THE MERGER AND CONTRIBUTION AGREEMENT
The following is a summary of the material terms of the merger and contribution agreement. This summary does not purport to describe all the terms of the merger and contribution agreement and is qualified in its entirety by reference to
the complete text of the merger and contribution agreement, which is incorporated by reference and attached to this proxy statement/prospectus as Annex A. You are urged to read carefully the merger and contribution agreement in its entirety because
this summary may not contain all the information that is important to you.
The Merger
Pursuant to the
merger and contribution agreement, GNS Acquisition Corp., a direct wholly owned subsidiary of Mosaic, will merge with and into IMC, with IMC as the surviving corporation. As a result of the merger, IMC will become a wholly owned subsidiary of
Mosaic.
Contribution of Entities Owning the Cargill Fertilizer Businesses
Pursuant to the merger and contribution agreement, Cargill, CFI, and certain of their subsidiaries, will contribute to Mosaic, immediately prior to the
merger, equity interests in entities (referred to as the contributed subsidiaries) owning all or substantially all of the assets, liabilities and obligations of the Cargill Fertilizer Businesses (excluding any tradenames and trademarks that
incorporate the word “Cargill”).
Pre-Contribution Restructuring
Currently, the Cargill Fertilizer Businesses are owned by a number of direct and indirect wholly owned subsidiaries of Cargill. Prior to the closing of the transactions, the terms of the merger and contribution agreement require Cargill to
restructure the Cargill Fertilizer Businesses as follows:
|
|
•
|
Cargill and its subsidiaries will convey, assign and transfer to the contributed subsidiaries all of the right, title and interest of Cargill and its subsidiaries in and to
|
|
|
•
|
all or substantially all of the assets, properties, rights and interests (excluding any tradenames and trademarks that incorporate the word “Cargill”) primarily owned or
used or held for use primarily in the Cargill Fertilizer Businesses (referred to as the Cargill fertilizer assets), and
|
|
|
•
|
subject to specified exceptions, all liabilities or obligations primarily related to the Cargill fertilizer assets or primarily related to any business or assets formerly owned or
operated by or used primarily in the Cargill Fertilizer Businesses or any contributed subsidiary, whether or not related to fertilizer (referred to as the Cargill fertilizer liabilities); and
|
|
|
•
|
Cargill and its subsidiaries will not convey, assign or transfer to the contributed subsidiaries or Mosaic
|
|
|
•
|
any assets, properties, rights or interests owned, used or held for use in the Cargill Retail Fertilizer Businesses (as defined in the merger and contribution agreement) or any of
Cargill’s or any affiliate of Cargill’s other business units that are not part of the Cargill Fertilizer Businesses, or
|
|
|
•
|
any of the liabilities or obligations of the Cargill Retail Fertilizer Businesses or any of the other business units described in the previous bullet point.
|
As part of the pre-contribution restructuring,
Cargill may add up to $100 million of externally borrowed restructuring indebtedness and up to $150 million of Cargill-funded restructuring indebtedness to one or more contributed subsidiaries, so long as:
|
|
•
|
Cargill adds an equal amount of cash or intercompany loans from a contributed subsidiary so that the net change in the consolidated assets of all of the contributed subsidiaries is
zero; and
|
|
|
•
|
such added restructuring indebtedness is not likely to materially and adversely affect Mosaic’s expected credit ratings as of the effective time of the merger and contribution.
|
Consideration to be Received Pursuant to the Transactions; Treatment of Stock Options
The merger and contribution agreement provides that:
|
|
•
|
each share of IMC common stock issued and outstanding immediately prior to the completion of the merger, but excluding shares of IMC common stock owned by IMC, GNS
Acquisition Corp. or any of
|
66
|
|
their respective subsidiaries, will be converted at the time of the merger into the right to receive one share of Mosaic common stock. After the merger is
completed, IMC common stockholders will own, on a pro forma basis, 33.5% of the outstanding shares of Mosaic common stock;
|
|
|
•
|
each share of IMC 7.50% preferred stock issued and outstanding immediately prior to the completion of the merger will be converted at the time of the merger into the right to
receive one share of Mosaic 7.50% preferred stock;
|
|
|
•
|
each outstanding option to acquire shares of IMC common stock and each other award based on IMC common stock outstanding immediately prior to the completion of the merger will be
converted into an option or other stock-based award to acquire shares of Mosaic common stock and will be governed by the same terms and conditions as those in effect immediately prior to the effective date of the transactions under the relevant IMC
stock plan. The number of shares of Mosaic common stock to be issued upon the exercise or issuance of any IMC stock option or stock award outstanding as of the effective date of the transactions, and the exercise price thereof, if any, will be the
same number or exercise price as in effect immediately prior to the effective date of the transactions; and
|
|
|
•
|
in exchange for and simultaneously with the contribution, Cargill will receive a number of shares of Mosaic common stock equal to 66.5% of the outstanding shares of Mosaic common
stock, after giving effect to the transactions. In addition, in order to offset any dilution to Cargill’s ownership percentage in the Mosaic common stock as a result of the conversion of shares of Mosaic 7.50% preferred stock into Mosaic common
stock, Cargill will also receive 5,458,955 shares of Mosaic Class B common stock, which will automatically convert into Mosaic common stock upon conversion of shares of Mosaic 7.50% preferred stock.
|
Closing and Effective Date
The
closing of the transactions will take place at 10:00 a.m. on the third business day after which the last to be fulfilled or waived of the conditions to closing has been satisfied or waived by the parties, unless the parties agree in writing to
another date. See “—Conditions to the Transactions” below for a more complete description of the conditions that must be satisfied or waived prior to closing. The transactions will become effective on the date on which (i) IMC and GNS
Acquisition Corp. have filed a certificate of merger with the Secretary of State of the State of Delaware and (ii) Cargill, CFI and certain of their subsidiaries have executed and delivered all necessary documentation to effect the contribution.
IMC and Cargill are working hard to complete the
transactions quickly, and currently expect that the transactions will be completed during September of 2004. However, because completion of the transactions is subject to regulatory approvals and other conditions, the actual timing of the closing
cannot be predicted with certainty.
Procedures for Exchange of Stock Certificates
Please do not return stock certificates with the enclosed proxy card.
As soon as reasonably practicable after the completion of the merger, and in any event within five business days after the merger is completed, an
exchange agent to be selected by Mosaic will mail the following materials to each former IMC stockholder who holds one or more IMC stock certificates:
|
|
•
|
a letter of transmittal for use in submitting stock certificates to the exchange agent for exchange, and
|
|
|
•
|
instructions explaining what IMC stockholders must do to effect the surrender of IMC stock certificates in exchange for Mosaic stock certificates.
|
IMC stockholders are requested to complete and sign the letter of
transmittal and return it to the exchange agent together with the IMC stockholder’s IMC stock certificates in accordance with the instructions. At or prior to the completion of the merger, Mosaic will deposit with the exchange agent, in trust
for the benefit of the former IMC stockholders, Mosaic stock certificates to be provided in exchange for IMC stock certificates.
67
After the merger, each certificate that previously represented shares of IMC common stock or IMC 7.50%
preferred stock will only represent the right to receive:
|
|
•
|
certificates representing the shares of Mosaic common stock or Mosaic 7.50% preferred stock, as the case may be, into which the shares have been converted; and
|
|
|
•
|
dividends or other distributions, if any, of Mosaic stock which IMC stockholders are entitled to receive under the terms of the merger and contribution agreement.
|
Dividends
No dividends or
distributions with a record date after the merger with respect to Mosaic stock will be paid to the holder of any unsurrendered IMC stock certificate until the IMC stock certificate is surrendered by the holder to the exchange agent for exchange.
When the IMC stock certificate is surrendered, any dividends that have been declared and paid after the closing date of the merger on the shares of Mosaic stock into which the IMC shares represented by the surrendered stock certificates were
converted will be paid without interest.
All shares
of Mosaic stock issued upon surrender of IMC stock certificates will be deemed to have been issued in full satisfaction of all rights relating to those shares of IMC stock. IMC will remain obligated, however, to pay any dividends or make any other
distributions declared or made by IMC on IMC stock with a record date before the completion of the merger and that remain unpaid at the completion of the merger. If IMC stock certificates are presented to Mosaic, IMC or the exchange agent after the
completion of the merger, they will be canceled and exchanged as described above.
Listing of Mosaic Stock
Mosaic has agreed to use its best efforts to, and IMC and Cargill have agreed to use their best efforts to cause Mosaic to, cause the shares of Mosaic stock to be issued in the transactions to be approved for listing on the New York Stock
Exchange, subject to official notice of issuance. Such listing approval is a condition to the obligations of the parties to the merger and contribution agreement to complete the transactions. In addition, Mosaic has agreed to use its best efforts
to, and IMC and Cargill have agreed to use their best efforts to cause Mosaic to, cause the shares of Mosaic common stock issuable upon exercise of the IMC stock options assumed by Mosaic pursuant to the terms of the merger and contribution
agreement to be approved for listing on the New York Stock Exchange.
Representations and Warranties
IMC, Cargill, CFI, Mosaic and GNS Acquisition Corp. each made a number of customary representations and warranties in the merger and contribution agreement, generally qualified by material adverse effect. The representations and warranties
will not survive after the transactions have been completed.
The representations and warranties in the merger and contribution agreement are complicated and not easily summarized. You are urged to carefully read the sections in the merger and contribution agreement under the headings
“Representations and Warranties of IMC,” “Representations and Warranties of Cargill and CFI” and “Representations and Warranties of Mosaic and GNS Acquisition Corp.”
Many of the representations and warranties given by IMC, on the one hand, and
Cargill and CFI, on the other hand, are substantially reciprocal, and cover the following topics as they relate to IMC and its subsidiaries, on the one hand, and Cargill and CFI and their respective subsidiaries that operate the Cargill Fertilizer
Businesses, on the other hand:
|
|
•
|
organization, standing and power to do business;
|
|
|
•
|
ownership of subsidiaries and jointly owned enterprises;
|
|
|
•
|
authority to enter into the transactions and absence of conflicts between the merger and contribution agreement and any relevant organizational documents, contracts or applicable
law;
|
68
|
|
•
|
required governmental approvals;
|
|
|
•
|
financial statements and absence of undisclosed liabilities;
|
|
|
•
|
information supplied in this proxy statement/prospectus and the registration statement of Mosaic of which this document forms a part;
|
|
|
•
|
absence of certain changes or events since a specified date;
|
|
|
•
|
matters relating to material contracts;
|
|
|
•
|
compliance with applicable laws and effectiveness of necessary permits;
|
|
|
•
|
investment bankers, finders or brokers engaged in connection with the transactions;
|
|
|
•
|
absence of actions or events that would prevent the tax-free treatment of the transactions; and
|
|
|
•
|
certain matters relating to unaffiliated joint ventures.
|
Representations and warranties made solely by IMC relate to IMC’s capital structure, SEC filings made by IMC and PLP, employee benefit plans, the
opinion of IMC’s financial advisor, anti-takeover statutes and IMC’s rights plan.
Representations and warranties made solely by Cargill and CFI relate to the indebtedness of the Cargill Fertilizer Businesses, the sufficiency of the assets to be owned by the contributed subsidiaries, transactions
between Cargill and the Cargill Fertilizer Businesses and the fact that no vote is required by Cargill stockholders to consummate the contribution.
The representations and warranties given by Mosaic and GNS Acquisition Corp. cover the following topics as they relate to Mosaic, GNS Acquisition Corp.
and their subsidiaries:
|
|
•
|
organization, standing and power to do business;
|
|
|
•
|
ownership of subsidiaries;
|
|
|
•
|
authority to enter into the transactions and absence of conflicts between the merger and contribution agreement and any relevant organizational documents, contracts or applicable
law;
|
|
|
•
|
required governmental approvals;
|
|
|
•
|
information supplied by Mosaic in this proxy statement/prospectus and the registration statement of Mosaic of which this document forms a part;
|
|
|
•
|
investment bankers, finders or brokers engaged in connection with the transactions;
|
69
|
|
•
|
the business activities of Mosaic and GNS Acquisition Corp.; and
|
|
|
•
|
absence of actions or events that would prevent the tax-free treatment of the transactions.
|
Definition of Material Adverse Effect
Many of the representations and warranties contained in the merger and contribution agreement are qualified by “material adverse effect.” This qualification also applies to some of the covenants and
conditions to the transactions described under “—Conditions to the Transactions” below, as well as to termination of the merger and contribution agreement for breaches of representations and warranties as described under
“—Termination of the Merger and Contribution Agreement.” For purposes of the merger and contribution agreement, “material adverse effect” means, with respect to IMC, the Cargill Fertilizer Businesses or Mosaic, as
applicable, any change, effect, event, occurrence or state of facts that is materially adverse to the business, properties, financial condition or results of operations of IMC and its subsidiaries, the Cargill Fertilizer Businesses or Mosaic and its
subsidiaries, as the case may be, taken as a whole. However, any change, effect, event, occurrence or state of facts relating to, caused by or resulting from the following will not be taken into account in determining whether there has been (or
whether there is reasonably expected to be) a “material adverse effect”:
|
|
•
|
the United States or any international economy or the United States or international financial markets in general, provided the respective company or businesses are not
disproportionately affected thereby;
|
|
|
•
|
with respect to IMC and its subsidiaries or the Cargill Fertilizer Businesses, the industries in which IMC and its subsidiaries or the Cargill Fertilizer Businesses, as applicable,
operate in general, provided the respective company or businesses are not disproportionately affected thereby;
|
|
|
•
|
the announcement of the merger and contribution agreement or the transactions;
|
|
|
•
|
with respect to IMC, any non-cash asset or goodwill impairment charges with respect to matters discussed with Cargill prior to the date of the merger and contribution agreement,
including any write-off or reclassification of goodwill recorded, taken or created by IMC or PLP relating to PLP or IMC’s investment therein or any loss, reclassification or write-off related to any disposition of the IMC Chemicals Business
Unit or the IMC Salt Business Unit (as those terms are defined in the merger and contribution agreement); or
|
|
|
•
|
with respect to the Cargill Fertilizer Businesses, any non-cash asset or goodwill impairment charges.
|
Interim Operations of IMC and the Cargill Fertilizer Businesses
IMC and Cargill (solely with respect to the Cargill Fertilizer Businesses) have each undertaken certain covenants concerning the conduct of the IMC
businesses and the Cargill Fertilizer Businesses, as applicable, between the date the merger and contribution agreement was signed and the completion of the transactions. Those covenants are complicated and not easily summarized. You are urged to
carefully read Sections 8.01 and 8.02 in the merger and contribution agreement, which are respectively entitled “Conduct of Business by IMC” and “Conduct of Business by Cargill.”
Under the merger and contribution agreement, each of IMC and Cargill (solely
with respect to the Cargill Fertilizer Businesses) and their respective subsidiaries have agreed that, prior to completion of the transactions, except as expressly contemplated or permitted by the merger and contribution agreement, they will carry
on their respective businesses in the ordinary course consistent with past practices, and will use all reasonable efforts, among other things, to preserve intact their business organizations and relationships with third parties and to keep available
the services of their present officers and employees.
In
addition to the provisions above, IMC and Cargill (solely with respect to the Cargill Fertilizer Businesses) have also agreed that, prior to the completion of the transactions, they will conduct their respective businesses in compliance with certain
restrictions, unless the other party otherwise consents in writing and except as expressly contemplated by the merger and contribution agreement.
70
Each of IMC and Cargill (solely with respect to the Cargill Fertilizer Businesses) have agreed that they
will not, and will not permit any of their respective subsidiaries or other controlled entities to:
|
|
•
|
make any equity investment in or acquisition of any third party or any material amount of assets, other than, among other exceptions, (i) as required by law, (ii) in the ordinary
course of business consistent with past practices, (iii) the acquisition by IMC or its subsidiaries of the PLP units in connection with the PLP merger, (iv) in the case of IMC, any investment or acquisition permitted under the terms of IMC’s
credit facilities and indentures, as they existed on the date of signing of the merger and contribution agreement, (v) the acquisition by Cargill of the assets of the Wingate Creek Mine in Manatee County, Florida or (vi) any investments or any
acquisitions not specifically permitted by the terms of the merger and contribution agreement in an aggregate principal amount not to exceed, in the case of IMC, $5 million or, in the case of Cargill, $20 million;
|
|
|
•
|
sell, lease, license or dispose of any material assets, other than, among other exceptions, (i) in the ordinary course of business consistent with past practices, (ii) pursuant to
existing contracts, (iii) obsolete property or assets, (iv) the sale by IMC of the IMC Salt Business or the IMC Chemical Business (as those terms are defined in the merger and contribution agreement), (v) in the case of IMC, any sales, leases,
licenses or other dispositions permitted under the terms of IMC’s credit facilities and indentures, as they existed on the date of signing of the merger and contribution agreement or (vi) any sales, leases, licenses or other dispositions not
specifically permitted by the terms of the merger and contribution agreement in an aggregate amount not to exceed $5 million;
|
|
|
•
|
make or commit to make any material capital expenditures, except (i) in the ordinary course of business in an aggregate amount not to exceed $125 million or (ii) as required by law
or governmental authorities;
|
|
|
•
|
incur or assume any indebtedness or issue any debt securities, or, in the case of IMC, pledge any shares of IMC stock, except, among other things:
|
|
|
•
|
short-term borrowings in the ordinary course of business consistent with past practices,
|
|
|
•
|
letters of credit obtained in the ordinary course of business consistent with past practices or, in the case of IMC, the refinancing of existing letters of credit under IMC’s
credit facilities,
|
|
|
•
|
borrowings made in connection with refunding existing indebtedness at maturity or at a lower cost of funds,
|
|
|
•
|
borrowings to finance capital expenditures or acquisitions permitted pursuant to the merger and contribution agreement,
|
|
|
•
|
in the case of IMC, as otherwise would be permitted under the terms of IMC’s credit facilities and indentures, as they existed on the date of signing of the merger and
contribution agreement,
|
|
|
•
|
loans or advances to or debt investments in their respective subsidiaries or, in the case of IMC, loans or advance to or debt investments in IMC by its subsidiaries,
|
|
|
•
|
in the case of IMC, assumptions, guarantees and endorsements by IMC’s subsidiaries for obligations of IMC or any other IMC subsidiaries,
|
|
|
•
|
in the case of IMC, borrowings necessary to refinance specified bonds issued by IMC, or
|
|
|
•
|
in the case of Cargill, refinancings of the Embedded Debt (as that term is defined in the merger and contribution agreement);
|
|
|
•
|
increase the compensation or benefits of any director, employee or independent contractor (other than pursuant to existing agreements), or pay such individual any benefit or
compensation not provided under a benefit plan in effect on the date of signing of the merger and contribution agreement, except for increases in salary or performance bonuses in the ordinary course of business consistent with past practices or
arrangements for newly hired individuals that are consistent with existing policies and practices;
|
71
|
|
•
|
enter into any contract limiting or restricting in any material respect such party’s ability to engage or compete in any line of business or in any geographical area;
|
|
|
•
|
pay, discharge, settle or satisfy any claims or obligations except, among other things, pursuant to existing contractual obligations or in the ordinary course of business for
amounts not in excess of $12.5 million in the aggregate;
|
|
|
•
|
materially revalue material assets, make, change or revoke any material tax election or change its respective method of accounting, except (i) as required by law, (ii) as a result
of a change in generally accepted accounting principal in the United States, (iii) in the case of Cargill, relating to tax obligations that are retained by Cargill after the completion of the transactions or (iv) in the case of IMC, relating to the
sale by IMC of certain specified IMC business units or relating to or arising out of the PLP merger;
|
|
|
•
|
settle any material audit with respect to taxes or file any amended tax return that would materially alter the tax obligation of the filing party;
|
|
|
•
|
fail to timely prepare and file all required tax returns in a manner consistent with past practices and timely pay all taxes due;
|
|
|
•
|
adopt, enter into or modify any collective bargaining agreement or labor union contract, except in the ordinary course of business;
|
|
|
•
|
fail to use reasonable efforts to maintain existing insurance policies;
|
|
|
•
|
take any action that would prevent or impede the merger from qualifying as a reorganization under Section 368(a) of the Internal Revenue Code or the merger and the contribution,
when considered together, from qualifying as a tax-free transaction under Section 351 of the Internal Revenue Code;
|
|
|
•
|
take any action that would make any representation or warranty inaccurate at the time of the transactions;
|
|
|
•
|
enter into any agreement relating to an acquisition, merger, consolidation or purchase that would materially delay or increase the risk of not obtaining any governmental
authorization or approval necessary for the completion of the transactions; or
|
|
|
•
|
authorize or enter into an agreement to do any of the above.
|
In addition, IMC has agreed that it will not adopt or propose any change to its certificate of incorporation or its bylaws, and has agreed that IMC will
not, and will not permit any of its subsidiaries or other controlled entities to:
|
|
•
|
adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization, except, among
other things, (i) as required to effectuate the PLP merger or (ii) mergers or consolidations among wholly owned subsidiaries of IMC;
|
|
|
•
|
split, combine, subdivide or reclassify any shares of capital stock (other than in the case of any wholly owned subsidiary of IMC) or declare, set aside or pay any dividends or
other distributions (other than regular quarterly cash dividends paid by IMC on IMC stock, not to exceed $0.02 per share per quarter in the case of IMC common stock or $0.09375 per share per quarter in the case of IMC 7.50% preferred stock);
|
|
|
•
|
issue, sell, transfer, pledge or dispose of any shares of, or any securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights to acquire, any
shares of capital stock of IMC or its subsidiaries, other than, among other things, (i) pursuant to outstanding options or existing option plans in the ordinary course consistent with past practices, (ii) issuances of shares of IMC common stock to
consummate the PLP merger or (iii) upon the conversion of shares of IMC 7.50% preferred stock;
|
72
|
|
•
|
redeem, purchase or otherwise acquire any of IMC’s capital stock other than pursuant to the PLP merger or repurchases in the ordinary course of business necessary to fund the
IMC Stock Plans (as defined in the merger and contribution agreement); or
|
|
|
•
|
amend, modify or seek a waiver with respect to the terms of IMC’s credit agreements or indentures, except that IMC may seek an amendment, modification or waiver that will not
materially impair the operations of IMC or materially increase the cost of borrowing to IMC.
|
No Solicitation
Pursuant to
the merger and contribution agreement, each of IMC and Cargill has agreed, as of the date of signing of the merger and contribution agreement, to instruct its officers, directors and employees and any of its advisors, agents or representatives to
terminate discussions or negotiations with third parties regarding takeover proposals (as described below) and request the return or destruction of any confidential information provided in relation to such discussions. Each of IMC and Cargill has
also agreed, subject to limited exceptions, that it will not, nor will it authorize or permit any of its subsidiaries, any of its or their officers, directors or employees or any advisors, agents or representatives to, whether directly or indirectly
through another person:
|
|
•
|
solicit, initiate, cause, knowingly encourage or knowingly facilitate any inquiries or the making of any proposal that constitutes or is reasonably likely to lead to a takeover
proposal; or
|
|
|
•
|
participate in discussions or negotiations with, or furnish any information to, a third party in connection with or in furtherance of a takeover proposal.
|
With respect to Cargill, a takeover proposal is any inquiry, proposal or
offer (other than those related to the transactions) by a third party, whether or not conditional and whether or not withdrawn, (i) for a merger, consolidation, dissolution, recapitalization or other business combination involving the Cargill
Fertilizer Businesses taken as a whole or (ii) to acquire 20% or more of the equity securities of any contributed subsidiaries or assets that represent 20% or more of the total consolidated Cargill fertilizer assets.
With respect to IMC, a takeover proposal is any inquiry, proposal or offer
(other than those related to the transactions) by a third party, whether or not conditional and whether or not withdrawn, (i) for a merger, consolidation or other business combination involving IMC, (ii) for the issuance of 20% or more of the equity
securities of IMC as consideration for the assets or securities of a third party or (iii) to acquire 20% or more of the equity securities or the total consolidated assets of IMC.
Despite the restrictions described above, the IMC board of directors is not prohibited from taking and disclosing to
IMC’s stockholders a position contemplated by Rule 14e-2(a) or Rule 14d-9 under the Securities Exchange Act. In addition, IMC and the IMC board of directors are permitted, subject to limitations set forth below, to take the following actions:
|
|
•
|
furnish information in response to a request for that information by a person making a bona fide written unsolicited takeover proposal after the date of signing of the merger and
contribution agreement, if
|
|
|
•
|
the proposing person first signs a confidentiality agreement with IMC containing confidentiality provisions no less restrictive than those in the confidentiality agreement between
IMC and Cargill, and
|
|
|
•
|
the information provided by IMC is provided to Cargill prior to or substantially concurrently with its provision to the proposing person;
|
|
|
•
|
participate in discussions or negotiations with a person making a bona fide written unsolicited takeover proposal after the date of signing of the merger and contribution agreement;
|
|
|
•
|
withdraw or modify, including in a manner adverse to Cargill, the approval, recommendation or declaration of advisability by the IMC board of directors of the merger and
contribution agreement; or
|
|
|
•
|
recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any takeover proposal.
|
73
The actions described in each of the four bullet points in the previous paragraph may be taken only if
the IMC board of directors determines in good faith, after consulting with outside legal counsel, that failure to take any of those actions would be a violation of its fiduciary duties under applicable law. In addition, the actions described in each
of the second, third and fourth bullet points in the previous paragraph may only be taken if the IMC board of directors determines, after consultation with its financial advisor, that the relevant takeover proposal constitutes, or is reasonably
likely to constitute, a superior proposal (as described below). IMC has agreed to notify Cargill of any takeover proposal or request for information or other inquiry that IMC reasonably believes could lead to a takeover proposal, and to keep Cargill
fully informed of the status and terms of the inquiry.
A
superior proposal is any bona fide written offer by a third party that, if consummated, would result in the third party (or its shareholders) owning greater that 50% of the shares of IMC common stock then outstanding or all or substantially all of
the consolidated assets of IMC:
|
|
•
|
on terms that the IMC board of directors determines in good faith, after consulting with outside legal counsel and a financial advisor of nationally recognized reputation and in
light of all relevant circumstances, to be more favorable to IMC stockholders from a financial point of view than the transactions;
|
|
|
•
|
as to which all necessary financing is committed or made available in writing; and
|
|
|
•
|
which is reasonably likely to be completed.
|
Indemnification, Exculpation and Insurance
The merger and contribution agreement provides that the surviving entity in the merger will assume all obligations for indemnification and exculpation from liabilities for acts or omissions occurring prior to the
effective date of the transactions for all past and present directors and officers of IMC and its subsidiaries or fiduciaries under benefits plans to the same extent as such individuals are indemnified or have the right to advancement of expenses as
of the effective date of the transactions. Mosaic will indemnify and hold harmless, and provide advancement of expenses to, these same directors and officers, with respect to their acts or omissions arising prior to the effective date of the
transactions, to the same extent such rights were provided by the IMC certificate of incorporation or bylaws or any applicable indemnification agreement entered into prior to December 1, 2003, and to the fullest extent permitted under the DGCL and
not expressly prohibited by the Sarbanes-Oxley Act of 2002.
In addition, the merger and contribution agreement requires Mosaic to maintain IMC’s current directors’ and officers’ liability and fiduciary insurance policies (or similar policies with coverage and amount no less
favorable), in respect of acts or omissions occurring at or prior to the effective date of the transactions, for six years following the completion of the transactions. Mosaic, however, is not obligated to pay an annual premium in excess of 300% of
the amount of the last annual premium paid by IMC prior to the execution of the merger and contribution agreement. If Mosaic cannot maintain the existing coverage without exceeding the 300% cap, Mosaic is required to provide such coverage as it may
obtain for the amount of 300% of IMC’s last annual premium.
Employee Matters
After the
completion of the transactions, Mosaic will maintain and operate the IMC employee benefit plans through December 31, 2004. Subject to obligations under applicable law, Mosaic intends to develop and implement new benefit plans, on or as soon as
reasonably practicable following the effective date of the transactions, which, among other things:
|
|
•
|
treat similarly situated employees on a substantially equivalent basis, taking into account all relevant factors, including duties, geographic location, tenure, qualifications and
abilities; and
|
|
|
•
|
do not discriminate between employees who were covered by Cargill benefit plans, on the one hand, or IMC benefit plans, on the other hand.
|
74
Mosaic will honor, grant and pay for any and all earned vacation payable to employees of IMC and the
Cargill Fertilizer Businesses, and will provide past service credit for service time worked with IMC and the Cargill Fertilizer Businesses in granting paid vacation time under Mosaic’s vacation policy.
With respect to Mosaic benefit plans in which employees and former
employees of Cargill and IMC become eligible to participate after the completion of the transactions, and in which such employees and former employees did not participate prior to the completion of the transactions, Mosaic will on the effective date
of the transactions, to the extent not resulting in duplication of benefits:
|
|
•
|
waive all pre-existing conditions, exclusions and waiting periods under the Mosaic benefit plans with respect to applicable participation and coverage requirements, except to the
extent those conditions, exclusions and waiting periods would apply under the analogous benefit plan of Cargill or IMC, as the case may be;
|
|
|
•
|
provide each employee and his or her eligible dependents with credit for any co-payments and deductibles paid prior to the completion of the transactions under the analogous benefit
plan of Cargill or IMC, as the case may be (to the same extent that such credit was given prior to the completion of the transactions), in satisfying any applicable deductible or annual out-of-pocket requirements under any Mosaic benefit plan; and
|
|
|
•
|
recognize all service with Cargill and IMC, and their respective affiliates, for all purposes (except, with respect to defined benefit pension plans, benefit accrual) under the
Mosaic benefit plans to the extent that service was taken into account under the analogous benefit plan of Cargill or IMC, as the case may be.
|
Cargill will not transfer to Mosaic any of its benefit plans or the assets thereof. Retirees of the Cargill Fertilizer
Businesses and active employees of the Cargill Fertilizer Businesses eligible to retire will be eligible to participate in Cargill’s retiree medical plan, and claims under such plan will be the sole responsibility of Cargill. Mosaic will become
a participating employer in Cargill’s pension plans, but employees of the Cargill Fertilizer Businesses who are employed by Mosaic will not accrue credit for service under the Cargill pension plans after December 31, 2004. Cargill may, in its
discretion, elect to keep the employees of the Cargill Fertilizer Businesses under the Cargill pension plan until December 31, 2004, allowing Mosaic to efficiently enroll all Mosaic employees on a Mosaic pension plan after December 31, 2004.
Pensionable salaries will not be frozen at the effective date of the transactions.
Mosaic has agreed to assume the rights and obligations of IMC under specified individual employment, termination, retention, severance, confidentiality, non-disclosure or other similar contracts. Cargill, IMC and
Mosaic have acknowledged and agreed that the closing of the transactions will constitute a “termination” as defined in certain of those agreements, thereby triggering change in control severance payments and benefits which Mosaic has
agreed it will pay to the individuals covered by those agreements. For a discussion of the severance arrangements of IMC’s executive officers that will be triggered by the closing of the transactions, see “The Transactions—Interests
of IMC’s Directors and Executive Officers in the Transactions—Severance Arrangements” beginning on page 58 of this proxy statement/prospectus.
Mosaic will assume the IMC stock plans with the result that all outstanding IMC stock options will be converted into
options to purchase Mosaic common stock. See “—Consideration to be Received Pursuant to the Transactions; Treatment of Stock Options” above.
Indemnity
Indemnification
by Cargill
Pursuant to the merger and contribution
agreement, Cargill has agreed, subject to the limitations described in the following paragraph, that, from the effective date of the transactions, it will indemnify Mosaic and its
75
subsidiaries, their respective directors, managers, officers and employees and the successors of the foregoing indemnified parties against any losses
incurred in connection with or arising from:
|
|
•
|
Cargill’s failure to pay, perform or discharge any of its liabilities or obligations, other than Cargill fertilizer liabilities;
|
|
|
•
|
Cargill’s failure to use commercially reasonable efforts, until the third anniversary of the effective date of the transactions, to
|
|
|
•
|
take all actions reasonably necessary to consummate and make effective the transactions, and
|
|
|
•
|
convey, assign or transfer to Mosaic any asset then owned by, or liability then assumed by, Cargill that Cargill and Mosaic each agree more properly belongs to, or should be assumed
by, Mosaic;
|
|
|
•
|
any breach by Cargill of its obligations relating to the payment of fees and expenses, as described in “—Payment of Fees and Expenses” below;
|
|
|
•
|
the failure of Cargill to ensure that, upon the completion of the transactions, the contributed subsidiaries have consolidated net working capital of at least $357.2 million; or
|
|
|
•
|
any breach by Cargill of its covenants or agreements relating to
|
|
|
•
|
employee matters, as described in “—Employee Matters” above, or
|
|
|
•
|
Cargill’s tax-related covenants.
|
Cargill will not be required to indemnify or hold harmless:
|
|
•
|
with respect to losses resulting from the events described in the first two bullet points of the previous paragraph unless the aggregate amount of those losses exceeds $5 million
and it has received written notice of those losses prior to the third anniversary of the effective date of the transaction;
|
|
|
•
|
with respect to losses resulting from the events described in the fifth bullet point of the previous paragraph unless the aggregate amount of those losses exceeds $500,000, and it
has received written notice of those losses prior to the seventh anniversary of the effective date of the transactions; or
|
|
|
•
|
with respect to losses resulting from the events described in the third and fourth bullet points of the previous paragraph unless it has received written notice of those losses
prior to the first anniversary of the effective date of the transactions.
|
Indemnification by Mosaic
Pursuant to the merger and contribution agreement, Mosaic has agreed, subject to the limitations described in the following paragraph, that, from the effective date of the transactions, it will indemnify Cargill and
its subsidiaries (other than Mosaic and its subsidiaries), their respective directors, managers, officers and employees and the successors of the foregoing indemnified parties against any losses incurred in connection with or arising from:
|
|
•
|
Mosaic’s failure to pay, perform or discharge any Cargill fertilizer liabilities;
|
|
|
•
|
Mosaic’s failure to use commercially reasonable efforts, until the third anniversary of the effective date of the transactions, to
|
|
|
•
|
take all actions reasonably necessary to consummate and make effective the transactions, and
|
|
|
•
|
convey, assign or transfer to Cargill any asset then owned by, or liability then assumed by, Mosaic that Cargill and Mosaic each agree more properly belongs to, or should be assumed
by, Cargill;
|
|
|
•
|
any breach by Mosaic of its obligations relating to the payment of fees and expenses, as described in “—Payment of Fees and Expenses” below;
|
|
|
•
|
any breach by Mosaic of its covenants or agreements relating to employee matters, as described in “—Employee Matters” above, or
|
76
|
|
•
|
Mosaic’s tax-related covenants.
|
|
|
•
|
any breach by Mosaic of its covenants to refrain
|
|
|
•
|
for a period of at least two years following the completion of the transactions, from disposing of the capital stock or discontinuing the active business of specified entities, and
|
|
|
•
|
from taking any action which would reasonably be likely to cause certain pre-contribution restructuring distributions by Cargill affiliates to be taxable under the Internal Revenue
Code; or
|
|
|
•
|
any breach by Mosaic of its covenant to refrain, and to cause IMC to refrain, for a period of two years following the completion of the transactions, from taking any action which
would affect the qualification of the merger as a reorganization under Section 368(a) of the Internal Revenue Code or the merger and contribution, when considered together, as a tax-free transaction under Section 351 of the Internal Revenue Code.
|
Mosaic will not be required to
indemnify or hold harmless:
|
|
•
|
with respect to losses resulting from events described in the first two bullet points of the previous paragraph unless the aggregate amount of those losses exceeds $5 million (other
than losses arising from Mosaic’s failure to pay indebtedness of the Cargill Fertilizer Businesses, which are not subject to the $5 million threshold) and it has received written notice of those losses prior to the third anniversary of the
effective date of the transaction;
|
|
|
•
|
with respect to losses resulting from the events described in the fourth, fifth and sixth bullet points of the previous paragraph unless the aggregate amount of those losses exceeds
$500,000, and it has received written notice of those losses prior to the seventh anniversary of the effective date of the transactions.
|
|
|
•
|
with respect to losses resulting from the events described in the third bullet point in the previous paragraph unless it has received written notice of those losses prior to the
first anniversary of the effective date of the transactions.
|
Covenant Not to Compete or Solicit Business
Pursuant to the merger and contribution agreement, Cargill has agreed that, until the third anniversary of the effective date of the transactions, it will not, and it will not permit any of its subsidiaries to, other
than by virtue of their ownership of shares of capital stock of Mosaic:
|
|
•
|
directly or indirectly own, manage, operate or control a business that is engaged in any material respect in competition with the Cargill Fertilizer Businesses as conducted by
Mosaic and its subsidiaries immediately after the completion of the transactions; or
|
|
|
•
|
solicit or actively encourage any employee of Mosaic or its subsidiaries after the completion of the transactions to terminate his or her employment in order to enter into an
employment relationship with a competitor of Mosaic and its subsidiaries.
|
Mosaic has agreed that, until the third anniversary of the effective date of the transactions, it will not, and it will not permit any of its subsidiaries
to:
|
|
•
|
directly or indirectly own, manage, operate or control a business that is engaged in any material respect in the sale, origination, storage or handling of grain anywhere in the
world in competition with the business of Cargill and its subsidiaries as conducted immediately after the completion of the transactions; or
|
|
|
•
|
solicit or actively encourage any employee of Cargill or its subsidiaries after the completion of the transactions to terminate his or her employment in order to enter into an
employment relationship with a competitor of Cargill and its subsidiaries.
|
77
Cargill has agreed pursuant to the merger and contribution agreement that, if at any time prior to
the third anniversary of the effective date of the transactions, it determines that the sale of fertilizer is desirable in conjunction with its sale of grain in geographic regions where Mosaic is not then located, it will provide Mosaic a right of
first refusal to enter into the region to provide fertilizer to Cargill in that region. If Mosaic accepts that opportunity within 30 days of receipt of written notice by Cargill, Cargill and Mosaic will negotiate commercially reasonable terms for
the commercial relationship. If Mosaic does not accept the opportunity within 30 days of Cargill’s written notice, Cargill is permitted to sell fertilizer or contract with third parties to sell fertilizer in that region.
If, at any time prior to the third anniversary of the effective date of
the transactions, Cargill acquires a third party that has a business unit or division that is engaged in a business which is in competition with the Cargill Fertilizer Businesses, it will offer to Mosaic the opportunity to purchase that competing
business on an arms-length basis and on mutually acceptable terms. Similarly, if Mosaic acquires, during the three years following the effective date of the transactions, a third party that has a business unit or division that is engaged in a
business which is in competition with Cargill’s business units, it will offer Cargill the opportunity to purchase that competing business on an arms-length basis and on mutually acceptable terms.
Conditions to the Transactions
The parties’ respective obligations to complete the transactions are subject to the prior satisfaction or waiver of various conditions. The following conditions, among others, must be satisfied or waived before each of the parties is
obligated to complete the transactions:
|
|
•
|
the merger and contribution agreement must have been approved and adopted by holders of a majority of the shares of IMC common stock;
|
|
|
•
|
the shares of Mosaic stock issuable to IMC stockholders and to Cargill must have been approved for listing, subject to official notice of issuance, on the New York Stock Exchange;
|
|
|
•
|
the waiting period (including any extensions) applicable to the consummation of the merger pursuant to the HSR Act must have expired or been terminated and any mandatory waiting
period or required consent under applicable foreign competition, merger control or antitrust law must have expired or been obtained (which waiting period has expired or the required consent has been obtained in each of Austria, China, Germany, Italy
and South Korea as of the date of this document);
|
|
|
•
|
no statute, law, ordinance, regulation, judgment, injunction or other order may have been enacted or issued by a governmental entity that
|
|
|
•
|
restrains or prohibits the completion of the transactions or limits the ownership or operation by Mosaic of its business,
|
|
|
•
|
prohibits or limits the ownership or operation, or requires any divestiture, by Cargill, IMC or their respective subsidiaries of any portion of any business or of any assets of
Cargill or IMC, respectively, as a result of the transactions, or
|
|
|
•
|
obtains any damages from Cargill, IMC or Mosaic,
|
if any of the above consequences would have a material adverse effect on IMC or Cargill (except that actions taken by any federal or state governmental
authority are not subject to such materiality standard) or materially impair the long-term benefits sought to be derived from the transactions;
|
|
•
|
no temporary restraining order, injunction, judgment or court order may be in effect preventing the transactions;
|
|
|
•
|
the registration statement, of which this proxy statement/prospectus is a part, must be effective under the Securities Act, and must not be the subject of any stop order or pending
or threatened proceeding seeking a stop order;
|
78
|
|
•
|
all specified consents must be obtained without conditions which would reasonably be expected to have a material adverse effect on IMC or Cargill or materially impair the
anticipated long-term benefits of the transactions, unless those consents may be obtained after the closing of the transactions without material delay or penalty, Cargill and IMC reasonably believe those consents will be obtained and no governmental
authority has advised Mosaic, Cargill or IMC that it has definitively determined to deny the granting of one or more of those consents;
|
|
|
•
|
Mosaic or one of its subsidiaries must, by the effective date of the transactions, satisfy the rules of financial responsibility for phosphate mining and manufacturing operations
put forth by the Florida Department of Environmental Protection; and
|
|
|
•
|
the investor rights agreement must have been entered into and remain in full force and effect. For more information on the investor rights agreement, see “Agreements Between
Mosaic and Cargill—Investor Rights Agreement” beginning on page 90 of this proxy statement/prospectus.
|
In addition, individually, the respective obligations of IMC, on the one hand, and Cargill and CFI, on the other hand, to effect the transactions are
subject to the prior satisfaction or waiver of the following conditions:
|
|
•
|
the representations and warranties of the other party in the merger and contribution agreement must be (i) true and correct as of the date of execution of the merger and
contribution agreement and (ii) except where the failures of those representations and warranties to be true and correct, either taken individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse
effect on the other party, either:
|
|
|
•
|
true and correct as of the date of the closing of the transactions as if they were made on the closing date, except to the extent that the representation or warranty speaks of
another date, or
|
|
|
•
|
if the representation and warranty was true and correct as of the date of execution of the merger and contribution agreement but, due to an intervening event not involving a breach
of the other party’s interim operating covenants (see “—Interim Operations of IMC and the Cargill Fertilizer Businesses” above), is not true and correct as of the date of the closing of the transactions, such failure to be true
and correct is not reasonably likely to materially adversely affect or materially impair, after the effective date of the transactions, the business, properties, financial conditions or results of operations of Mosaic;
|
|
|
•
|
the other party must perform in all material respects each of its obligations under the merger and contribution agreement, and must certify that they have so performed; and
|
|
|
•
|
there must be no change, effect, event, occurrence or state of facts that has had or will reasonably be expected to result in a material adverse effect on the other party which
change, effect, event, occurrence or state of facts will or is reasonably likely to materially adversely effect or impair, after the transactions, the business, properties, financial condition or operations of Mosaic.
|
IMC’s obligation to complete the transactions is also subject to the
following additional conditions:
|
|
•
|
IMC must have received from counsel an opinion to the effect that the merger will qualify for U.S. federal income tax purposes as a reorganization under Section 368(a) of the
Internal Revenue Code;
|
|
|
•
|
Cargill and Mosaic must have entered into a transition services agreement;
|
|
|
•
|
each of Cargill and its subsidiaries that is directly contributing to Mosaic a real property interest must have provided Mosaic with a certification of non-foreign status in
accordance with Treas. Reg. § 1.1445-2(b); and
|
|
|
•
|
except for Restructuring Indebtedness as contemplated in Section 8.06 of the merger and contribution agreement, all indebtedness of the contributed subsidiaries owed to Cargill or
any of its subsidiaries must be paid, cancelled or converted into equity.
|
79
Cargill and CFI’s respective obligations to complete the transactions are also subject to the
following additional conditions:
|
|
•
|
Cargill shall have received from counsel an opinion to the effect that the contribution, when considered together with the merger, will qualify as a tax-free transaction under
Section 351 of the Internal Revenue Code;
|
|
|
•
|
The registration rights agreement entered into concurrently with the merger and contribution agreement must be in full force and effect (see “Agreements Between Mosaic and
Cargill—Registration Rights Agreement” beginning on page 93 of this proxy statement/prospectus); and
|
|
|
•
|
The PLP merger must be completed (see “The PLP Merger” beginning on page 94 of this proxy statement/prospectus).
|
Other than as specifically indicated above, none of the foregoing conditions
have been satisfied or waived as of the date of this document.
Termination of the Merger and Contribution Agreement
The merger and contribution agreement may be terminated by mutual written consent of Cargill and IMC, or by either Cargill or IMC, under any of the following circumstances, at any time before the completion of the
transactions, whether before or after the special meeting, as summarized below:
|
|
•
|
if the transactions are not completed (not as a result of a breach or failure to perform by the terminating party) by the later to occur of
|
|
|
•
|
60 days after receipt of the final necessary governmental consent, or
|
|
|
•
|
provided that all other conditions to the closing of the transactions have been satisfied, five business days after completion of the PLP merger,
|
but in no event later than October 31, 2004;
|
|
•
|
if a governmental judgment, order or restraint prohibiting the transactions becomes final and is not appealable;
|
|
|
•
|
if IMC’s common stockholders do not approve and adopt the merger and contribution agreement at the special meeting; or
|
|
|
•
|
if the other party has breached any of its representations and warranties or failed to perform any of its covenants and the breach or failure to perform
|
|
|
•
|
would result in the applicable closing condition to the transactions not being satisfied, and
|
|
|
•
|
is not cured or curable within 30 days following receipt of notice of the breach or failure to perform.
|
In addition, the merger and contribution agreement may also be terminated by IMC if:
|
|
•
|
the IMC board of directors authorizes IMC, subject to complying with the terms of the merger and contribution agreement, to enter into a binding written agreement concerning a
transaction that constitutes a superior proposal and IMC notifies Cargill in writing that it intends to enter into the agreement;
|
|
|
•
|
Cargill does not make, within five business days of receiving IMC’s written notification that it intends to enter into a binding agreement for a superior proposal, an offer
that the IMC board of directors determines, in good faith after consultation with its financial advisors, is at least as favorable, from a financial point of view, to the IMC stockholders as the superior proposal; and
|
|
|
•
|
prior to or concurrently with the termination of the merger and contribution agreement, IMC pays to Cargill the termination fee described in “—Payment of Fees and
Expenses” below.
|
80
IMC also agreed:
|
|
•
|
that it will not enter into a binding agreement referred to in the first bullet point of the previous paragraph until at least the sixth business day after it has provided the
requisite notice to Cargill; and
|
|
|
•
|
that it will notify Cargill promptly if its intention to enter into a written agreement referred to in its notification changes at any time after giving the notification.
|
In addition, Cargill may terminate the merger
and contribution agreement:
|
|
•
|
on the date on which IMC’s board of directors or any of its committees withdraws or modifies, in a manner adverse to Cargill, its recommendation of the transactions or the
merger and contribution agreement to IMC’s common stockholders, or approves or recommends a takeover proposal other than the transactions; or
|
|
|
•
|
upon the failure by IMC’s board of directors, within 5 days of a written request by Cargill (received at least 7 business days before the IMC special meeting and after IMC
receives a takeover proposal that is not rejected by the IMC board of directors), to publicly confirm its recommendation of the transactions and the merger and contribution agreement.
|
Payment of Fees and Expenses
Except as described below, whether the transactions are completed or the merger and contribution agreement is terminated, all costs and expenses incurred in connection with the merger and contribution agreement and the transactions will be
paid by the party incurring the expense. Cargill and IMC will pay 66.5% and 33.5%, respectively, of the costs of preparing, filing with the SEC and distributing this proxy statement/prospectus and all costs of filing the pre-merger notification and
report under the HSR Act and all applicable filings under foreign competition laws.
IMC will be required to pay Cargill a termination fee of $30 million in the event that the merger and contribution agreement is terminated:
|
|
•
|
by either Cargill or IMC pursuant to the termination right described in the first bullet point of the first paragraph under “ —Termination of the Merger and Contribution
Agreement” above, and
|
|
|
•
|
a vote to obtain the approval of IMC’s common stockholders has not yet been held;
|
|
|
•
|
the failure to hold the IMC common stockholder vote was not due to (i) circumstances beyond the control of IMC (including Cargill’s breach of any of its obligations in the
merger and contribution agreement) or (ii) any temporary restraining order, injunction, judgment or court order delaying the special meeting past July 1, 2004, if IMC exercised commercially reasonable efforts to remove any temporary restraining
order, injunction, judgment or court order delaying the meeting for the IMC stockholder vote and to hold that meeting in a timely manner; and
|
|
|
•
|
within 12 months after termination of the merger and contribution agreement, IMC reaches an agreement for or consummates a takeover proposal;
|
|
|
•
|
by either Cargill or IMC pursuant to the termination right relating to the failure of IMC’s common stockholders to approve and adopt the merger and contribution agreement at
the special meeting described in the third primary bullet point of the first paragraph under “—Termination of the Merger and Contribution Agreement” above, and
|
|
|
•
|
IMC would not have been entitled to terminate the merger and contribution agreement pursuant to the termination right described in the fourth bullet point of the first paragraph
under “—Termination of the Merger and Contribution Agreement” above as a result of a breach or failure to perform by Cargill;
|
|
|
•
|
a takeover proposal was communicated to IMC and publicly announced or was communicated directly to the IMC stockholders, in each case after the date of the execution of the merger
and contribution agreement; and
|
81
|
|
•
|
within 12 months after termination of the merger and contribution agreement, IMC reaches an agreement for or consummates a takeover proposal;
|
|
|
•
|
by IMC pursuant to the termination right described in the second paragraph under “—Termination of the Merger and Contribution Agreement” above;
|
|
|
•
|
by Cargill pursuant to the termination right described in the fourth bullet point of the first paragraph under “—Termination of the Merger and Contribution Agreement”
above as a result of a breach or failure to perform by IMC, other than a breach by IMC of its obligations described under “—No Solicitation” above, and
|
|
|
•
|
IMC’s breach or failure to perform triggering the termination is willful;
|
|
|
•
|
a takeover proposal was communicated to IMC or was communicated directly to the IMC stockholders, in each case after the date of the execution of the merger and contribution
agreement; and
|
|
|
•
|
within 12 months after termination of the merger and contribution agreement, IMC reaches an agreement for or consummates a takeover proposal; or
|
|
|
•
|
pursuant to the termination right described in the fourth bullet point of the first paragraph under “—Termination of the Merger and Contribution Agreement” above as a
result of IMC’s breach of its obligations described under “—No Solicitation” above (other than an immaterial and non-continuing breach); or
|
|
|
•
|
pursuant to the termination rights set forth in the two bullet points in the fourth paragraph under “—Termination of the Merger and Contribution Agreement” above.
|
The termination fee is required to be paid by
IMC at different times, depending on what provision is used to terminate the merger and contribution agreement. If the termination fee becomes payable pursuant to the first, second or fourth bullet points above, the fee is required to be paid to
Cargill upon the earlier of IMC entering into a definitive agreement with respect to a takeover proposal or completing a takeover proposal. If the termination fee becomes payable pursuant to the third or fifth bullet points above, the fee is
required to be paid to Cargill prior to or concurrently with the termination. In any case, the termination fee is payable to Cargill by wire transfer of same-day funds.
Cargill will be required to pay IMC a termination fee of $30 million in the event that the merger and contribution agreement
is terminated by IMC:
|
|
•
|
pursuant to the termination right described in the fourth bullet point of the first paragraph under “—Termination of the Merger and Contribution Agreement” above as a
result of a breach or failure to perform by Cargill, other than a breach by Cargill of its obligations described under “—No Solicitation” above, and
|
|
|
•
|
Cargill’s breach or failure to perform triggering the termination is willful;
|
|
|
•
|
a takeover proposal was communicated to Cargill after the date of the execution of the merger and contribution agreement; and
|
|
|
•
|
within 12 months after termination of the merger and contribution agreement, Cargill reaches an agreement for or consummates a takeover proposal; or
|
|
|
•
|
pursuant to the termination right described in the fourth bullet point of the first paragraph under “—Termination of the Merger and Contribution Agreement” above as a
result of Cargill’s breach of its obligations described under “—No Solicitation” above (other than an immaterial and non-continuing breach).
|
82
The termination fee is required to be paid by Cargill at different times, depending on what provision is
used to terminate the merger and contribution agreement. If the termination fee becomes payable pursuant to the first bullet point above, the fee is required to be paid to IMC upon the earlier of Cargill entering into a definitive agreement with
respect to a takeover proposal or completing a takeover proposal. If the termination fee becomes payable pursuant to the second bullet point above, the fee is required to be paid to IMC prior to or concurrently with the termination. In any case, the
termination fee is payable to IMC by wire transfer of same-day funds.
Failure by either IMC or Cargill to pay the termination fee promptly will require that party to pay the other party’s expenses in obtaining any judgment against the party obligation to pay the termination fee, as well as interest on
the payments due at the prime rate of Citibank, N.A. in effect on the date the termination fee was required to be made.
Amendments, Extensions and Waivers
The merger and contribution agreement may be amended by the parties at any time before or after the special meeting, provided that, once the merger and contribution agreement has been adopted and approved by IMC’s common stockholders,
any amendment that would require further stockholder approval under applicable law must be submitted to the common stockholders of IMC for approval. All amendments to the merger and contribution agreement must be in a writing signed by each party.
In addition, any amendment made to the merger and contribution agreement after the effective date of the transactions must comply with any applicable provisions of the investor rights agreement described in “Agreements between Mosaic and
Cargill—Investor Rights Agreement” beginning on page 90 of this proxy statement/prospectus.
At any time before the effective date of the transactions, any party to the merger and contribution agreement may, to the extent legally allowed:
|
|
•
|
extend the time for the performance of any of the obligations or other acts of the other parties;
|
|
|
•
|
waive any inaccuracies in the representations and warranties contained in, or in any document delivered pursuant to, the merger and contribution agreement; and
|
|
|
•
|
subject to the requirements relating to amendments set forth above, waive compliance by the other parties with any of the agreements or conditions contained in the merger and
contribution agreement.
|
83
Next Section
Previous Section