UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 22, 2011
ARCTIC CAT INC.
(Exact name of Registrant as Specified in its Charter)
| Minnesota | 0-18607 | 41-1443470 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| 505 Hwy 169 North Suite 1000 Plymouth, Minnesota |
55441 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
(763) 354-1800
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry Into a Material Definitive Agreement. |
On December 22, 2011, Arctic Cat Inc. (the “Company”) entered into a Stock Redemption Agreement (the “Agreement”) with Suzuki Motor Corporation (“Suzuki”) pursuant to which the Company purchased from Suzuki 6,102,000 shares of Class B Common Stock of the Company, which constitutes all of the outstanding shares of Class B Common Stock of the Company, for a purchase price of $79.3 million.
The foregoing summary of the Agreement is qualified by reference to the full text of the Agreement, which is filed as Exhibit 10.1 hereto and incorporated by reference as if fully set forth herein.
The Company issued a press release on December 28, 2011 announcing the stock redemption. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. |
Mr. Masayoshi Ito resigned from his position as a Director of the Company effective upon the execution of the Agreement on December 22, 2011. Mr. Ito represented Suzuki on the Company’s Board of Directors pursuant to the rights granted to Suzuki in connection with its purchase of Class B Common Stock of the Company. Mr. Ito’s resignation was not a result of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
| Item 9.01 | Financial Statements and Exhibits |
| 10.1 | Stock Redemption Agreement, dated as of December 22, 2011, by and between Arctic Cat Inc. and Suzuki Motor Corporation. |
| 99.1 | Press release issued on December 28, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| ARCTIC CAT INC. | ||||||
| By | /S/ TIMOTHY C. DELMORE | |||||
| Timothy C. Delmore, | ||||||
| Chief Financial Officer | ||||||
Dated: December 28, 2011
ARCTIC CAT INC.
FORM 8-K CURRENT REPORT
INDEX TO EXHIBITS
| Exhibit No. |
Description | |
| 10.1 | Stock Redemption Agreement, dated as of December 22, 2011, by and between Arctic Cat Inc. and Suzuki Motor Corporation. | |
| 99.1 | Press release issued on December 28, 2011. | |
Exhibit 10.1
STOCK REDEMPTION AGREEMENT
THIS STOCK REDEMPTION AGREEMENT (the “Agreement”), dated and made effective as of December 22, 2011, is entered into by and between SUZUKI MOTOR CORPORATION, a corporation incorporated and existing under the laws of Japan (“Seller”), and ARCTIC CAT INC., a corporation incorporated and existing under the laws of Minnesota (“Company”).
WITNESSETH
WHEREAS Seller is the record owner of 6,102,000 shares of Class B Common Stock, with a par value of $0.01 per share, of the Company (the “Shares”), and
WHEREAS Seller desires to sell to Company, and Company desires to purchase from Seller, all of the Shares, under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and provisions contained herein, the parties hereto hereby agree as follows:
1. Sale of Shares. Seller hereby agrees to sell, assign, transfer and convey to Company at the Closing all of its rights, title and interest in and to the Shares, and Company hereby agrees to purchase at the Closing the Shares from Seller, in consideration of the Purchase Price (as defined in Section 2 hereof). This sale and purchase of the Shares shall be subject to the terms and conditions, and will be made in reliance upon the representations and warranties, set forth in this Agreement.
2. Purchase Price. In consideration for the transfer of the Shares from Seller to Company pursuant to Section 1, Company shall pay to Seller at the Closing (as defined in Section 5 below) an amount of immediately available funds equal to Seventy-nine Million Three Hundred Twenty-six Thousand United States Dollars (USD $79,326,000) (the “Purchase Price”). Company shall pay the Purchase Price to Seller by electronic funds transfer to a bank account designated by Seller prior to the Closing.
3. Seller’s Representations and Warranties. Seller represents and warrants to Company as follows:
(a) Seller is the record and beneficial owner of the Shares;
(b) the Shares are free of any and all liens, pledges, mortgages, charges, security interests and encumbrances of any kind; and
(c) Seller has full power, right and authority to enter into and perform its obligations hereunder, and upon Seller’s execution and delivery of this Agreement, this Agreement will constitute the legal, valid, and binding obligations of Seller, enforceable against Seller in accordance with the terms hereof.
4. Company’s Representations and Warranties. Company represents and warrants to Seller as follows:
(a) The consummation of the transaction contemplated hereby is lawfully permitted by, and does not violate in any way, the provisions of Sections 302A.551 and .553 of the Minnesota Statutes;
(b) Company’s board of directors (excluding Masayoshi Ito, who has recused himself from participating in the board’s decision-making process with respect to this Agreement and the transaction contemplated by this Agreement) (the “Board”), at a meeting duly called and held, has unanimously (i) determined that this Agreement and the consummation of the transaction contemplated by this Agreement are fair and in the best interests of Company’s stockholders and (ii) approved the execution and delivery of this Agreement and the transaction contemplated hereby;
(c) Company has full power, right and authority to enter into and perform its obligations hereunder, and upon Company’s execution and delivery of this Agreement, this Agreement will constitute the legal, valid, and binding obligations of Company, enforceable against Company in accordance with the terms hereof;
(d) Company has received (i) a written opinion, satisfactory to Seller in form and substance, of Raymond James (the “Financial Advisor”) addressed to the Board to the effect that, as of the Closing Date, the Purchase Price to be paid to Seller for the Shares is fair, from a financial point of view, to Company, and (ii) a favorable written opinion, satisfactory to Seller in form and substance, of the Financial Advisor addressed to the Board, that immediately after giving effect to the consummation of the transaction contemplated by this Agreement and any indebtedness incurred by Company or an affiliate thereof in connection herewith, (1) the Company should be able to pay its existing and disclosed debts as they become absolute and mature and as they become due in the usual course of business considering all financing alternatives and potential asset sales reasonably available to the Company; (2) on a pro forma basis, the fair value and present fair saleable value of the Company’s assets would exceed the Company’s stated liabilities and identified contingent liabilities by more than its stated capital; and (3) the capital remaining in the Company after the transaction would not be unreasonably low for the business in which the Company is engaged as its management has indicated it is now conducted and is proposed to be conducted following the consummation of the transaction.
(e) True and complete copies of the opinions (but not the underlying analyses) referenced in Section 4(d) hereof have been provided to Seller; and
(f) Company has timely filed with or otherwise furnished (as applicable) to the U.S. Securities Exchange Commission, all reports, forms, statements, and other documents required to be filed or furnished under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), from June 1, 2007 (collectively, the “SEC Documents”). Each SEC Document filed or furnished under the Securities Act and the Exchange Act, at the time of its filing or being furnished (or, if amended, as of the date of the last amendment),
complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable. As of their respective dates, the SEC Documents filed pursuant to the Securities Act or the Exchange Act did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Company is not in possession of any material, nonpublic information regarding Company or any of its subsidiaries that has been required to be publicly disclosed prior to the date of this Agreement and has not been so disclosed.
5. Closing. The closing of the transaction under Sections 1 and 2 hereunder (the “Closing”) shall take place concurrently with the execution and delivery of this Agreement, at Fredrikson & Byron, P.A., 200 South 6th Street, Suite 4000, Minneapolis, Minnesota 55402 (the “Closing Date”).
6. Closing Deliveries. At the Closing, (a) Company shall deliver the opinions contemplated by Section 4(e) and pay the Purchase Price to Seller by wire transfer in immediately available funds in United States Dollars (all wire transfer fees to be borne by Company), and (b) Seller shall deliver, or caused to be delivered, to Company the original stock certificate(s) representing the Shares, the stock power on the reverse side thereof having been duly endorsed by Seller to Company.
7. Indemnification. After the Closing, Seller, on the one hand, and Company, on the other hand (each, an “Indemnitor”), shall indemnify and hold harmless the other party hereto and its respective directors, officers, and employees (collectively, the “Indemnitees”) from and against all causes of action, claims, losses, liabilities, costs and expenses (including interest, penalties and reasonable legal fees, but excluding any lost profits, indirect, consequential, special or punitive damages) (“Losses”) suffered or incurred by the Indemnitees based upon, arising out of, or in connection with, any breach of any representation and warranties or covenants of the Indemnitor under this Agreement. Each party’s right of indemnification under this Section 7 shall be the sole remedy that may be sought by the Indemnitee to the Indemnitor, and all other remedies available under law, equity or otherwise shall be excluded. If any claim is asserted or action or proceeding commenced or threatened by a third party against an Indemnitee that would reasonably be expected to give rise to a claim for indemnification by such Indemnitee against the Indemnitor pursuant to this Section 7 (each, a “Third Party Claim”), the Indemnitee shall promptly notify the Indemnitor in writing of such asserted, commenced or threatened Third Party Claim (with reasonable specificity of the nature of the claim), the amount of the claim (to the extent then known), and the basis for indemnification hereunder; provided that the failure to provide such notice as provided herein will not relieve the Indemnitor of its obligations hereunder except to the extent such failure actually prejudices in any significant respect the Indemnitor hereunder. The Indemnitor shall be entitled to participate in the defense of such Third Party Claim giving rise to such claim for indemnification at the Indemnitor’s sole cost and expense. The party controlling the defense of a Third Party Claim (the “Controlling Party”) will not consent to the entry of any judgment, or enter into any settlement, compromise, discharge or plea of no contest, with respect to such Third Party Claim, without the prior written consent of the other Party (the “Non-Controlling Party”), which consent shall not
unreasonably be withheld or delayed, and the Non-Controlling Party shall not be liable under this Section 7 for any Losses resulting from the Controlling Party consenting to the entry of any judgment, or entering into any settlement, compromise, discharge, or plea of no contest, with respect to such Third Party Claim, without such consent.
8. Further Assurances. Each party hereto shall take such additional actions that the other party hereto reasonably requests to effectuate, record, evidence or perfect the transfer of the Shares from Seller to Company pursuant to this Agreement or to otherwise effectuate or consummate the transaction contemplated hereby. Furthermore, Seller hereby affirms that it will use its best efforts to supply to Buyer snowmobile engines until December 31, 2013 pursuant to the terms and conditions of the Purchase/Supply Agreement dated as of March 1, 1985 and the Addendum to Purchase/Supply Agreement and Stock Purchase Agreement dated as of June 4, 2010.
9. Entire Agreement. This Agreement and all instruments and agreements executed in connection herewith constitute the entire agreement of the parties hereto with respect to the subject matter hereof.
10. Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, USA. Any legal action by or against Seller or Company relating to this Agreement shall be instituted and determined exclusively in the federal courts located in Minnesota, to the jurisdiction of which each party hereby expressly and unconditionally and irrevocably agrees to submit. Each of the parties hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named court for any reason, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such court (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable law, any claim that (1) the suit, action or proceeding in such court is brought in an inconvenient forum, (2) the venue of such suit, action or proceeding is improper or (3) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
(b) EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTION CONTEMPLATED HEREBY.
11. Waiver. No waiver of a right under this Agreement shall constitute a waiver of any other rights of the same or other provisions of this Agreement.
12. Survival. All representations and warranties made herein shall survive the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby for twelve months after the Closing.
13. Counterparts. This Agreement may be executed in separate counterparts, each of which, when so executed, is deemed to be an original and both of which, when taken together, constitute but one and the same agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.
SELLER:
SUZUKI MOTOR CORPORATION, a
Japanese corporation
By: /s/ TOSHIHIRO SUZUKI
Name: Toshihiro Suzuki
Title: Executive Vice President
COMPANY:
ARCTIC CAT INC., a Minnesota corporation
By: /s/ CLAUDE J. JORDAN
Name: Claude J. Jordan
Title: President and CEO
Exhibit 99.1
NEWS RELEASE
| CONTACTS: | Arctic Cat Inc. | Padilla Speer Beardsley Inc. | ||
| Timothy C. Delmore | Shawn Brumbaugh | |||
| Chief Financial Officer | ||||
| sbrumbaugh@padillaspeer.com | ||||
| 763-354-1791 | 612-455-1754 |
Arctic Cat Announces Cash Buyback of 6.1 Million Class B Shares
From Suzuki Motor Corporation
| § | All-cash purchase for $79.3 million; |
| § | Arctic Cat expects to end fiscal 2012 with more than $60 million in cash, following Suzuki share purchase; |
| § | Arctic Cat’s outstanding shares reduced from 18.4 million to 12.3 million, while public share float unchanged; |
| § | Suzuki to continue supplying Arctic Cat with snowmobile engines and engine parts, as planned; |
| § | Investor conference call at 10 a.m. CT today |
MINNEAPOLIS, December 28, 2011 – Arctic Cat Inc. (NASDAQ: ACAT) today announced that it has purchased all of Suzuki Motor Corporation’s approximately 6.1 million shares of Arctic Cat Class B common stock for a purchase price of $79.3 million. The stock buyback reduces Arctic Cat’s outstanding shares from 18.4 million to 12.3 million, increasing non-Suzuki shareholders’ ownership of outstanding common shares by approximately 33 percent, and leaves Arctic Cat’s public share float unchanged. Arctic Cat funded this purchase with existing cash on its balance sheet. The company expects to end its 2012 fiscal year with more than $60 million in cash and no debt, after deducting cash used for the share purchase from Suzuki.
Commented Claude Jordan, Arctic Cat’s president and chief executive officer: “Based on our current cash position and ongoing cash generation, we feel comfortable with this share purchase and believe it provides great value to our remaining shareholders. Suzuki has been a major shareholder since 1988 and a valued engine supplier for the Arctic Cat brand since 1976. We have benefited significantly from this long-standing relationship. Although Suzuki will no longer have an ownership stake in Arctic Cat, we look forward to continuing to purchase snowmobile engines for the next two model years, in addition to having Suzuki supply Arctic Cat with snowmobile engine parts to service existing engines after that time.”
As previously announced on June 10, 2010, Suzuki will supply snowmobile engines to Arctic Cat through the 2014 model year, as well as engine parts to service existing engines. Arctic Cat will move snowmobile engine manufacturing to its St. Cloud, Minn., facility, where the company has manufactured ATV engines since 2007.
In conjunction with the buyback of all of Suzuki’s Class B Arctic Cat shares, Suzuki’s representative has resigned from Arctic Cat’s board of directors, effective immediately. This is a position granted Suzuki as part of its ownership of the Class B shares, does not continue following the buyback and brings the total number on Arctic Cat’s board to seven, the majority of which are independent directors.
Investor Conference Call
A conference call is scheduled for 10 a.m. CT (11 a.m. ET) today. To listen to the live call dial 1-800-762-8779. The webcast may be accessed through the investor relations section of www.arcticcat.com/corporate. In addition, a telephone replay will be available for one week by dialing 1-800-406-7325, passcode 4501572.
About Arctic Cat
Arctic Cat Inc. designs, engineers, manufactures and markets all-terrain vehicles (ATVs) and snowmobiles under the Arctic Cat® brand name, as well as related parts, garments and accessories. Its common stock is traded on the Nasdaq Global Select Market under the ticker symbol “ACAT.” More information about Arctic Cat and its products is available at www.arcticcat.com.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements. The Company’s Annual Report, as well as the Report on Form 10-K, its Quarterly Report on Form 8-K and other filings with the Securities and Exchange Commission, the Company’s press releases and oral statements made with the approval of an authorized executive officer, contain forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. The words “aim,” “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions that indicate future events and trends identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to: product mix and volume; competitive pressure on sales, pricing and sales incentives; increase in material or production cost which cannot be recouped in product pricing;
changes in the sourcing of engines; interruption of dealer floorplan financing; warranty expenses and product recalls; foreign currency exchange rate fluctuations; product liability claims and other legal proceedings in excess of reserves or insured amounts; environmental and product safety regulatory activity; effects of the weather; general economic conditions and political changes; interest rate changes; consumer demand and confidence; and those set forth in the Company’s Annual Report on Form 10-K for the year ended March 31, 2011, under heading “Item 1A. Risk Factors.” The Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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