Agreement And Plan of Merger

AGREEMENT AND PLAN OF MERGER


BY AND BETWEEN


TYCO ACQUISITION CORP. XIX (NV)


AND


THE CIT GROUP, INC.


INCLUDING


GUARANTEE


OF


TYCO INTERNATIONAL LTD.


March 12, 2001


TABLE OF CONTENTS


ARTICLE I THE MERGER..................................................7
Section 1.01 The Merger..................................................7
Section 1.02 Effective Time..............................................7
Section 1.03 Effect of the Merger........................................7
Section 1.04 Articles of Incorporation; By-laws..........................7
Section 1.05 Directors and Officers......................................8
Section 1.06 Effect on Securities, Etc...................................8
Section 1.07 Exchange of Shares..........................................9
Section 1.08 Stock Transfer Books.......................................11
Section 1.09 No Further Ownership Rights in Company Common Stock........11
Section 1.10 Lost, Stolen or Destroyed Certificates.....................11
Section 1.11 Tax Consequences...........................................12
Section 1.12 Taking of Necessary Action; Further Action.................12


ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............12
Section 2.01 Organization and Qualification; Subsidiaries...............12
Section 2.02 Certificate of Incorporation and By-laws...................13
Section 2.03 Capitalization.............................................13
Section 2.04 Authority Relative to This Agreement.......................14
Section 2.05 Material Contracts; No Conflict; Required
Filings and Consents....................................15
Section 2.06 Compliance; Permits........................................17
Section 2.07 SEC Filings; Financial Statements; Regulatory Filings......17
Section 2.08 Absence of Certain Changes or Events.......................18
Section 2.09 No Undisclosed Liabilities; Certain Assets.................19
Section 2.10 Absence of Litigation......................................19
Section 2.11 Employee Benefit Plans; Employment Agreements..............20
Section 2.12 Employment and Labor Matters...............................24
Section 2.13 Registration Statement; Proxy Statement/Prospectus.........25
Section 2.14 Restrictions on Business Activities; Agreement
with Regulatory Agencies...............................25
Section 2.15 Properties.................................................26
Section 2.16 Taxes......................................................26
Section 2.17 Environmental Matters......................................27
Section 2.18 Brokers....................................................29
Section 2.19 Intellectual Property......................................29
Section 2.20 Interested Party Transactions..............................31
Section 2.21 Insurance..................................................31
Section 2.22 Interest Rate and Foreign Exchange Contracts...............31
Section 2.23 Compliance With The Foreign Corrupt Practices Act..........31
Section 2.24 Opinion of Financial Advisor...............................31


ARTICLE III REPRESENTATIONS AND WARRANTIES OF ACQUIROR.................32
Section 3.01 Organization and Qualification; Subsidiaries...............32


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Section 3.02 Capitalization.............................................32
Section 3.03 Authority Relative to this Agreement.......................33
Section 3.04 No Conflicts; Required Filings and Consents................33
Section 3.05 Compliance; Permits........................................34
Section 3.06 SEC Filings; Financial Statements..........................35
Section 3.07 Absence of Certain Changes or Events.......................35
Section 3.08 No Undisclosed Liabilities.................................36
Section 3.09 Absence of Litigation......................................36
Section 3.10 Registration Statement; Proxy Statement/Prospectus.........36
Section 3.11 Restrictions on Business Activities........................37
Section 3.12 Taxes......................................................37
Section 3.13 Environmental Matters......................................38
Section 3.14 Brokers....................................................38
Section 3.15 Ownership of Acquiror......................................39
Section 3.16 No Prior Activities........................................39
Section 3.17 No Vote Required...........................................39


ARTICLE IV CONDUCT OF BUSINESS PENDING THE MERGER.....................39
Section 4.01 Conduct of Business by the Company.........................39
Section 4.02 No Solicitation............................................42
Section 4.03 Conduct of Business by Guarantor...........................43


ARTICLE V ADDITIONAL AGREEMENTS......................................44
Section 5.01 Proxy Statement/Prospectus; Registration Statement.........44
Section 5.02 Company Stockholders Meeting...............................46
Section 5.03 Access to Information; Confidentiality.....................46
Section 5.04 Consents; Approvals........................................47
Section 5.05 Agreements with Respect to Affiliates......................47
Section 5.06 Indemnification and Insurance..............................48
Section 5.07 Notification of Certain Matters............................49
Section 5.08 Further Action/Tax Treatment...............................49
Section 5.09 Public Announcements.......................................50
Section 5.10 Guarantor Common Shares....................................50
Section 5.11 Stock Options and ESPP.....................................50
Section 5.12 Certain Employee Benefits..................................51
Section 5.13 Accountants Letters........................................53
Section 5.14 Compliance with State Property Transfer Statutes...........53
Section 5.15 Conveyance Taxes...........................................53
Section 5.16 Exchangeco Shares..........................................53


ARTICLE VI CONDITIONS TO THE MERGER...................................54
Section 6.01 Conditions to Obligation of Each Party
to Effect the Merger...................................54
Section 6.02 Additional Conditions to Obligations of Acquiror...........55
Section 6.03 Additional Conditions to Obligation of the Company.........56


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ARTICLE VII TERMINATION................................................57
Section 7.01 Termination................................................57
Section 7.02 Effect of Termination......................................58
Section 7.03 Fees and Expenses..........................................58


ARTICLE VIII GENERAL PROVISIONS.........................................60
Section 8.01 Effectiveness of Representations, Warranties
and Agreements........................................60
Section 8.02 Notices....................................................60
Section 8.03 Certain Definitions........................................62
Section 8.04 Amendment..................................................63
Section 8.05 Waiver.....................................................63
Section 8.06 Headings; Intepretation....................................63
Section 8.07 Severability...............................................64
Section 8.08 Entire Agreement...........................................64
Section 8.09 Assignment.................................................64
Section 8.10 Parties in Interest........................................64
Section 8.11 Failure or Indulgence Not Waiver; Remedies Cumulative......64
Section 8.12 Governing Law; Jurisdiction................................65
Section 8.13 Counterparts...............................................65
Section 8.14 Waiver of Jury Trial.......................................65
Section 8.15 Performance of Guarantee...................................65


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AGREEMENT AND PLAN OF MERGER


This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered into as of March 12, 2001, between Tyco Acquisition Corp. XIX (NV) ("Acquiror"), a Nevada corporation and a direct, wholly-owned subsidiary of Tyco International Ltd., a Bermuda company ("Guarantor"), and The CIT Group, Inc., a Delaware corporation (the "Company").


W I T N E S S E T H:


WHEREAS, the Boards of Directors of Acquiror and the Company have each determined that it is advisable and in the best interests of their respective stockholders, and consistent with and in furtherance of their respective business strategies and goals, for Guarantor to acquire the Company through the merger of the Company with and into Acquiror upon the terms and subject to the conditions set forth herein;


WHEREAS, in furtherance of such combination, the Boards of Directors of Acquiror and the Company have each approved and adopted this Agreement providing for the merger (the "Merger") of the Company with and into Acquiror in accordance with the applicable provisions of the Nevada General Corporation Law (the "NGCL") and the Delaware General Corporation Law (the "DGCL") and upon the terms and subject to the conditions set forth herein;


WHEREAS, Acquiror and the Company intend that (i) the Merger shall constitute a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder (the "Code"), (ii) by approving resolutions authorizing this Agreement, to adopt this Agreement as a plan of reorganization within the meaning of Sections 354 and 361 of the Code and (iii) that the transactions contemplated by this Agreement be undertaken pursuant to such plan;


WHEREAS, pursuant to the Merger, each outstanding share of the Company's common stock, par value $0.01 per share (the "Company Common Stock" and each such share, a "Share"), shall be converted into the right to receive the Merger Consideration (as defined in Section 1.07(b)), upon the terms and subject to the conditions set forth herein;


WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition to the Company's willingness to enter into this Agreement, Guarantor has agreed fully and unconditionally to guarantee the representations, warranties, covenants, agreements and other obligations of Acquiror in this Agreement (the "Guarantee"); and


WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition to Acquiror's willingness to enter into the Agreement, Acquiror has entered into a stock purchase agreement (the "Stock Purchase Agreement") with The Dai-Ichi Kangyo Bank, Ltd. (the "Stockholder"), which is the owner of approximately 26.8% of the outstanding Shares, pursuant to which the Stockholder has agreed to sell, and Acquiror has agreed to purchase, all of such Stockholder's Shares in accordance with the terms thereof;


NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Acquiror and the Company hereby agree as follows:


Definitions:


"Acquiror" is defined in the preamble.


"Acquisition Proposal" is defined in Section 4.02(a)(i).


"Adjusted Option" is defined in Section 5.11(a).


"affiliates" is defined in Section 8.03(a).


"Affiliate Plan" is defined in Section 2.11(a).


"Agreement" is defined in the preamble.


"Alternative Transaction" is defined in Section 4.02(a).


"Alternative Transaction Condition" is defined in Section 7.03(b).


"Articles of Merger" as defined in Section 1.02(a).


"2000 Balance Sheet" is defined in Section 2.09(a)(i).


"Benefits Continuation Period" is defined in Section 5.12(a).


"business day" is defined in Section 8.03(b).


"Certificate of Merger" is defined in Section 1.02(b).


"Certificates" is defined in Section 1.06(f).


"COBRA" is defined in Section 2.11(b)(i).


"Code" is defined in the recitals.


"Company" is defined in the preamble.


"Company Affiliate Agreement" is defined Section 5.05.


"Company Affiliate Letter" is defined in Section 5.05.


"Company Charter Documents" is defined in Section 2.02.


"Company Common Stock" is defined in the recitals.


"Company Disclosure Schedule" is defined in Section 2.01.


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"Company Employee" is defined in Section 5.12(a).


"Company Employee Plans" is defined in Section 2.11(a).


"Company ESPP" is defined in Section 1.06(c).


"Company Financial Advisor" is defined in Section 2.18.


"Company Financing Agreement" is defined in Section 2.06(a).


"Company Intellectual Property Assets" is defined in Section 2.19(a).


"Company Permits" is defined in Section 2.06(b).


"Company Preferred Stock" is defined in Section 2.03.


"Company SEC Documents" is defined in Section 2.03.


"Company Stock Options" is defined in Section 1.06(c).


"Company Stock Option Plans" is defined in Section 1.06(c).


"Company Stockholders Meeting" is defined in Section 2.04(c)(iii).


"Confidentiality Agreement" is defined in section 5.03(a).


"control" is defined in Section 8.03(c).


"Covered Persons" is defined in Section 5.06(c).


"Defined Benefit Plan" is defined in Section 2.11(e).


"DGCL" is defined in the recitals.


"D&O Insurance" is defined in Section 5.06(d).


"DOL" is defined in Section 2.11(a).


"dollars" or "$" is defined in Section 8.03(d).


"Effective Time" is defined in Section 1.02.


"Environmental Claim" is defined in Section 2.17(e)(i).


"Environmental Health and Safety Laws" is defined in Section 2.05(c)(i).


"Environmental Laws" is defined in Section 2.17(e)(ii).


"ERISA" is defined in Section 2.11(a).


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"Exchange Act" is defined in Section 2.05(a)(iii).


"Exchange Agent" is defined in Section 1.07(a).


"Exchange Ratio" is defined in Section 1.06(a)(i).


"Exchangeco" is defined in Section 1.06(a)(ii).


"Exchangeco Documents" is defined in Section 1.06(a)(ii).


"Exchangeco Shares" is defined in Section 1.06(a)(ii).


"Expenses" is defined in Section 7.03(b).


"Fee" is defined in Section 7.03(b).


"GAAP" is defined in Section 2.07(b).


"Governmental Authority" is defined in Section 2.05(c).


"Guarantee" is defined in the recitals.


"Guarantor" is defined in the preamble.


"2000 Guarantor Balance Sheet" is defined in Section 3.08(i).


"Guarantor Charter Documents" is defined in Section 3.01(a).


"Guarantor Common Shares" is defined in Section 1.06(a)(i).


"Guarantor Permits" is defined in Section 3.05.


"Guarantor Preference Shares" is defined in Section 3.02(a).


"Guarantor SEC Documents" is defined in Section 3.05.


"HSR Act" is defined in Section 2.05(c)(i).


"Indemnified Parties" is defined in section 5.06(b).


"Intellectual Property Assets" is defined in Section 2.19(a).


"IRS" is defined in Section 2.11(b)(vi).


"ISO" is defined in Section 2.11(c)(i).


"knowledge" is defined in Section 8.03(e).


"Material Adverse Effect" is defined in Section 8.03(f).


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"Material Agreement" is defined in Section 3.04(b).


"Materials of Environmental Concern" is defined in Section 2.17(e)(iii).


"Merger" is defined in the recitals.


"Merger Consideration" is defined in Section 1.07(b).


"NGCL" is defined in the recitals.


"Non-U.S. Monopoly Laws" is defined in Section 2.05(c).


"NYSE" is defined in Section 1.06(f).


"Ordinary Course Finance Agreements" is defined in Section 2.03.


"PBGC" is defined in Section 2.11(b)(ix).


"PCBs" is defined in Section 2.17(d).


"person" is defined in Section 8.03(g).


"Post-1997 Company SEC Documents" is defined in Section 2.07(a).


"Post-1998 Guarantor SEC Documents" is defined in Section 3.06(a).


"Proxy Statement/Prospectus" is defined in Section 2.13(a)(ii).


"Registration Statement" is defined in Section 3.10(a)(i).


"Regulatory Agency" is defined in Section 2.07(c).


"Regulatory Agreement" is defined in Section 2.14(b).


"Regulatory Approvals" is defined in Section 2.05(c)(ii).


"SEC" is defined in Section 2.03.


"Securities Act" is defined in Section 2.05(c)(i).


"Share" is defined in the recitals.


"significant subsidiary" is defined in Section 8.03(h).


"Special Voting Stock" is defined in Section 1.06(a)(iii).


"Stock Purchase Agreement" is defined in the recitals.


"Stockholder" is defined in the recitals.


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"subsidiary" or "subsidiaries" is defined in Section 8.03(i).


"Subsidiary Documents" is defined in Section 2.02.


"Surviving Corporation" is defined in Section 1.01.


"Tax" is defined in Section 2.16(b).


"Tax Return" is defined in Section 2.16(b).


"Terminating Breach" is defined in Section 7.01(h).


"Terminating Change" is defined in Section 7.01(g).


"Terminating Misrepresentation" is defined in Section 7.01(f).


"Third Party" is defined in Section 4.02(a).


"Third Party Intellectual Property Assets" is defined in Section 2.19(c).


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ARTICLE I


THE MERGER


Section 1.01 The Merger. At the Effective Time, and subject to and upon the terms and conditions of this Agreement, the NGCL and the DGCL, the Company shall be merged with and into Acquiror, the separate corporate existence of the Company shall cease, and Acquiror shall continue as the surviving corporation (hereinafter sometimes referred to as the "Surviving Corporation").


Section 1.02 Effective Time. Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Section 7.01, as promptly as practicable (and in any event within two business days) after the satisfaction or waiver of the conditions set forth in Article VI, the parties hereto shall cause the Merger to be consummated by (a) filing articles of merger as contemplated by the NGCL (the "Articles of Merger") and (b) filing a properly executed agreement or certificate of merger as contemplated by the DGCL (the "Certificate of Merger"), each, together with any required related certificates, with the Secretaries of State of the States of Nevada and Delaware, as appropriate, in such forms as required by, and executed in accordance with the relevant provisions of, the NGCL and the DGCL, respectively. The Merger shall become effective at the time of the later to occur of such filings or at such later time, which will be as soon as reasonably practicable, specified in the Articles of Merger and the Certificate of Merger (the "Effective Time"). Prior to such filing, a closing shall be held at the offices of Kramer Levin Naftalis & Frankel LLP, 919 Third Avenue, New York, NY, unless another time or place is agreed to in writing by the parties hereto, for the purpose of confirming the satisfaction or waiver, as the case may be, of the conditions set forth in Article VI.


Section 1.03 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Articles of Merger, the Certificate of Merger and the applicable provisions of the NGCL 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 Acquiror shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Acquiror shall become the debts, liabilities and duties of the Surviving Corporation.


Section 1.04 Articles of Incorporation; By-laws. (a) Subject to Section 5.06, at the Effective Time, the Articles of Incorporation of the Acquiror, as in effect immediately prior to the Effective Time, shall be the Articles of Incorporation of the Surviving Corporation (other than that the name of the Surviving Corporation reflected in such Articles of Incorporation shall be The CIT Group, Inc.) until thereafter amended as provided by law and such Articles of Incorporation of the Surviving Corporation.


(b) Subject to Section 5.06, at the Effective Time, the By-laws of Acquiror, as in effect immediately prior to the Effective Time, shall be the By-laws of the Surviving Corporation until thereafter amended.


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Section 1.05 Directors and Officers. The directors of Acquiror immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Articles of Incorporation and By-laws of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified.


Section 1.06 Effect on Securities, Etc. At the Effective Time, by virtue of the Merger and without any action on the part of Acquiror, the Company or the holders of any securities of the Company:


(a) Conversion of Securities. (i) Each Share issued and outstanding immediately prior to the Effective Time (excluding any Shares to be canceled pursuant to Section 1.06(b)) shall be converted, subject to Sections 1.06 (e) and (f), into the right to receive from Acquiror 0.6907 (such fraction, the "Exchange Ratio") of a fully paid and nonassessable common share of Guarantor, par value U.S. $0.20 per share (the "Guarantor Common Shares").


(ii) Each share in the non-voting class of exchangeable shares (the "Exchangeco Shares") of CIT Exchangeco Inc., a wholly-owned subsidiary of the Company formed under the laws of the province of Nova Scotia ("Exchangeco"), shall remain outstanding, and the provisions attaching thereto, the Exchangeable Share Support Agreement in respect thereof, dated November 15, 1999, between the Company, 3026192 Nova Scotia Company and Exchangeco and the Voting and Exchange Trust Agreement in respect thereof, dated November 15, 1999, between the Company, Exchangeco and Montreal Trust Company of Canada (collectively, the "Exchangeco Documents"), shall each be modified as required pursuant to the terms thereof to provide that, from and after the Effective Time, each Exchangeco Share shall be exchangeable, subject to Sections 1.06(e) and (f), for a fraction of a Guarantor Common Share equal to the Exchange Ratio, and the foregoing fraction of a Guarantor Common Share shall be substituted for shares of Company Common Stock for all other purposes under the Exchangeco Documents.


(iii) The Special Voting Stock of the Company (the "Special Voting Stock") shall be converted into a special voting preference share of Guarantor, having the designations, powers, preferences, rights, qualifications and limitations substantially similar to the designations, powers, preferences, rights, qualifications and limitations of the Special Voting Stock.


(b) Cancellation. Each Share held in the treasury of the Company and each Share owned by Guarantor, Acquiror or any direct or indirect, wholly-owned subsidiary of the Company or Guarantor immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to be outstanding, be canceled and retired without payment of any consideration therefor and cease to exist.


(c) Stock Options; Employee Stock Purchase Plan. At the Effective Time, all options ("Company Stock Options") to purchase Company Common Stock then outstanding, whether under the Company's Long-Term Equity Compensation Plan, the Company's Transition


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Option Plan or otherwise (together, the "Company Stock Option Plans"), shall be treated in accordance with Section 5.11 of this Agreement. Rights to purchase shares of Company Common Stock outstanding under any employee stock purchase or restricted stock plan or any similar U.S. or non-U.S. plan (collectively, the "Company ESPP") shall be treated as set forth in Section 5.11 of this Agreement. Any rights to purchase Company Common Stock under the Company's 401(k) plans shall be treated as set forth in Section 5.12 of this Agreement.


(d) Capital Stock of Acquiror. Each share of common stock, $0.01 par value per share, of Acquiror issued and outstanding immediately prior to the Effective Time shall constitute one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation. Following the Effective Time, each certificate evidencing ownership of shares of Acquiror common stock shall evidence ownership of such shares of capital stock of the Surviving Corporation.


(e) Adjustments to Exchange Ratio, Etc. If, during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of Guarantor or the Company shall occur, including by reason of any reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, or any stock dividend thereon with a record d ...