliff's wife, [200,000] shares of Common Stock beneficially
owned by Mr. Ratliff as trustee of the Robert J. Ratliff
Charitable Remainder Unitrust and [568,360] shares of Common
Stock owned by a family limited partnership of which Mr.
Ratliff controls the general partner. Mr. Ratliff disclaims
beneficial ownership of these shares.
(11) Includes 5,453,298 shares of Ag-Chem common stock owned by the
Alvin E. McQuinn Revocable Trust of which
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<PAGE> 64
Mr. McQuinn is a co-trustee and 10,000 shares of Ag-Chem
common stock held by Mr. McQuinn as custodian for
grandchildren.
(12) Includes 62,450 shares of Ag-Chem common stock owned jointly
with Mr. Retherford's spouse and 16,734 shares held of record
by Mr. Retherford's minor children. Also includes 8,416 shares
of Ag-Chem common stock owned of record by two trusts of which
Mr. Retherford is trustee, as to all of which shares Mr.
Retherford disclaims beneficial ownership.
(13) Includes 27,000 shares of Ag-Chem common stock held of record
by Ms. Jetland's spouse and 100 shares of Ag-Chem common stock
held of record by Ms. Jetland's children, as to all of which
Ms. Jetland disclaims beneficial ownership.
(14) Includes 5,453,298 shares of Ag-Chem common stock owned by the
Alvin E. McQuinn Revocable Trust of which Mr. Hoffman is a
co-trustee, and 1,200 shares of Ag-Chem common stock held by
Mr. Hoffman's spouse.
(15) Includes 6,000 shares of Ag-Chem common stock held of record
by Mr. Garrett's spouse and 800 shares of Ag-Chem common stock
held of record by Mr. Garrett's children.
(16) Includes 3,300 shares of Ag-Chem common stock held jointly
with Mr. Giese's spouse.
56
<PAGE> 65
INTERESTS OF CERTAIN PERSONS IN THE MERGER
INTERESTS OF AG-CHEM DIRECTORS, EXECUTIVE OFFICERS AND SHAREHOLDERS
When considering the Ag-Chem board's recommendation that the Ag-Chem
shareholders vote in favor of the merger agreement, Ag-Chem shareholders should
be aware that a number of Ag-Chem officers, directors and employees have certain
arrangements that provide them with interests in the merger that are different
from, or in addition to, the interests of Ag-Chem shareholders as a whole.
Severance for Certain Officers, Directors and Employees. Under the
merger agreement, AGCO has agreed to provide severance payments under certain
circumstances for certain officers, directors and employees following completion
of the merger. Any other employee of Ag-Chem or its subsidiaries whose
employment is terminated following the merger will receive severance in
accordance with AGCO's policies existing at the time. Nothing in the merger
agreement or any document or agreement related to the merger creates a contract
or term of employment for any Ag-Chem employee. Each of Mary M. Jetland, Steve
Koep, Donald D. Pottinger, John C. Retherford and one other person are entitled
to receive severance in an amount equal to two times his or her annual base
salary as of the date of the merger agreement if he or she is terminated by AGCO
without "cause" or voluntarily resigns for "good reason" prior to the first
anniversary of the effective date of the merger. Each of seven other individuals
are entitled to receive severance in an amount equal to his annual base salary
as of the date of the merger agreement if he is terminated by AGCO without
"cause," or voluntarily resigns for "good reason" prior to the first anniversary
of the effective date of the merger.
"Cause" for these purposes is defined in the merger agreement as (i)
the employee's habitual drunkenness or chronic substance abuse; (ii) a willful
failure by the employee to materially perform and discharge the duties and
responsibilities of the employee as determined by AGCO; (iii) any breach by the
employee of the terms and conditions of such employee's employment; (iv) any
misconduct by the employee that is materially injurious to AGCO; or (v) a
conviction of a felony involving the personal dishonesty or moral turpitude of
the employee. "Good Reason" for these purposes is defined in the merger
agreement to mean (i) a reduction in the employee's base salary, other than in
connection with an across-the-board reduction in salaries and/or benefits for
similarly situated employees; or (ii) the relocation of the employee's full-time
place of employment to a location greater than fifty miles from the employee's
current place of employment.
Election to the AGCO Board of Alvin E. McQuinn. Under the merger
agreement, if Alvin E. McQuinn acquires an aggregate of 7,000,000 AGCO common
shares in connection with the merger and/or pursuant to the exercise of any
subscription right offered by AGCO to Ag-Chem shareholders, AGCO has agreed
that, at the first meeting of the AGCO board of directors following the merger,
AGCO will use reasonable best efforts to increase the size of its board and to
appoint Alvin E. McQuinn to any vacancy created thereby.
Phantom Stock Plan. Certain Ag-Chem officers, directors and employees
are in possession of "phantom shares" of Ag-Chem stock pursuant to the Ag-Chem
Equipment Co., Inc. 1998 Key Employee Phantom Stock Bonus Plan effective
December 1, 1998. Pursuant to the merger agreement, Ag-Chem has agreed upon
closing of the merger to terminate the Phantom Stock Bonus Plan and to make cash
payments to its employees of approximately $13.86 per phantom share, aggregating
$1,178,100 and of which $55,440 will be paid to each of Donald D. Pottinger,
president of Ag-Chem, John C. Retherford, senior vice president and chief
financial officer of Ag-Chem and Mary M. Jetland, senior vice president, SOILTEQ
operations, of Ag-Chem, and $41,580 will be paid to Steve M. Koep, Senior Vice
President, Sales and Marketing.
INDEMNIFICATION AND INSURANCE
AGCO has agreed to indemnify the current and former directors and
officers of Ag-Chem and to continue insurance coverage for such persons for a
period of time following the effective time of the merger. For more information,
refer to "Material Provisions of the Merger Agreement and Related
Agreements--Director and Officer Indemnification" on page ___.
57
<PAGE> 66
COMPARISON OF SHAREHOLDER RIGHTS
THIS SECTION OF THE PROXY STATEMENT/PROSPECTUS DESCRIBES CERTAIN
DIFFERENCES BETWEEN THE RIGHTS OF HOLDERS OF AG-CHEM COMMON STOCK AND AGCO
COMMON STOCK. WHILE THE DESCRIPTION SUMMARIZES THE MATERIAL DIFFERENCES BETWEEN
THE TWO, THIS SUMMARY MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT
TO YOU. YOU SHOULD CAREFULLY READ THIS ENTIRE DOCUMENT AND THE OTHER DOCUMENTS
TO WHICH IT REFERS FOR A MORE COMPLETE UNDERSTANDING OF THE DIFFERENCES BETWEEN
BEING A SHAREHOLDER OF AG-CHEM AND BEING A SHAREHOLDER OF AGCO.
AUTHORIZED SHARES; SHARES OUTSTANDING; TRANSFER AGENT
Ag-Chem's articles of incorporation authorize the issuance of up to
40,000,000 shares of capital stock, no par value per share in the case of common
stock, and a par value as determined by its board of directors in the case of
preferred stock. As of January ___, 2000, __________ shares of Ag-Chem common
stock were outstanding. Ag-Chem's common stock is the only class or series of
Ag-Chem capital stock issued and outstanding.
AGCO's certificate of incorporation authorizes the issuance of up to
150,000,000 shares of common stock par value $0.01 per share, of which _________
shares were issued and outstanding as of January ___, 2000, and up to 1,000,000
shares of preferred stock, par value $.0l per share, of which no shares were
issued and outstanding as of January ___, 2000. AGCO's preferred stock is
issuable in series, each series having such rights and preferences as AGCO's
board of directors may fix and determine by resolution. As of January __, 2000,
like Ag-Chem, AGCO's common stock was the only class or series of AGCO's capital
stock issued and outstanding. The merger agreement does not prohibit, nor is
AGCO otherwise prohibited from, issuing additional shares of common stock or
preferred stock. AGCO's transfer agent is SunTrust Bank, Atlanta.
Minnesota law does not allow shares to be held in treasury. Under
Delaware law, treasury shares may be held, sold, lent, pledged, exchanged,
transferred or otherwise disposed of by AGCO. Treasury shares, however, are not
outstanding shares and therefore do not have voting rights.
CERTAIN DIFFERENCES BETWEEN MINNESOTA AND DELAWARE CORPORATION STATUTES
As a shareholder of Ag-Chem, your rights are currently governed by the
Minnesota Business Corporation Act (MBCA), Ag-Chem's articles of incorporation
and Ag-Chem's bylaws. The rights of AGCO shareholders are currently governed by
the Delaware General Corporation Law (DGCL), AGCO's certificate of incorporation
and AGCO's by-laws. After completion of the merger, you will become a
shareholder of AGCO and your rights will be governed by the DGCL, AGCO's
certificate of incorporation and AGCO's by-laws.
CAPITALIZATION AND VOTING RIGHTS; CUMULATIVE VOTING
Ag-Chem has one class of common stock issued and outstanding. AGCO has
one class of common stock issued and outstanding. Holders of Ag-Chem common
stock and holders of AGCO common stock are each entitled to one vote for each
share held. Neither holders of Ag-Chem common stock nor holders of AGCO common
stock are allowed to cumulate votes for the election of directors.
AGCO's certificate of incorporation also authorizes AGCO to issue
preferred stock in one or more classes or series, with such voting powers,
designations, preferences, rights, qualifications, limitations or restrictions
as AGCO's board of directors may determine.
APPRAISAL AND DISSENTERS' RIGHTS
Under the MBCA, shareholders have the right, under certain
circumstances, to dissent from certain corporate transactions, principally
mergers and consolidations, by demanding payment in cash for their shares equal
to the fair value, as determined by the corporation or by a court. Under the
MBCA, Ag-Chem shareholders would have dissenters' rights if Ag-Chem amends it
articles in such a way that materially and adversely affects the rights or
preferences of the shares of the dissenting shareholder, enters into a sale,
lease, transfer, or other disposition of all or substantially all of the
property and assets of the corporation, a plan of merger, a plan of exchange or
any other
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<PAGE> 67
action taken pursuant to a shareholder vote if the articles, bylaws or a
resolution approved by the board directs that dissenting shareholders may obtain
payment for their shares. For a discussion of Ag-Chem shareholders' dissenters'
rights of appraisal in connection with the merger, see "Appraisal and
Dissenters' Rights" on page ___.
The DGCL also provides shareholders with the right, under certain
circumstances, to dissent from certain corporate transactions, principally
mergers and consolidations, by demanding payment in cash for their shares equal
to the fair value (excluding any appreciation or depreciation as a consequence
or in expectation of the transaction) as determined by the corporation or by an
independent appraiser appointed by a court in an action timely brought by the
dissenters.
Under the DGCL, no dissenters' rights exist for shares of stock of a
constituent corporation in a merger or consolidation that are either listed on a
national securities exchange or designated as a national market system security
on an inter dealer quotation system by the NASD, or held of record by more than
2,000 shareholders. However, dissenters' rights will exist if the shareholders
receive anything other than: (i) shares of stock (or depositary receipts) of the
corporation surviving or resulting from such merger or consolidation; (ii)
shares of stock of any other corporation (or depositary receipts) which at the
effective date of the merger or consolidation will be either listed on a
national securities exchange or designated as a national market system security
on an inter dealer quotation system by the NASD, or held of record by more than
2,000 shareholders; (iii) cash in lieu of fractional shares of the corporation
described in clauses (i) and (ii) above, or (iv) any combination of clauses (i),
(ii) or (iii). AGCO's certificate does not provide any appraisal rights. As an
AGCO shareholder, you will not have appraisal rights other than as set forth in
the DGCL.
SHAREHOLDER ACTION
Ag-Chem shareholders may take action at annual or special meetings of
the shareholders, or by unanimous written consent of all Ag-Chem shareholders
entitled to vote. AGCO shareholders may take action at annual or special
meetings of shareholders, but may not take action by written consent.
CONTROL SHARE ACQUISITIONS
The Minnesota control share acquisition statute requires disinterested
shareholder approval for any acquisition of shares of an "issuing public
corporation" which results in the "acquiring person" owning more than a
designated percentage of the outstanding shares of such corporation. Shares
beneficially owned by the acquiring person that exceed certain share ownership
thresholds lose their voting power unless and until the acquiring person
discloses certain information to the corporation and voting rights are granted
by the shareholders at a special or annual meeting of the shareholders or the
certain shares are transferred to an unaffiliated third party. These shares may
also be subject to redemption rights in various circumstances. The Minnesota
control share acquisition statute applies unless the "issuing public
corporation" opts out of the statute in its articles of incorporation or bylaws
approved by its shareholders. Ag-Chem has not opted out of such provisions.
Under Minnesota law, control share acquisitions do not include, among other
things:
- mergers or consolidations if the issuing public corporation is
party to the transaction;
- an acquisition from the issuing public corporation; or
- an acquisition subsequent to January 1, 1991, pursuant to a
cash tender offer to purchase all shares of the voting stock
of the issuing public corporation which has been approved by a
majority vote of the members of a committee comprised of the
disinterested members of the board of directors of the issuing
public corporation formed before the commencement or the
public announcement of the intent to commence, of the tender
offer and pursuant to which acquisition the acquiring person
will become the owner of over 50% of the voting stock of the
issuing public corporation outstanding at the time of the
transaction.
There are no provisions of Delaware law comparable to the Minnesota
control share acquisition act.
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AMENDMENT OF CHARTER DOCUMENTS
Articles/Certificate of Incorporation. Ag-Chem's articles of
incorporation may be amended in accordance with the MBCA, which provides that an
amendment to a corporation's articles of incorporation may be approved by a
majority of the voting power of the shares entitled to vote on the proposed
amendment.
AGCO's certificate of incorporation may be amended in accordance with
Delaware law, which provides that an amendment to a corporation's certificate of
incorporation may be approved by a majority of the outstanding shares entitled
to vote on the proposed amendment.
Bylaws. Under the MBCA, shareholders entitled to vote have the power to
amend the corporation's bylaws at any time. In addition, subject to the power of
the shareholders to enact, change or repeal the bylaws by a majority vote of the
shareholders, Ag-Chem's bylaws vest power to amend its bylaws in the board of
directors.
Under the DGCL, shareholders entitled to vote have the power to
adopt, amend or repeal by-laws. A corporation may, in its certificate of
incorporation, confer such power upon the board of directors. The shareholders
always have the power to adopt, amend or repeal by-laws, even though the board
may also be delegated such power.
AGCO's by-laws provide that its by-laws may be amended or repealed (1)
by the affirmative vote of a majority of the voting power of all of the
then-outstanding shares of the voting stock at a duly called meeting of the
shareholders, or (2) by AGCO's board of directors.
BUSINESS COMBINATIONS WITH CERTAIN PERSONS
Ag-Chem is also subject to Section 302A.673 which generally prohibits a
Minnesota public corporation from engaging in a "business combination" with an
"interested shareholder" for a period of four years after the date of the
transaction in which the person became an interested shareholder, unless the
business combination is approved in a prescribed manner. "Business combination"
includes mergers, assets sales, certain issuances of stock and other
transactions resulting in a financial benefit to the interested shareholder. An
"interested shareholder" is a person or an entity who is the beneficial owner,
directly or indirectly, of 10% or more of the voting power of the outstanding
shares entitled to vote of the issuing public corporation or who is an affiliate
or associate of the corporation and at any time within the four years prior to
the date in question was the beneficial owner, directly or indirectly, of 10% or
more of the voting power of the outstanding shares entitled to vote of the
issuing public corporation.
The DGCL requires the approval of the board of directors and the
holders of a majority of the outstanding shares entitled to vote thereon for
mergers or consolidations, and for sales, leases or exchanges of all or
substantially all of its property or assets.
The DGCL, like the MBCA permits a surviving corporation to merge with
another corporation without obtaining the approval of its shareholders if:
- the merger agreement does not amend the surviving
corporation's certificate of incorporation;
- each share of the surviving common stock outstanding
immediately prior to the effective date of the merger is to be
an identical outstanding or treasury share of the surviving
common stock after the merger; and any authorized but unissued
shares or treasury shares of the surviving common stock to be
issued or delivered under the plan of merger plus those
initially issuable upon conversion of any other securities or
obligations to be issued or delivered under such plan do not
exceed 20% of the shares of the surviving common stock
outstanding immediately prior to the effective date of the
merger.
Section 203 of the DGCL governs business combinations (e.g. mergers,
sales and leases of assets, issuance of securities) and certain other similar
transactions between a Delaware public company and an "interested stockholder."
An interested stockholder is a person who beneficially owns or has the right to
vote 15% (unlike 10% in Minnesota) or more of a company's outstanding shares.
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Section 203 will not apply if:
- prior to the person or entity becoming an interested
shareholder, the business combination or the transaction
pursuant to which such person or entity became an interested
shareholder was approved by AGCO's board of directors,
- upon consummation of the transaction in which he or she became
an interested shareholder, the interested shareholder holds at
least 85% of AGCO's common stock outstanding at the time the
transaction commenced (excluding shares held by persons who
are both officers and directors and shares held by certain
employee stock plans); or
- following the transaction in which such person became an
interested shareholder, the business combination is approved
by AGCO's board of directors and by the holders of at least
two-thirds of the outstanding shares of common stock
(excluding shares owned by the interested shareholder) at an
annual or special meeting of the AGCO shareholders (and not by
written consent).
The restrictions imposed on interested shareholders under Section 203
do not apply under certain limited circumstances where a company proposes, with
the approval of the majority of the directors who were directors before any
person became an interested stockholder, a merger or sale of at least 50% of its
assets (as defined under Section 203) or supports (or does not oppose) a tender
offer for at least 50% of its voting stock.
Section 203 only applies to Delaware corporations which have a class of
voting stock that is listed on a national securities exchange, is authorized for
quotation on Nasdaq or is held by record by more than 2,000 shareholders.
However, a Delaware corporation may elect not to be governed by Section 203 in
its certificate of incorporation or the bylaws. The authorization of this
provision must be approved by a majority of the shares entitled to vote and, in
the case of a bylaw amendment, may not be further amended by the board of
directors. Currently, Section 203 applies to AGCO.
If Section 203 applies, then for three years after a person becomes an
interested stockholder, the following transactions between the company and the
interested stockholder or persons related to that stockholder are prohibited:
- the sale, lease, exchange, mortgage, pledge, transfer or
acquisition (other than proportionately to shareholders) of
any interest in assets worth more than 10% of the market value
of the company's assets;
- mergers and similar transactions;
- loans or guarantees; and
- subject to certain exceptions, the issuance or transfer of
stock or any rights to acquire stock of the company's
outstanding stock or the stock of its subsidiaries.
DIRECTOR LIABILITY AND INDEMNIFICATION
The MBCA provides that, unless the articles of incorporation or bylaws
otherwise provide, directors and officers will be indemnified against judgments,
penalties, fines, settlements and expenses (including attorneys' fees) incurred
in connection with legal proceedings to which they are made, or threatened to be
made, a party by reason of their present or former status as a director or
officer, if:
- they have not been indemnified by another organization;
- they acted in good faith;
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- they received no improper personal benefit;
- in the case of any criminal proceeding, they had no reasonable
cause to believe their conduct was unlawful; and
- they reasonably believed their conduct to be in the
corporation's best interests.
Ag-Chem's bylaws provide indemnification to directors and officers to
the full extent permitted by the MBCA.
The DGCL permits a corporation to indemnify any director, officer,
employee or agent made or threatened to be made a party to any threatened,
pending or completed proceeding if the person acted in good faith and in a
manner such person reasonably believed to be in the best interests of the
corporation, and, with respect to any criminal proceeding, had no reasonable
cause to believe that his or her conduct was unlawful.
AGCO's by-laws contain provisions which require AGCO to indemnify
directors and officers to the full extent permitted by the DGCL.
AGCO's by-laws also provide, in accordance with the DGCL, that the
corporation may advance expenses incurred by its directors or officers in
defending a civil or criminal action, suit or proceeding because that person is
a director or officer. However, such payment will be made only if the
corporation receives an undertaking by or on behalf of that director or officer
to repay all amounts advanced if it is ultimately determined that he or she is
not entitled to be indemnified by the corporation.
LIMITATION ON DIRECTORS LIABILITIES
Both the MBCA and the DGCL permit a corporation to include a provision
in its certificate of incorporation eliminating or limiting the personal
liability of a director to the corporation or its shareholders for damages for a
breach of the director's fiduciary duty, subject to certain limitations.
Ag-Chem's articles of incorporation include such a provision to the maximum
extent permitted by law. AGCO's certificate of incorporation does not include
such a provision.
REMOVAL OF DIRECTORS
Ag-Chem directors may be removed with or without cause by a vote of the
shareholders holding a majority of the shares entitled to vote at an election of
directors except, as otherwise provided by law, where shareholders have the
right to cumulate their votes. In addition, Ag-Chem directors who have been
elected by the board of directors to fill a vacancy or to fill a directorship
created by action of the board, and who have not been subsequently reelected by
the shareholders, may be removed by a majority vote of all the directors.
AGCO directors may be removed for cause only by the affirmative vote of
the holders of at least a majority of the shares entitled to vote at an election
of directors.
SPECIAL MEETINGS OF SHAREHOLDERS
Ag-Chem's bylaws provide that a special meeting may be called by the
chief executive officer, chief financial officer, or such other officer as may
be designated by the board of directors; upon request of a majority of the
members of the board of directors; or upon written request of one or more
shareholders holding 10% or more of the shares entitled to vote on matters to be
presented at the meeting. The MBCA further provides that if an annual meeting of
shareholders has not been held during the immediately preceding 15 months, one
or more shareholders holding three percent or more of the voting power of all
shares entitled to vote may demand an annual meeting by written notice of demand
given to the chief executive officer or chief financial officer of the company.
AGCO's by-laws provide that special meetings of the shareholders may be
called by order of the board of directors or the executive committee. The DGCL
further provides that if an annual meeting is not held within 30 days of the
date designated for the meeting, or is not held for a period of 13 months after
the last annual meeting,
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the Delaware Court of Chancery may summarily order a meeting to be held if
requested by any shareholder or director.
NUMBER OF DIRECTORS
Ag-Chem directors are elected for a term of one year and until their
successors are elected and qualified. Ag-Chem's board is not divided into
classes. Ag-Chem's board of directors currently consists of eight directors. The
number of directors on Ag-Chem's board is determined, from time to time, by the
shareholders of Ag-Chem or the board of directors of Ag-Chem.
AGCO's board of directors is divided into three classes, as permitted
by Delaware law, with one class being elected annually. AGCO directors are
elected for a term of three years and until their successors are elected and
qualified. AGCO's board of directors currently consists of eleven directors. The
number of directors on AGCO's board is determined by a resolution adopted by a
majority vote of the board of directors and may not be less than three nor more
than thirteen.
NEWLY CREATED DIRECTORSHIPS AND VACANCIES
Ag-Chem's bylaws provide that vacancies on the board of directors
resulting from an increase in the number of directors authorized under the
bylaws may be filled by a majority vote of the directors serving at the time of
such increase. All other vacancies on the board of directors shall be filled by
a majority of the remaining directors even though less than a quorum.
AGCO's by-laws provide that any vacancies on the board of directors may
be filled by the affirmative vote of a majority of the remaining directors then
in office, even if less than a quorum. Any director elected in such a manner
shall serve until the election of his successor or until his resignation or
removal as provided in AGCO's by-laws.
COMMITTEES OF THE BOARD OF DIRECTORS
Ag-Chem
Ag-Chem's bylaws provide that, by the affirmative vote of a majority of
the directors, the board of directors may designate two or more individuals to
constitute a committee having the authority of the board of directors to the
extent provided by the board of directors.
AGCO
AGCO's bylaws provide for an Executive Committee, Audit Committee,
Compensation Committee and Nominating Committee. AGCO's bylaws also provide that
the board of directors may create any other committee it deems desirable and may
discontinue such other committees at any time.
SHAREHOLDER RIGHTS PLAN
In April 1994, AGCO designated 300,000 shares of Junior Cumulative
Preferred Stock in connection with the adoption of a shareholders' rights plan.
Under the terms of the rights plan, one-third of a preferred stock purchase
right (a right) is attached to each outstanding share of AGCO common stock. The
rights plan contains provisions that are designed to protect shareholders in the
event of certain unsolicited attempts to acquire AGCO. Under the terms of the
rights plan, each right entitles the holder to purchase one one-hundredth of a
share of the AGCO junior preferred stock, par value of $0.01 per share, at an
exercise price of $200 per share. The rights are exercisable a specified number
of days following (i) the acquisition by a person or group of persons of 20% or
more of AGCO's common stock or (ii) the commencement of a tender or exchange
offer for 20% or more of AGCO's common stock. In the event AGCO is the surviving
company in a merger with a person or group of persons that owns 20% or more of
AGCO's outstanding stock, each right will entitle the holder (other than such
20% shareholder) to receive, upon exercise, common stock of AGCO having a value
equal to two times the right's
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exercise price. In addition, in the event AGCO sells or transfers 50% or more of
its assets or earning power, each right will entitle the holder to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the right's exercise price. The rights may be redeemed by AGCO at $0.01
per right prior to their expiration on April 27, 2004.
Ag-Chem has no shareholder rights plan.
NOMINATION PROCEDURES AND SHAREHOLDER PROPOSALS
Minnesota law provides that any business appropriate for action by the
shareholders may be transacted at a regular meeting of the shareholders.
AGCO's by-laws provide that a shareholder who wishes to nominate
directors for election at a shareholder meeting or who wants to bring business
before a shareholder meeting must have given timely notice thereof in writing to
the secretary of the corporation. In order to be timely, the notice must be
received at the corporation's executive offices not less than 60 nor more than
90 days prior to the first anniversary of the preceding year's annual meeting.
Shareholder nominations and proposals will not be brought before any
AGCO shareholder meeting unless the nomination or proposal was made in
accordance with the specific requirements set forth in the by-laws. The chairman
of the AGCO shareholder meeting will have the power to determine whether the
business or nomination set forth by the shareholder was properly brought before
the shareholder meeting. If the chairman determines that the business or
nomination was not properly brought before the shareholder meeting, the chairman
may declare that the business or nomination will be disregarded.
DIVIDENDS
Under the MBCA, Ag-Chem may declare a dividend to its shareholders if
the board determines that Ag-Chem will be able to pay its debts in the ordinary
course of business after making the distribution and the board does not know
before the dividend is made that the determination was or has become erroneous.
A dividend may be made to the holders of a class or series of shares only if all
amounts payable to the holders of shares having a preference for the payment are
paid and the distribution does not reduce the remaining net assets of Ag-Chem
below the aggregate preferential amount payable in the event of liquidation to
the holders of shares having preferential rights, unless the distribution is
made to those shareholders in the order and to the extent of their respective
priorities.
The DGCL provides that, subject to any restrictions in the
corporation's certificate of incorporation, dividends may be declared from the
corporation's surplus (as defined by and computed in accordance with the DGCL)
or, if there is no surplus, from its net profits for the fiscal year in which
the dividend is declared and the preceding fiscal year. However, if the
corporation's capital (as defined by and computed in accordance with the DGCL)
has been diminished to an amount less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets, dividends may not be declared and
paid out of net profits until the deficiency in the capital has been repaired.
INSPECTION OF DOCUMENTS
The MBCA provides that any shareholder or group of shareholders of a
publicly held corporation have the right, upon written demand stating the
purpose, to examine and copy the corporation's share register and other
corporate records upon demonstrating a proper purpose. The DGCL provides that a
shareholder of a Delaware corporation may inspect the books and records
(including shareholder lists) of the corporation during normal business hours
upon written demand under oath stating the purpose of the inspection, if such
purpose is reasonably related to such person's interest as a shareholder.
WHERE YOU CAN FIND MORE INFORMATION
This proxy statement/prospectus incorporates documents by reference
which are not presented in or
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delivered with this proxy statement/prospectus.
For AGCO (SEC File No. 1-12930), these documents include:
- AGCO's Annual Report on Form 10-K for the year ended December
31, 1999;
- AGCO's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000;
- AGCO's proxy statement relating to its Annual Meeting of
Stockholders held on April 26, 2000;
- AGCO's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000; and
- AGCO's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000.
For Ag-Chem (SEC File No. 0-25360), these documents include:
- Ag-Chem's Annual Report on Form 10-K for the fiscal year ended
September 30, 2000.
All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 after the date of this proxy
statement/prospectus and before the date of the special meeting also are
incorporated by reference into and are made a part of this proxy
statement/prospectus from the date of filing of those documents.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT,
DELIVERED WITH THIS PROXY STATEMENT/PROSPECTUS OR THAT WE HAVE REFERRED YOU TO.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this proxy statement/prospectus will be deemed to
be modified or superseded for purposes of this proxy statement/prospectus to the
extent that a statement contained in this proxy statement/prospectus or any
other subsequently filed document that is deemed to be incorporated by reference
into this proxy statement/prospectus modifies or supersedes that statement. Any
statement so modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this proxy statement/prospectus.
We file reports, proxy statements and other information with the
Securities and Exchange Commission. Copies of our reports, proxy statements and
other information may be inspected and copied at the public reference facilities
maintained by the Securities and Exchange Commission at:
<TABLE>
<S> <C> <C>
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 500 West Madison Street 13th Floor
450 Fifth Street, NW Suite 1400 New York, NY 10048
Washington, D.C. 20549 Chicago, Illinois 60661
</TABLE>
Reports, proxy statements and other information concerning Ag-Chem may
be inspected at:
The National Association of Securities Dealers
1735 K Street, N.W.
Washington, D.C. 20006
Copies of these materials can also be obtained by mail at prescribed
rates from the Public Reference Section of the Securities and Exchange
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 or by calling the
Securities and Exchange Commission at 1-800-SEC-0330. The Securities and
Exchange Commission maintains a Website that contains reports, proxy statements
and other information regarding Ag-Chem and AGCO. The address of the Securities
and Exchange Commission Website is http://www.sec.gov.
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AGCO has filed a registration statement on Form S-4 under the
Securities Act with the Securities and Exchange Commission with respect to
AGCO's common stock to be issued to Ag-Chem shareholders. This proxy
statement/prospectus constitutes the prospectus of AGCO filed as part of the
registration statement. This proxy statement/prospectus does not contain all of
the information set forth in the registration statement because certain parts of
the registration statement are omitted in accordance with the rules and
regulations of the Securities and Exchange Commission. The registration
statement and its exhibits are available for inspection and copying as set forth
above.
EXPERTS
The consolidated financial statements and schedules of AGCO as of
December 31, 1999 and 1998, and for each of the three years in the period ended
December 31, 1999, which are incorporated by reference in this proxy
statement/prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
The consolidated financial statements and schedule of Ag-Chem as of
September 30, 1999 and 2000, and for each of the years in the three-year period
ended September 30, 2000, have been incorporated by reference herein and in this
proxy statement/prospectus in reliance upon the reports of KPMG LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing.
The discussions under the heading "Material Federal Income Tax
Consequences" were reviewed by KPMG LLP, independent certified public
accountants, and have been included herein upon the authority of said firm as
experts in tax accounting.
Ag-Chem anticipates that one or more representatives of KPMG LLP will
be present at the special meeting with an opportunity to make a statement, if
desired, and will be available to answer appropriate questions from shareholders
who are present.
LEGAL MATTERS
Troutman Sanders LLP, counsel to AGCO, will deliver an opinion to AGCO
pursuant to the merger agreement, relating to certain material federal income
tax matters. Troutman Sanders LLP will deliver an opinion as to the validity of
the AGCO common stock issued in the merger. Larkin, Hoffman, Daly & Lindgren,
Ltd. has represented Ag-Chem in connection with the merger agreement and matters
related to the merger.
FUTURE SHAREHOLDER PROPOSALS
Ag-Chem will hold its annual meeting of Ag-Chem shareholders only if
the merger is not consummated. Shareholder proposals sought to be included in
the proxy statement for the 2001 annual meeting of Ag-Chem shareholders if the
merger is not completed should have been received by Ag-Chem at its principal
executive offices on or before ________, 2001. Pursuant to Rule 14a-4(c)(1), as
promulgated under the Securities Exchange Act of 1934, as amended, if a
proponent of a proposal fails to notify Ag-Chem of a shareholder proposal at
least 45 days prior to the date of mailing of the prior year's proxy statement
(i.e., January 8, 1999), the management proxies will be allowed to use their
discretionary voting authority when the proposal is raised at the meeting,
without any discussion of the matter in the proxy statement.
OTHER MATTERS
The Ag-Chem Board of Directors knows of no other matters that are
likely to be brought before the special meeting. If any other matters are
properly brought before the meeting, Alvin E. McQuinn and John C. Retherford, as
the proxy agents named in the enclosed proxy, will vote on those matters in
accordance with their best judgment.
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APPENDICES
You should rely only on the information contained or incorporated by
reference in this proxy statement/prospectus to vote on the proposal to adopt
the merger agreement. Neither AGCO nor Ag-Chem has authorized anyone to provide
you with information that is different from that which is contained in this
proxy statement/prospectus. You should not assume that the information contained
in this proxy statement/prospectus is accurate as of any date other than the
date set forth on the cover page, and neither the mailing of this proxy
statement/prospectus to shareholders nor the issuance of AGCO common stock in
the merger shall create any implication to the contrary.
Appendix A - Agreement and Plan of Merger
Appendix B - Voting Agreement
Appendix C - Sections 302A.471 and 473 of the Minnesota Business Corporation Act
Appendix D - Opinion of Goldsmith, Agio, Helms Securities, Inc.
Appendix E - Form of Affiliate Letter
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
by and among
AGCO CORPORATION,
AGRI ACQUISITION CORP.
and
AG-CHEM EQUIPMENT CO., INC.
Dated as of November 20, 2000
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TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS............................................................................. 1
ARTICLE II THE MERGER; EFFECTS OF THE MERGER............................................................... 9
ARTICLE III CONVERSION OF SHARES; EXCHANGE PROCEDURES....................................................... 10
ARTICLE IV ACTIONS PENDING MERGER.......................................................................... 14
ARTICLE V REPRESENTATIONS AND WARRANTIES.................................................................. 17
ARTICLE VI COVENANTS....................................................................................... 31
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................................................ 41
ARTICLE VIII TERMINATION..................................................................................... 44
ARTICLE IX MISCELLANEOUS................................................................................... 47
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AGREEMENT AND PLAN OF MERGER, dated as of November 20, 2000
(this "Agreement"), by and among AGCO CORPORATION, a corporation organized under
the laws of the State of Delaware ("Parent"), AGRI ACQUISITION CORP., a
corporation organized under the laws of the State of Delaware ("Sub"), and
AG-CHEM EQUIPMENT CO., INC., a corporation organized under the laws of the State
of Minnesota (the "Company").
WITNESSETH:
WHEREAS, the Boards of Directors of each of Parent, Sub and
the Company have determined that it is advisable and in the best interests of
their respective companies and their stockholders to consummate the transaction
provided for herein in which, upon the terms and subject to the conditions set
forth herein, the Company will merge (the "Merger") with Sub;
WHEREAS, the parties intend that for U.S. federal income tax
purposes, the Merger qualify as a "reorganization" within the meaning of Section
368(a) of the Code (in the event that it is a merger under Section 2.01(a)(i)
hereof);
WHEREAS, as a condition and as an inducement to Parent's
willingness to enter into this Agreement, Parent is entering into a Voting
Agreement (the "Voting Agreement") with a certain substantial Company
shareholder (the "Specified Stockholder"); and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
certain conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01. Certain Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Acquisition Proposal" shall mean any offer, proposal, inquiry
or indication of interest with respect to any of the following, in each case
other than the transactions contemplated by this Agreement (a) a merger,
reorganization or consolidation, or any similar business combination or
transaction, involving the Company (other than mergers, reorganizations,
consolidations or similar business combinations or transactions involving solely
the Company and/or one or more wholly-owned Subsidiaries of the Company), (b) a
direct or indirect purchase or other acquisition (including by way of merger,
consolidation, share exchange, tender or exchange offer involving any Subsidiary
of the Company or securities issued by any Subsidiary of the Company, as the
case may be) of greater than 15% of the consolidated assets of the Company and
its Subsidiaries, (c) a purchase or other acquisition (including by way of
merger, consolidation, share exchange, tender or exchange offer or otherwise) of
beneficial ownership of securities representing more than 10% of the voting
power of the Company, (d) any substantially similar transaction.
"Agreement" shall have the meaning set forth in the first
paragraph of this Agreement.
"Arthur Andersen" shall have the meaning set forth in Section
6.13.
"Articles of Merger" shall have the meaning set forth in
Section 2.01(b).
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"Business Day" shall mean each day on which banking
institutions in New York, New York are not authorized or required to close.
"Capitalization Date" shall have the meaning set forth in
Section 5.01(b).
"Cash Portion" shall mean (i) $25.80 minus (ii) the product of
(A) the Stock Portion multiplied by (B) the Parent Price.
"Certificate of Merger" shall have the meaning set forth in
Section 2.01(b).
"Code" shall mean the U.S. Internal Revenue Code of 1986, as
amended.
"Company" shall have the meaning set forth in the first
paragraph of this Agreement.
"Company Affiliate" shall have the meaning set forth in
Section 6.07(a).
"Company Board" shall mean the Board of Directors of the
Company.
"Company By-Laws" shall mean the By-Laws of the Company.
"Company Certificate" shall mean the Articles of Incorporation
of the Company, as amended.
"Company Common Stock" shall have the meaning set forth in
Section 3.01(b).
"Company Disclosure Schedule" shall have the meaning set forth
in the opening paragraph of Section 5.01.
"Company Employees" shall have the meaning set forth in
Section 6.12(a).
"Company Equity Interests" shall have the meaning set forth in
Section 5.01(c).
"Company Filed SEC Documents" shall mean the forms, reports
and documents filed or to be filed by the Company with the SEC since January 1,
1996.
"Company Financial Advisor" shall have the meaning set forth
in Section 5.01(j).
"Company Intellectual Property" shall have the meaning set
forth in Section 5.01(n).
"Company Meeting" shall have the meaning set forth in Section
6.02.
"Company Plan" shall mean any Plan entered into or currently
maintained, sponsored, or contributed to by the Company or any of its
Subsidiaries or to which the Company or any such Subsidiary has any obligation
to contribute or with respect to which the Company or any of its Subsidiaries
may have any liability.
"Company Proxy Statement" shall have the meaning set forth in
Section 6.03(a).
"Confidentiality Agreement" shall mean that certain
confidentiality agreement, dated July 27, 2000, by and between the Company's
Financial Advisor and Parent (of which the Company is a third party beneficiary)
and the confidentiality agreement between the Company and Parent dated May 30,
2000.
"Copyrights" shall have the meaning set forth in the
definition of Intellectual Property Rights.
"Costs" shall have the meaning set forth in Section 6.11(a).
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"Designated Price" shall mean the greater of (i) $8.38 or (ii)
the lowest amount necessary, as a result of any amounts required to be paid out
to dissenting shareholders of the Company or for fractional shares, in order for
the opinions set forth in Sections 7.02(c) and 7.03(c) to be provided.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"Effective Date" shall have the meaning set forth in Section
2.02.
"Effective Time" shall have the meaning set forth in Section
2.02.
"Environmental Claim" shall mean any claim, demand, action,
suit, complaint, investigation, or notice of noncompliance, violation, or
liability, by any person or entity asserting liability or potential liability
(including without limitation liability or potential liability for enforcement,
investigatory costs, cleanup costs, governmental response costs, natural
resource damages, property damage, personal injury, fines or penalties) arising
out of, based on or resulting from (i) the presence, discharge, emission,
release or threatened release of any Hazardous Materials at or from any
location, (ii) circumstances forming the basis of any violation or alleged
violation of any Environmental Laws or Environmental Permits, or (iii) otherwise
relating to obligations or liabilities under any Environmental Law.
"Environmental Laws" shall mean any and all laws, rules,
orders, regulations, statutes, ordinances, guidelines, codes, decrees, or other
legally enforceable requirements (including, without limitation, common law) of
any foreign government, the United States, or any state, local, municipal or
other governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment (including without
limitation indoor air, ambient air, surface water, groundwater, land surface,
subsurface strata, or plant or animal species) or human health as affected by
the environment or Hazardous Materials (including without limitation employee
health and safety).
"Environmental Permits" shall mean all permits, licenses,
registrations, approvals, exemptions and other filings with or authorizations by
any Governmental Authority under any Environmental Law.
"Environmental Report" shall mean any report, study,
assessment, audit, or other similar document that addresses any issue of actual
or potential noncompliance with, actual or potential liability under or cost
arising out of, or actual or potential impact on business in connection with,
any Environmental Law or any proposed or anticipated change in or addition to
Environmental Law, that may affect the Company or any of its Subsidiaries.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and the regulations promulgated thereunder and published
interpretations of any Governmental Authority with respect thereto.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Exchange Agent" shall have the meaning set forth in Section
3.05(a).
"Exchange Fund" shall have the meaning set forth in Section
3.05(a).
"Expenses" shall mean out-of pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates) incurred
by a party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Company Proxy Statement, the
solicitation of shareholder approvals and all other matters related to the
consummation of the Merger.
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"GAAP" shall mean accounting principles generally accepted in
the respective country where a Party, or its Subsidiaries operate, as
applicable.
"Governmental Authority" means any foreign or domestic
federal, state, county, provincial or local court, tribunal, judicial or
arbitral body, administrative agency or commission or other governmental or
regulatory authority or instrumentality.
"HSR Act" shall have the meaning set forth in Section 5.01(p).
"Hazardous Materials" shall mean all hazardous or toxic
substances, wastes, materials or chemicals, petroleum (including crude oil or
any fraction thereof), petroleum products, asbestos, asbestos-containing
materials, pollutants, contaminants, radioactivity and all other materials,
whether or not defined as such, that are regulated pursuant to or that could
result in liability under any applicable Environmental Laws.
"Indemnified Party" shall have the meaning set forth in
Section 6.11(a).
"Insurance Amount" shall have the meaning set forth in Section
6.11(b).
"Intellectual Property Rights" shall mean all proprietary,
license and other rights anywhere in the United States in and to: (A)
trademarks, service marks, brand names, trade dress, trade names and any and all
other indications of origin whether registered or at common law, domain names
and the goodwill associated with the foregoing ("Trademarks"); (B) patents,
patent applications (together, "Patents"), inventors' certificates and invention
disclosures; (C) trade secrets and other confidential or non-public business
information, including ideas, formulas, compositions, discoveries and
improvements, know-how, manufacturing and production processes and techniques,
and research and development information; drawings, specifications, plans,
proposals and technical data; analytical models, investment and lending
strategies and records, financial and other products; financial, marketing and
business data, pricing and cost information; business and marketing plans and
customer and supplier lists and information; in each case whether patentable,
copyrightable or not ("Trade Secrets"); (D) computer programs and databases, in
each case whether patentable, copyrightable or not (collectively, "Software"),
and all documentation therefor; (E) writings and other works of authorship,
including marketing materials, brochures, training materials, including all
copyrights and moral rights related to each of the foregoing ("Copyrights"); (F)
rights to limit the use or disclosure of confidential information by any Person;
(G) registrations of, and applications to register, any of the foregoing with
any Governmental Authority and any renewals or extensions thereof; and (I) any
claims or causes of action arising out of or related to any infringement or
misappropriation of any of the foregoing and the right to recover damages and
lost profits therefrom.
"Issuance Election" shall mean an election by Parent pursuant
to Section 3.02(b).
"KPMG" shall have the meaning set forth in Section 6.13.
"Knowledge" or "knowledge" with respect to a party shall mean
to the knowledge of its directors and the individuals listed on Schedule A
hereto.
"Law" shall mean the common law and any statute, ordinance,
code or other law, rule, regulation, order, requirement or procedure enacted,
adopted, promulgated, applied or followed by any Governmental Authority.
"Liens" shall mean any charge, mortgage, pledge, security
interest, material restriction, claim, lien, or encumbrance.
"MBCA" shall mean the Minnesota Business Corporation Act.
"Material Adverse Effect" shall mean with respect to the
Company or Parent, any event, change, occurrence, fact or circumstance which (i)
is or which would reasonably be expected to lead to an adverse change in
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the consolidated balance sheet of the Company or any of the Company's
Subsidiaries, or Parent or any of Parent's Subsidiaries, which is material to
the Company and its Subsidiaries, taken as a whole, or Parent and its
Subsidiaries taken as a whole, as the case may be, or (ii) would materially
impair the ability of Parent or the Company, as the case may be, to perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby, other than (in the case of (i) or (ii)) an event, change, occurrence,
fact or circumstance (A) arising out of general U.S. or global economic
conditions, (B) arising with respect to the industry in which Parent and the
Company compete, so long as such change does not specifically relate to or
disproportionately affect Parent or the Company, as the case may be, (C) arising
out of facts or events specifically set forth in the Company Disclosure Schedule
or the Parent Disclosure Schedule, as the case may be or (D) arising out of the
public announcement of the transactions contemplated by this Agreement.
"Maximum Share Amount" shall mean 11,800,000 Parent Common
Shares.
"Merger" shall have the meaning set forth in the recitals to
this Agreement.
"Merger Consideration" shall mean the Cash Portion plus the
Stock Portion.
"NASD" shall mean the National Association of Securities
Dealers, Inc. or, if the context so requires, the Nasdaq Stock Market, Inc.
"New Certificates" shall have the meaning set forth in Section
3.05(a).
"NYSE" shall mean the New York Stock Exchange, Inc.
"Old Certificates" shall have the meaning set forth in Section
3.05(a).
"Parent" shall have the meaning set forth in the first
paragraph of this Agreement.
"Parent Board" shall mean the Board of Directors of Parent.
"Parent By-Laws" shall mean the By-Laws of Parent.
"Parent Certificate" shall mean the Certificate of
Incorporation of Parent, as amended.
"Parent Common Shares" shall mean shares of common stock, par
value $0.01 per share, of Parent.
"Parent Disclosure Schedule" shall have the meaning set forth
in the opening paragraph of Section 5.02.
"Parent Filed SEC Documents" shall mean the forms, reports and
documents filed or to be filed by the Parent with the SEC since January 1, 1996.
"Parent Plan" shall have the meaning set forth in Section
6.12(a).
"Parent Price" shall mean the average (rounded to the nearest
1/100th) of the closing price of Parent Common Shares on the NYSE Composite
Transaction Reporting System, as reported in The Wall Street Journal (for
trading during regular trading hours, not extended trading), for the 10
consecutive Trading Days ending on the Trading Day immediately preceding the
Effective Date.
"Parent Rights" shall mean the Rights issued pursuant to the
Parent Rights Plan.
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"Parent Rights Plan" shall mean the shareholder rights plan
established pursuant to the Rights Agreement dated as of April 27, 1994, between
Parent and SunTrust Bank, as such plan may from time to time be amended.
"Parent Trigger Price" shall mean the closing price of Parent
Common Shares on the NYSE Composite Transactions Reporting System (for trading
during regular trading hours, not extended trading) on the Trading Day
immediately preceding the Effective Date. For purposes of this definition, the
Effective Date shall be determined without reference to the conditions set forth
in Sections 7.02(c) and 7.03(c).
"Party" shall mean Parent, Company and/or Sub, as applicable.
"Patents" shall have the meaning set forth in the definition
of Intellectual Property Rights.
"Person" or "person" shall mean any individual, bank,
corporation, limited liability company, partnership, association, joint-stock
company, business trust or unincorporated organization.
"Plan" shall mean any employee benefit plan, including,
without limitation, any "employment benefit plan" within the meaning of Section
3(3) of ERISA, whether or not subject to ERISA, and any employment, consulting,
termination, severance, retention, change in control, deferred or incentive
compensation, bonus, phantom stock, restricted stock, stock option, stock bonus,
stock purchase or other equity based, vacation or other fringe benefit plan,
program, policy, arrangement, agreement or commitment.
"Previously Disclosed" by a party shall mean set forth in the
related section of its Disclosure Schedule.
"Registration Statement" shall have the meaning set forth in
Section 6.03(a).
"Regulatory Law" shall mean the Sherman Act, as amended, the
Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, and all other federal, state and foreign, if any, statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines and other
laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade or
lessening of competition through merger or acquisition.
"Rights" shall mean, with respect to any person, securities or
obligations convertible into or exercisable or exchangeable for, or giving any
person any right to subscribe for or acquire, or any options, warrants, calls,
agreements, arrangements or commitments of any character relating to, or any
stock appreciation right, phantom stock option or other instrument the value of
which is determined in whole or in part by reference to the market price or
value of, shares of capital stock of such person.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Specified Stockholder" shall have the meaning set forth in
the recitals to this Agreement.
"Software" shall have the meaning set forth in the definition
of Intellectual Property Rights.
"Stock Portion" shall mean:
(A) if the Parent Trigger Price is greater than or equal to
the Designated Price, a number of Parent Common Shares
equal to the lesser of (i) the quotient obtained by
dividing (x) $12.90 by (y) the Parent Price or (ii)
1.2317;
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(B) if the Parent Trigger Price is less than the Designated
Price but no Issuance Election has been made, zero or
such other number elected by Parent pursuant to Section
3.02(a); or
(C) if the Parent Trigger Price is less than the Designated
Price and an Issuance Election has been made, a number
of Parent Common Shares equal to the quotient obtained
by dividing (x) $10.32 by (y) the Parent Price.
Notwithstanding the foregoing, in the event one or more shareholders of the
Company have properly exercised their dissenters rights pursuant to the MBCA,
(i) the number set forth in clause (A)(ii) above shall automatically be
increased to the maximum amount allowed such that no more than the Maximum Share
Amount of Parent Common Shares are issued and (ii) the amount set forth in
clause (C) above shall automatically be increased by the minimum amount
necessary in order for the opinions set forth in Sections 7.02(c) and 7.03(c) to
be provided.
"Sub" shall have the meaning set forth in the first paragraph
of this Agreement.
"Sub Common Stock" shall have the meaning set forth in Section
3.01(a).
"Subsidiary" and "Significant Subsidiary" shall have the
meanings ascribed to them in Rule 1-02 of Regulation S-X of the SEC.
"Superior Proposal" shall have the meaning set forth in
Section 6.06(a).
"Surviving Corporation" shall mean the surviving corporation
in the Merger as provided in Section 2.01(a).
"Takeover Laws" shall mean any "control share," "fair price,"
or other anti-takeover laws or regulations of any state or jurisdiction that are
applicable to the Merger or the other transactions contemplated by this
Agreement or the Voting Agreement.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" shall mean any report, return, document,
declaration, claim for refund, information return, or other information or
filing relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
"Termination Fee" shall have the meaning set forth in Section
8.02(b).
"Trade Secrets" shall have the meaning set forth in the
definition of Intellectual Property Rights.
"Trademarks" shall have the meaning set forth in the
definition of Intellectual Property Rights.
"Trading Day" shall mean any day on which the NYSE is open for
trading.
"Voting Agreement" shall mean the agreement defined as such in
the recitals hereto, as such agreement may from time to time be amended.
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ARTICLE II
THE MERGER; EFFECTS OF THE MERGER
2.01. The Merger. (a) Surviving Corporation. Upon the terms
and subject to the conditions set forth in this Agreement, and in accordance
with the DGCL and the MBCA, at the Effective Time:
(i) if the Parent Trigger Price is greater than or equal
to the Designated Price or in the event of an
Issuance Election (where the Company has not
terminated this Agreement pursuant to Section
8.01(g)), the Company will merge with and into Sub
pursuant to the Merger and, following the Effective
Time of the Merger, the separate corporate existence
of the Company shall cease and Sub shall survive and
continue to exist as a Delaware corporation; or
(ii) if the Parent Trigger Price is less than the
Designated Price (unless there is an Issuance
Election), Sub will merge with and into the Company
pursuant to the Merger and, following the Effective
Time of the Merger, the separate corporate existence
of Sub shall cease and the Company shall survive and
continue to exist as a Minnesota corporation.
(b) Effectiveness and Effects of the Merger. Subject to
the satisfaction or waiver of the conditions set forth in Article VII in
accordance with this Agreement, the Merger shall become effective upon the
occurrence of (i) the filing in the office of the Secretary of State of the
State of Minnesota of articles of merger ("Articles of Merger") in accordance
with Sections 302A.615 of the MBCA executed in accordance with the relevant
provisions of the MBCA and the making of all other filings and recordings
required under the MBCA to effect the Merger and (ii) the filing in the office
of the Secretary of State of the State of Delaware of a certificate of merger
("Certificate of Merger") in accordance with Section 251 of the DGCL and the
making of all other filings or recordings required under the DGCL to effect the
Merger, or at such later date and time as may be set forth in the Articles of
Merger and the Certificate of Merger. The Merger shall have the effects
prescribed in the MBCA and the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Sub shall be vested in the
Surviving Corporation, and all debt, liabilities and duties of the Company and
Sub shall become the debt, liabilities and duties of the Surviving Corporation.
(c) Certificate of Incorporation and By-Laws. The
certificate of incorporation and by-laws of the corporation that continues in
existence, as in effect immediately prior to the Effective Time, shall be those
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
(d) Name. The name of the Surviving Corporation shall be
Ag-Chem Equipment Co., Inc.
(e) Officers and Directors of Surviving Corporation. The
officers of the Company as of the Effective Time shall be the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be an officer or until their respective successors are duly
elected and qualified, as the case may be. The directors of Sub as of the
Effective Time shall be the directors of the Surviving Corporation until the
earlier of their resignation or removal or otherwise ceasing to be a director or
until their respective successors are duly elected and qualified, as the case
may be.
2.02. Effective Date and Effective Time. (a) Subject to the
satisfaction or waiver (subject to applicable law) of the conditions set forth
in Article VII in accordance with this Agreement, the parties shall cause the
effective date of the Merger (the "Effective Date") to occur on the earliest of:
(i) the first Business Day that the Parent Trigger Price
is greater than or equal to the Designated Price,
provided that the last of the conditions set forth in
Sections 7.01, 7.02 and 7.03 has been satisfied or
waived (other than conditions that, by their terms,
cannot be satisfied until the Effective Date so long
as it is reasonably apparent that such conditions
will be satisfied on the Effective Date);
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(ii) the first Business Day following the thirty (30) day
period from and including the date upon which the
last of the conditions set forth in Sections 7.01,
7.02 and 7.03 has been satisfied or waived (other
than the conditions set forth in Sections 7.02(c) and
7.03(c) and other than conditions that, by their
terms, cannot be satisfied until the Effective Date
so long as it is reasonably apparent that such
conditions will be satisfied on the Effective Date),
provided that, Parent may, in its sole discretion,
elect by providing written notice to the Company at
any time during such thirty (30) day period to cause
the Effective Time to occur on the first Business Day
following such election; or
(iii) such other date to which the Parties may agree in
writing.
(b) The time on the Effective Date when the Merger shall
become effective pursuant to (i) the filing of the Articles of Merger with the
Secretary of State of the State of Minnesota in the form required by and
executed in accordance with the applicable provisions of the MBCA and (ii) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware in the form required by and executed in accordance with the applicable
provisions of the DGCL is referred to as the "Effective Time."
2.03. Tax Consequences. In the event the Merger is effected
pursuant to Section 2.01(a)(i), it is intended that the Merger shall qualify as
a reorganization under Section 368(a) of the Code. The parties agree to use
their reasonable best efforts, not inconsistent with the terms of this
Agreement, to have this Merger effectuated pursuant to Section 368(a) of the
Code, and agree to work with each other and their respective counsel in order to
determine the lowest possible Designated Price which will allow the transaction
to be treated as tax-free reorganization pursuant to Section 368(a) of the Code.
ARTICLE III
CONVERSION OF SHARES; EXCHANGE PROCEDURES
3.01. Conversion of Shares. Subject to the provisions of
this Agreement, at the Effective Time, automatically by virtue of the Merger and
without any action on the part of any party or shareholder of the Company or
Sub:
(a) Conversion of Sub Common Stock. If the Merger is
effected pursuant to Section 2.01(a)(i) each share of common stock of
Sub, no par value per share (the "Sub Common Stock"), issued and
outstanding immediately prior to the Effective Time, shall remain
issued and outstanding after the Merger as fully-paid and
non-assessable share of common stock, no par value per share, of the
Surviving Corporation.
(b) Conversion of Company Common Stock. Subject to
Section 3.04, each share of common stock, par value $0.01 per share, of
the Company (the "Company Common Stock") issued and outstanding
immediately prior to the Effective Time (other than any Dissenting
Shares) shall become and be converted into the right to receive, upon
surrender of the certificate formerly representing such Company Common
Stock (or compliance with the procedures set forth in Section 3.05(f)
hereof relating to lost certificates), the Merger Consideration,
without interest thereon, together, if the Parent Rights Plan is then
in effect, with the related Parent Rights. All of the shares of Company
Common Stock converted into the right to receive the Merger
Consideration pursuant to this Article III shall no longer be
outstanding and shall automatically be canceled and retired and shall
cease to exist as of the Effective Time.
(c) If the Merger shall be effected pursuant to Section
2.01(a)(ii), at the Effective Time, the Surviving Corporation shall
issue to Parent 1,000 shares of newly issued, fully-paid and
non-assessable common stock of the Surviving Corporation.
3.02 Election. (a) In the event that the Parent Trigger
Price is less than Designated Price on the Trading Day of such determination and
the Merger is to be consummated pursuant to Section 2.01(a)(ii), Parent
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shall give written notice to the Company of Parent's election as to the number
of Parent Common Shares, if any, that shall constitute the Stock Portion, but in
no event shall such number of Parent Common Shares to be issued, if any, be more
than the Maximum Share Amount.
(b) In lieu of the election set forth in Section 3.02(a),
in the event that the Parent Price is less than $6.10, Parent may give written
notice to the Company prior to the otherwise expected Effective Time of (i) its
determination to terminate the Agreement pursuant to Section 8.01(f) or (ii) its
election (an "Issuance Election") to seek approval from its shareholders for the
issuance of a number of Parent Common Shares in connection with the Merger in
excess of the Maximum Share Amount, in which event the Effective Time shall be
deferred as contemplated by Section 7.01(a).
(c) In the event that Parent makes an election pursuant
to Section 3.02(a), each Company shareholder may elect to purchase such number
of Parent Common Shares from the Parent equal to or less than the difference
between the Maximum Share Amount and the number of Parent Common Shares issued
in the Merger, at a per share price equal to the lesser of (i) the Designated
Price and (ii) 105% of the Parent Price. In the event that elections made by
Company shareholders to purchase Parent Common Shares, when added to the number
of Parent Common Shares issued in the Merger, are more than the Maximum Share
Amount or such greater number as Parent may consent to, the number available to
be purchased by each Company shareholder shall be determined on a pro rata basis
based upon the number of shares of Company Common Stock held by each holder
making an election to purchase Parent Common Shares. Each election by a
shareholder of the Company must be made not more than thirty days after the
Effective Time in connection with the submission of transmittal materials
pursuant to Section 3.05.
3.03. Rights as Shareholders; Stock Transfers. At the
Effective Time, holders of Company Common Stock shall cease to be, and shall
have no rights as, shareholders of the Company, other than the right to receive
any dividend or other distribution with respect to such Company Common Stock
with a record date occurring prior to the Effective Time and the consideration
provided under this Article III. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company or the Surviving
Corporation of shares of Company Common Stock.
3.04. Fractional Shares. Notwithstanding any other
provision hereof, no fractional Parent Common Shares (or related Parent Rights)
and no certificates or scrip therefor, or other evidence of ownership thereof,
will be issued in the Merger; instead, Parent shall pay to each holder of
Company Common Stock who would otherwise be entitled to a fractional share of
Parent Common Shares (after taking into account all Old Certificates delivered
by such holder) an amount (in U.S. dollars) in cash (without interest)
determined by multiplying such fraction by the Parent Price. As promptly as
practicable after the determination of the amount of cash, if any, to be paid to
holders of fractional interests, Parent shall so notify the Exchange Agent, and
Parent shall cause the Surviving Corporation to deposit such amount with the
Exchange Agent and shall cause the Exchange Agent to forward payments to such
holders of fractional interests subject to and in accordance with the terms
hereof.
3.05. Exchange Procedures. (a) At or prior to the Effective
Time, Parent shall deposit, or shall cause to be deposited, with a bank or trust
company to act as exchange agent (the "Exchange Agent"), for the benefit of the
holders of certificates formerly representing shares of Company Common Stock
("Old Certificates") and for exchange in accordance with this Article III, the
Merger Consideration (including a sufficient number of Parent Common Shares, the
"New Certificates") and an estimated amount of cash payable pursuant to Section
3.04 (such Merger Consideration and estimated amount of cash, without any
interest thereon, being hereinafter referred to as the "Exchange Fund") to be
paid pursuant to this Article III in exchange for outstanding shares of Company
Common Stock.
(b) As promptly as practicable after the Effective Date,
Parent shall send or cause the Exchange Agent to send or cause to be sent to
each former holder of record of shares (other than any Dissenting Shares) of
Company Common Stock immediately prior to the Effective Time transmittal
materials for use in exchanging such shareholder's Old Certificates for the
Merger Consideration with respect to such Old Certificates as set forth in this
Article III. In the event that an election is made pursuant to Section 3.02(a),
the transmittal materials shall provide
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for the purchase of Parent Common Shares provided for in Section 3.02(c). Parent
shall cause the Merger Consideration into which shares of a shareholder's
Company Common Stock are converted at the Effective Time and/or any check in
respect of any fractional share interests or dividends or distributions which
such person shall be entitled to receive pursuant to this Article III, to be
delivered to such shareholder upon delivery to the Exchange Agent of Old
Certificates representing such shares of Company Common Stock (or, pursuant to
Section 3.05(f), a surety bond reasonably satisfactory to Parent and the
Exchange Agent, if any of such certificates are lost, stolen or destroyed) owned
by such shareholder. No interest will be paid or accrued on the Cash Portion of
the Merger Consideration or any cash to be paid in lieu of fractional share
interests or in respect of dividends or distributions which any such person
shall be entitled to receive pursuant to this Article III upon such delivery.
Notwithstanding anything to the contrary contained herein, Old Certificates
surrendered for exchange by any Person constituting a Company Affiliate for
purposes of Section 6.07 shall not be exchanged until Parent has received from
such Person an agreement in the form attached hereto as Exhibit A.
(c) Notwithstanding the foregoing, neither the Exchange
Agent nor any party hereto shall be liable to any Person for any amount properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(d) No dividends or other distributions with respect to
Parent Common Shares with a record date occurring after the Effective Time shall
be paid to the holder of any unsurrendered Old Certificate representing shares
of Company Common Stock converted in the Merger into the right to receive the
Merger Consideration and cash in lieu of fractional Parent Common Shares
pursuant to Section 3.04, until the holder thereof shall be entitled to receive
the Merger Consideration and such amount of cash in exchange therefor in
accordance with this Article III. After becoming so entitled in accordance with
this Article III, the record holder thereof also shall be entitled to receive
any such dividends or other distributions, without any interest thereon, which
theretofore had become payable with respect to Parent Common Shares such holder
had the right to receive upon surrender of the Old Certificate, and payment
thereof shall be made promptly following the later of (i) the date on which such
holder shall become entitled to receive New Certificates and (ii) the payment
date with respect to such dividend or other distribution.
(e) Any portion of the Exchange Fund that remains
unclaimed by the shareholders of the Company for six months after the Effective
Time shall, upon demand by Parent, be paid or delivered to Parent. Any
shareholders of the Company who have not theretofore complied with this Article
III shall thereafter look only to Parent for payment of the Merger
Consideration, cash in lieu of any fractional shares and unpaid dividends and
distributions on the Parent Common Shares deliverable in respect of each share
of Company Common Stock such shareholder holds, as determined pursuant to this
Agreement, in each case, without any interest thereon.
(f) If any Old Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Old Certificate to be lost, stolen or destroyed and the posting by
such person of a bond in such reasonable amount as Parent may direct as
indemnity against any claim that may be made against it or the Surviving
Corporation with respect to such Old Certificate, Parent shall, in exchange for
such lost, stolen or destroyed Old Certificate, deliver or cause the Exchange
Agent to deliver a New Certificate and cash payment in respect thereof pursuant
to this Article III.
(g) The Exchange Agent shall invest any cash included in
the Exchange Fund as directed by the Surviving Corporation on a daily basis. Any
interest or other income resulting from such investments shall promptly be paid
to the Surviving Corporation.
3.06. Anti-Dilution Provisions. In the event Parent changes
(or establishes a record date for changing) the number of Parent Common Shares
issued and outstanding prior to the Effective Time as a result of a stock split,
stock dividend, recapitalization, subdivision, reclassification, combination,
exchange of shares or similar transaction with respect to the outstanding Parent
Common Shares then (a) if the record and payment dates therefor shall be prior
to the Effective Time, the Stock Portion and references to $6.10 and Designated
Price shall be proportionately adjusted to reflect such stock split, stock
dividend, recapitalization, subdivision, reclassification, combination, exchange
of shares or similar transaction; and (b) if the record date therefor shall be
prior to the
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Effective Time but the payment date therefor shall be subsequent to the
Effective Time, Parent shall take such action as shall be required so that on
such payment date any former holder of Old Certificates who shall have received
or become entitled to receive New Certificates pursuant to this Article III
shall be entitled to receive such additional Parent Common Shares as such holder
would have received as a result of such event if the record date therefor had
been immediately after the Effective Time.
3.07. Stock Plans. Pursuant to the terms of the Company's
1998 Key Employee Phantom Stock Bonus Plan, at the Effective Time, the Company
shall terminate such plan, and pay to each individual then entitled to receive
payment immediately prior to the termination of such plan the difference between
$25.80 and eleven and 15/16ths dollars ($11 15/16) multiplied by the number of
Phantom Shares (as defined in such plan) granted to such individual. The Company
shall use its reasonable best efforts to cause the Compensation Committee of the
Company Board to take any and all such action necessary in order to accelerate
the timing and vesting of such payment pursuant to the terms and conditions of
such plan.
3.08. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, each share of Company Common Stock that is issued and
outstanding immediately prior to the Effective Time and that is held by a
shareholder who has properly demanded and perfected such shareholder's rights to
dissent from the Merger and to be paid the fair value of such shares in
accordance with Sections 302A.471 and 302A.473 of the MBCA (the "Dissenting
Shares"), shall not be converted into or exchangeable for the right to receive
the Merger Consideration, but the holder thereof shall be entitled to such
rights as are granted by the MBCA and the Surviving Corporation shall make all
payments to the holders of such Dissenting Shares with respect to such demands
in accordance with the MBCA; provided, however, that if any such holder shall
have failed to perfect or shall have lost the right to dissent and obtain
payment for such holder's Dissenting Shares under the MBCA, each share of
Company Common Stock held by such holder shall thereupon be deemed to have been
converted into and to have become exchangeable for, as of the Effective Time,
solely the right to receive the Merger Consideration. The Company shall give
prompt written notice to Parent and Sub of any demands received by the Company
for payment under Sections 302A.471 and 302A.473 of the MBCA, and Parent and Sub
shall have the right to participate in all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Parent and Sub, make any payment with respect to, settle or offer to
make any payment or settle, any such demands.
ARTICLE IV
ACTIONS PENDING MERGER
4.01. Forbearances of the Company. From the date hereof
until the Effective Time, except as expressly contemplated by this Agreement,
including, without limitation, Section 6.06 below, or as set forth in Section
4.01 of the Company's Disclosure Schedule, without the prior written consent of
Parent (which consent will not be unreasonably withheld with respect to Sections
4.01(i), 4.01(l) and 4.01(n)), the Company will not, and will cause each of its
Subsidiaries not to:
(a) Ordinary Course. (i) Conduct its business and the
business of its Subsidiaries other than in the ordinary and usual
course consistent with past practice in all material respects and in
material compliance with applicable laws and regulations or (ii) to the
extent consistent with subsection (i) above, fail to use reasonable
best efforts to preserve intact their business organizations and assets
and maintain their rights, franchises and existing relations with
customers, suppliers, employees and business associates.
(b) Capital Stock. (i) Except as set forth in Section
4.01(b) of the Company Disclosure Schedule, issue, sell, pledge,
dispose of or encumber, or authorize or propose the issuance, sale,
pledge, disposition or encumbrance of, any shares of its capital stock
or any other securities or any Rights, (ii) enter into any agreement
with respect to the foregoing or (iii) permit any additional shares of
capital stock to become subject to new grants of employee or director
stock options, other Rights or similar stock-based employee rights,
other than issuances by a wholly owned Subsidiary of the Company of
capital stock to the Company.
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(c) Dividends; Adjustments. (i) Make, declare, pay or set
aside for payment any dividend (other than dividends from the Company's
Subsidiaries to the Company or another Subsidiary of the Company) on or
in respect of, or declare or make any distribution on any shares of its
capital stock or (ii) except for any such transaction by a wholly owned
Subsidiary of the Company which remains a wholly owned Subsidiary after
consummation of such transaction, directly or indirectly adjust, split,
combine, redeem, reclassify, purchase, repurchase or otherwise acquire,
any shares of the capital stock of the Company or any of its
Subsidiaries.
(d) Compensation; Employment Agreements. Except as set
forth in Section 4.01(d) of the Company Disclosure Schedule, enter into
or amend any employment, consulting, severance, retention, termination,
change in control or similar agreements or arrangements with, or make
any severance, retention, termination, change of control or similar
payments to, any of its or its Subsidiaries' directors, officers,
employees or consultants or former directors, officers, employees or
consultants, or grant any salary, wage or other compensation increase,
make any award or grant under any Plan or increase or modify any
employee benefit (including any incentive or bonus payments or
perquisite), except for (i) increases in annual salary or hourly wage
rates granted to current employees (other than officers) in the
ordinary course of business consistent with past practice, (ii)
consulting arrangements with new consultants in connection with Soiltec
initiatives existing as of the date of this Agreement (provided that
such consulting arrangements do not involve in excess of $100,000 in
the aggregate), and (iii) changes required to be implemented in
accordance with the current terms of any Company Plan set forth in
Section 4.01(d) of the Company Disclosure Schedule.
(e) Benefit Plans. Enter into, adopt, implement or amend
in any material respect (except to the extent required to comply with
applicable law) any Plan.
(f) Acquisitions and Dispositions. Except as set forth in
Section 4.01(f) of the Company Disclosure Schedule, acquire all or any
portion of the assets, business or properties of any other entity or
sell, transfer, mortgage, encumber or otherwise dispose of or
discontinue any material portion of its assets, business or properties
or agree to enter into any merger, reorganization, share exchange,
business combination or similar transaction pursuant to which
shareholders of the Company would receive any consideration in exchange
for or in addition to their existing shares of Company Common Stock.
(g) Amendments. Amend the Company Certificate or the
Company By-Laws, or adopt a shareholder rights plan.
(h) Accounting Methods. Implement or adopt any change in
its accounting principles, practices or methods, other than as may be
required by GAAP or SEC regulation.
(i) Contracts. Except in the ordinary course of business
or as set forth in Section 4.01(i) of the Company Disclosure Schedule,
enter into or terminate any contract, agreement or lease potentially
involving in excess of $200,000, or terminate, amend or modify in any
material respect any of its existing contracts, agreements or leases
(including any licensing agreement) in excess of $200,000 or involving
any non-competition or similar obligation by the Company or its
affiliates.
(j) Claims. Pay, discharge, satisfy or settle any claim,
liability, obligation (whether absolute, accrued, asserted or
unasserted, contingent or otherwise), action or proceeding, except (i)
in the ordinary course of business consistent with past practice, (ii)
as reflected or reserved against in the consolidated financial
statements in the Company Filed SEC Documents as of the date hereof
(iii) settlements with customers consistent with past practices in
connection with the Company's September 8, 2000, safety recall, or (iv)
in an additional amount not to exceed $100,000 in the aggregate. In the
event Parent determines not to consent to any proposed settlement with
Valmet related to the Company's September 8, 2000, safety recall, the
parties hereto agree that any change or event arising out of such
determination shall not constitute a Material Adverse Effect with
respect to the Company.
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(k) Adverse Actions. (i) Unless the Merger shall be
effected pursuant to Section 2.01(a)(ii), take any action while knowing
that such action would, or is reasonably likely to, prevent or impede
the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code; or (ii) knowingly take any action that is
intended or is reasonably likely to result in (A) any of its
representations and warranties set forth in this Agreement being or
becoming untrue at any time at or prior to the Effective Time, (B)
except as otherwise permitted by Section 6.06, any of the conditions to
the Merger set forth in Article VII not being satisfied or satisfaction
of any such condition being materially delayed or (C) a violation of
any provision of this Agreement except, in each case, as may be
required by applicable law.
(l) Incurrence of Indebtedness. Other than (i)
indebtedness incurred in the ordinary course of business consistent
with past practice under its short and long term line of credit loan
agreements but in no event to exceed an aggregate of $55,000,000 of
indebtedness and (ii) indebtedness of the Company or any of its
Subsidiaries to the Company or any of its Subsidiaries in the ordinary
course of business consistent with past practice, incur any
indebtedness for borrowed money, assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of
any other individual, corporation or other entity, or make any loan or
advance.
(m) Derivatives. Enter into (i) leveraged derivative
contracts (defined as contracts that use a factor to multiply the
underlying index exposure), or (ii) other derivative contracts except
for the purpose of hedging known interest rate and foreign exchange
exposures or otherwise reducing the Company's cost of financing.
(n) Capital Expenditures. Except as set forth in Section
4.01(n) of the Company Disclosure Schedule, make any capital
expenditures in excess of $500,000 in the aggregate in any quarter of
the year.
(o) Tax Elections. Make any new or different material Tax
election, or revoke any material Tax election, file any material
amended Tax Returns, settle any material Tax audits or other
proceedings, other than in connection with currently pending
proceedings or subsequent related proceedings, or change in any
material respect (i) its method of tax accounting or tax practice, or
(ii) its accounting policies, methods, or procedures, except as
required by GAAP.
(p) Confidentiality Agreements. Waive any confidentiality
or "standstill" provisions entered into with any third party in
connection with its consideration of an Acquisition Proposal.
(q) Agreements. In writing or otherwise, agree or commit
to do anything prohibited by the above paragraphs (a) through (o).
4.02. Forbearances of Parent. From the date hereof until
the Effective Time, except as expressly contemplated by this Agreement or as set
forth in Section 4.02 of Parent's Disclosure Schedule, without the prior written
consent of the Company, Parent will not, and will cause each of its Subsidiaries
not to (i) unless the Merger shall be effected pursuant to Section 2.01(a)(ii),
take any action while knowing that such action would, or is reasonably likely
to, prevent or impede the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code; or (ii) knowingly take any action that is
intended or is reasonably likely to result in (A) any of its representations and
warranties set forth in this Agreement being or becoming untrue at any time at
or prior to the Effective Time, (B) any of the conditions to the Merger set
forth in Article VII not being satisfied or satisfaction of any such condition
being materially delayed or (C) a violation of any provision of this Agreement
except, in each case, as may be required by applicable law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties of the Company. Except
as set forth in the disclosure schedule delivered by the Company to Parent prior
to the execution of this Agreement, with specific reference to the
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section of this Agreement to which the information stated in such disclosure
relates (the "Company Disclosure Schedule"), the Company hereby represents and
warrants to each of Parent and Sub as follows:
(a) Organization, Standing and Authority. The Company is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Minnesota. It is duly qualified to do
business and is in good standing in the states of the United States and
foreign jurisdictions where its ownership, leasing or operation of
property or assets or the conduct of its business requires it to be so
qualified and it has in effect all federal, state, local and foreign
governmental authorizations necessary for it to own, lease and operate
its properties and assets and to carry on its business as it is now
conducted, except where the failure to be so duly qualified and in good
standing or to have in effect all federal, state, local, and foreign
governmental authorizations does not have, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company. The Company has, prior to the date of this
Agreement, made available to Parent complete and correct copies of the
Company Certificate and the Company By-Laws, in each case as amended
and in full force and effect as of the date of this Agreement, and the
Company is not in violation of any provision thereof.
(b) Shares.
(i) The authorized capital stock of the Company
consists of 40,000,000 shares of Company Common Stock of which
9,579,868 shares were outstanding as of July 31, 2000 (the
"Capitalization Date"). Since the Capitalization Date, there
have been no issuances of shares of the capital stock of the
Company or any other securities of the Company.
(ii) All issued and outstanding shares of Company
Common Stock have been duly authorized and validly issued, and
are fully paid and nonassessable, and no class of capital
stock of the Company is entitled to, rights nor have any
shares of Company Common Stock been issued in violation of,
nor are they subject to, any preemptive rights. There are no
voting trusts or other agreements or understandings to which
the Company is a party with respect to the voting of the
capital stock of the Company or any of its Subsidiaries.
(iii) There were outstanding at the Capitalization
Date no Rights to acquire capital stock from the Company. No
Rights to acquire capital stock from the Company have been
issued or granted since the Capitalization Date.
(iv) Neither the Company nor any of its
Subsidiaries has any authorized or outstanding bonds,
debentures, notes or other indebtedness or obligations the
holders of which have the right to vote (or convertible or
exchangeable into or exercisable for securities the holders of
which would have the right to vote) with the shareholders of
the Company on any matter. There are no outstanding
obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of the
Company Common Stock.
(c) Subsidiaries.
(i) Section 5.01(c)(i) of the Company Disclosure
Schedule sets forth a list as of the date hereof of all of the
Company's Subsidiaries, together with their jurisdiction of
organization or incorporation. Unless otherwise described
therein, the Company owns, directly or indirectly,
beneficially and of record 100% of the issued and outstanding
voting securities of each such Subsidiary (other than
directors' qualifying shares, if any, described in Section
5.01(c)(i) of the Company Disclosure Schedule). Except as
described in Section 5.01(c)(i) of the Company Disclosure
Schedule, no equity securities of any of the Company's
Subsidiaries are or may become required to be issued (other
than to the Company or its wholly owned Subsidiaries) by
reason of any Rights and there are no contracts, commitments,
understandings or arrangements by which any of such
Subsidiaries is bound to sell or otherwise transfer any shares
of capital stock of any such Subsidiaries (other than to the
Company or its wholly owned Subsidiaries). In addition,
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Section 5.01(c)(i) of the Company Disclosure Schedule lists as
of the date of this Agreement each corporation, partnership,
limited liability company or similar entity with respect to
which, as of the date of this Agreement, the Company or any
Subsidiary of the Company owns more than 5% but less than a
majority of the voting equity or similar voting interest or
any interest convertible into, or exchangeable or exercisable
for, more than 5% but less than a majority of the voting
equity or similar voting interest and which interest is
carried on the Company's most recent financial statements (or
if not held as of the date thereof, would be carried on the
Company's financial statements if prepared as of the date
hereof) at a value in excess of $100,000 (collectively, the
"Company Equity Interests"). Except as set forth in Section
5.01(c)(i) of the Company Disclosure Schedule, all of the
shares of capital stock of each of the Subsidiaries of the
Company and all the Company Equity Interests held by the
Company and each Subsidiary of the Company are fully paid and
nonassessable and are owned by the Company or such Subsidiary
free and clear of any Liens and are not subject to, and were
not issued in violation of, any preemptive rights. Except as
set forth in Section 5.01(c)(i) of the Company Disclosure
Schedule, there are no outstanding contractual obligations of
the Company or any of its Subsidiaries to provide funds to, or
make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary or in any entity
in which the Company or any Subsidiary of the Company owns a
Company Equity Interest.
(ii) Each of the Company's Subsidiaries has been
duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation. Each
of such Subsidiaries is duly qualified to do business and is
in good standing in the states or jurisdictions where its
ownership, leasing or operation of property or assets or the
conduct of its business requires it to be so qualified and
each has in effect all federal, state, local and foreign
governmental authorizations necessary for it to own, lease and
operate its properties and assets and to carry on its business
as it is now conducted, except where the failure to be so
qualified and in good standing or to have in effect all
federal, state, local, and foreign governmental authorizations
does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on
the Company. The Company has, prior to the date of this
Agreement, made available to Parent complete and correct
copies of the articles or certificate of incorporation,
by-laws or other governing or organizational documents of each
of its Subsidiaries, in each case as amended and in full force
and effect as of the date of this Agreement, and neither the
Company nor any such Subsidiary is in violation of any
provision thereof.
(d) Corporate Power. The Company and each of its
Subsidiaries has all necessary corporate power and authority to carry
on its business as it is now being conducted and to own, lease and
operate all its properties and assets; and it has all requisite
corporate power and authority to execute and deliver this Agreement and
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
(e) Corporate Authority.
(i) Subject, in the case of the consummation of
the Merger, only to receipt of the requisite approval and
adoption of this Agreement and the Merger by the holders of a
majority of the outstanding shares of Company Common Stock
entitled to vote thereon, the special committee of the Company
Board having unanimously adopted a resolution approving this
Agreement and the Merger, and the Company Board having
ratified such approval, this Agreement and the transactions
contemplated hereby have been authorized and approved by all
necessary corporate action of the Company, the special
committee of the Company Board and the Company Board.
(ii) This Agreement is a legal, valid and binding
obligation of the Company, enforceable in accordance with its
terms.
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(f) No Defaults. Except as set forth in Section 5.01(f)
of the Company Disclosure Schedule and subject to (i) receipt of the
regulatory approvals, and expiration of the waiting periods, referred
to in Section 5.01(p), (ii) any required filings under federal and
state securities laws, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
by the Company do not and will not (i) constitute a breach or violation
of, or a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, or agreement, indenture
or instrument of the Company or of any of its Subsidiaries or to which
the Company or any of its Subsidiaries or any of their respective
properties or assets are subject or bound, (ii) constitute a breach or
violation of, or a default under, the articles or certificate of
incorporation or by-laws or other organizational or governing documents
of the Company or any of its Subsidiaries or (iii) require any consent
or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license, agreement, indenture or
instrument, except in the case of (i) and (iii), where such breach,
violation or default or the failure to obtain such consents or
approvals would not in the aggregate have a Material Adverse Effect on
the Company, the Surviving Corporation or Parent and would not prevent
or materially impair the Company's ability to consummate the
transactions contemplated by this Agreement. Section 5.01(f) of the
Company Disclosure Schedule contains a list of all consents of third
parties required to be obtained by the Company or its Subsidiaries
prior to, or as a result of, the consummation of the Merger.
(g) Financial Reports and SEC Documents.
(i) Company Filed SEC Reports. Since January 1,
1996, the Company has filed, and will file after the date
hereof, all forms, reports and documents with the SEC required
to be filed by it pursuant to all applicable federal
securities laws, all of which complied, or will comply, as of
the date filed (or, with respect to a document filed prior to
the date of this Agreement and amended or superseded by a
subsequent filing prior to the date of this Agreement, then on
the date of such filing as so amended or superseded), in all
material respects as to form with all applicable requirements
of the Securities Act or the Exchange Act, as applicable, and
the rules and regulations promulgated thereunder. None of the
Company Filed SEC Reports, at the time filed (or, with respect
to a document filed prior to the date of this Agreement and
amended or superseded by a subsequent filing prior to the date
of this Agreement, then on the date of such filing as so
amended or superseded), contained, or will contain, any untrue
statement of a material fact or omitted to state a 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.
(ii) Financial Statements, Accounting Matters.
The consolidated balance sheets and the related consolidated
statements of earnings, stockholders' equity and cash flows
(including the related notes thereto) of the Company included
in or incorporated by reference in the Company Filed SEC
Reports complied, or will comply, as to form in all material
respects with the published rules and regulations of the SEC
with respect thereto, were prepared, or will be prepared, in
accordance with GAAP applied on a basis consistent with prior
periods (except as otherwise noted therein), and presented
fairly, or will present fairly, the financial position of the
Company and its Subsidiaries as of their respective dates, and
the consolidated results of its operations and its cash flows
for the periods presented therein (subject, in the case of the
unaudited interim financial statements, to normal year-end
adjustments and except that the unaudited interim financial
statements do not contain all of the footnote disclosure
required by GAAP). Notwithstanding the foregoing, no
representations or warranties are made regarding any forecast,
projections or budgets relating to the Company or its
Subsidiaries.
(iii) Since September 30, 1999, neither the
Company nor any of its Subsidiaries has incurred any material
liabilities (whether absolute, accrued, contingent or
otherwise) except (x) liabilities as set forth on the face of
the consolidated balance sheet of the Company as of September
30, 1999 in the Company Filed SEC Documents, (y) other
liabilities incurred since September 30, 1999 in the ordinary
course of business consistent with past practice or (z) as set
forth in Section 5.01(g)(iii) of the Company Disclosure
Schedule.
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(iv) Unless the Merger shall be effected pursuant
to Section 2.01(a)(ii), to the knowledge of the Company,
neither the Company nor any of the Company Affiliates has
taken or agreed to take any action that would jeopardize the
qualification of the Merger as a reorganization within the
meaning of Section 368(a) of the Code.
(h) Litigation. Section 5.01(h) of the Company Disclosure
Schedule sets forth all litigation, claims, actions or proceedings
before any Governmental Authority as of the date hereof pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries or their respective property, assets
or businesses which (i) could reasonably be expected to result,
individually or in the aggregate, in judgment against the Company or
its Subsidiaries in excess of $100,000 if determined adversely to the
Company or its Subsidiaries or (ii) could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries nor any of their
respective properties, assets or businesses is subject to any
outstanding order writ, judgment, stipulation, award, injunction or
decree or, to the knowledge of the Company, any investigation or
inquiry by any Governmental Authority issued against or affecting the
Company or any of its Subsidiaries or naming the Company or any of its
Subsidiaries which has had or would have a Material Adverse Effect on
the Company.
(i) Compliance with Laws. As of the date hereof, the
business of the Company and its Subsidiaries is not being conducted in
violation of any Law, except for possible violations which,
individually or in the aggregate, would not have a Material Adverse
Effect.
(j) No Brokers. No action has been taken by the Company,
its officers, directors or employees that would give rise to any valid
claim against any party hereto for a brokerage commission, finder's fee
or other like payment with respect to the transactions contemplated by
this Agreement, other than fees to be paid to Goldsmith, Agio, Helms &
Lynner, Ltd. (the "Company Financial Advisor") pursuant to the
Company's written agreement with such firm, a true and complete copy of
which has been furnished to Parent prior to the date of this Agreement.
(k) Employee Benefits; Employee Relations.
(i) Section 5.01(k) of the Company Disclosure
Schedule contains a complete and correct list of each written
Company Plan and each material oral Company Plan. With respect
to each such Company Plan, true and complete copies have been
made available to Parent of: (A) the plan document or
agreement or, with respect to any Company Plan that is not in
writing, a written description of the terms thereof; (B) the
trust agreement, insurance contract or other documentation of
any related funding arrangement; (C) the summary plan
description; (D) the most recent required Internal Revenue
Service Form 5500, including all schedules thereto, and
actuarial report; and (E) any material communication within
the past two years to or from any Governmental Authority,
including a written description of any oral communication.
(ii) Neither the Company nor any Subsidiary
thereof has disseminated in writing or otherwise broadly or
generally notified employees of any intent or commitment
(whether or not legally binding) to create or implement any
additional Plan or to amend, modify or terminate any Company
Plan, except for immaterial amendments to any Company Plan
that will not result in an increase in the annual costs in
respect of such plan incurred or to be incurred by the Company
or any of its Subsidiaries.
(iii) Each Company Plan has been operated and
administered, and is, in compliance with its terms and all
applicable Laws, except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
(iv) No Company Plan is, and neither the Company
nor any Subsidiary thereof contributes to or has any liability
or obligation with respect to any Plan that is, (A) a
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multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA, (B) any single employer plan or other pension plan
subject to Title IV or Section 302 of ERISA or Section 412 of
the Code or (C) a multiple employer plan within the meaning of
Section 4063 or 4064 of ERISA.
(v) Each Company Plan that is intended to
qualify under Section 401(a) and/or 401(k) of the Code so
qualifies and its trust is exempt from taxation under Section
501(a) of the Code. The Company and its Subsidiaries have
timely paid all contributions, premiums and expenses payable
to or in respect of each Company Plan under the terms thereof
and in accordance with applicable law, including ERISA and the
Code, and, to the extent any such contributions, premiums or
expenses are not yet due, the liability therefor has been
properly and adequately accrued to the extent required by GAAP
on the Company's financial statements included in its
Quarterly Report on Form 10-Q for the period ended June 30,
2000.
(vi) Neither the Company nor any of its
Subsidiaries has incurred or will incur, either directly or
indirectly (including as a result of an indemnification
obligation), any liability under or pursuant to any provision
of Title I or IV of ERISA or the penalty, excise tax or joint
and several liability provisions of the Code relating to
employee benefit plans, and to the Knowledge of the Company,
no event, transaction or condition has occurred, exists or is
expected to occur which could reasonably be expected to result
in any such liability to the Company, any of its Subsidiaries
or, after the Effective Time, Parent or any of its affiliates.
(vii) Except as set forth in Section 5.01(k)(vii)
of the Disclosure Schedule, neither the execution and delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby, either alone or in combination with
another event (whether contingent or otherwise) will (A)
entitle any current or former employee, consultant, officer or
director of the Company or any of its Subsidiaries to any
increased or modified benefit or payment; (B) increase the
amount of compensation due to any such employee, consultant,
officer or director; (C) accelerate the vesting, payment or
funding of any compensation, stock-based benefit, incentive or
other benefit; (D) result in any "parachute payment" under
Section 280G of the Code (whether or not such payment is
considered to be reasonable compensation for services
rendered); or (E) cause any compensation to fail to be
deductible under Section 162(m), or any other provision of the
Code or any similar foreign Law.
(l) Takeover Laws. A special committee of the Company
Board has approved this Agreement and the transactions contemplated
hereby, such approval has been ratified by the Company Board and such
approval constitutes approval of the Merger and transactions
contemplated hereby under the provisions of Section 302A.613 of the
MBCA such that Section 302A.671 of the MBCA does not apply to the
shares of the Company or of the Sub as a result of this Agreement and
the transactions hereby. There are no other Takeover Laws applicable to
this Agreement or the Voting Agreement and the transactions
contemplated hereby and thereby; provided that, no representation is
made hereunder as to any Takeover Laws under the Georgia Business
Corporation Code or the DGCL.
(m) Environmental Matters.
Except as disclosed in Section 5.01(m) of the Company
Disclosure Schedule or in the Company Filed SEC Documents, as of the
date hereof: (i) (A) the Company and each of its Subsidiaries are, and
within the period of all applicable statutes of limitation have been,
in material compliance with all applicable Environmental Laws; and (B)
the Company and each of its Subsidiaries believes that each of them
will, and will not incur material expense to, timely attain or maintain
compliance with any Environmental Laws applicable to any of their
current operations or properties or to any of their planned operations
with respect to properties currently or formerly owned, leased or
otherwise occupied by the Company or any of its Subsidiaries; (ii) the
Company and its Subsidiaries hold all material Environmental Permits
(each of which is in full force and effect) required for any of their
current operations and for any property owned, leased, or otherwise
operated by any of them, and are, and within the period of all
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applicable statutes of limitation have been, in material compliance
with all such Environmental Permits; and (iii) neither the Company nor
any of its Subsidiaries has received any material Environmental Claim
against any of them, and neither the Company nor any of its
Subsidiaries has knowledge of any material Environmental Claim being
threatened; and to the knowledge of the Company, no Hazardous Materials
or other conditions are present on any property formerly or currently
owned, leased, occupied or operated by the Company or any of its
Subsidiaries, or at any other location, that are reasonably likely to
form the basis of any material Environmental Claim against any of them
or against any person or entity (including without limitation any
predecessor of the Company or any of its Subsidiaries) whose liability
the Company or any of its Subsidiaries retained or assumed either
contractually or by operation of law.
(n) Intellectual Property.
(i) Except as set forth in Section 5.01(n)(i) of
the Company Disclosure Schedule, as of the date hereof the
Company and its Subsidiaries own or are licensed to use all
material Intellectual Property Rights as currently used in the
business of the Company or its Subsidiaries or necessary to
conduct the business of the Company and its Subsidiaries as
currently conducted or, in the case of Soiltec, currently
anticipated to be conducted (the "Company Intellectual
Property Rights").
(ii) Section 5.01(n)(ii) of the Company
Disclosure Schedule contains an accurate and complete list as
of the date of this Agreement of the following categories of
Company Intellectual Property Rights owned by the Company or
any of its Subsidiaries: (A) Trademarks that are registered or
for which an application for registration is pending; (B)
Patents; (C) Software; and (D) material Copyrights that are
registered or for which an application for registration is
pending.
(iii) Section 5.01(n)(iii) of the Company
Disclosure Schedule contains an accurate and complete list as
of the date of this Agreement of (A) all licenses and
agreements under which the Company and its Subsidiaries are
licensed to use third party Intellectual Property Rights,
other than licenses that are readily available on commercially
reasonable terms (such as routine accounting systems, CAD
systems and the like) and (B) all licenses and sublicenses
under which the Company and its Subsidiaries have granted
material rights to third parties to use the Company
Intellectual Property Rights. Except as set forth in Section
5.01(n)(iii) of the Company Disclosure Schedule, the Company
and its Subsidiaries are not required to pay any royalties,
fees or other amounts to any Person in connection with the use
of the Company Intellectual Property Rights.
(iv) Except as set forth in Section 5.01(n)(iv),
within the past two years and prior to the date hereof,
neither the Company nor any of its Subsidiaries: (A) has been
notified or is otherwise aware of any actual or threatened
adverse proceeding or claims of any Person pertaining to any
challenge to the Company Intellectual Property Rights; (B) to
the knowledge of the Company, is the subject of any claim of
infringement or misappropriation by the Company or any of its
Subsidiaries of any third party Intellectual Property Rights;
or (C) to the knowledge of the Company, has any claim for
infringement or misappropriation of, or breach of any license
or agreement involving, any of the Company Intellectual
Property Rights.
(o) Tax Matters.
(i) Each of the Company and its Subsidiaries has
filed all Tax Returns that it was required to file. All such
Tax Returns were correct and complete in all material
respects. All material Taxes due and owing by any of the
Company and its Subsidiaries (whether or not shown on any Tax
Return) have been paid. Except as set forth in Section
5.01(o)(i) of the Company Disclosure Schedule, none of the
Company and its Subsidiaries currently is the beneficiary of
any extension of time within which to file any Tax Return. To
the knowledge of the Company, no claim has been made within
the past five years by a Governmental Authority in a
jurisdiction
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where any of the Company and its Subsidiaries does not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction.
(ii) Except as set forth in Section 5.01(o)(ii)
of the Company Disclosure Schedule, as of the date hereof,
there is no dispute or claim concerning any Tax liability of
any of the Company and its Subsidiaries either claimed or
raised by any Governmental Authority in writing. No audit of
any Tax or Tax Return of the Company or any of its
Subsidiaries is being conducted by any Governmental Authority
as of the date of this Agreement, except as set forth in
Section 5.01(o)(ii) of the Company Disclosure Schedule.
(iii) Except as set forth in Section 5.01(o)(iii)
of the Company Disclosure Schedule, none of the Company and
its Subsidiaries has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency, which waiver or
agreement is currently in effect.
(iv) None of the Company and its Subsidiaries has
filed a consent under Section 341(f) of the Code concerning
collapsible corporations. None of the Company and its
Subsidiaries has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will
not be deductible under Section 280G of the Code. Each of the
Company and its Subsidiaries has disclosed on its federal
income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax
within the meaning of Section 6662 of the Code. None of the
Company and its Subsidiaries is a party to any Tax allocation
or sharing agreement. None of the Company and its Subsidiaries
(A) has been a member of an "affiliated group" (as defined in
Section 1504(a) of the Code, or any similar group defined
under a similar provision of state, local or foreign law)
filing a consolidated federal income Tax Return (other than a
group the common parent of which was the Company) or (B) has
any liability for the Taxes of any person (other than any of
the Company and its Subsidiaries) under Treasury Regulation
ss.1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise.
(p) Regulatory Approvals. No consents or approvals of, or
filings or registrations with, any Governmental Authority or
instrumentality are necessary to consummate the Merger except (i) as
may be required under, and other applicable requirements of, the
Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"); (ii) as may be required by the by-laws, rules, regulations
or policies of the NYSE in respect of the Parent Common Shares to be
issued in the Merger; (iii) the filing with the SEC of the Company
Proxy Statement and the filing and declaration of effectiveness of the
Registration Statement; (iv) the filing of the Articles of Merger with
the Secretary of State of the State of Minnesota pursuant to the MBCA
and the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware pursuant to the DGCL, each as provided in
Section 3.01(b); and (v) such filings as are required to be made or
approvals as are required to be obtained under the securities or "Blue
Sky" laws of various states in connection with the issuance of Parent
Common Shares in the Merger.
(q) Title to Properties; Encumbrances. As of June 30,
2000, the Company and each of its Subsidiaries had good and marketable
title to all properties, interests in properties and assets (real and
personal) reflected in the consolidated balance sheet of the Company as
of June 30, 2000 and continues to have good and marketable title
thereto except for properties, interests in properties and assets sold
or otherwise disposed of in the ordinary course of business since the
respective dates of such balance sheets free and clear of all Liens of
any kind or character, except for (i) Liens of public record (ii)
rights of lessors or licensors pursuant to lease or license agreements
with the Company and/or its Subsidiaries (iii) current taxes not yet
due and payable and (iv) such Liens which would not, individually or in
the aggregate, have a Material Adverse Effect.
(r) Insurance. The Company and its Subsidiaries have
obtained and currently maintain in full force and effect insurance with
responsible and reputable insurance companies or associations in such
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amounts, on such terms and covering such risks, including fire and
other risks insured against by extended coverage, as is reasonably
prudent, and each is maintaining in full force and effect public
liability insurance, insurance against claims for personal injury or
death or property damage occurring in connection with the activities of
the Company or its Subsidiaries or any properties owned, occupied or
controlled by the Company or its Subsidiaries, in such amounts as
reasonably deemed necessary by the Company or its Subsidiaries.
(s) Fairness Opinion. The Company Financial Advisor has
delivered its opinion to the Company Board that the Merger
Consideration is fair, from a financial point of view, to the holders
of Company Common Stock (other than Parent) and such opinion has not
been withdrawn.
5.02. Representations and Warranties of Parent and Sub.
Except as set forth in the disclosure schedule delivered by Parent to the
Company prior to the execution of this Agreement (the "Parent Disclosure
Schedule") (each section of which qualifies the correspondingly numbered
representation and warranty or covenant to the extent specified therein), Parent
and Sub hereby represent and warrant to the Company as follows:
(a) Organization, Standing and Authority. Each of Parent
and Sub (x) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization
and (y) is duly qualified to do business and is in good standing in the
states of the United States and foreign jurisdictions where its
ownership, leasing or operation of property or assets or the conduct of
its business requires it to be so qualified, except where the failure
to be duly organized, validly existing, in good standing, or duly
qualified does not have and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent
or Sub. Each of Parent and Sub has in effect all federal, state, local
and foreign governmental authorizations necessary for it to own, lease
and operate its properties and assets and to carry on its business as
it is now conducted, except where failure to have in effect such
authorizations does not have and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on
Parent. Each of Parent and Sub has made available to the Company a
complete and correct copy of its certificate of incorporation and
by-laws, each as amended to date and in full force and effect and the
Parent is not in violation of any provision thereof.
(b) Shares.
(i) As of the date hereof, the authorized
capital stock of Parent consists of 150,000,000 Parent Common
Shares, of which 59,592,961 shares were outstanding as of July
31, 2000 and 1,000,000 shares of $.01 par value preferred
stock, of which no shares were outstanding as of July 31,
2000.
(ii) The authorized capital stock of Sub consists
of 1,000 shares of common stock, no par value per share, which
shares are outstanding and is owned directly by Parent. Sub
has not conducted any business prior to the date hereof and
has no Subsidiaries and no assets, liabilities or obligations
of any nature other than incident to its formation and
incident to this Agreement.
(iii) The outstanding shares of Parent's and Sub's
capital stock have been duly authorized and are validly issued
and outstanding, fully paid and nonassessable, and subject to
no preemptive rights (and were not issued in violation of any
preemptive rights). As of the date hereof, there are no shares
of capital stock of Sub authorized and reserved for issuance
pursuant to, and Sub does not have, any Rights issued or
outstanding with respect to its capital stock or any
commitment to authorize, issue or sell any such shares or
Rights, except pursuant to this Agreement.
(iv) The Parent Common Shares to be issued in
exchange for shares of Company Common Stock in the Merger,
when issued will be duly authorized, validly issued,
fully-paid and non-assessable and will not have been issued in
violation of, nor will they be subject to, any preemptive
rights.
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(c) Corporate Power. Each of Parent and Sub has all
necessary corporate power and authority to carry on its business as it
is now being conducted and to own, lease and operate all its properties
and assets; and each of Parent and Sub has all requisite corporate
power and authority to execute and deliver this Agreement and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby.
(d) Corporate Authority. (i) This Agreement and the
transactions contemplated hereby, including the issuance of Parent
Common Shares in the Merger (except for any issuance of Parent Common
Shares in excess of the Maximum Share Amount in connection with the
Merger and/or pursuant to Section 3.02(c), which issuance shall be
subject to approval by Parent's shareholders), have been authorized and
approved by all necessary corporate action of Parent, Sub, the Parent
Board and the Board of Directors of Sub prior to the date hereof (which
action has not been rescinded or modified in any way) and (ii) this
Agreement is a legal, valid and binding obligation of each of Parent
and Sub, enforceable in accordance with its terms. This Agreement and
the transactions contemplated hereby, including the issuance of Parent
Common Shares (up to the Maximum Share Amount) in the Merger do not
require the approval of the shareholders of Parent.
(e) No Defaults. Subject to (i) receipt of the regulatory
approvals, and expiration of the waiting periods, referred to in
Section 5.02(i) and (ii) any required filings under federal and state
securities laws, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
by Parent and Sub do not and will not (i) constitute a breach or
violation of, or a default under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of Parent or of any of Parent's Subsidiaries or
to which it or any of its Subsidiaries or any of their respective
properties or assets are subject or bound, (ii) constitute a breach or
violation of, or a default under, the certificate of incorporation or
by-laws of either Parent or Sub, or (iii) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or instrument,
except in the case of (i) and (iii), where such breach, violation or
default or the failure to obtain such consents or approvals would not
in the aggregate have a Material Adverse Effect on the Company, the
Surviving Corporation or Parent and would not prevent or materially
impair Parent's or Sub's ability to consummate the transactions
contemplated by this Agreement.
(f) Financial Reports and SEC Documents.
(i) Parent SEC Reports. Since January 1, 1996,
the Parent has filed, and will file after the date hereof, all
forms, reports and documents with the SEC required to be filed
by it pursuant to all applicable federal securities laws, all
of which complied, or will comply, as of date filed (or, with
respect to a document filed prior to the date of this
Agreement and amended or superseded by a subsequent filing
prior to the date of this Agreement, then on the date of such
filing as so amended or superseded), in all material respects
with all applicable requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations
promulgated thereunder. None of the Parent Filed SEC Reports,
at the time filed (or, with respect to a document filed prior
to the date of this Agreement and amended or superseded by a
subsequent filing prior to the date of this Agreement, then on
the date of such filing as so amended or superseded),
contained, or will contain, any untrue statement of a material
fact or omitted to state a 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.
(ii) Financial Statements, Accounting Matters.
The consolidated balance sheets and the related consolidated
statements of earnings, stockholders' equity and cash flows
(including the related notes thereto) of the Parent included
in or incorporated by reference in the Parent Filed SEC
Reports complied, or will comply, as to form in all material
respects with the published rules and regulations of the SEC
with respect thereto, were prepared, or will be prepared, in
accordance with GAAP applied on a basis consistent with prior
periods (except as otherwise noted therein),
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and presented fairly, or will present fairly, the financial
position of the Parent and its Subsidiaries as of their
respective dates, and the consolidated results of its
operations and its cash flows for the periods presented
therein (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments and
except that the unaudited interim financial statements do not
contain all of the footnote disclosure required by GAAP).
Notwithstanding the foregoing, no representations or
warranties are made regarding any forecast, budgets or
projections of the Parent or the Sub.
(iii) Unless the Merger shall be effected pursuant
to Section 2.01(a)(ii), to the knowledge of the Parent,
neither the Parent nor any of the Parent Affiliates, has taken
or agreed to take any action that would jeopardize the
qualification of the Merger as a reorganization within the
meaning of Section 368(a) of the Code.
(g) Litigation. Except as Previously Disclosed, no
litigation, claim or other proceeding before any court or governmental
agency that is pending or, to Parent's Knowledge, threatened against
Parent or any of its Subsidiaries would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent.
(h) No Brokers. No action has been taken by it that would
give rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement, excluding fees to be paid
to Donaldson, Lufkin and Jenrette.
(i) Regulatory Approvals. No consents or approvals of, or
filings or registrations with, any Governmental Authority or with any
third party are necessary to consummate the Merger except for (i) as
may be required under, and other applicable requirements of, the HSR
Act; (ii) as may be required by the by-laws, rules, regulations or
policies of the NYSE in respect of the Parent Common Shares to be
issued in the Merger; (iii) the filing with the SEC of the Company
Proxy Statement in definitive form and the filing and declaration of
effectiveness of the Registration Statement; (iv) the filing of the
Articles of Merger with the Secretary of State of the State of
Minnesota pursuant to the MBCA and the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to
the DGCL, each as provided in Section 3.01(b); and (v) such filings as
are required to be made or approvals as are required to be obtained
under the securities or "Blue Sky" laws of various states in connection
with the issuance of Parent Common Shares in the Merger.
(j) Parent Common Stock. Prior to the Effective Time,
Parent will have taken all necessary action required to permit it to
issue the number of shares of Parent Common Stock required to be issued
pursuant to Article III. Parent Common Stock issued pursuant to Article
III will, when issued, be validly issued, fully paid and nonassessable,
and no Person will have any pre-emptive or subscription or purchase
right in respect thereof. Such Parent's Common Stock will, when issued,
be registered under the Securities Act and the Exchange Act, and will
be registered or exempt from registration under any applicable state
securities laws and will be listed on the Exchange, subject to notice
of official issuance.
(k) Adequate Financing. Parent has obtained all financing
required of it in order to consummate the transactions contemplated by
this Agreement.
(l) Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the Merger and transactions contemplated
thereby, and has not engaged in any business activities or conducted
any operations other than in connection with the Merger. Sub has no
Subsidiaries.
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ARTICLE VI
COVENANTS
The Company hereby covenants to and agrees with Parent, and
each of Parent and Sub hereby covenants to and agrees with the Company, that:
6.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each Party shall use its reasonable best efforts
in good faith to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or desirable (including, without
limitation, obtaining any regulatory approvals and obtaining any consents of
third parties required under any agreement to be obtained by it or its
subsidiaries prior to, or as a result of, the consummation of the Merger so that
such agreement is not terminable as a result of the Merger, or advisable under
applicable laws, so as to permit consummation of the Merger) as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purpose of this Agreement or to vest the
Surviving Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of any of the parties to the Merger, the
proper officers and directors of each party to this Agreement and their
respective Subsidiaries shall take all such necessary action as may be
reasonably requested by Parent.
6.02. Shareholder Approvals. The Company shall take, in
accordance with this Agreement, applicable law, applicable NASD rules and the
Company Certificate and Company By-Laws, all action necessary to duly call, give
notice of, convene and hold a meeting of shareholders of the Company to consider
and vote upon the approval and adoption of this Agreement, the Merger and the
transactions contemplated hereby and thereby and any other matters required to
be approved by the Company's shareholders for consummation of the Merger
(including any adjournment or postponement, the "Company Meeting") as promptly
as practicable after the date hereof.
6.03. Registration Statement. (a) As soon as practicable
after the date hereof, each of Parent and the Company agrees to prepare, and to
cooperate in the preparation of, a registration statement on Form S-4 (the
"Registration Statement") to be filed by Parent with the SEC in connection with
the issuance of Parent Common Shares in the Merger or pursuant to Section
3.02(c) (including the proxy statement and prospectus and other proxy
solicitation materials of the Company constituting a part thereof (the "Company
Proxy Statement") and all related documents). The Registration Statement and the
Company Proxy Statement shall comply as to form in all material respects with
the applicable provisions of the Securities Act and the Exchange Act and the
rules and regulations thereunder. The Company agrees to file the Company Proxy
Statement in preliminary form with the SEC as promptly as practicable, and
Parent agrees to file the Registration Statement with the SEC as promptly as
practicable after any SEC comments with respect to the preliminary Company Proxy
Statement are resolved or at such earlier time as Parent may elect. Each of
Parent and the Company shall, as promptly as practicable after receipt thereof,
provide copies of any written comments received from the SEC with respect to the
Registration Statement and the Company Proxy Statement, as the case may be, to
the other party, and advise the other party of any oral comments with respect to
the Registration Statement or the Company Proxy Statement received from the SEC.
Each of Parent and the Company agrees to use reasonable best efforts to cause
the Registration Statement to be declared effective under the Securities Act as
promptly as practicable after filing thereof, and the Company agrees to mail the
Company Proxy Statement to its shareholders as promptly as practicable after the
Registration Statement is declared effective. Each Party shall furnish to the
other Parties all information concerning such Party, and its officers, directors
and shareholders as may be necessary in connection with the preparation and
filing of the Registration statement and any amendments or supplements thereto.
(b) Each of Parent and the Company agrees, as to itself
and its Subsidiaries, that none of the information supplied or to be supplied by
it for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement and each amendment or supplement
thereto, if any, becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any 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 and (ii) the Company
Proxy Statement and any amendment or supplement thereto
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will, at the date of mailing to shareholders and at the time of the Company
Meeting, contain any untrue statement of a material fact or omit to state any
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. The Company agrees promptly to advise Parent if at any time during
which the Company Proxy Statement is required to be delivered any information
provided by the Company, its subsidiaries, officers, directors or shareholders
in the Company Proxy Statement becomes incorrect or incomplete in any material
respect and to provide Parent with the information necessary to correct such
inaccuracy or omission.
(c) Parent agrees to advise the Company, promptly after
Parent receives notice thereof, of the time when the Registration Statement has
become effective or any supplement or amendment has been filed, of the issuance
of any stop order or the suspension of the qualification of the Parent Common
Shares for offering or sale in any jurisdiction, of the initiation or threat of
any proceeding for any such purpose, or of any request by the SEC for the
amendment or supplement of the Registration Statement or for additional
information.
(d) As promptly as practicable after the date of an
Issuance Election and provided that the Company has not terminated this
Agreement pursuant to Section 8.01(g) hereof, Parent agrees to take, in
accordance with this Agreement, applicable law, applicable NYSE rules and the
Parent Certificate and Parent By-Laws, all action necessary to duly call, give
notice of, convene and hold a meeting of shareholders of Parent to consider and
vote upon the approval of the issuance of Parent Common Shares in excess of the
Maximum Share Amount pursuant to the Merger and/or Section 3.02(c) (including
any adjournment or postponement, the "Parent Meeting"), and Parent agrees to
prepare a proxy statement and other proxy solicitation materials of Parent
constituting a part thereof (the "Parent Proxy Statement") and all related
documents for use in connection therewith and promptly provide Company with a
copy of all documents and filings. The Parent Proxy Statement shall comply as to
form in all material respects with the applicable provisions of the Securities
Act and the Exchange Act and the rules and regulations thereunder. Parent agrees
to file the Parent Proxy Statement in preliminary form with the SEC as promptly
as practicable after the date of an Issuance Election. Parent shall, as promptly
as practicable after receipt thereof, provide copies of any written comments
received from the SEC with respect to the Parent Proxy Statement to the Company,
and advise the Company of any oral comments with respect to the Parent Proxy
Statement received from the SEC. Parent agrees to mail the Parent Proxy
Statement to its shareholders as promptly as practicable after the resolution of
any comments with the SEC. The Company shall furnish to Parent all information
concerning the Company, and its officers, directors and shareholders as may be
necessary in connection with the preparation and filing of the Parent Proxy
Statement and any amendments or supplements thereto. Parent agrees that none of
the information included or incorporated by reference in the Parent Proxy
Statement and any amendment or supplement thereto will, at the date of mailing
to Parent's shareholders and at the time of the Parent Meeting, contain any
untrue statement of a material fact or omit to state any 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. The Company agrees
promptly to advise Parent if at any time during which the Parent Proxy Statement
is required to be delivered any information provided by the Company, its
subsidiaries, officers, directors or shareholders in the Parent Proxy Statement
becomes incorrect or incomplete in any material respect and to provide Parent
with the information necessary to correct such inaccuracy or omission.
(e) Parent will use its reasonable best efforts to obtain
state securities law or "Blue Sky" permits and approvals required to carry out
the transactions contemplated by this Agreement.
6.04. Press Releases. Parent and the Company shall jointly
agree on an initial press release with respect to the Merger. Neither Party
will, without the prior approval of the other Party, issue any other press
release or written statement for general circulation (including any written
statement circulated to employees, customers or other third parties) relating to
the transactions contemplated hereby, except, based on the advice of counsel, as
otherwise required by applicable law or regulation or NYSE or NASD rules and
only after consulting with the other Party and, prior to the issuance of any
such release or statement, providing written copies of any such proposed press
release or written statement to the other Party and providing the other Party
with a reasonable opportunity to review and comment upon such proposed press
release or written statement.
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6.05. Access; Information. (a) Upon reasonable notice and
subject to applicable laws relating to the exchange of information, the Parties
shall afford to the officers, employees, counsel, accountants and other
authorized representatives of the other Party, reasonable access, during normal
business hours throughout the period prior to the Effective Date, to all of the
Parties' employees, properties, books, contracts, commitments and records in
order for the other Party to make such investigations as it shall reasonably
require and, during such period, it shall furnish promptly to the other Party
(i) a copy of each material report, schedule and other document filed by it or
any of its Subsidiaries pursuant to the requirements of federal, state or
foreign securities laws, and (ii) all other information concerning its or any of
its Subsidiaries' business, properties and personnel as a party may reasonably
request; provided, that such information may not be used for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. The Parties shall promptly inform the other Party of any litigation,
claim or other proceeding before any court or other governmental authority that
arises following the date of this Agreement and any material development in any
such existing litigation, claim or other proceeding. The Parties shall not be
required to provide access to or to disclose information where such access or
disclosure would contravene any law, rule, regulation, order, judgment, decree
or agreement. Parent and the Company shall make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) Subject to the requirements of applicable law,
pending consummation of the Merger, all non-public information provided by the
Company to Parent and Parent to the Company pursuant to this Agreement or
otherwise will remain subject to the obligations of Parent and the Company under
the Confidentiality Agreement.
(c) No investigation by a party, pursuant to this Section
6.05 or otherwise, shall affect or be deemed to modify any representation or
warranty of the other party contained herein.
6.06. Acquisition Proposals. (a) Subject to Section 6.06(d)
of this Agreement, the Company shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any of its directors, officers
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its Subsidiaries to, directly
or indirectly through another person, (i) solicit, initiate or encourage, or
take any other actions designed to facilitate, any inquiries or the making of
any proposal which constitutes an Acquisition Proposal, (ii) participate in any
discussions or negotiations regarding any Acquisition Proposal, (iii) provide
any information or data with respect to the Company or its Subsidiaries to any
Person in connection with an Acquisition Proposal or (iv) grant any waiver or
release under any standstill or similar agreement with respect to the Company
Common Stock. The Company and its officers and directors will cease any existing
discussions or negotiations, if any, with any parties conducted heretofore with
respect to, or that could reasonably be expected to lead to, any Acquisition
Proposal. Notwithstanding the foregoing, if the Board of Directors of the
Company reasonably determines, after consultation with its financial advisors
and outside legal counsel, that it has received an Acquisition Proposal that may
reasonably lead to a Superior Proposal (as defined herein), the Company may
furnish information and access to the Person who has submitted such Superior
Proposal pursuant to confidentiality agreements with terms no less restrictive
than the Confidentiality Agreement (July 27, 2000 version), and may participate
in discussions and negotiate with such Person concerning any proposed merger,
sale of assets, sale of shares of capital stock or similar transaction involving
the Company. For the purposes of this Agreement, "Superior Proposal" shall mean
any bona fide written Acquisition Proposal made by a third party that did not
result from a violation of this Agreement and which a majority of the Company
Board determines in good faith (based on the advice of its financial advisor and
the advice of outside legal counsel), within 45 days from the date hereof, to
represent superior value, from a financial point of view, to the shareholders of
the Company as compared to the transactions contemplated by this Agreement
(taking into account, among other things, all legal, financial, regulatory and
other aspects of the proposal and the identity of the offeror).
(b) If the Company receives an Acquisition Proposal, the
Company shall promptly advise Parent in writing of the terms of the Acquisition
Proposal and the identity of the Person making the Acquisition Proposal. The
Company shall keep Parent fully informed on a current basis of the status,
including any change to the details, of such Acquisition Proposal and promptly
provide to Parent after receipt or delivery thereof with copies of all material
correspondence and other written material sent or provided to the Company from
any third party in connection with any Acquisition
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Proposal or sent or provided by the Company in connection with any Acquisition
Proposal. The Company agrees that it shall simultaneously provide to Parent any
non-public information concerning the Company or its Subsidiaries provided to
any other person or group in connection with any Acquisition Proposal that was
not previously provided to Parent. Notwithstanding the foregoing, the Company
shall not be required to provide Parent with (i) non-public analyses prepared
for a Person who has made an Acquisition Proposal with respect to business or
financial synergies unique to such Person, or (ii) non-public financial or
similar information of a Person who has made an Acquisition Proposal.
(c) The Company agrees that neither the Company Board nor
any committee thereof shall (i) amend, condition, qualify, withdraw or modify,
or propose to amend, condition, qualify, withdraw or modify, in a manner adverse
to Parent, the approval and declaration of advisability by the Company Board of
this Agreement or the Merger, (ii) approve or recommend, or propose to approve
or recommend, any Acquisition Proposal, (iii) approve or cause the Company or
any of its Subsidiaries to enter into any letter of intent, agreement in
principle, acquisition or merger agreement or other similar agreement with
respect to any Acquisition Proposal or (iv) other than in accordance with
subsection (a) above, withdraw or modify, in a manner adverse to Parent, or fail
to make, the recommendation to Company shareholders of this Agreement and the
Merger.
(d) Notwithstanding the foregoing, nothing herein shall
require the Company's Board of Directors on behalf of the Company (a) to act, or
refrain from acting, in any manner which, in the opinion of such Board of
Directors after consultation with its legal counsel, would violate its fiduciary
duties to the Company's shareholders under applicable Law or (b) to fail to
comply with Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act with
regard to an Acquisition Proposal.
6.07. Affiliate Agreements. (a) Not later than the mailing
of the Company Proxy Statement, the Company shall deliver to Parent a schedule
of each person that, to the best of its knowledge, is or is reasonably likely to
be, as of the date of the Company Meeting, deemed to be an "affiliate" of it
(each, a "Company Affiliate") as that term is used in Rule 145 under the
Securities Act. Thereafter, the Company shall promptly notify Parent upon
becoming aware of any other person that is or is reasonably likely to be, as of
the date of the Company Meeting, deemed to be a Company Affiliate.
(b) The Company shall use its best efforts to cause each
person who may be deemed to be a Company Affiliate to execute and deliver to
Parent on or before the date of mailing of the Company Proxy Statement (or, in
the case of any person identified as a possible Company Affiliate after such
date, as promptly thereafter as possible) an agreement in the form attached
hereto as Exhibit A.
6.08. Takeover Laws. Subject to Section 6.06, no party
shall take any action that would cause the transactions contemplated by this
Agreement or the Voting Agreement to be subject to requirements imposed by any
Takeover Law and each of them shall take all necessary steps within its control
to exempt (or ensure the continued exemption of) or minimize the effect on, the
transactions contemplated by this Agreement and the Voting Agreement from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect, that purports to apply to this Agreement,
the Voting Agreement or the transactions contemplated hereby or thereby.
6.09. Shares Listed. Parent shall use its reasonable best
efforts to list, prior to the Effective Date, on the NYSE, subject to official
notice of issuance, the Parent Common Shares to be issued to the holders of
Company Common Stock in the Merger or pursuant to Section 3.02(c).
6.10. Regulatory Applications. (a) Parent and the Company
and their respective Subsidiaries shall cooperate and use their respective
reasonable best efforts (i) to prepare all documentation, to effect all filings
(including, without limitation, filings under the HSR Act) and to obtain all
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement and (ii) to cause the Merger to be consummated as
expeditiously as reasonably practicable. Each of Parent and the Company shall
have the right to review in advance, and to the extent practicable each will
consult with the other, in each case subject to applicable laws relating to the
exchange of information, with respect to, all material written information
submitted to any third party or any Governmental Authority in
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connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto agrees to act reasonably and as
promptly as practicable. Each party hereto agrees that it will consult with the
other party hereto with respect to the obtaining of all material permits,
consents, approvals and authorizations of all third parties and Governmental
Authorities necessary or advisable to consummate the transactions contemplated
by this Agreement and each party will keep the other party apprised of the
status of material matters relating to completion of the transactions
contemplated hereby.
(b) Each party agrees, upon request, to furnish the other
party with all information concerning itself, its Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with any filing, notice or application made by or on
behalf of such other party or any of its Subsidiaries to any third party or
Governmental Authority.
(c) In furtherance and not in limitation of the covenants
of the parties contained in Sections 6.10(a) and (b), if any objections are
asserted with respect to the transactions contemplated by this Agreement under
any Regulatory Law or if any suit is instituted or threatened by any
Governmental Authority or any private party challenging any of the transactions
contemplated by this Agreement as violative of any Regulatory Law, each of
Parent and the Company shall use its reasonable best efforts to resolve any such
objections or challenge as such Governmental Authority or private party may have
to such transactions under such Regulatory Law so as to permit consummation of
the transactions contemplated by this Agreement, and if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Regulatory Law, each of
Parent and the Company shall cooperate in all respects with each other and use
its respective reasonable best efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and prohibits, prevents or restricts consummation
of the transactions contemplated by this Agreement. Notwithstanding the
foregoing or any other provision of this Agreement, nothing in this Section 6.10
shall limit a party's rights under Sections 7.01(b) and 8.01(d) so long as such
party has theretofore complied in all respects with its obligations under this
Section 6.10.
6.11. Indemnification. (a) Following the Effective Date and
until the expiration of any applicable statutory limitations period, the Parent
and the Surviving Corporation shall, jointly and severally, indemnify, defend
and hold harmless the present and former directors and officers of the Company
and its Subsidiaries (each, an "Indemnified Party") against all costs or
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement and the Voting Agreement) to the
fullest extent that the Company is permitted to indemnify its directors and
officers under the laws of the State of Minnesota, the Company Certificate and
the Company By-Laws as in effect on the date hereof (and the Surviving
Corporation shall also advance expenses as incurred to the fullest extent
permitted under applicable law).
(b) For a period of six years from the Effective Time,
Parent shall provide a "runoff" policy with respect to that portion of
director's and officer's liability insurance that serves to cover the present
and former officers and directors of the Company and its Subsidiaries
(determined as of the Effective Time) with respect to claims against such
directors and officers arising from facts or events which occurred at or before
the Effective Time, which "runoff" insurance shall contain substantially the
same coverage and amounts to such officers and directors, and contain terms and
conditions substantially the same, as that coverage currently provided by the
Company; provided, however, that in no event shall Parent be required to expend
to maintain or obtain the insurance called for by this Section 6.11(b) more than
150 percent of the current annual amount expended by the Company to maintain or
procure such directors and officers insurance coverage for the current year (the
"Insurance Amount"); provided, further, that if Parent is unable to maintain or
obtain the insurance called for by this Section 6.11(b), Parent shall use its
reasonable best efforts to obtain as much comparable insurance as is available
for the Insurance Amount; provided, further, that officers and directors of the
Company or any Subsidiary of the Company
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may be required to make application and provide customary representations and
warranties to Parent's insurance carrier for the purpose of obtaining such
insurance.
(c) Any Indemnified Party wishing to claim
indemnification under Section 6.11(a), upon learning of any claim, action, suit,
proceeding or investigation described above, shall promptly notify Parent
thereof; provided, that the failure so to notify shall not affect the
obligations of Parent under Section 6.11(a) unless and to the extent such
failure materially increases Parent's liability under such subsection (a).
(d) If Parent or any of its successors or assigns shall
consolidate with or merge into any other entity and shall not be the continuing
or surviving entity of such consolidation or merger or shall transfer all or
substantially all of its assets to any entity, then and in each case, proper
provision shall be made so that the successors and assigns of Parent shall
assume the obligations set forth in this Section 6.11.
6.12. Certain Employee Benefit Matters. (a) With respect to
the Plans, if any, of Parent or Parent's Subsidiaries in which employees of the
Company or its Subsidiaries ("Company Employees") become eligible to participate
after the Effective Time (the "Parent Plans"), Parent shall, or shall cause its
Subsidiaries or the Surviving Corporation to: (i) with respect to each Parent
Plan that is a medical or health plan, (x) waive any exclusions for pre-existing
conditions under such Parent Plan that would result in a lack of coverage for
any condition for which the applicable Company Employee would have been entitled
to coverage under the corresponding Company Plan in which such Company Employee
was an active participant immediately prior to his or her transfer to the Parent
Plan; (y) waive any waiting period under such Parent Plan to the extent that
such period exceeds the corresponding waiting period under the corresponding
Company Plan in which such Company Employee was an active participant
immediately prior to his or her transfer to the Parent Plan (after taking into
account the service credit provided for herein for purposes of satisfying such
waiting period); and (z) provide each Company Employee with credit for any
co-payments and deductibles paid by such Company Employee prior to his or her
transfer to the Parent Plan (to the same extent such credit was given under the
analogous Company Plan prior to such transfer) in satisfying any applicable
deductible or out-of-pocket requirements under such Parent Plan for the plan
year that includes such transfer; and (ii) recognize service of the Company
Employees with the Company or any of its Subsidiaries for purposes of
eligibility to participate and vesting credit, and, solely with respect to
vacation benefits, benefit accrual in any Parent Plan in which the Company
Employees are eligible to participate after the Effective Time to the extent
that such service was recognized for that purpose under the analogous Company
Plan prior to such transfer; provided that the foregoing shall not apply to the
extent it would result in duplication of benefits. While Parent agrees to
provide the aforesaid benefits, nothing in this paragraph shall be interpreted
to require Parent to provide for the participation of any Company Employee in
any existing Parent Plan.
(b) To the extent applicable, Parent and the Company
shall each take such reasonable steps as are required to cause the disposition
and acquisition of equity securities (including derivative securities) pursuant
to Article III of this Agreement in connection with the consummation of the
Merger by each individual who is an officer or director of the Company to
qualify for exemption from Section 16(b) of the Exchange Act pursuant to Rule
16b-3(e) promulgated under the Exchange Act.
6.13. Accountants' Letters. The Company shall use its
reasonable best efforts to cause to be delivered to Parent a letter of KPMG LLP,
certified public accountants ("KPMG"), and Parent shall use its reasonable best
efforts to cause to be delivered to the Company a letter of Arthur Andersen LLP,
independent auditors ("Arthur Andersen"), each dated a date within two Business
Days of the date on which the Registration Statement shall become effective and
addressed to such other party, and in form and substance customary for "Agreed
Upon Procedures" letters delivered by independent accountants and certified
public accountants in accordance with Statement of Accounting Standards No. 72
for similar transactions.
6.14. Notification of Certain Matters. (a) Each of the
Company and Parent shall give prompt notice to the other of any fact, event or
circumstance known to it that would cause or constitute a material breach of any
of its representations, warranties, covenants or agreements contained herein.
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(b) Parent shall promptly notify the Company, and the
Company shall promptly notify Parent, in writing, of any notice or other
communication from any regulatory authority or self-regulatory organization in
connection with the transactions contemplated by this Agreement or the Voting
Agreement.
(c) Each of Parent and the Company shall promptly notify
the other of any fact, event or circumstance known to it that could reasonably
be expected to, individually or taken together with all other facts, events and
circumstances known to it, cause the Merger to fail to qualify as a
"reorganization" within the meaning of Section 368(a) of the Code (unless the
Merger shall be effected pursuant to Section 2.01(a)(ii).
6.15. Certain Tax Matters. Unless the Merger shall be
effected pursuant to Section 2.01(a)(ii), each of Parent and the Company will
use its reasonable best efforts to cause the Merger to constitute a
reorganization within the meaning of Section 368(a) of the Code, and to timely
satisfy, or cause to be timely satisfied, all applicable tax reporting and
filing requirements contained in the U.S. Code and Treasury Regulations with
respect to the Merger.
6.16. Withholding. To the extent required by applicable
United States, state, local or foreign laws, the parties to this Agreement agree
and acknowledge that Parent and Sub shall withhold Taxes from the amounts
otherwise required to be paid or delivered to Company, its shareholders or their
affiliates. If Company, its shareholders or their affiliates desire to avail
themselves of an exemption from the otherwise applicable withholding laws, or a
reduced withholding rate, then Company, its shareholders or their affiliates, as
the case may be, shall be obligated to obtain and furnish to Parent and Sub such
appropriate certificates, affidavits, rulings from Governmental Authorities, or
other documents necessary to establish or qualify for such exemption or reduced
rate. Parent and Sub shall reasonably cooperate with Company, its shareholders
and their affiliates in this regard. Company, its shareholders and their
affiliates hereby agree to indemnify Parent and Sub for any Costs that arise
from a failure to withhold Taxes, which failure was based on a good faith
interpretation of the law.
6.17. Election to Board. If Alvin E. McQuinn shall have
acquired an aggregate of 7,000,000 Parent Common Shares either in connection
with the Merger or pursuant to Section 3.02(c) hereof, at the first meeting of
Parent's Board of Directors following the Effective Time, Parent shall use
reasonable best efforts to increase the size of its Board of Directors and shall
take such other action as may be necessary to appoint Alvin E. McQuinn to the
vacancy created thereby.
6.18. Reorganization. Unless the Merger shall be effected
pursuant to Section 2.01(a)(ii), neither Party shall take any action that would
jeopardize the qualification of the Merger as a reorganization within the
meaning of Section 368(a) of the Code.
6.19. Severance for Employees. Each of the employees of the
Company listed on Schedule B1 hereto whose employment is terminated by Parent or
Surviving Corporation prior to the first anniversary of the Effective Time for
reasons other than "Cause" (as defined on Schedule B3) or such employee's
voluntary resignation for "Good Reason" (as defined on Schedule B3) shall
receive severance in an amount equal to two times such employee's annual base
salary as of the date of this Agreement. Each of the employees of the Company
listed on Schedule B2 hereto whose employment is terminated by Parent or
Surviving Corporation prior to the first anniversary of the Effective Time for
reasons other than "Cause" (as defined on Schedule B3) or such employee's
voluntary resignation for "Good Reason" (as defined on Schedule B3) shall
receive severance in an amount equal to such employee's annual base salary as of
the date of this Agreement. All other employees of the Company or any of its
Subsidiaries whose employment is terminated by Parent or Surviving Corporation
following the Effective Time shall receive severance in accordance with Parent's
policies existing at the time of such termination. Nothing in this Section 6.19
shall be construed as creating a contract or term of employment.
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ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each of Parent, Sub and the Company to
consummate the Merger is subject to the fulfillment or written waiver by Parent,
Sub and the Company prior to the Effective Time of each of the following
conditions:
(a) Stockholder Approvals. This Agreement and the Merger
shall have been duly adopted by the requisite vote of the shareholders
of the Company. In the event Parent shall have made an Issuance
Election and the Company shall not have terminated this Agreement
pursuant to Section 8.01(g) hereof, the issuance of Parent Common
Shares in excess of the Minimum Share Amount shall have been duly
approved by the requisite vote of the shareholders of Parent.
(b) Regulatory Approvals. All regulatory approvals
required to consummate the transactions contemplated hereby shall have
been obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired and (in
the case of Parent's obligation to consummate the Merger) no such
approvals shall contain any conditions, restrictions or requirements
which would reasonably be expected to, following the Effective Time,
have a Material Adverse Effect on Parent, the Company or the Surviving
Corporation.
(c) No Injunction. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in
effect and enjoins or prohibits consummation of the Merger.
(d) Registration Statement. The Registration Statement
shall have become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and be in effect and no proceedings for that purpose shall
have been initiated or threatened by the SEC and not concluded or
withdrawn.
(e) Listing. The Parent Common Shares to be issued in the
Merger or pursuant to Section 3.02(c) shall have received conditional
approval for listing on the NYSE, subject to official notice of
issuance, and Parent shall have received all state securities and Law
or "blue sky" permits and authorizations necessary to issue the Parent
Common Shares in exchange for the Company Shares in the Merger or
pursuant to Section 3.02(c).
7.02. Conditions to Obligation of the Company. The
obligation of the Company to consummate the Merger is also subject to the
fulfillment or written waiver by the Company prior to the Effective Time of each
of the following conditions:
(a) Representations and Warranties. The representations
and warranties of Parent and Sub shall be true and correct, in each
such case as of the date of this Agreement and as of the Effective Time
as though made on the Effective Time (except that the representations
and warranties that speak as of a specific date shall be true and
correct as of such date), provided that for purposes of determining the
satisfaction of the foregoing, such representations and warranties
shall be deemed true and correct if the failure or failures of such
representations and warranties to be so true and correct (excluding the
effect of any qualifications set forth therein relating to
"materiality" or "Material Adverse Effect") have not had and could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and the Company shall have received a
certificate, dated the Effective Date, signed on behalf of Parent by
the Chief Executive Officer and the Chief Financial Officer of Parent
to such effect.
(b) Performance of Obligations. Parent shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Effective Time,
and the
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Company shall have received a certificate, dated the Effective Date,
signed on behalf of Parent by the Chief Executive Officer and the Chief
Financial Officer of Parent to such effect.
(c) Opinion of the Company's Counsel. Unless the Merger
shall be effected pursuant to Section 2.01(a)(ii), the Company shall
have received an opinion of Larkin, Hoffman, Daly & Lindgren, Ltd.,
counsel to the Company, and/or KPMG, dated the Effective Date, to the
effect that, on the basis of facts, representations and assumptions set
forth in such opinion, (a) the Merger constitutes a reorganization
within the meaning of Section 368(a) of the Code, and (b) that,
accordingly, (i) no gain or loss will be recognized by the Company as a
result of the Merger and (ii) no gain or loss will be recognized by a
shareholder of the Company who receives the Merger Consideration in
exchange for shares of Company Common Stock, except to the extent of
shareholder realized gain for the Cash Portion of the Merger
Consideration and cash received in lieu of fractional share interests.
In rendering its opinion, such counsel may require and rely upon
customary representations contained in letters from the Company,
Parent, Sub and shareholders of the Company.
(d) Fairness Opinion. The Company shall have received a
fairness opinion from the Company's Financial Advisor in form
acceptable to the Company.
7.03. Conditions to Obligation of Parent and Sub. The
obligations of Parent and Sub to consummate the Merger are also subject to the
fulfillment or written waiver by Parent and Sub prior to the Effective Time of
each of the following conditions:
(a) Representations and Warranties. The representations
and warranties of Company shall be true and correct, in each such case
as of the date of this Agreement and as of the Effective Time as though
made on the Effective Time (except that the representations and
warranties that speak as of a specific date shall be true and correct
as of such date), provided that for purposes of determining the
satisfaction of the foregoing, such representations and warranties
shall be deemed true and correct if the failure or failures of such
representations and warranties to be so true and correct (excluding the
effect of any qualifications set forth therein relating to
"materiality" or "Material Adverse Effect") have not had and could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and Parent and Sub shall have received a
certificate, dated the Effective Date, signed on behalf of the Company
by the Chief Executive Officer and the Chief Financial Officer of the
Company to such effect.
(b) Performance of Obligations of the Company. The
Company shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the
Effective Time, and Parent and Sub shall have received a certificate,
dated the Effective Date, signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to
such effect.
(c) Opinion of Parent and Sub's Counsel. Unless the
Merger shall be effected pursuant to Section 2.01(a)(ii), Parent shall
have received an opinion of Troutman Sanders LLP, counsel to Parent and
Sub dated the Effective Date, to the effect that, on the basis of
facts, representations and assumptions set forth in such opinion, (a)
the Merger constitutes a reorganization under Section 368(a) of the
Code, and (b) that, accordingly, (i) no gain or loss will be recognized
by Parent, Sub and the Company as a result of the Merger. In rendering
its opinion, Troutman Sanders LLP may require and rely upon customary
representations contained in letters from the Company, Parent, Sub and
shareholders of the Company.
7.04. Frustration of Closing Conditions. Neither Parent nor
the Company may rely on the failure of any condition set forth in Sections 7.01,
7.02 or 7.03, as the case may be, to be satisfied if such failure was caused by
such party's failure to use reasonable best efforts to consummate the Merger and
the other transactions contemplated by this Agreement.
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ARTICLE VIII
TERMINATION
8.01. Termination. This Agreement may be terminated, and
the Merger may be abandoned:
(a) Mutual Consent. At any time prior to the Effective
Time, by the mutual written consent of Parent and the Company by action
taken by their respective Boards of Directors.
(b) Breach. At any time prior to the Effective Time, by
Parent or the Company, in the event of either: (i) a breach by the
other party of any representation or warranty contained herein which
would result in the non-satisfaction of the conditions set forth in
Sections 7.02(a) and 7.03(a), as the case may be, which breach is not
capable of being cured or has not been cured within 30 calendar days
after the giving of written notice to the breaching party of such
breach; or (ii) a material breach by the other party of any of the
covenants or agreements contained herein, which breach is not capable
of being cured or has not been cured within 30 calendar days after the
giving of written notice to the breaching party of such breach.
(c) Delay. At any time prior to the Effective Time, by
Parent or the Company, if its Board of Directors so determines, in the
event that the Merger is not consummated by June 30, 2001, except to
the extent that the failure of the Merger then to be consummated arises
out of or results from the knowing action or inaction of the party
seeking to terminate pursuant to this Section 8.01(c) which action or
inaction is in violation of its obligations under this Agreement.
(d) No Approval.
(i) By the Company or Parent, by action taken by
its Board of Directors, in the event the approval of any Governmental
Authority required for consummation of the Merger and the other
transactions contemplated by this Agreement shall have been denied by
final nonappealable action of such Governmental Authority, or in the
event any Governmental Authority of competent jurisdiction shall have
issued an order, decree or ruling or taken any other action to
permanently enjoining or otherwise prohibiting consummation, or
requiring the unwinding, of the Merger, or imposing substantial
penalties as a result of the Merger, and such action shall have become
final and nonappealable.
(ii) By Parent, by action taken by its Board of
Directors, in the event any required approval of a Governmental
Authority contains any final nonappealable conditions, restrictions or
requirements which would reasonably be expected to, following the
Effective Time, have a Material Adverse Effect on Parent or the Company
as the Surviving Corporation.
(iii) By the Company, by action taken by its Board
of Directors, in the event any required approval of a Governmental
Authority contains any final, nonappealable conditions, restrictions or
requirements which would reasonably be expected to, following the
Effective Time, have a Material Adverse Effect on Parent and its
Subsidiaries taken as a whole, unless within 30 days following receipt
by Parent of written notice of the Company's intent to terminate this
Agreement under this clause (iii) Parent notifies the Company that it
waives its right to terminate this Agreement under clause (ii) above.
(iv) By Parent or the Company, if its Board of
Directors so determines, in the event the approval of the Company's
shareholders required by Section 7.01(a) herein is not obtained at the
Company Meeting by reason of the failure to obtain the requisite vote
required by Section 7.01(a).
(e) Withdrawal of Recommendation.
(i) By Parent, if at any time after the date
hereof and prior to the Company Meeting, (A) the Company, or its Board
of Directors, as the case may be, shall have (1) entered into any
written letter of intent, written agreement in principle, written
acquisition or written merger agreement or other written agreement with
respect to any Superior Proposal (other than a confidentiality
agreement contemplated by
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Section 6.06), (2) amended, conditioned, qualified, withdrawn or
modified, or if the Company Board shall have proposed to do so, in a
manner adverse to Parent, its approval and recommendation of the Merger
and this Agreement, or (3) approved or recommended, or if the Company
Board shall have proposed to approve or recommend, any Superior
Proposal other, or (B) the Company or the Company's Board of Directors
or any committee thereof shall have resolved to do any of the
foregoing;
(ii) By the Company, if (A) after consultation
with legal counsel, in the exercise of the Company Board's good faith
judgment as to fiduciary duties to the Company's shareholders, the
Company Board determines that such termination is required by
applicable Law as a result of a Superior Proposal being made and (B)
after written notice is given to Parent of the intent to accept a
Superior Proposal, Parent has not communicated in writing, within five
(5) Business Days after receipt of such notice, a proposal that, in the
good faith judgment of the Company Board, matches or is more favorable
than the third-party Superior Proposal from a financial point of view.
(f) By Parent, if the Parent Price calculated pursuant to
Section 3.02(b) hereof is less than $6.10 and Parent has determined not
to make an Issuance Election in accordance with Section 3.02(b).
(g) By the Company, within three (3) Business Days
following Company's receipt of an Issuance Election.
(h) By the Company, if Parent fails to make an Issuance
Election by the date specified in Section 3.02(b).
8.02. Effect of Termination and Abandonment. (a) In the
event of termination of this Agreement and the abandonment of the Merger
pursuant to this Article VIII, no party to this Agreement (nor any of their
respective officers, directors or agents) shall have any liability or further
obligation to any other party hereunder except as set forth in subsections (b)
and (c) below and in Section 9.01, and except that termination shall not relieve
a party from liability for any willful breach of this Agreement. In the event of
termination of this Agreement by either Parent or Company pursuant to Section
8.01 hereof, the terminating party shall give prompt written notice thereof to
the non-terminating party.
(b) Parent and the Company agree that the Company shall
pay to Parent the sum of $10,000,000 (the "Termination Fee") solely if the
Company or Parent terminates this Agreement pursuant to: (i) Section 8.01(d)(iv)
or (ii) Section 8.01(e).
(c) The Termination Fee required to be paid pursuant to
Section 8.02(b) shall be payable by the Company to Parent on the same day as the
termination referred to therein and payment of such Termination Fee shall be a
condition precedent to the effectiveness of any termination by the Company.
Notwithstanding the foregoing, (i) in no event shall more than one Termination
Fee be payable and (ii) Parent may elect, by notice to the Company, to defer the
payment of the Termination Fee from time to time for a period or periods of up
to an aggregate of twelve months after the date such fee would otherwise be
payable. In the event that the Company shall fail to pay any Termination Fee
when due in accordance with this Article VIII, the amount of any such
Termination Fee shall be increased to include the costs and expenses actually
incurred (including, without limitation, fees and expenses of counsel) in
connection with the collection under and enforcement of this Section 8.02. All
payments under this Section 8.02 shall be made by wire transfer of immediately
available funds to an account designated by Parent.
(d) Upon termination of this Agreement, except for any amounts
payable by the Company pursuant to this Section 8.02 and except as otherwise
contemplated by this Section 8.02, this Agreement shall become void and have no
effect, without any liability on the part of any party hereto or its Affiliates,
directors, officers or stockholders; provided that, notwithstanding the
foregoing, this shall not relieve a breaching Party from liability for an
uncured willful breach of a representation, warranty or covenant or agreement
giving rise to such termination. In the event a claim is made against a party
under this Section 8.02(d), the non-prevailing party shall reimburse the
prevailing party for its reasonable costs and expenses incurred in connection
with a claim made against the other party under this Section 8.02(d).
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ARTICLE IX
MISCELLANEOUS
9.01. Survival. All representations, warranties, agreements
and covenants contained in this Agreement shall not survive the Effective Time
or termination of this Agreement if this Agreement is terminated prior to the
Effective Time; provided, however, if the Effective Time occurs, the agreements
of the parties in Sections 6.01, 6.03, 6.04, 6.09, 6.11, 6.12, 6.15, 6.16, 6.17,
6.18 and 6.19 and this Article IX shall survive the Effective Time, and if this
Agreement is terminated prior to the Effective Time, the agreements of the
parties in the proviso to Section 6.05(a), Sections 6.05(b) and 8.02 and Article
IX and the Confidentiality Agreement shall survive such termination.
9.02. Amendment; Extension; Waiver. (a) Subject to
compliance with applicable law, this Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the shareholders of the Company; provided, however, that after any
approval of the transactions contemplated by this Agreement by the shareholders
of the Company, there may not be, without further approval of such shareholders,
any amendment of this Agreement which by law requires such further approval by
such shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
(b) Prior to the Effective Time, the parties hereto, by
action taken or authorized by their respective Boards of Directors, may, to the
extent legally allowed, (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 or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party, but such extension or waiver
or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
9.03. Counterparts. This Agreement may be executed in one
or more counterparts, each of which when executed shall be deemed to constitute
an original but all of which when taken together shall constitute one and the
same instrument.
9.04. Governing Law. This Agreement shall be governed by,
and interpreted in accordance with, the laws of the State of Delaware (except
insofar as mandatory provisions of the MBCA are applicable), without regard to
the conflict of law principles thereof.
9.05. Expenses. Subject to Sections 8.02(b) and 8.02(c) and
except as otherwise provided herein, each party hereto will bear all Expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby, except that printing and mailing expenses and SEC
registration and filing fees shall be shared equally between the Company and
Parent.
9.06. Notices. All notices, requests and other
communications hereunder to a party shall be in writing and shall be deemed
given if personally delivered, telecopied (with confirmation) or three Business
Days after being mailed by registered or certified mail (return receipt
requested) or one Business Day after being delivered by overnight courier to
such party at its address set forth below or such other address as such party
may specify by notice to the parties hereto.
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If to Parent or to Sub, to:
AGCO Corporation
4205 River Green Parkway
Duluth, Georgia 30096-2568
Attention: Stephen D. Lupton, Senior Vice President and
General Counsel
Fax: (770) 813-6599
Phone: (770) 813-6094
With a copy to:
Troutman Sanders LLP
Bank of America Plaza
Suite 5200
600 Peachtree St., N.E.
Atlanta, Georgia 30308-2216
Attention: Robert W. Grout, Esq.
Fax: (404) 962-6789
Phone: (404) 885-3152
If to the Company, to:
Ag-Chem Equipment Co., Inc.
5720 Smetana Drive
Minnetonka, Minnesota 55343-9688
Attention: Alvin E. McQuinn
Fax: (952) 933-8799
Phone: (952) 933-9006
With a copy to:
Larkin, Hoffman, Daly & Lindgren, Ltd.
1500 Wells Fargo Plaza
7900 Xerxes Avenue South
Bloomington, Minnesota 55431-1194
Attention: Frank I. Harvey
Fax: (952) 896-3333
Phone: (952) 896-3291
9.07. Entire Understanding. This Agreement (including the
Disclosure Schedules), the Voting Agreement and the Confidentiality Agreement
represent the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and thereby and this Agreement supersedes any
and all other oral or written agreements (other than the Voting Agreement and
the Confidentiality Agreement) heretofore made.
9.08. Assignment; No Third Party Beneficiaries. Neither
this Agreement, nor any of the rights, interests or obligations shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns. Except
for Section 6.19, nothing in this Agreement expressed or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
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<PAGE> 115
9.09. Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Disclosure Schedules, such reference shall be
to a Section of, or Exhibit or Disclosure Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation". Any reference to "herein" or "hereof" or similar terms shall refer
to the agreement as a whole rather than to the individual paragraph, section or
article.
9.10. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as it is enforceable.
9.11. Immunity of Officers. No recourse shall be had for
any claims arising under this Agreement against (excluding any claims resulting
from fraud) any past, present or future officer, director, incorporator,
employee or shareholder of a Party, or any of them, either directly or
indirectly, under any rule of law or equity, statute or constitution, and all
such liability of any such officer, director, incorporator, employee, or
shareholder is hereby expressly waived and released as a condition of and in
consideration for the execution of this Agreement.
* * *
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<PAGE> 116
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in counterparts by their duly authorized officers, all
as of the day and year first above written.
AGCO CORPORATION
By: /s/ Robert J. Ratliff
--------------------------------------------
Name: Robert J. Ratliff
Title: Chairman of the Board
AGRI ACQUISITION CORP.
By: /s/ Robert J. Ratliff
--------------------------------------------
Name: Robert J. Ratliff
Title: President
AG-CHEM EQUIPMENT CO., INC.
By: /s/ Alvin E. McQuinn
--------------------------------------------
Name: Alvin E. McQuinn
Title: Chairman and Chief Executive Officer
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APPENDIX B
VOTING AGREEMENT
VOTING AGREEMENT, dated as of November 20, 2000, by and among AGCO
Corporation, a Delaware corporation ("Parent"), The Alvin E. McQuinn Revocable
Trust (the "Trust"), a trust created pursuant to that certain Trust Agreement
(the "Trust Agreement") dated July 19, 1973, as amended, by and between Alvin E.
McQuinn and Robert L. Hoffman ("Hoffman") , and Alvin E. McQuinn, a resident of
the State of Minnesota ("McQuinn" or individually a "Shareholder" and together
with the Trust, the "Shareholders").
WHEREAS, concurrently herewith, Parent and Ag-Chem Equipment Co., Inc., a
Minnesota corporation ("Company"), are entering into an Agreement and
Plan of Merger (as amended or supplemented from time to time, the
"Merger Agreement") (capitalized terms used without definition herein
having the meanings ascribed thereto in the Merger Agreement);
WHEREAS, as of the date hereof, the Shareholders own and/or have the
power to vote, as applicable, 5,634,148 shares of Company Common Stock (the
"Shares");
WHEREAS, the parties hereto desire that this Agreement apply only to
1,906,393 Shares, representing approximately 19.9% of the voting capital stock
of the Company (the "Subject Shares", as such number of Subject Shares may be
increased pursuant to Section 2(b) hereof);
WHEREAS, approval of the Merger Agreement by the Company's shareholders
is a condition to the consummation of the Merger;
WHEREAS, the Company Board has established a special committee of its
disinterested directors determined pursuant to Section 302A.673 of the MBCA, who
have affirmatively voted pursuant to Section 302A.673 of the MBCA, to approve
the Merger Agreement and the transactions contemplated thereby; and
WHEREAS, as a condition to its entering into the Merger Agreement,
Parent has required that the Shareholders agree, and the Shareholders have so
agreed, to enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Agreement to Vote. (a) Each of the Shareholders, by this
Agreement, hereby (i) agree to appear at any annual, special, postponed or
adjourned meeting of the shareholders of the Company or otherwise cause the
Subject Shares such Shareholder beneficially owns on the record date of any such
meeting to be counted as present thereat for purposes of establishing a quorum
and to vote or consent, and (ii) constitute and appoint Parent, or any nominee
thereof, with full power of substitution, during and for the term of this
Agreement, as each such Shareholder's true and lawful attorney and proxy for and
in each such Shareholder's name, place and stead, to vote all the Subject Shares
such Shareholder beneficially owns at the time of the record date for such vote,
at any annual, special, postponed or adjourned meeting of the shareholders of
the Company (and this appointment will include the right to sign the name of
each of the Shareholders (as shareholders) to any consent, certificate or other
document relating to the Company that laws of the State of Minnesota may require
or permit, in the case of both (i) and (ii) above, (x) in favor of approval of
the Merger Agreement and approval of the Merger and the transactions
contemplated thereby, (y) against any action, transaction or agreement that
would result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement (including, without limitation, any Acquisition Proposal or Superior
Proposal), and (z) except as otherwise agreed to in writing in advance by
Parent, against the following actions (other than the Merger and the
transactions contemplated by the Merger Agreement): (A) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company or any of its Subsidiaries; (B) a sale,
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lease or transfer of a material amount of assets of the Company or any of its
Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation
of the Company or any of its Subsidiaries; (C) (1) any change in a majority of
the Persons who constitute the Company Board; (2) any change in the present
capitalization of the Company or any amendment of the Company Certificate or
Company By-Laws; (3) any other material change in the Company's corporate
structure or business; or (4) any other action involving the Company or any of
its Subsidiaries which is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone or materially adversely affect the Merger or any
of the transactions contemplated by this Agreement or the Merger Agreement. This
proxy and power of attorney is a proxy and power coupled with an interest, and
each Shareholder declares that it is irrevocable until this Agreement shall
terminate in accordance with its terms. Each Shareholder hereby revokes all and
any other proxies with respect to the Subject Shares that such Shareholder may
have heretofore made or granted. For Subject Shares as to which a Shareholder is
the beneficial but not the record owner, such Shareholder shall use his or its
reasonable best efforts to cause any record owner of such Subject Shares to
grant to Parent a proxy to the same effect as that contained herein. Each
Shareholder hereby agrees to permit Parent to publish and disclose in the
Registration Statement, any related filings under the securities laws and any
press release or announcement issued in accordance with the Merger Agreement,
such Shareholder's identity, intent in and ownership of the Subject Shares and
the nature of the commitments, arrangements and understandings under this
Agreement.
(b) Nothing herein contained shall (i) restrict, limit or prohibit
McQuinn or Hoffman from exercising (in his capacity as a director or officer)
his fiduciary duties to the shareholders of the Company under applicable law, or
(ii) require McQuinn or Hoffman, in his capacity as an officer of the Company,
to take any action in contravention of, or omit to take any action pursuant to,
or otherwise take or refrain from taking any actions which are inconsistent
with, instructions or directions of the Board of Directors of the Company
undertaken in the exercise of his fiduciary duties, provided that nothing in
this Section 1(b) shall relieve or be deemed to relieve McQuinn or Hoffman from
his obligations under Sections 1 or 2 of this Agreement.
Section 2. Disposition of Subject Shares. (a) During the term of this
Agreement, except as otherwise expressly provided herein, each Shareholder
agrees that such Shareholder will not (i) tender into any tender or exchange
offer or otherwise sell, offer for sale, transfer, pledge, assign, hypothecate
or otherwise dispose of, or encumber with any security interest, lien, claim,
pledge, option, right of first refusal, agreement, charge or other encumbrance
or restriction or limitation on such Shareholder's right to vote or dispose of,
whether directly or indirectly, any of the Subject Shares, (ii) acquire any
shares of Company Common Stock or other securities of the Company (otherwise
than in connection with a transaction of the type described in Section 2(b)),
(iii) deposit the Subject Shares into a voting trust, enter into a voting
agreement or arrangement with respect to the Subject Shares or grant any proxy
or power of attorney with respect to the Subject Shares, (iv) enter into any
contract, commitment, arrangement, understanding or relationship (including any
profit sharing arrangement) with respect to the direct or indirect acquisition
or sale, transfer, pledge, assignment, hypothecation, disposition or encumbrance
with any security interest, lien, claim, pledge, option, right of first refusal,
agreement, charge or other encumbrance or restriction or limitation, or other
disposition of any interest in or the voting of any Subject Shares or any other
securities of the Company, (v) exercise any rights (including, without
limitation, under Sections 302A.471 and 302A.473 of the MBCA) to demand
appraisal of any Subject Shares which may arise with respect to the Merger, or
(vi) take any other action that would in any way restrict, limit or interfere
with the performance of such Shareholder's obligations hereunder or the
transactions contemplated hereby or which would otherwise diminish the benefits
of this Agreement to Parent.
(b) In the event (i) of any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of capital
stock or other securities of the Company on, of or affecting the Subject Shares
or the like or any other action that would have the effect of changing a
Shareholder's ownership of the Company's capital stock or other securities or
(ii) a Shareholder becomes the beneficial owner of any additional shares of
Company Common Stock or other securities of the Company, then, except as
provided otherwise in this Section 2(b), the terms of this Agreement will apply
to the shares of capital stock held by such Shareholder immediately following
the effectiveness of the events described in clause (i) or such Shareholder
becoming the beneficial owner thereof, as described in clause (ii), as though
they were Subject Shares hereunder.
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(c) Each Shareholder hereby agrees, while this Agreement is in
effect, to promptly notify Parent of the number of any new Shares acquired by
such Shareholder, if any, after the date hereof.
(d) Each Shareholder agrees with and covenants to Parent that such
Shareholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
the Subject Shares, unless such transfer is made in compliance with this
Agreement.
Section 3. Other Covenants and Agreements. (a) Each party shall execute
and deliver such additional instruments and other documents and shall take such
further actions as may be reasonably necessary or appropriate to effectuate,
carry out and comply with all of their respective obligations under this
Agreement. Without limiting the generality of the foregoing, neither party shall
enter into any agreement or arrangement (or alter, amend or terminate any
existing agreement or arrangement) or take any other action (or fail to take any
other action) if such action (or failure) would materially impair the ability of
any party to effectuate, carry out or comply with all the terms of this
Agreement. Parent agrees to cooperate with each Shareholder in connection with
any filings required to be made by a Shareholder in connection with the Merger
and the transactions contemplated thereby. McQuinn agrees and covenants that he
will not, without the prior written consent of Parent, directly or indirectly,
take any action, or authorize or direct any action to be taken, that would cause
the Trust to be amended, modified, dissolved, revoked or terminated in any
manner that would be adverse to Parent.
(b) In the event a subscription election is made available to the
shareholders of the Company under Section 3.02(c) of the Merger Agreement, the
Shareholders jointly and severally agree and covenant to exercise such
subscription election to subscribe to the maximum number of Parent Common Shares
for which such Shareholders are eligible to subscribe pursuant to such Section
3.02(c); provided that, such Shareholders shall only be obligated to subscribe
for such number of Parent Common Shares that, when added to the aggregate number
of Parent Common Shares received by the Shareholders in the Merger, would equal
7,000,000 Parent Common Shares in the aggregate.
Section 4. Representations and Warranties of Shareholder. Each
Shareholder represents and warrants to Parent as follows:
(a) The Shares constitute all of the securities (as defined in
Section 3(a)(10) of the Exchange Act), of the Company beneficially owned,
directly or indirectly, by such Shareholder.
(b) Except for the Shares, each Shareholder does not, directly or
indirectly, beneficially own or have any option, warrant or other right to
acquire any securities of the Company that are or may by their terms become
entitled to vote or any securities that are convertible or exchangeable into or
exercisable for any securities of the Company that are or may by their terms
become entitled to vote, nor is such Shareholder subject to any contract,
commitment, arrangement, understanding, restriction or relationship (whether or
not legally enforceable), other than this Agreement, that provides for a
Shareholder to vote or acquire any securities of the Company. Such Shareholder
holds exclusive power to vote and dispose of the Shares free and clear of any
security interests, liens, claims, pledges, options, rights of first refusal,
agreement, charge, encumbrance or any other restriction or limitation on their
right to vote or dispose of the Shares, and neither Shareholder has granted a
proxy to any other Person to vote the Shares, subject to the limitations set
forth in this Agreement.
(c) Each Shareholder has all necessary power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
Shareholder and, assuming due authorization, execution and delivery of this
Agreement by Parent, is a valid and binding obligation of each Shareholder
enforceable against each of them in accordance with its terms.
(d) None of the execution and delivery of this Agreement by such
Shareholder, the consummation by such Shareholder of the transactions
contemplated hereby or compliance by such Shareholder with any of the provisions
hereof shall (i) result in violation or breach of, or constitute (with or
without notice or lapse of time or
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both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, loan agreement, bond mortgage, indenture,
license, contract, commitment, lease, permit, franchise, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
such Shareholder is a party or by which such Shareholder or any of his or its
properties or assets may be bound, or (ii) violate any order, writ, injunction,
decree, judgment, law, statute, rule or regulation applicable to such
Shareholder or any of his or its properties or assets, excluding from the
foregoing such violations, breaches or defaults which would not, individually or
in the aggregate, have a material adverse effect on such Shareholder or which
would materially impair the ability of such Shareholder to consummate the
transactions contemplated hereby.
(e) The execution and delivery of this Agreement by such
Shareholder does not, and the performance of this Agreement by such Shareholder
shall not, require any consent, approval, authorization or permit of, or filing
with or notification to, any court or arbitrator or any governmental body,
agency or official except for applicable requirements, if any, of the Exchange
Act, and except where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay the performance by such Shareholder of his or its obligations
under this Agreement.
(f) Each Shareholder understands and acknowledges that Parent is
entering into the Merger Agreement in reliance upon such Shareholder's execution
and delivery of this Agreement.
(g) There are no Takeover Laws that are applicable to this
Agreement or the transactions contemplated hereby.
Section 5. Effectiveness. It is a condition precedent to the
effectiveness of this Agreement that the Merger Agreement shall have been duly
executed and delivered by the parties thereto.
Section 6. Termination. The termination of this Agreement will occur
upon the first to occur of (a) the Effective Time or (b) termination of the
Merger Agreement. In the event (i) a Termination Fee is payable by the Company
pursuant to Section 8.02(b)(i) or 8.02(b)(ii) of the Merger Agreement and (ii)
within 12 months of the termination of the Merger Agreement, the Company
consummates an Acquisition Proposal or Superior Proposal, the Shareholders shall
pay to Parent in cash simultaneously with the consummation of such Acquisition
Proposal or Superior Proposal an amount equal to the product of (x) the excess
of the per share consideration paid in connection with such Acquisition Proposal
or Superior Proposal over $25.80 multiplied by (y) the number of Subject Shares.
The foregoing calculation shall be adjusted appropriately to reflect any stock
split, stock dividend, recapitalization, reclassification, combination or
exchange of shares of capital stock or other securities of the Company after the
date hereof.
Section 7. Miscellaneous.
(a) Notices, Etc. All notices, requests, demands or other communications
required by or otherwise with respect to this Agreement shall be in
writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered
by telecopy and confirmed by return telecopy, or three days after being
mailed by courier service that guarantees overnight delivery, in each
case to the applicable addresses set forth below:
If to Parent:
AGCO Corporation
4205 River Green Parkway
Duluth, Georgia 30096-2568
Attention: Stephen D. Lupton, Senior Vice President and
General Counsel
Fax: (770) 813-6599
Phone: (770) 813-6094
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with a copy to:
Troutman Sanders LLP
Bank of America Plaza
Suite 5200
600 Peachtree St., N.E.
Atlanta, Georgia 30308-2216
Attention: Robert W. Grout, Esq.
Fax: (404) 962-6789
Phone: (404) 885-3152
If to either Shareholder:
Ag-Chem Equipment Co., Inc.
5720 Smetana Drive
Minnetonka, Minnesota 55343-9688
Attention: Alvin E. McQuinn
Fax: (952) 933-8799
Phone: (952) 933-9006
with a copy to:
Larkin, Hoffman, Daly & Lindgren, Ltd.
1500 Wells Fargo Plaza
7900 Xerxes Avenue South
Bloomington, Minnesota 55431-1194
Attention: Frank I. Harvey
Fax: (952) 896-3333
Phone: (952) 896-3291
or to such other address as such party shall have designated by notice so given
to each other party.
(b) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by Parent and Shareholder.
(c) Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the parties and their
respective heirs, successors and assigns, including without limitation any party
succeeding to the ownership of (or power to vote) the Shares. The foregoing
sentence shall be deemed to be an amendment to the Trust Agreement.
(d) Entire Agreement. This Agreement and the Merger Agreement
embodies the entire agreement and understanding between the parties relating to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. There are no representations, warranties or
covenants by the parties hereto relating to such subject matter other than those
expressly set forth in this Agreement and the Merger Agreement.
(e) Severability. If any term of this Agreement or the application
thereof to any party or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such term to
the other party or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that in
such event the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.
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(f) Specific Performance. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
(g) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
(h) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(i) Third Party Beneficiaries. This Agreement is not intended to
be for the benefit of and shall not be enforceable by any person or entity who
or which is not a party hereto, except the parties hereto acknowledge that
Company is a third party beneficiary with respect to Section 1(b) of this
Agreement.
(j) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts located in the State of
Minnesota in any action arising in connection with this Agreement, and agrees
that any such action shall be brought only in such court (and waives any
objection based on forum non conveniens or any other objection to venue
therein); provided, however, that such consent to jurisdiction is solely for the
purpose referred to in this paragraph (j) and shall not be deemed to be a
general submission to the jurisdiction of said courts or in the State of
Minnesota other than for such purposes; provided, further, that if any action
arises in connection with the Merger Agreement in a state or federal court other
than a state or federal court located in the State of Minnesota, each party
hereto agrees to submit to the jurisdiction of such other court with respect to
any action arising in connection with this Agreement. Each party hereto hereby
waives any right to a trial by jury in connection with any such action.
(k) Governing Law. This Agreement and all disputes hereunder shall
be governed by and construed and enforced in accordance with the laws of the
State of Minnesota to the fullest extent possible.
(l) Name, Captions, Gender. The name assigned this Agreement and
the section captions used herein are for convenience of reference only and shall
not affect the interpretation or construction hereof. Whenever the context may
require, any pronoun used herein shall include the corresponding masculine,
feminine or neuter forms.
(m) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
(n) Expenses. Each party shall bear its or his own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby.
(o) Applicability. Notwithstanding anything herein to the
contrary, the provisions of Section 1 and 2 hereof shall be deemed to apply only
to such number of Subject Shares representing 19.9% of the Company's outstanding
voting capital stock.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
/s/ Alvin E. McQuinn
--------------------------------------------
Alvin E. McQuinn
TRUST
By: /s/ Alvin E. McQuinn
----------------------------------------
Name: Alvin E. McQuinn
Title: Co-Trustee
By: /s/ Robert L. Hoffman
----------------------------------------
Name: Robert L. Hoffman
Title: Co-Trustee
PARENT
By: /s/ Robert J. Ratliff
----------------------------------------
Name: Robert J. Ratliff
Title: Chairman of the Board
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APPENDIX C
MINNESOTA BUSINESS CORPORATION ACT SS. 302A.473
SUBDIVISION 1. DEFINITIONS. (a) For purposes of this section, the terms defined
in this subdivision have the meanings given them.
(b) "Corporation" means the issuer of the shares held by a dissenter before the
corporate action referred to in section 302A.471, subdivision 1 or the successor
by merger of that issuer.
(c) "Fair value of the shares" means the value of the shares of a corporation
immediately before the effective date of the corporate action referred to in
section 302A.471, subdivision 1.
(d) "Interest" means interest commencing five days after the effective date of
the corporate action referred to in section 302A.471, subdivision 1, up to and
including the date of payment, calculated at the rate provided in section 549.09
for interest on verdicts and judgments.
SUBD. 2. NOTICE OF ACTION. If a corporation calls a shareholder meeting at which
any action described in section 302A.471, subdivision 1 is to be voted upon, the
notice of the meeting shall inform each shareholder of the right to dissent and
shall include a copy of section 302A.471 and this section and a brief
description of the procedure to be followed under these sections.
SUBD. 3. NOTICE OF DISSENT. If the proposed action must be approved by the
shareholders, a shareholder who is entitled to dissent under section 302A.471
and who wishes to exercise dissenters' rights must file with the corporation
before the vote on the proposed action a written notice of intent to demand the
fair value of the shares owned by the shareholder and must not vote the shares
in favor of the proposed action.
SUBD. 4. NOTICE OF PROCEDURE; DEPOSIT OF SHARES. (a) After the proposed action
has been approved by the board and, if necessary, the shareholders, the
corporation shall send to all shareholders who have complied with subdivision 3
and to all shareholders entitled to dissent if no shareholder vote was required,
a notice that contains:
(1) The address to which a demand for payment and certificates of certificated
shares must be sent in order to obtain payment and the date by which they must
be received;
(2) Any restrictions on transfer of uncertificated shares that will apply after
the demand for payment is received;
(3) A form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired the shares
or an interest in them and to demand payment; and
(4) A copy of section 302A.471 and this section and a brief description of the
procedures to be followed under these sections.
(b) In order to receive the fair value of the shares, a dissenting shareholder
must demand payment and deposit certificated shares or comply with any
restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all other
rights of a shareholder until the proposed action takes effect.
SUBD. 5. PAYMENT; RETURN OF SHARES. (a) After the corporate action takes effect,
or after the corporation receives a valid demand for payment, whichever is
later, the corporation shall remit to each dissenting shareholder who has
complied with subdivisions 3 and 4 the amount the corporation estimates to be
the fair value of the shares, plus interest, accompanied by:
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(1) The corporation's closing balance sheet and statement of income for a fiscal
year ending not more than 16 months before the effective date of the corporate
action, together with the latest available interim financial statements;
(2) An estimate by the corporation of the fair value of the shares and a brief
description of the method used to reach the estimate; and
(3) A copy of section 302A.471 and this section, and a brief description of the
procedure to be followed in demanding supplemental payment.
(b) The corporation may withhold the remittance described in paragraph (a) from
a person who was not a shareholder on the date the action dissented from was
first announced to the public or who is dissenting on behalf of a person who was
not a beneficial owner on that date. If the dissenter has complied with
subdivisions 3 and 4, the corporation shall forward to the dissenter the
materials described in paragraph (a), a statement of the reason for withholding
the remittance, and an offer to pay to the dissenter the amount listed in the
materials if the dissenter agrees to accept that amount in full satisfaction.
The dissenter may decline the offer and demand payment under subdivision 6.
Failure to do so entitles the dissenter only to the amount offered. If the
dissenter makes demand, subdivisions 7 and 8 apply.
(c) If the corporation fails to remit payment within 60 days of the deposit of
certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the corporation may again give notice under subdivision 4
and require deposit or restrict transfer at a later time.
SUBD. 6. SUPPLEMENTAL PAYMENT; DEMAND. If a dissenter believes that the amount
remitted under subdivision 5 is less than the fair value of the shares plus
interest, the dissenter may give written notice to the corporation of the
dissenter's own estimate of the fair value of the shares, plus interest, within
30 days after the corporation mails the remittance under subdivision 5, and
demand payment of the difference. Otherwise, a dissenter is entitled only to the
amount remitted by the corporation.
SUBD. 7. PETITION; DETERMINATION. If the corporation receives a demand under
subdivision 6, it shall, within 60 days after receiving the demand, either pay
to the dissenter the amount demanded or agreed to by the dissenter after
discussion with the corporation or file in court a petition requesting that the
court determine the fair value of the shares, plus interest. The petition shall
be filed in the county in which the registered office of the corporation is
located, except that a surviving foreign corporation that receives a demand
relating to the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered office of the
constituent corporation was located. The petition shall name as parties all
dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under the
rules of civil procedure. Nonresidents of this state may be served by registered
or certified mail or by publication as provided by law. Except as otherwise
provided, the rules of civil procedure apply to this proceeding. The
jurisdiction of the court is plenary and exclusive. The court may appoint
appraisers, with powers and authorities the court deems proper, to receive
evidence on and recommend the amount of the fair value of the shares. The court
shall determine whether the shareholder or shareholders in question have fully
complied with the requirements of this section, and shall determine the fair
value of the shares, taking into account any and all factors the court finds
relevant, computed by any method or combination of methods that the court, in
its discretion, sees fit to use, whether or not used by the corporation or by a
dissenter. The fair value of the shares as determined by the court is binding on
all shareholders, wherever located. A dissenter is entitled to judgment in cash
for the amount by which the fair value of the shares as determined by the court,
plus interest, exceeds the amount, if any, remitted under subdivision 5, but
shall not be liable to the corporation for the amount, if any, by which the
amount, if any, remitted to the dissenter under subdivision 5 exceeds the fair
value of the shares as determined by the court, plus interest.
SUBD. 8. COSTS; FEES; EXPENSES. (a) The court shall determine the costs and
expenses of a proceeding under subdivision 7, including the reasonable expenses
and compensation of any appraisers appointed by the court, and
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shall assess those costs and expenses against the corporation, except that the
court may assess part or all of those costs and expenses against a dissenter
whose action in demanding payment under subdivision 6 is found to be arbitrary,
vexatious, or not in good faith.
(b) If the court finds that the corporation has failed to comply substantially
with this section, the court may assess all fees and expenses of any experts or
attorneys as the court deems equitable. These fees and expenses may also be
assessed against a person who has acted arbitrarily, vexatiously, or not in good
faith in bringing the proceeding, and may be awarded to a party injured by those
actions.
(c) The court may award, in its discretion, fees and expenses to an attorney for
the dissenters out of the amount awarded to the dissenters, if any.
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MINNESOTA BUSINESS CORPORATION ACT SS. 302A.471
SUBDIVISION 1. ACTIONS CREATING RIGHTS. A shareholder of a corporation may
dissent from, and obtain payment for the fair value of the shareholder's shares
in the event of, any of the following corporate actions:
(a) An amendment of the articles that materially and adversely affects the
rights or preferences of the shares of the dissenting shareholder in that it:
(1) alters or abolishes a preferential right of the shares;
(2) creates, alters, or abolishes a right in respect of the redemption of the
shares, including a provision respecting a sinking fund for the redemption or
repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of the shares to
acquire shares, securities other than shares, or rights to purchase shares or
securities other than shares;
(4) excludes or limits the right of a shareholder to vote on a matter, or to
cumulate votes, except as the right may be excluded or limited through the
authorization or issuance of securities of an existing or new class or series
with similar or different voting rights; except that an amendment to the
articles of an issuing public corporation that provides that section 302A.671
does not apply to a control share acquisition does not give rise to the right to
obtain payment under this section;
(b) A sale, lease, transfer, or other disposition of all or substantially all of
the property and assets of the corporation, but not including a transaction
permitted without shareholder approval in section 302A.661, subdivision 1, or a
disposition in dissolution described in section 302A.725, subdivision 2, or a
disposition pursuant to an order of a court, or a disposition for cash on terms
requiring that all or substantially all of the net proceeds of disposition be
distributed to the shareholders in accordance with their respective interests
within one year after the date of disposition;
(c) A plan of merger, whether under this chapter or under chapter 322B, to which
the corporation is a constituent organization, except as provided in subdivision
3;
(d) A plan of exchange, whether under this chapter or under chapter 322B, to
which the corporation is a party as the corporation whose shares will be
acquired by the acquiring corporation, except as provided in subdivision 3; or
(e) Any other corporate action taken pursuant to a shareholder vote with respect
to which the articles, the bylaws, or a resolution approved by the board directs
that dissenting shareholders may obtain payment for their shares.
SUBD. 2. BENEFICIAL OWNERS. (a) A shareholder shall not assert dissenters'
rights as to less than all of the shares registered in the name of the
shareholder, unless the shareholder dissents with respect to all the shares that
are beneficially owned by another person but registered in the name of the
shareholder and discloses the name and address of each beneficial owner on whose
behalf the shareholder dissents. In that event, the rights of the dissenter
shall be determined as if the shares as to which the shareholder has dissented
and the other shares were registered in the names of different shareholders.
(b) A beneficial owner of shares who is not the shareholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting shareholder under the terms of this
section and section 302A.473, if the beneficial owner submits to the corporation
at the time of or before the assertion of the rights a written consent of the
shareholder.
SUBD. 3. RIGHTS NOT TO APPLY. (a) Unless the articles, the bylaws, or a
resolution approved by the board otherwise provide, the right to obtain payment
under this section does not apply to a shareholder of (1) the surviving
corporation in a merger with respect to shares of the shareholder that are not
entitled to be voted on the merger and
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are not canceled or exchanged in the merger or (2) the corporation whose shares
will be acquired by the acquiring corporation in a plan of exchange with respect
to shares of the shareholder that are not entitled to be voted on the plan of
exchange and are not exchanged in the plan of exchange.
(b) If a date is fixed according to section 302A.445, subdivision 1, for the
determination of shareholders entitled to receive notice of and to vote on an
action described in subdivision 1, only shareholders as of the date fixed, and
beneficial owners as of the date fixed who hold through shareholders, as
provided in subdivision 2, may exercise dissenters' rights.
SUBD. 4. OTHER RIGHTS. The shareholders of a corporation who have a right under
this section to obtain payment for their shares do not have a right at law or in
equity to have a corporate action described in subdivision 1 set aside or
rescinded, except when the corporate action is fraudulent with regard to the
complaining shareholder or the corporation.
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APPENDIX D
GOLDSMITH, AGIO, HELMS SECURITIES, INC.
Member: National Association Securities Dealers
U.S. BANK PLACE o THE FORTY-SIXTH FLOOR
TEL 612 339 0500 601 Second Avenue South, Minneapolis, Minnesota 55402
FAX 612 339 0507
18 November 2000
PERSONAL AND CONFIDENTIAL
Members of the Special Committee of the Board of Directors and the
Board of Directors
Ag-Chem Equipment Co., Inc.
5720 Smetana Drive
Minnetonka, Minnesota 55343
Re: Fairness Opinion
Members of the Special Committee of the Board of Directors and the
Board of Directors:
In connection with the proposed merger (the "Merger") of Ag-Chem
Equipment Co., Inc. ("Ag-Chem" or the "Company") with AGRI Acquisition
Corp., a wholly-owned subsidiary ("Sub") of AGCO Corporation ("AGCO"
or "Parent"), pursuant to the Agreement and Plan of Merger to be dated
November 20, 2000 (the "Agreement"), by and among AGCO, Sub, and
Ag-Chem, you have requested our opinion as to the fairness, from a
financial point of view, to the Company's shareholders of the
consideration to be received by such shareholders for their common
stock in the proposed Merger pursuant to the Agreement. Capitalized
terms used herein, unless otherwise defined herein, will have the
meanings ascribed to them in the Agreement.
Subject to the provisions of the Agreement, at the effective time of
the Merger (the "Effective Time"), each share of Ag-Chem common stock
("Company Common Stock") issued and outstanding immediately prior to
the Effective Time (other than any dissenting shares) shall become and
be converted, by virtue of the Merger, into the right to receive, upon
surrender of the certificate formerly representing such Company Common
Stock, as consideration in the Merger, $25.80 composed of the Cash
Portion and the Stock Portion as defined and described in the Merger
Agreement. The Cash Portion plus the Stock Portion are hereinafter
referred to as the "Merger Consideration."
As a customary part of its investment banking business, Goldsmith,
Agio, Helms Securities, Inc. is engaged in the valuation of businesses
and securities in connection with mergers and acquisitions, private
placements, and valuations for corporate and other purposes. In return
for our services in connection with providing this opinion, the
Company will pay us a fee, which fee is not contingent upon the
consummation of the Merger, and indemnify us against certain
liabilities. We also are acting as a financial advisor to the Company
in connection with the Merger for which we will receive certain other
fees, a significant portion of which is contingent upon the
consummation of the Merger.
In arriving at our opinion, we have undertaken such reviews, analyses
and inquiries as we
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deemed necessary and appropriate under the circumstances. Among other
things, we have (i) reviewed the latest draft of the Agreement; (ii)
analyzed financial and other information that is publicly available
relating to AGCO; (iii) analyzed financial and other information that
is publicly available relating to the Company; (iv) analyzed certain
internal financial and operating data of the Company that has been
made available to us by the Company; (v) visited certain facilities
of the Company and discussed with management of the Company the
financial condition, operating results, business outlook and
prospects of the Company; (vi) discussed with management of AGCO the
financial condition, operating results, business outlook and
prospects of AGCO; (vii) analyzed the valuations of publicly traded
companies that we deemed comparable to the Company; (viii) performed
a discounted cash flow analysis of the Company based on financial
projections that the Company's management provided to us; and (ix)
analyzed the financial terms of certain transactions we deemed
similar to the Merger that recently have been effected.
We have relied upon and assume the accuracy, completeness, and
fairness of the financial statements and other information furnished
by, or publicly available relating to, the Company or AGCO, or
otherwise made available to us, and relied upon and assumed that the
representations and warranties of the Company and AGCO contained in
the Agreement are true and correct. We were not engaged to, and did
not attempt to or assume responsibility to, verify independently such
information. We have further relied upon assurances by the Company
that the information provided to us has a reasonable basis, and with
respect to projections and other business outlook information,
reflects the best currently available estimates, and that the Company
is not aware of any information or fact that would make the
information provided to us incomplete or misleading. We also assumed
that the Company and AGCO each will perform all of the covenants and
agreements to be performed by it under the Agreement and that the
conditions to the Merger as set forth in the Agreement would be
satisfied and that the Merger would be consummated on a timely basis
in the manner contemplated by the Agreement. In arriving at our
opinion, we have not performed any appraisals or valuations of
specific assets or liabilities of the Company or AGCO and express no
opinion regarding the liquidation value of the Company or AGCO or any
of their respective assets. Our opinion is based upon the information
available to us and the facts and circumstances as they exist and are
subject to evaluation on the date hereof; events occurring after the
date hereof could materially affect the assumptions used in preparing
this opinion. However, we do not have any obligation to update,
revise, or reaffirm this opinion.
We have relied, with respect to legal and accounting matters related
to the Agreement, on the advice of the Company's and AGCO's legal and
accounting advisors. We have made no independent investigation of any
legal or accounting matters that may affect the Company or AGCO and
have assumed the correctness of the legal and accounting advice
provided to the Company and AGCO, their respective Boards of
Directors, and the Special Committee of the Company's Board of
Directors.
Our opinion is rendered for the benefit and use of the Board of
Directors of the Company and the Special Committee in connection with
the Board's and the Special Committee's consideration of the Merger
and does not constitute a recommendation to any holder of Company
Common Stock as to how such shareholder should vote with respect to
the Merger. We do not opine on, nor does our opinion consider, the tax
consequences of the Merger, including tax consequences to any holder
of Company Common Stock. We have not been asked to, nor do we, express
an opinion as to the relative merits of the Merger as compared to any
alternative business strategies that might exist for the Company, the
effect of any other transaction in which the Company might engage, or
the form of the Agreement or the terms contained therein. Furthermore,
we express no opinion as to the prices at which Ag-Chem or AGCO stock
may trade following the date of this opinion or following consummation
of the Merger. Our opinion is rendered as of the date hereof, and we
do not express any opinion as
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to whether, on or about the Effective Time, the Merger Consideration
will be fair, from a financial point of view, to the Company's
shareholders; such opinion can only be rendered as of such time. This
opinion may not be published or otherwise used or referred to publicly
without our written consent; provided, however, that this opinion may
be included in its entirety in any filing with the Securities and
Exchange Commission with respect to the Merger.
Based upon and subject to the foregoing, and based upon such other
facts as we consider relevant, it is our opinion that, as of the date
hereof, the Merger Consideration to be received by the Company's
shareholders for their common stock in the proposed Merger pursuant to
the Agreement is fair to such shareholders from a financial point of
view.
Sincerely,
/s/ Goldsmith, Agio, Helms Securities, Inc.
Goldsmith, Agio, Helms Securities, Inc.
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APPENDIX E
FORM OF AFFILIATE LETTER
Parent Corporation
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of Ag-Chem Equipment Co., Inc., a Minnesota
corporation (the "Company"), as the term "affiliate" is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"). Pursuant to the terms of the
Agreement and Plan of Merger dated as of November 20, 2000 (the "Agreement"), by
and between AGCO Corporation, a Delaware corporation ("Parent"), Agri
Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Parent
("Sub") and the Company, the Company will merge with Sub (the "Merger").
As a result of the Merger, I may receive common shares,
without par value, of Parent (the "Parent Common Shares") in exchange for shares
owned by me of common stock, par value $0.01 per share, of the Company.
I represent, warrant and covenant to Parent that in the event
I receive any Parent Common Shares as a result of the Merger:
A. I shall not make any sale, transfer or other
disposition of Parent Common Shares in violation of the Act or the Rules and
Regulations.
B. I have carefully read this letter and the Agreement
and discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of the Parent
Common Shares, to the extent I felt necessary, with my counsel or counsel for
Parent.
C. I have been advised that the issuance of Parent
Common Shares to me pursuant to the Merger has been registered with the
Commission under the Act on a Registration Statement on Form S-4. However, I
have also been advised that, since at the time the Merger was submitted for a
vote of the shareholders of the Company, I may be deemed to have been an
affiliate of the Company and the distribution by me of the Parent Common Shares
has not been registered under the Act, I may not sell, transfer or otherwise
dispose of the Parent Common Shares issued to me in the Merger unless (i) such
sale, transfer or other disposition has been registered under the Act, (ii) such
sale, transfer or other disposition is made in conformity with Rule 145
promulgated by the Commission under the Act or (iii) in the opinion of counsel
reasonably acceptable to Parent, or pursuant to a "no action" letter obtained by
the undersigned from the staff of the Commission, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
D. I understand that, except as may be provided in any
registration rights agreement entered into by Parent and the undersigned, Parent
is under no obligation to register the sale, transfer or other disposition of
the Parent Common Shares by me or on my behalf under the Act or to take any
other action necessary in order to make compliance with an exemption from such
registration available.
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Execution of this letter should not be considered an admission
on my part that I am an "affiliate" of the Company as described in the first
paragraph of this letter or as a waiver of any rights I may have to object to
any claim that I am such an affiliate on or after the date of this letter.
Very truly yours,
----------------------------------
Agreed to and Accepted this
____ day of _________, 2000
AGCO CORPORATION
By:
-------------------------------
Name:
Title:
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was a director, officer, employee or agent of such corporation, or is or
was serving at the request of such corporation as a director, officer, employee
or agent of another corporation or enterprise. A corporation may indemnify such
person against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation to procure a judgment in its favor
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where a present or former officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify such person against the expenses (including
attorneys' fees) which such person actually and reasonably incurred in
connection therewith. The indemnification provided is not deemed to be exclusive
of any other rights to which an officer or director may be entitled under any
corporation's by-laws, agreement, vote or otherwise.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
A list of the exhibits included as part of this registration
statement is set forth on the Exhibit Index immediately preceding such exhibits
and is incorporated herein by reference.
(b) Financial Statement Schedules:
All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have been
omitted because they are not required, amounts which would otherwise be required
to be shown with respect to any item are not material, are inapplicable or the
required information has already been provided elsewhere in the registration
statement.
(c) Opinions of Financial Advisors:
Opinion of Goldsmith, Agio, Helms Securities, Inc., advisors
to Ag-Chem (see Appendix D to proxy statement/ prospectus).
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) That prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
II-1
<PAGE> 135
(2) That every prospectus (i) that is filed pursuant to
paragraph (1) immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(4) To respond to requests for information that is
incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or
13 of this Form, within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding to
the request.
(5) To supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired or involved
therein, that was not the subject of and included in the registration statement
when it became effective.
(6) For purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(7) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement; (i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of
1933; (ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement. (iii) To include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement. (2) That, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
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<PAGE> 136
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Atlanta, Georgia on the
18th day of December.
AGCO Corporation
By: /s/ John M. Shumejda
---------------------------------
John M. Shumejda
President and Chief Executive Officer
Each person whose signature appears below constitutes and appoints
Robert J. Ratliff and John M. Shumejda, and each or either of them, his true and
lawful attorney-in-fact, with full power of substitution and resubstitution, for
him and in his stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this Registration Statement, to sign
any Registration Statement pursuant to Rule 462(b) under the Securities Act of
1933, and to cause the same to be filed, with all exhibits thereto and all other
documents in connection therewith, with the Securities and Exchange Commission,
hereby granting to said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing whatsoever
requisite or desirable to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and the foregoing power of attorney have been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert J. Ratliff Chairman of the Board December 18, 2000
----------------------------------------
Robert J. Ratliff
/s/ John M. Shumejda President, Chief Executive Officer and Director December 18, 2000
----------------------------------------
John M. Shumejda
/s/ Donald R. Millard Senior Vice President and Chief Financial Officer December 18, 2000
----------------------------------------
Donald R. Millard
/s/ W. Wayne Booker Director December 18, 2000
----------------------------------------
W. Wayne Booker
/s/ Henry J. Claycamp Director December 18, 2000
----------------------------------------
Henry J. Claycamp
/s/ Wolfgang Deml Director December 18, 2000
----------------------------------------
Wolfgang Deml
/s/ Gerald B. Johanneson Director December 18, 2000
----------------------------------------
Gerald B. Johanneson
</TABLE>
<PAGE> 137
<TABLE>
<S> <C> <C>
/s/ Anthony D. Loehnis Director December 18, 2000
----------------------------------------
Anthony D. Loehnis
/s/ David E. Momot Director December 18, 2000
----------------------------------------
David E. Momot
/s/ Curtis E. Moll Director December 18, 2000
----------------------------------------
Curtis E. Moll
/s/ Wolfgang Sauer Director December 18, 2000
----------------------------------------
Wolfgang Sauer
/s/Henk Visser Director December 18, 2000
----------------------------------------
Henk Visser
</TABLE>
<PAGE> 138
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
<S> <S> <C>
2.1 Agreement and Plan of merger dated as of November 20, 2000. Included as Appendix A
to Proxy Statement/
Prospectus.
3.1 Certificate of Incorporation of AGCO. **
3.2 Bylaws of AGCO. **
4.1 Rights Agreement, as amended between AGCO and SunTrust Bank. ****
4.2 Form of Affiliate Letter. Included as Appendix E
to Registration
statement/proxy statement
5.1 Form of opinion of Troutman Sanders LLP regarding legality of the shares of
common stock being offered.
8.1* Form of opinion of Troutman Sanders LLP regarding certain tax matters.
10.1 Voting Agreement dated as of November 20, 2000. Included as Appendix B
to Registration
statement/proxy
statement.
23.1 Consent of Troutman Sanders LLP. Included in Exhibit 5.1
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of KPMG LLP.
24 Power of Attorney. Included in the
signature pages to this
Registration Statement
99.1* Form of Proxy Card.
</TABLE>
-------
* To be filed by amendment.
** Incorporated by reference to the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996.
*** Incorporated by reference to the Annual Report on Form 10-K for the
year ended December 31, 1997.
**** Incorporated by reference to the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994 and the Form 8-A/A dated August 8, 1999.
