JOY Joy Global Inc. (delisted)

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Material U.S. Federal Income Tax Consequences of the Merger

        The following is a general discussion of the material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of Joy Global common stock whose shares are exchanged for cash pursuant to the merger. This discussion does not address U.S. federal income tax consequences with respect to holders other than U.S. holders. This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), applicable U.S. Treasury Regulations, judicial opinions and administrative rulings and published positions of the Internal Revenue Service (the "IRS"), each as in effect as of the date hereof. These authorities are subject to change or differing interpretations, possibly on a retroactive basis, and any such change or interpretation could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion is for general information purposes only and does not purport to be a complete analysis of all potential tax consequences. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010, nor does it address any tax considerations under state, local or foreign laws or U.S. federal laws other than those pertaining to the U.S. federal income tax. This discussion is not binding on the IRS or the courts and, therefore, could be subject to challenge, which could be sustained. No ruling is intended to be sought from the IRS with respect to the merger.

        For purposes of this discussion, the term "U.S. holder" means a beneficial owner of common stock that is for U.S. federal income tax purposes:

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a citizen or individual resident of the United States;



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a corporation, or other entity classified as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;



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a trust if (1) a court within the United States is able to exercise primary supervision over the trust's administration, and one or more U.S. persons are authorized to control all substantial decisions of the trust or (2) such trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or



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an estate the income of which is subject to U.S. federal income tax regardless of its source.

        This discussion applies only to U.S. holders of shares of Joy Global common stock who hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income

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taxation that may be relevant to a U.S. holder in light of its particular circumstances, or that may apply to U.S. holders subject to special treatment under U.S. federal income tax laws (including, for example, insurance companies, dealers or brokers in securities or foreign currencies, traders in securities who elect the mark-to-market method of accounting, holders subject to the alternative minimum tax, U.S. holders that have a functional currency other than the U.S. dollar, tax-exempt organizations, governmental agencies or instrumentalities, tax-qualified retirement plans, banks and other financial institutions, mutual funds, certain expatriates, partnerships (or other entities or arrangements treated as partnerships for U.S. federal income tax purposes), S corporations, or other pass-through entities, or investors in such partnerships, S corporations or other pass-through entities, real estate investment trusts, regulated investment companies, U.S. holders who hold shares of common stock as part of a hedge, straddle, constructive sale, conversion or other integrated transaction, U.S. holders who will hold (actually or constructively) an equity interest in the surviving corporation immediately after the merger, and U.S. holders who acquired their shares of common stock through the exercise of employee stock options or other compensation arrangements). This discussion also does not address the U.S. federal income tax consequences to holders of shares of common stock who exercise appraisal rights in connection with the merger under the DGCL.

        If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Joy Global common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partners and the activities of the partnership. If you are, for U.S. federal income tax purposes, a partner in a partnership holding shares of Joy Global common stock, you should consult your tax advisor.

         This summary of material U.S. federal income tax consequences is for general information purposes only and is not tax advice. Holders of Joy Global common stock are urged to consult their own tax advisors to determine the particular tax consequences to them of the merger, including the applicability and effect of the alternative minimum tax, the unearned income Medicare contribution tax and any other U.S. federal, or state, local, foreign or other tax laws.

Consequences to U.S. Holders

        The receipt of cash by U.S. holders in exchange for shares of Joy Global common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of Joy Global common stock pursuant to the merger will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) the U.S. holder's adjusted tax basis in its shares of Joy Global common stock.

        Any such gain or loss will be long-term capital gain or loss if a U.S. holder's holding period in the shares of Joy Global common stock surrendered in the merger is greater than one year as of the date of the merger. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. If a U.S. holder acquired different blocks of Joy Global common stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of Joy Global common stock.

Information Reporting and Backup Withholding

        Payments made in exchange for shares of Joy Global common stock pursuant to the merger may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 28%). To avoid backup withholding, a non-corporate U.S. holder that does not otherwise establish an exemption should complete and return to the applicable withholding agent a properly completed and executed IRS Form W-9, certifying under penalties of perjury that such U.S. holder is a

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"United States person" (within the meaning of the Code), that the taxpayer identification number provided is correct, and that such U.S. holder is not subject to backup withholding.

        Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder's U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

Regulatory Approvals

        Under the HSR Act and related rules, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the FTC and the Antitrust Division and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or termination of the applicable waiting period under the HSR Act. In accordance with the merger agreement, Company and Komatsu shall file, as promptly as reasonably practicable after the date of the merger agreement, their respective Notification and Report Forms with the FTC and the Antitrust Division.

        Completion of the merger is further subject to certain regulatory processes, including the receipt of antitrust clearance and/or approval or the filing of notices in Austria, Australia, Botswana, Brazil, Canada, China, Chile, Colombia, the European Commission, in case of referral, Poland, Russia, South Africa and Sweden.

        At any time before or after the expiration of the statutory waiting periods under the HSR Act the FTC or the Antitrust Division may take action under the antitrust laws, including seeking to enjoin the completion of the merger, to rescind the merger or to conditionally permit completion of the merger subject to regulatory conditions or other remedies. In addition, non-U.S. regulatory bodies and U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. Although neither Joy Global nor Komatsu believes that the merger will violate the antitrust laws, there can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

        If necessary to obtain the agreed antitrust clearances, Komatsu has agreed, among other things, to take or commit to the sale, divestiture, license, holding separate or other disposition of, or restriction on, the businesses, assets, properties, product lines or equity interests of, or changes to the conduct of business of, Joy Global, Komatsu and their respective subsidiaries (including the surviving corporation and its subsidiaries); provided, however, that Komatsu will not be required to (1) divest or dispose of any asset, product or line of business of Joy Global, or undertake any limitation on the conduct of Joy Global, Komatsu or their respective affiliates, representing in excess of $600 million in revenues or (2) offer or agree to the sale, divestiture, hold separate, licensing or disposition of any assets or businesses of Komatsu or its affiliates or (3) offer or accept any remedies or divestitures consisting of or impeding the use of intellectual property in the SR Drive Technology, unless Komatsu retains either ownership of or an unrestricted, perpetual, worldwide, royalty-free license to the SR Drive Technology. See the section entitled " The Merger (Proposal 1)—Regulatory Approvals ."

        "SR Drive Technology" refers to the structure or methods of using or manufacturing any drive system making use of a switched reluctance motor, as well as all hardware and software components and intellectual property necessary to use the system in operation in heavy equipment, including but not limited to kinetic energy storage, controller, power source, power conversion and braking components.

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        For purposes of the regulatory approvals provisions in the merger agreement, the calculation of revenues for any asset, product, line of business, or conduct restriction of Joy Global will be made on the basis of revenues reflected in the audited Joy Global consolidated accounts as of October 30, 2015. In the case of conduct restrictions on Komatsu and its affiliates, the calculation of revenues will be made on the basis of the revenues of Komatsu's parent company, Komatsu Ltd., as reflected in the audited Komatsu Ltd. consolidated accounts as of March 31, 2016.

Delisting and Deregistration of Company Common Stock

        If the merger is completed, the Company common stock will be delisted from the NYSE and deregistered under the Exchange Act.

Certain Litigation Relating to the Merger

        Several purported class action complaints relating to the merger have been filed in the United States District Court for the Eastern District of Wisconsin on behalf of putative classes of Joy Global's public shareholders (the "federal cases"). The complaints name as defendants Joy Global and its directors, and one of the complaints ( Soffer ) also names Komatsu America and Merger Sub. The federal cases generally allege that Joy Global and its directors breached federal securities laws by failing to disclose material information in the preliminary form of this proxy statement. The Soffer complaint also alleges that Joy Global's directors violated their fiduciary duties by entering into the merger agreement after engaging in an unfair process resulting in an unfair price, by improperly seeking to benefit themselves, and by agreeing to certain "deal protection" terms in the merger agreement. The Soffer complaint alleges that Joy Global, Komatsu America and Merger Sub aided and abetted these alleged violations of fiduciary duties. The federal cases are: Oduntan v. Joy Global Inc., et al. , Civil Action No. 16-cv-1136, filed August 24, 2016; Soffer v. Doheny, et al. , Civil Action No. 16-cv-1148, filed August 26, 2016; and Gordon v. Joy Global Inc., et al. , Case No. 16-cv-1153, filed August 26, 2016. Also on August 26, 2106, a putative class action, Garfield v. Joy Global Inc., et al. , 16CV006588, was filed in the Circuit Court of Wisconsin, Milwaukee County, naming Joy Global, its directors, Komatsu America, Komatsu Ltd., Goldman Sachs and unnamed Goldman Sachs employees (the "state case"). The state case alleges that the individual defendants breached their fiduciary duties by entering into the merger agreement and further that Joy Global and the individual defendants have failed to disclose material terms concerning the merger. The complaint alleges that Komatsu America, Komatsu Ltd. and the Goldman Sachs defendants aided and abetted the individual defendants' alleged breaches of fiduciary duties. Each of the federal cases and the state case seek, among other things, injunctive relief preventing the consummation of the merger, damages and an award of plaintiff's expenses and attorneys' fees. Defendants believe that the claims respectively asserted against them are without merit.

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THE MERGER AGREEMENT

         The following is a summary of the material provisions of the merger agreement, a copy of which is attached to this proxy statement as Annex A and which is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Merger Agreement

        The following summary of the merger agreement, and the copy of the merger agreement attached as Annex A to this proxy statement, are intended to provide information regarding the terms of the merger agreement and are not intended to provide any factual information about Joy Global or modify or supplement any factual disclosures about Joy Global in its public reports filed with the SEC. In particular, the merger agreement and the related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to Joy Global. The merger agreement contains representations and warranties by and covenants of Joy Global, Komatsu and Merger Sub which were made only for purposes of that agreement and as of specified dates. The representations, warranties and covenants in the merger agreement were made solely for the benefit of the parties to the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts, and may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in Joy Global's public disclosures. Investors are not third-party beneficiaries under the merger agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, the description of the merger agreement below does not purport to describe all of the terms of such agreement and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Annex A and is incorporated herein by reference.

        Additional information about Joy Global may be found elsewhere in this proxy statement and Joy Global's other public filings. See the section entitled " Where You Can Find Additional Information ."

Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

        At the effective time, Merger Sub will merge with and into Joy Global, and the separate corporate existence of Merger Sub will cease. Joy Global will be the surviving corporation in the merger and will continue its corporate existence as a Delaware corporation and a wholly owned subsidiary of Komatsu. The certificate of incorporation and bylaws of Merger Sub that are in effect immediately before the effective time will become the certificate of incorporation and bylaws of the surviving corporation, although the certificate of incorporation and bylaws will be amended to reflect the name of the surviving corporation as "Joy Global Inc."

        Except as otherwise determined by Komatsu prior to the effective time, the individuals holding positions as directors of Merger Sub immediately before the effective time will become the initial directors of the surviving corporation, and the officers of Joy Global as of immediately prior to the effective time shall be the initial officers of the surviving corporation.

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When the Merger Becomes Effective

        The closing of the merger will take place at 10:00 a.m. local time at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York, 10019, no later than on the third business day following the day on which the last of the conditions set forth in the merger agreement to be satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of such conditions) shall be satisfied or waived in accordance with the merger agreement, or at such other place, date and time as Joy Global and Komatsu may agree in writing.

        On the closing date, Joy Global will file a certificate of merger with the Secretary of State of the State of Delaware. The merger will become effective at such time as the certificate of merger has been filed with the Secretary of State of the State of Delaware, or at such later time as is agreed between the parties and specified in the certificate of merger.

        As of the date of this proxy statement, we expect to complete the merger in mid-2017. However, completion of the merger is subject to the satisfaction or waiver of the conditions to the completion of the merger, which are described below and include various regulatory clearances and approvals, and it is possible that factors outside the control of Joy Global or Komatsu could delay the completion of the merger, or prevent it from being completed at all. There may be a substantial amount of time between the special meeting and the completion of the merger. We expect to complete the merger promptly following the receipt of all required approvals.

Effect of the Merger on the Common Stock

        At the effective time, each share of Joy Global common stock outstanding immediately before the effective time (other than shares owned by Joy Global, Komatsu or Merger Sub or any of their respective subsidiaries, which will be cancelled, and other than dissenting shares) will be converted into the right to receive the merger consideration. The merger consideration will be $28.30 per share in cash, without interest, and subject to any applicable withholding taxes.

        At the effective time, each share of Joy Global common stock outstanding immediately before the effective time that is owned or held in treasury by Joy Global or any of its direct or indirect subsidiaries and any shares of Joy Global common stock owned, directly or indirectly, by Komatsu or Merger Sub, will be cancelled, and no consideration will be delivered in exchange for such cancellation.

        Each share of Merger Sub common stock, $1.00 par value, issued and outstanding immediately before the effective time shall be converted into one share of common stock, $1.00 par value, of the surviving corporation and shall constitute the only outstanding shares of capital stock of the surviving corporation. From and after the effective time, all certificates representing the common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of common stock of the surviving corporation into which they were converted.

Withholding Rights

        Komatsu, Merger Sub, Joy Global, the surviving corporation, and the paying agent will each be entitled to deduct and withhold any amounts due under applicable tax laws from the amounts that would otherwise become payable under the terms of the merger agreement, and any such withheld amounts that are timely paid to the appropriate taxing authorities will be treated as having been paid to the person from whom such amounts were originally deducted and withheld.

Treatment of Company Equity Awards; Stock Purchase Program

        Stock Options.     At the effective time, each Joy Global stock option that is outstanding as of the effective time, whether vested or unvested, will be cancelled in consideration for the right to receive a

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cash payment (without interest and less applicable withholding taxes) equal to the product of (a) the number of shares of Joy Global common stock subject to such option as of immediately prior to the effective time and (b) the excess, if any, of the merger consideration over the exercise price per share of such option as of immediately prior to the effective time.

        Company Restricted Share Unit Awards and Company Performance Share Awards.     At the effective time, each Joy Global restricted share unit award that was granted prior to the date of the merger agreement, each Joy Global restricted share unit award that is held by a non-employee director (whether granted to such director prior to or after the date of the merger agreement), and each Joy Global performance share award that is outstanding as of immediately prior to the effective time will be cancelled in consideration for the right to receive a cash payment (without interest and less applicable withholding taxes) equal to the product of (1) the number of shares of Joy Global common stock subject to such award as of immediately prior to the effective time and (2) the merger consideration. For each Joy Global performance share award outstanding immediately prior to the effective time, the number of shares subject to the applicable award shall be one hundred percent of the "Target Number of Performance Shares" set forth in the award at the time of grant.

        At the effective time, each Joy Global restricted share unit award granted after the date of the merger agreement (other than any such award granted to a non-employee director), that is outstanding as of immediately before the effective time will be converted into a long-term incentive award that entitles the holder to receive a fixed amount in cash equal to the product of (1) the number of shares of Joy Global common stock underlying such award as of immediately prior to the effective time and (2) the merger consideration. Each resulting long-term incentive award will be subject to the same vesting terms that applied to the corresponding Joy Global restricted share unit award as of immediately prior to the effective time.

        Employee Stock Purchase Plans.     Joy Global's employee stock purchase plans will be terminated immediately prior to the closing date. The offering periods under these plans that were ongoing as of the date of the merger agreement will be the final offering periods under these plans, and will terminate, and all outstanding purchase rights will be exercised, on the earlier of the applicable regularly scheduled purchase date and the trading date that is five business days prior to the closing date. Participants are prohibited from increasing their payroll deductions for these plans from those in effect on the date of the merger agreement.

Payment for Common Stock in the Merger

        Prior to the effective time, Komatsu will irrevocably deposit, or cause to be deposited, with a bank or trust company mutually agreed upon by Komatsu and Joy Global to act as the paying agent, in trust for the benefit of the holders of Joy Global common stock, cash sufficient to pay the aggregate merger consideration. Komatsu shall provide to Joy Global reasonably satisfactory written evidence of the completion of such deposit. Promptly (and no later than the second business day) after the effective time, the paying agent will mail to each holder of record of a certificate representing outstanding shares of Joy Global common stock immediately prior to the effective time (a "certificate") and to each holder of uncertificated shares of Joy Global common stock represented by book entry immediately prior to the effective time ("book entry shares"), in each case, whose shares were converted into the right to receive the merger consideration, (1) a letter of transmittal and (2) instructions for use in effecting the surrender of certificates or book-entry shares formerly representing shares of the common stock in exchange for payment of the merger consideration. The letter of transmittal shall specify that the shareholder only risks losing title to certificates or book entry shares upon delivery of the certificates or book entry shares to the paying agent in a form reasonably satisfactory to Komatsu and Joy Global. Upon surrender of certificates or book-entry shares to the paying agent, the holder of such certificates or book-entry shares will be entitled to receive the merger consideration for the number of

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shares formerly represented by the surrendered certificate or book entry share (less any amount that may be withheld with respect to any applicable withholding taxes).

        From and after the effective time, the stock transfer books of Joy Global will be closed and there will be no further transfers thereafter on Joy Global's records, and any certificates or book-entry shares presented to Joy Global for transfer thereafter shall be canceled against delivery of the merger consideration payable in respect of the shares of Joy Global common stock represented by such certificate or book-entry shares.

        The paying agent will invest the aggregate merger consideration deposited with it as directed by Komatsu; provided that such investment shall be in obligations of, or guaranteed by, the United States of America, in commercial paper obligations of issuers organized under the law of a state of the United States of America, rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Ratings Service, respectively, or in certificates of deposit, bank repurchase agreements or bankers' acceptances of commercial banks with capital exceeding $10,000,000,000 or in mutual funds investing in such assets. Any interest and other income resulting from any such investments will be paid to and become income of Komatsu. To the extent that there are losses with respect to such investments, Komatsu will promptly replace or restore the cash in the payment fund, so as to ensure that the payment fund is at all times maintained at a level sufficient to promptly make such cash payments.

        Any portion of the aggregate merger consideration deposited with the paying agent that remains undistributed to holders of shares of Joy Global common stock on the date that is six months after the effective time will be delivered to the surviving corporation, upon demand. Thereafter, any former holder of certificates or book entry shares prior to the merger who has not complied with the exchange and payment procedures described above may look only to the surviving corporation for payment of the merger consideration.

Representations and Warranties

        The merger agreement contains representations and warranties of Joy Global, Komatsu and Merger Sub to each other, subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms of the merger agreement (including in the disclosure schedule delivered by Joy Global to Komatsu). The representations and warranties made by Joy Global (including, in certain cases, with respect to its subsidiaries) to Komatsu and Merger Sub relate to, among other things, the following:

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organization, good standing and qualification to do business of Joy Global and its subsidiaries;



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capital stock and indebtedness;



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corporate authority, consents and approvals relating to the execution, delivery and performance of the merger agreement;



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the reports, forms, documents and financial statements of Joy Global required by the SEC;



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the establishment and maintenance of certain disclosure controls and procedures and internal control over financial reporting;



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the absence of undisclosed liabilities;



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compliance with applicable laws and permits;



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the absence of lawsuits and judgments against Joy Global or investigations regarding Joy Global;



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certain details with respect to the employee benefit plans and other agreements, plans and policies with or concerning employees of Joy Global and its subsidiaries;

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the absence of certain material changes or events in the business of Joy Global, including that there has not been a material adverse effect with respect to Joy Global;



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the absence of any investigations or litigation;



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certain details pertaining to Joy Global's and its subsidiaries' environmental matters and real property;



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certain details pertaining to Joy Global's and its subsidiaries' tax returns, filings and other tax matters;



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certain details with respect to Joy Global's and its subsidiaries' employee relations, labor matters and compliance with workplace safety and workers' compensation laws;



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certain details pertaining to Joy Global's and its subsidiaries' intellectual property;



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the receipt by the Joy Global board of the opinion from Goldman Sachs as to the fairness from a financial point of view, as of the date of each such opinion, of the consideration to be received by the holders of shares of Joy Global's common stock pursuant to the merger;



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material contracts;



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broker's and finder's fees;



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state takeover statutes; and



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insurance policies.

        The merger agreement also contains representations and warranties of Komatsu and Merger Sub, subject to certain exceptions in the merger agreement and the disclosure schedules delivered in connection with the merger agreement, as to, among other things:

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organization, good standing and qualification to do business;



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corporate authority, consents and approvals relating to the execution, delivery and performance of the merger agreement;



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compliance with applicable laws;



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broker's and finder's fees;



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the availability of sufficient funds to pay all of Komatsu's and Merger Sub's cash obligations under the merger agreement and the transaction contemplated hereby;



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the ownership and operations of Merger Sub;



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any ownership of Joy Global common stock; and



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the absence of a need for a vote of Komatsu stockholders on the merger.

        Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a "material adverse effect" qualification with respect to either Joy Global or Komatsu, as discussed below.

        For purposes of the merger agreement, a "material adverse effect" with respect to Joy Global means any change, fact, effect, event, occurrence or development that has a material adverse effect on the business, operations or financial condition of Joy Global and its subsidiaries taken as a whole or would reasonably be expected to prevent or materially impede, interfere with or delay Joy Global's

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timely consummation of, the transactions contemplated by the merger agreement. However, a material adverse effect is not deemed to include the impact of:

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any change or condition affecting the mining or heavy equipment manufacturing and servicing industries in North America or in any other region where such industries exist, including the coal mining and coal mining heavy equipment manufacturing and servicing industries in North America or in any other region where such industries exist or any industry in which Joy Global or a Joy Global subsidiary operates or does business whether in North America or in any other region where such industry exists (including, in each case, any changes in the operations thereof);



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any change affecting any economic, legislative or political condition or any change affecting any securities, credit, financial, commodities or other capital markets condition, in each case in the United States, in any foreign jurisdiction or in any specific geographical area in which Joy Global or a Joy Global subsidiary operates or does business;



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any failure in and of itself by Joy Global or any Joy Global subsidiary to meet any internal or public projection, budget, forecast, estimate or prediction in respect of revenues, earnings or other financial or operating metrics for any period (it being understood that the changes and effects giving rise to or contributing to such failure may (if not otherwise excluded hereby) constitute or be taken into account in determining whether a material adverse effect has occurred);



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any change resulting from the announcement, execution or delivery of the merger agreement, including (i) any action taken by Joy Global or any Joy Global subsidiary that is required or contemplated by the merger agreement, or is consented to by Komatsu or (ii) any claim arising out of or related to the merger agreement (including stockholder litigation);



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any change or condition affecting the market for minerals, ores, refined or unrefined products thereof or other commodities, including any change in the price or availability of minerals, ores, refined or unrefined products thereof or other commodities;



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any change in the market price, credit rating or trading volume of shares of Joy Global Common Stock on the NYSE or any change affecting the ratings or the ratings outlook for Joy Global or any Joy Global subsidiary (it being understood that the changes and effects giving rise to or contributing to any such change may (if not otherwise excluded hereby) constitute or be taken into account in determining whether a material adverse effect has occurred);



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any change in applicable law, regulation or GAAP (or authoritative interpretation thereof);



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geopolitical conditions, the outbreak or escalation of hostilities, any act of war, sabotage or purported terrorism, or any escalation or worsening of any such act of war, sabotage or purported terrorism threatened or underway as of the date of the merger agreement;



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any hurricane, strong winds, ice event, fire, tornado, tsunami, flood, earthquake or other natural disaster or weather-related event, circumstance or development;



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any change or effect arising from any requirements imposed by any governmental entities as a condition to obtaining the required statutory approvals; and



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any action required or permitted to be taken by Joy Global or any Joy Global subsidiary set forth on the Joy Global Disclosure Schedule;

provided, however, with respect to the matters described in the foregoing first, second, fifth and seventh bullet points above, such impact will be taken into account to the extent that it is disproportionately adverse to Joy Global and its subsidiaries, taken as a whole, relative to others in the industry or industries in which Joy Global and its subsidiaries operate.

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        For the purpose of the merger agreement, a "material adverse effect" with respect to Komatsu means any fact, circumstance, effect, change, event or development that has or would reasonably be expected to have a material and adverse effect on the ability of Komatsu or Merger Sub to timely consummate, or that would reasonably be expected to prevent or materially impede, interfere with or delay Komatsu or Merger Sub's timely consummation of, the transactions contemplated by the merger agreement.

Conduct of Business Pending the Merger

        The merger agreement provides that, during the period from July 21, 2016 until the effective time or the valid termination of the merger agreement under the terms therein, except as required by applicable law, with Komatsu's prior written consent (which shall not be unreasonably withheld, conditioned or delayed), as required by the merger agreement or as set forth in the disclosure schedules to the merger agreement, Joy Global will, and will cause each of its subsidiaries to, conduct its business in all material respects in the ordinary course consistent with past practice, and will not, and will not permit any of its subsidiaries to take, any of the following actions:

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amend its governing organizational documents or otherwise take any action to exempt any person from any provision of its governing organizational documents;



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except for transactions among Joy Global and the Joy Global subsidiaries or among the Joy Global subsidiaries, split, combine, consolidate, subdivide or reclassify any of its capital stock, other equity interests or voting securities, or securities convertible into or exchangeable or exercisable for capital stock or other equity interests or voting securities, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, other equity interests or voting securities, except for any issuances of compensatory equity awards relating to Joy Global Common Stock in the ordinary course of business consistent with past practice (provided that such awards are granted in accordance with the terms set forth in the merger agreement) or issuances of Joy Global common stock pursuant to the due exercise, vesting and/or settlement of company options, restricted share unit awards and performance share awards outstanding as of the date hereof in accordance with their terms;



•

declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, except for dividends paid by a direct or indirect wholly owned Joy Global subsidiary to Joy Global or another direct or indirect wholly owned Joy Global subsidiary or regular quarterly cash dividends from legally available funds payable by Joy Global or any Joy Global subsidiary in respect of shares of Joy Global Common Stock on a schedule consistent with the Joy Global's past practices and in an amount per share of Joy Global Common Stock for each such quarterly dividend not in excess of $0.01 per share (and, with respect to Joy Global's restricted share unit awards and performance share awards, dividend equivalents to the extent required by the terms of such awards as in effect on the date of the merger agreement);



•

repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, Joy Global or any Joy Global subsidiary or any securities of Joy Global or any Joy Global subsidiary convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, Joy Global or any Joy Global subsidiary, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests, except pursuant to (1) the due exercise, vesting and/or settlement of Joy Global options, restricted share unit awards, or performance share awards outstanding as of the date hereof in accordance with their terms and (2) transactions between Joy Global and a wholly owned Joy Global subsidiary or between wholly owned Joy Global subsidiaries;

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•

except as required pursuant to a company benefit plan or collective bargaining agreement in effect on the date of or by the terms of the merger agreement, (1) grant to any Joy Global personnel any increase in compensation or benefits (including paying to any Joy Global personnel any amount not due) other than increases in base salary or wage rate in the ordinary course of business consistent with past practices, provided that in the case of Joy Global personnel whose annual base salary would be $150,000 or more after such increase, no such increase, alone or in the aggregate, shall increase such person's base salary by more than three percent (3%) and provided further that no increases may be provided to Joy Global personnel who are party to a change in control agreement, (2) pay or award, or commit to pay or award, any bonuses or incentive compensation, (3) grant to any Joy Global personnel any new rights to, or increase any existing rights to, change-in-control, severance, retention or termination pay, or enter into or amend any change-in-control, severance, retention or termination agreement with any Joy Global personnel, (4) establish, adopt, enter into, amend in any material respect or terminate any company benefit plan, or (5) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any company benefit plan;



•

make any material change in financial accounting methods, principles or practices, except to the extent required by a change in applicable law or GAAP or by any governmental entity (including the SEC or the Public Company Accounting Oversight Board);



•

make any acquisition or disposition of a material asset or business (including by merger, consolidation or acquisition of stock or assets), except for (1) any acquisition or disposition of assets for consideration that is individually not in excess of $5,000,000 and in the aggregate not in excess of $10,000,000, (2) transactions between Joy Global and any direct or indirect wholly owned Joy Global subsidiary or between direct or indirect wholly owned Joy Global subsidiaries in the ordinary course of business, (3) any disposition of obsolete or worn-out equipment in the ordinary course of business, (4) purchases of raw materials in the ordinary course of business and (5) sales to customers of the products or services of Joy Global in the ordinary course of business;



•

redeem, repurchase, prepay (other than repayment of revolving loans), decrease or incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of any indebtedness, except for (1) guarantees and other credit support incurred in the ordinary course of business consistent with past practice, (2) as reasonably necessary to finance any capital expenditures permitted pursuant to the current capital expenditure plan of Joy Global, (3) indebtedness in replacement of existing indebtedness, consistent with the company Disclosure Schedule, (4) guarantees by Joy Global of existing indebtedness of any wholly owned subsidiary, (5) borrowings under existing revolving credit facilities in the ordinary course of business, (6) borrowings under existing local foreign borrowing lines in the ordinary course of business and (7) the establishment of and borrowings under any new local foreign borrowing line established by Joy Global or a subsidiary under certain conditions; provided, however, that Joy Global shall provide written notice, with reasonable detail, to Komatsu within ten business days in the event of certain occurrences as specified in the merger agreement;



•

other than (1) in the ordinary course of business (including renewals consistent with the terms thereof) and in a manner not material to Joy Global and its subsidiaries, taken as a whole, or (2) as otherwise may be reasonably necessary to comply with the terms of the merger agreement, (A) modify or amend in any material respect, or terminate or waive any material right under, any material contract (as defined by the merger agreement) or (B) enter into any contract that would have been a material contract had it been entered into prior to the date of the merger agreement;

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•

institute, waive, release, assign, settle or compromise any material claim, other than the compromise or settlement of claims for waivers, releases, assignments, settlements or compromises (1) in the ordinary course of business, (2) up to an amount designated in the merger agreement or (3) which would not reasonably be expected to have a material restrictive impact on the operations of Joy Global or its subsidiaries;



•

other than in the ordinary course of business, (1) settle or compromise any material tax claim, audit or assessment for an amount materially in excess of the amount accrued or reserved with respect to taxes, (2) change any material tax election, change any annual tax accounting period, or change any method of tax accounting, in each case, if such change would result in material taxes or (3) enter into any material closing agreement or surrender in writing any right to claim a material tax refund, in each case, for an amount materially in excess of the amount accrued or reserved with respect to taxes;



•

enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar contract with respect to any joint venture, strategic partnership or alliance (which contracts, for the avoidance of doubt, shall not include master sale or purchase agreements), or outside the ordinary course of business, with respect to any distributorship;



•

except as permitted by the merger agreement, take any action to exempt any person from, or make any acquisition of securities of Joy Global by any Person not subject to, any state takeover statute or similar statute or regulation that applies to Joy Global with respect to a takeover proposal or otherwise, except for Komatsu, Merger Sub or any of their respective subsidiaries or affiliates, or the transactions contemplated by the merger agreement;



•

abandon, encumber in any material respect not in the ordinary course of business, convey title (in whole or in part), exclusively license or grant any exclusive license to material intellectual property of Joy Global or any Joy Global subsidiaries;



•

dissolve or liquidate any existing direct or indirect Joy Global subsidiaries, in each case outside the ordinary course of business, or establish any new direct or indirect Joy Global subsidiaries;



•

fail to keep in full force and effect any material insurance policy or reduce the coverage provided by any material insurance policy;



•

materially reorganize or modify the management structure of Joy Global, any Joy Global subsidiary or any division or business segment thereof, including the corporate, surface mining or underground mining divisions; provided that the foregoing shall not restrict Joy Global from hiring and firing employees in the ordinary course of business; or



•

announce any intention, resolve, or to commit or enter into any contract to do any of the foregoing.

Access

        Subject to certain exceptions and limitations, during the period from July 21, 2016 until the earlier of the termination of the merger agreement in accordance with its terms and the effective time, Joy Global must afford Komatsu and its representatives reasonable access during normal business hours with advance notice to Joy Global's and its subsidiaries' personnel, properties, contracts, commitments, tax returns, books and records and such other information concerning its business, properties and personnel (other than certain highly confidential information or information that would jeopardize the attorney-client privilege or conflict with any law or contract to which Joy Global or its subsidiaries are bound).

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No Solicitation; Alternative Proposals

        While the merger is pending, Joy Global has agreed that, subject to certain exceptions described below, Joy Global and its affiliates and representatives will:

•

not, directly or indirectly, solicit, initiate, or knowingly encourage, induce or facilitate any company takeover proposal (as defined below) or any inquiry or proposal that would reasonably be expected to lead to a company takeover proposal;



•

not, directly or indirectly, participate in any discussions or negotiations regarding, or furnish to any other person (other than Komatsu and its affiliates and its and their respective representatives) any nonpublic information with respect to, or cooperate in any way with any such person with respect to, any company takeover proposal or any inquiry or proposal that would reasonably be expected to lead to a company takeover proposal; and



•

immediately cease and cause to be terminated any discussions or negotiations with any persons (other than Komatsu and its affiliates and its and their respective representatives) that may be ongoing with respect to a company takeover proposal or inquiry or proposal that could reasonably be expected to lead to a company takeover proposal, request the prompt return or destruction of all confidential information previously provided to such persons and terminate all physical and electronic data room access previously granted to any such persons or their representatives.

        Pursuant to the merger agreement, a "company takeover proposal" means any proposal, indication, interest or offer (whether or not in writing), from any person (other than Komatsu and its subsidiaries) involving a (1) merger, consolidation, share exchange, joint venture, other business combination, recapitalization, liquidation, dissolution or similar transaction involving Joy Global or any of its subsidiaries whose revenues, net income or assets, taken together, constitute 15% or more of the consolidated revenues, net income or assets of Joy Global and its subsidiaries, taken as a whole, (2) sale, lease, contribution or other disposition, directly or indirectly (including by way of merger, consolidation, share exchange, other business combination, partnership, joint venture, sale of capital stock of or other equity interests in Joy Global Subsidiary or otherwise) of any business or assets of Joy Global or Joy Global subsidiaries representing 15% or more of the consolidated revenues, net income or assets of Joy Global and Joy Global subsidiaries, taken as a whole, (3) issuance, sale or other disposition, directly or indirectly, to any person (or the stockholders of any person) or group of securities (or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing 15% or more of the voting power of Joy Global, (4) transaction (including any tender offer or exchange offer) in which any person (or the stockholders of any person) would acquire (in the case of a tender offer or exchange offer, if consummated), directly or indirectly, beneficial ownership, or the right to acquire beneficial ownership, or formation of any group that beneficially owns or has the right to acquire beneficial ownership of 15% or more of any class of capital stock of Joy Global or (5) any combination of the foregoing.

Receipt of Company Takeover Proposals

        Notwithstanding the provisions of the merger agreement described above, if at any time after July 21, 2016 and prior to obtaining the required vote of the Company's stockholders to adopt the merger agreement, Joy Global receives a bona fide written company takeover proposal from a third party (that did not result from a breach of the non-solicitation provisions of the merger agreement), and if the Joy Global board determines in good faith, after consultation with its independent financial advisors and outside legal counsel, that such company takeover proposal constitutes or could reasonably

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be expected to lead to a superior company proposal (as defined below), then Joy Global and its representatives may take the following actions:

•

furnish, pursuant to an acceptable confidentiality agreement (a copy of which shall be provided to Komatsu for informational purposes within 24 hours), information (including non-public information) with respect to Joy Global and its subsidiaries to the person that has made such company takeover proposal and its representatives; provided that Joy Global must substantially concurrently provide to Komatsu any non-public information concerning Joy Global or any of its subsidiaries that is provided or made available to such person or its representatives, unless such non-public information has been previously provided to Komatsu; and



•

participate in discussions or negotiations with the person making such company takeover proposal and its representatives regarding such proposal, including terms of a definitive agreement with respect thereto, and the negotiations of such terms with the person making such company takeover proposal;

but in each case described in the two preceding bullet points, only if (A) the Joy Global board determines in good faith (after consultation with its outside legal counsel and financial advisor) that the failure to take such action could reasonably likely be inconsistent with its fiduciary duties to the stockholders under applicable law and (B) Joy Global shall have delivered to Komatsu a prior written notice advising Komatsu that it intends to take such action.

        Joy Global must promptly (and in no event later than 24 hours) notify Komatsu orally and in writing of (1) any company takeover proposal, any request outside the ordinary course of business for material non-public information relating to Joy Global or its subsidiaries, and the identity of the person making such proposal or request, and (2) any company intervening event (as defined below) or any facts and circumstances that would reasonably be expected to lead to a company intervening event. Joy Global must keep Komatsu reasonably informed of the material terms and status of any company takeover proposal or of the facts and circumstances of any company intervening event.

        If, at any time prior to obtaining the required vote of the Company's stockholders to adopt the merger agreement, the Joy Global board determines in good faith, after consultation with independent financial advisors and outside legal counsel, that a written company takeover proposal that did not result from a breach of the non-solicitation provision of the merger agreement constitutes a superior company proposal, then the Joy Global board may terminate the merger agreement with Komatsu, provided that (1) Joy Global must have given Komatsu at least three business days prior written notice of its intention to take such action, and have provided Komatsu the material terms and conditions of, and the identity of the person making, any such superior company proposal, (2) if requested by Komatsu, Joy Global must have negotiated with Komatsu in good faith regarding any revision to the merger agreement committed to in writing by Komatsu, and (3) at the end of such notice period, the Joy Global board must have considered in good faith any revisions to the terms of the merger agreement proposed in writing by Komatsu, and have determined, after consultation with its independent financial advisors and outside legal counsel, that after taking into account any revisions to the merger agreement proposed by Komatsu, the failure to terminate the merger agreement as a result of such superior company proposal would reasonably likely be inconsistent with the Joy Global board's fiduciary duties under applicable law. If there are any subsequent changes to the superior company proposal, then the Joy Global board must provide Komatsu written notice of such changes and the period set forth above is extended an additional two business days.

        The non-solicitation provisions of the merger agreement do not prohibit Joy Global or the Joy Global board from taking and disclosing to the stockholders of Joy Global a position contemplated by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act or making any disclosure to the stockholders of Joy Global if the Joy Global board determines in good faith that failure to so disclose would reasonably likely be inconsistent with its obligations under applicable law.

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        Pursuant to the merger agreement, a "superior company proposal" means a bona fide written company takeover proposal (provided that for purposes of this definition, the applicable percentage in the definition of company takeover proposal shall be "50.1%" rather than "15% or more"), that did not result from, or arise in connection with, any material breach of the merger agreement's no solicitation provision, and that the Joy Global board determines in good faith, after consultation with its outside legal counsel and financial advisor, and taking into account the legal, financial, regulatory and other relevant aspects of such a proposal, is (1) reasonably capable of being completed on the terms proposed and (2) more favorable to the holders of Joy Global Common Stock than the transactions contemplated by the merger agreement with Komatsu (after taking into account any proposed revisions to the terms of the merger agreement that are committed to in writing by Komatsu).

        A "company intervening event" means a change or effect relating to the Joy Global that (A) is unknown to the Joy Global board as of July 21, 2016, or if known to the Joy Global board as of such date, the material consequences of which were not known or reasonably foreseeable to the Joy Global board as of such date, and (B) does not relate to any company takeover proposal or any consequence thereof.

Changes in Board Recommendation

        The Joy Global board has unanimously recommended that Joy Global stockholders vote " FOR " the proposal to adopt the merger agreement. The merger agreement permits the Joy Global board to make a "company adverse recommendation change" in the event that (i) a company intervening event occurs or (ii) Joy Global receives a superior company proposal that does not result from a breach of the non-solicitation requirement, and, in each case, if the Joy Global board determines in good faith (after consultation with its outside legal counsel and financial advisor and after taking into account any changes to the terms of the merger agreement proposed by Komatsu during the three business day period referred to in clause (3) below) that the failure to effect a company adverse recommendation change would reasonably likely be inconsistent with the Joy Global board's fiduciary duties under applicable law.

        In addition, to make a change of recommendation, the Joy Global board must (1) provide three business days prior written notice to Komatsu that it is prepared to effect a company adverse recommendation change, which notice shall identify the company intervening event or describe the material terms and conditions of the superior company proposal; (2) if requested by Komatsu, during the three business day period after delivery of the notice, negotiate in good faith with Komatsu and its representatives regarding any revisions to the merger agreement committed to in writing by Komatsu and (3) at the end of such three business day period and taking into account any changes to the terms of the merger agreement committed to in writing by Komatsu, determine in good faith (after consultation with its outside legal counsel and financial advisor) that the failure to make such a company adverse recommendation change would reasonably likely be inconsistent with its fiduciary duties to stockholders under applicable law. If there are any subsequent changes to the superior company proposal leading to a company adverse recommendation change, then the Joy Global board must provide Komatsu written notice of such changes and the period set forth above is extended an additional two business days.

Stockholders' Meeting

        Joy Global has agreed under the merger agreement to call a meeting of its stockholders to be held as soon as reasonably practicable after the mailing of this proxy statement. Joy Global shall make an effort to (i) solicit from the stockholders proxies in favor of adopting the merger agreement and (ii) take all other actions necessary to secure the vote of the stockholders required by applicable law to obtain approval of the merger. Joy Global may adjourn or postpone the company stockholders meeting only if, as of the time for which such meeting is originally scheduled, there are insufficient shares of

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Joy Global Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such meeting, or if on the date of such meeting Joy Global has not received proxies representing a sufficient number of shares necessary to obtain the required company stockholder approval. Joy Global has also agreed under the merger agreement for the Joy Global board to recommend to Joy Global's stockholders the adoption of the merger agreement, subject to the provisions of the merger agreement described above under the section of this proxy statement entitled " —No Solicitation " and " —Changes in Board Recommendation ."

Financing

        There is no financing condition to the merger. Komatsu has represented in the merger agreement that it will have, at the effective time, immediately available sufficient funds to pay the merger consideration and make all other necessary payments by it in connection with the merger.

Employee Matters

        The merger agreement provides that, during the period commencing at the effective time and ending on the first anniversary of the effective time (the "continuation period"), except as would be inconsistent with applicable law, Komatsu will provide, or will cause the surviving corporation to provide, to each employee of Joy Global or its subsidiaries who continues to be employed by Komatsu or the surviving corporation or any of their respective subsidiaries following the effective time (collectively, the "company employees"), and who, in each case, is not represented by a union, labor organization or works council, (1) a base salary or wage rate that is no less favorable than that provided to such company employee immediately prior to the effective time and (2) aggregate incentive compensation opportunities and employee benefits that are substantially comparable, in the aggregate, to those cash-based and equity-based incentive compensation opportunities and employee benefits provided to such company employee immediately prior to the effective time (but not taking into account any retention program established pursuant to the merger agreement and recognizing that equity-based compensation may be replaced with other forms of long-term compensation). Furthermore, during the one-year period immediately following the effective time, Komatsu shall, and shall cause the surviving corporation to, provide each company employee in certain jurisdictions who experiences a termination of employment other than for cause with the surviving corporation, Komatsu or any of their subsidiaries with severance benefits that are no less favorable than those set forth in the severance plan applicable to such jurisdiction as in effect on the date of the merger agreement.

        Following the effective time of the merger, subject to certain customary exclusions, Komatsu and the surviving corporation will: (1) use commercially reasonable efforts to (A) cause any preexisting condition limitations or eligibility waiting periods under plans of Komatsu, the surviving corporation or a subsidiary to be waived with respect to company employees to the extent such limitation would have been waived or satisfied under the Joy Global benefit plan in which such company employee participated immediately prior to the merger, and (B) credit each company employee under these plans for co-payments or deductibles incurred in the plan year in which such company employee is first eligible to participate and cause such credited expenses to count toward any annual or lifetime limits, and (2) recognize service with Joy Global and its subsidiaries (and any predecessors thereof) for all purposes under these plans, including eligibility to participate, level of benefits, vesting and benefit accruals.

        The merger agreement further provides that Joy Global may establish a cash-based retention program in the aggregate amount of $5 million to promote retention, to incentivize efforts to consummate the closing and to provide for a transition for a reasonable period of time following the closing (the "retention program"). Awards under the retention program may be allocated by the Chief Executive Officer of Joy Global (or his designee(s)) among Joy Global employees; provided that no awards may be granted to an individual who is covered by a change in control agreement and any

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award in excess of $100,000 shall be subject to the prior approval by Komatsu, such approval not to be unreasonably withheld or delayed. The merger agreement provides that each retention award will vest and be paid fifty percent immediately prior to the effective time, twenty-five percent on the date that is ninety days after the effective time and twenty-five percent on the date that is one hundred eighty days after the effective time, subject to continued employment through the applicable payment date, except that any unpaid portion of the award will vest in full and be paid on an earlier qualifying termination, subject to the employee providing a general release of claims against Joy Global and its affiliates. If a retention award under the retention program is forfeited by a participant prior to the effective time, the Chief Executive Officer of Joy Global (or his designee(s)) may reallocate the retention award to existing employees or new hires of Joy Global and its subsidiaries. Joy Global may enter into a retention letter agreement with each recipient of a retention award under the retention program setting forth the amount and terms of such award.

        Pursuant to the merger agreement, Joy Global may pay to each employee of Joy Global and its subsidiaries actively employed on the last day of Joy Global's 2016 fiscal year (ending October 28, 2016), a full bonus under the applicable annual bonus plan in respect of Joy Global's 2016 fiscal year based on actual performance during such fiscal year, such payment to be made at the earlier of (1) immediately prior to the effective time, and (2) in the ordinary course of business consistent with past practice. Joy Global may establish awards for employees under the applicable annual bonus plan in respect of Joy Global's 2017 fiscal year (ending October 27, 2017) and the related performance goals, in each case, in the ordinary course of business and consistent with past practice. If the effective time occurs during Joy Global's 2017 fiscal year, Komatsu shall pay, or cause to be paid, to each company employee who participated in an annual bonus plan immediately prior to the effective time and who experiences a qualifying termination at or following the effective time and prior to payment of such bonus (subject to the employee providing a general release of claims against Joy Global and its affiliates, including Joy Global personnel, in the form used by Joy Global in the ordinary course) a bonus equal to the product obtained by multiplying (a) the company employee's full year bonus entitlement under all applicable annual bonus plans for Joy Global's 2017 fiscal year based on actual performance, and (b) a fraction (not to exceed 1), the numerator of which equals the number of days that have elapsed during such fiscal year through the date of the qualifying termination and the denominator of which equals 365, with such bonus being paid at the same time as bonuses to company employees who remain in the employ of Joy Global, but in any event not later than the 15th day of the third month following the later of (i) the end of calendar year of the qualifying termination and (ii) the end of Joy Global's fiscal year in which the qualifying termination occurs.

Efforts to Complete the Merger

        Joy Global, Komatsu and Merger Sub have agreed to use their respective reasonable best efforts to cause the conditions to the closing to be satisfied as promptly as reasonably practicable, including (i) making all necessary filings with governmental entities or third parties, (ii) obtaining the required consents and all other third-party consents that are necessary to consummate the merger, (iii) obtaining the required statutory approvals and all other consents of governmental entities that are necessary to consummate the merger, (iv) avoiding the entry, enactment or application of any law, judgment, or other legal restraint that might impede or delay consummation of the merger and (v) executing and delivering any additional instruments that are necessary to consummate the merger. Komatsu shall be responsible for 100% of the fees, costs and expenses (except for the fees, costs and expenses of Joy Global's advisors), including any filing fees, associated with any filings or consents contemplated by the merger agreement.

        Joy Global and Komatsu must also, if necessary to obtain the required or advisable antitrust approvals, (1) defend through litigation any claim asserted in any court that could impede the closing, but only through the completion of a preliminary or permanent injunction hearing in the U.S., and, in

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other jurisdictions, only until the time that continuing to do so would no longer reasonably likely lead to the satisfaction of the conditions precedent to closing and (2) divest, license or otherwise dispose of any of Joy Global's assets, product lines or businesses, or agree to any conduct restrictions, that produced revenues in the aggregate not exceeding $600 million. Komatsu is not required (a) to sell, divest or hold separate any of Komatsu's assets or business (as opposed to Joy Global's assets and business) or (b) to divest intellectual property in the SR Drive Technology, unless permitted to retain ownership of, or a worldwide royalty-free, unrestricted license to the SR Drive Technology.

Indemnification and Insurance

        Komatsu and Merger Sub have agreed that all rights to exculpation and indemnification for acts or omissions occurring at or prior to the effective time, whether asserted or claimed prior to, at or after the effective time (including any matters arising in connection with the transactions contemplated by the merger agreement), now existing in favor of the current or former directors, officers or employees, as the case may be, of Joy Global or any of its subsidiaries (which we refer to as the "indemnified parties") as provided in Joy Global's or any of its subsidiaries' governing organizational documents, each as in effect on July 21, 2016, will survive the merger and continue in full force and effect in accordance with their terms. For a period of not less than six years after the effective time, Komatsu will cause the surviving corporation to indemnify, defend and hold harmless, and advance expenses to, the indemnified parties with respect to all acts or omissions by them in their capacities as such at any time prior to the effective time, to the fullest extent provided by the organizational documents of Joy Global and its subsidiaries and applicable law.

        In addition, Komatsu will obtain, or cause the surviving corporation to obtain, for a period of not less than six years after the effective time, for the indemnified parties who are insured under Joy Global's directors' and officers' insurance and indemnification policy, an insurance and indemnification policy that provides coverage for events occurring at or prior to the effective time that is no less favorable than the existing policy of Joy Global, with certain qualifications.

Coordination on Litigation

        Joy Global, Komatsu, and Merger Sub have each agreed to promptly notify the other parties in writing of any stockholder litigation or other litigation or proceedings arising from the merger agreement or the merger that is brought against such party or any of its Affiliates or members of its board of directors ("Transaction Litigation"). Each party shall keep the other parties informed on the reasonably current status of any Transaction Litigation (including by promptly furnishing to the other parties and their representatives such information relating to such litigation or proceedings as may be reasonably requested). Joy Global shall give Komatsu the opportunity to participate in the defense and settlement of any Transaction Litigation. No compromise or full or partial settlement of any Transaction Litigation shall be agreed to by Joy Global or its affiliates or members of the Joy Global board without Komatsu's prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).

Other Covenants and Agreements

        The merger agreement also contains additional covenants, including, among others, covenants relating to the filing of this proxy statement, covenants relating to regulatory filings and approvals, reporting requirements under Section 16 of the Exchange Act, the treatment of certain indebtedness and delisting and deregistration of the Joy Global common stock, and public announcements with respect to the transactions contemplated by the merger agreement.

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Conditions to Completion of the Merger

        Each party's obligation to complete the merger is subject to the satisfaction or waiver of the following conditions:

•

the adoption of the merger agreement by the requisite Joy Global stockholder vote;



•

no injunction by any court or other tribunal of competent jurisdiction having been entered and continuing to be in effect and no law continuing to be in effect, in each case that prevents, makes illegal or prohibits the consummation of the merger; and



•

all required statutory approvals, including the expiration or termination of any waiting period applicable to the merger under the HSR Act, having been obtained at or prior to the effective time.

        The respective obligations of Komatsu and Merger Sub to complete the merger are subject to the satisfaction or waiver (in writing) of the following additional conditions:

•

the accuracy of the representations and warranties of Joy Global both at and as of July 21, 2016 and at and as of the effective time (except for any such representations and warranties made as of a particular date or period, which representations and warranties must be true and correct only as of that date or period), in most cases, without giving effect to any materiality limitation set forth therein but subject to a "material adverse effect" or other materiality standard provided in the merger agreement;



•

Joy Global having performed and complied in all material respects with each covenant required by the merger agreement to be performed or complied with by it prior to the closing;



•

Komatsu's receipt of a certificate signed on behalf of Joy Global by an executive officer of Joy Global to the effect that each of the conditions described in the two preceding bullet points have been satisfied; and



•

The absence of any fact, circumstance, effect, change, event or development occurring after July 21, 2016 that has had or would reasonably be expected to have, individually or in the aggregate, a company material adverse effect.

        The obligation of Joy Global to complete the merger is subject to the satisfaction or waiver (in writing) of the following additional conditions:

•

the accuracy of the representations and warranties of Komatsu and Merger Sub both at and as of July 21, 2016 and at and as of the effective time (except for any such representations and warranties made as of a particular date or period, which representations and warranties must be true and correct only as of that date or period), in most cases, without giving effect to any materiality limitation set forth therein but subject to a "material adverse effect" standard provided in the merger agreement;



•

each of Komatsu and Merger Sub having performed and complied in all material respects with each covenant required by the merger agreement to be performed or complied with by it prior to the closing; and



•

Joy Global's receipt of a certificate signed on behalf of Komatsu by an executive officer of Komatsu to the effect that each of the conditions described in the two preceding bullet points have been satisfied.

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Termination

        The merger agreement may be terminated and abandoned at any time prior to the effective time in the following circumstances:

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by the mutual written consent of Joy Global and Komatsu;



•

by either Joy Global or Komatsu, if:



•

the merger has not been completed by 5:00 p.m. New York City time on July 21, 2017 (referred to in this proxy statement as the "end date"), provided that (1) if all of the conditions to closing, other than those pertaining to legal restraints under antitrust laws, waiting periods under the HSR Act or receipt of all required statutory approvals, have been satisfied or waived at such time, the end date may be extended by either Joy Global or Komatsu by a total of two three-month periods by written notice to the other party prior to 5:00 p.m. New York City time on the then-applicable end date; and (2) neither Joy Global nor Komatsu may terminate the merger agreement if it is in breach of any of its covenants or agreements in the merger agreement and such breach has caused or resulted in either (a) the failure to satisfy the conditions to the obligations of the terminating party to consummate the merger prior to the end date or (b) the failure of the closing to have occurred prior to the end date;



•

an order by a governmental entity of competent jurisdiction has been issued (1) in respect of any antitrust law of the United States, preliminarily or permanently enjoining the consummation of the merger, (2) in respect of any other antitrust law, if continuing to pursue approvals would no longer reasonably likely permit the antitrust approvals to be obtained, or (3) in respect of any other legal restraint, the legal restraint has become final and nonappealable, and in each case, the party seeking to terminate the merger agreement has delivered notice to the other party describing the applicable legal restraint in reasonable detail and given the other party opportunity for no less than five business days to consider and discuss such legal restraint with the party seeing to terminate the merger agreement; provided that, in each case, a party will not have the right to terminate if such order resulted due to the intentional material breach by such party of any representation, warranty, covenant or other agreement of such party set forth in the merger agreement; or



•

if the required vote of Joy Global's stockholders to adopt the merger agreement has not been obtained at the Joy Global stockholders meeting or at any adjournment or postponement of the Joy Global stockholders meeting; or



•

by Joy Global, if:



•

Komatsu or Merger Sub has breached or there is any inaccuracy in any of its representations or warranties, or has breached or failed to perform any of its covenants or other agreements contained in the merger agreement, which (1) would result in a failure of a condition to the obligations of Joy Global to effect the merger and (2) is either not curable or is not cured by the earlier of the end date and the date that is 30 days following written notice from Joy Global to Komatsu describing such breach or failure; provided, however, that Joy Global is not then in breach of any covenant and there is no inaccuracy in any of Joy Global's representations or warranties; or



•

at any time prior to obtaining the required vote of Joy Global's stockholders to adopt the merger agreement, in accordance with the provisions relating to Joy Global's right to terminate the merger agreement to enter into a superior company proposal, Joy Global enters into a definitive agreement with respect to a superior company proposal; or

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•

by Komatsu, if:



•

Joy Global has breached or there is any inaccuracy in any of its representations or warranties, or has breached or failed to perform any of its covenants or other agreements contained in the merger agreement (with certain exceptions), which (1) would result in a failure of a condition to the obligations of Komatsu and Merger Sub to effect the merger and (2) is either not curable or is not cured by the earlier of the end date and the date that is 30 days following written notice from Komatsu to Joy Global describing such breach or failure; or



•

prior to obtaining required vote of Joy Global's stockholders to adopt the merger agreement, the Joy Global board (1) has effected or publicly announced its intention to make a company adverse recommendation change or (2) does not reaffirm its recommendation after a request from Komatsu following the public disclosure of a company takeover proposal (provided that the Joy Global board is not required to reaffirm its recommendation more than two times);



•

prior to obtaining required vote of Joy Global's stockholders to adopt the merger agreement, a tender or exchange offer relating to the common stock is commenced and Joy Global does not send to its stockholders within 10 business days a statement reaffirming its recommendation and recommending that its stockholders reject the tender or exchange offer; or



•

prior to obtaining required vote of Joy Global's stockholders to adopt the merger agreement and in accordance with the terms of the merger agreement, Joy Global enters into a definitive agreement with respect to a superior company proposal.

Termination Fee

Company Termination Fee

        Joy Global will pay Komatsu a termination fee in an amount equal to $75 million in cash if the merger agreement is terminated in the following circumstances:

•

if the merger agreement is terminated by either Joy Global or Komatsu due to Joy Global having entered into a definitive agreement with respect to a superior company proposal in accordance with the conditions set forth in the merger agreement; or



•

if the merger agreement is terminated by Komatsu because the Joy Global board makes or publicly announces its intention to make a company adverse recommendation change; or



•

if the merger agreement is terminated (a) by either party because Joy Global's stockholders vote not to adopt the merger agreement, (b) by either party because the merger was not completed before the end date or (c) by Komatsu because of a material breach by Joy Global of its non-solicitation obligations or if the Joy Global board fails to reaffirm its recommendation after a request from Komatsu in certain circumstances, and, in each case, (i) prior to any termination a third party makes a company takeover proposal that is publicly announced and not withdrawn, (ii) within 315 days of termination, Joy Global enters into a definitive agreement providing for, or completes, any company takeover proposal and (iii) at the time of termination there are no legal restraints relating to antitrust law and the antitrust-related closing conditions were reasonably expected to be satisfied prior to the end date.

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Parent Termination Fee

        Komatsu will pay Joy Global a termination fee in an amount equal to $150 million in immediately available funds if the merger agreement is terminated in the following circumstances:

•

if either Komatsu or Joy Global terminates the merger agreement because the merger was not completed before the end date and, at the time of the termination, the required regulatory approvals have not been received (and all other conditions to closing are satisfied), or because the transaction is enjoined in connection with any required regulatory approval; or



•

if the merger agreement is terminated by Joy Global because Komatsu has breached certain of its covenants and obligations under the merger agreement relating to seeking to obtain the required regulatory approvals and such breach results or would be reasonably likely to result in the failure of the antitrust-related closing conditions to be satisfied.

Delisting and Deregistration of Company Common Stock

        If the merger is completed, the Company common stock will be delisted from the New York Stock Exchange (the "NYSE"), and deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Limitation on Remedies

        In the event of the termination of the merger agreement pursuant to the provisions described in the section entitled "— Termination ," and if a termination fee is due and payable, from and after the termination of the merger agreement and payment of the termination fee in full pursuant to the merger agreement, Joy Global, Komatsu and Merger Sub (as applicable) will have no further liability of any kind for any reason in connection with the merger agreement or its termination, except for any liability arising from a willful breach of the merger agreement. The payment of the termination fee will be considered liquidated damages and will be the recipient's sole and exclusive remedy for any claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses suffered or incurred by the recipient. The parties expressly waive and relinquish any other right, remedy or recourse, provided that regardless of whether a party is obligated to pay a termination fee, nothing in the merger agreement releases such a party from liability for a willful breach of the merger agreement. In no event will any party be entitled to payment of a termination fee on more than one occasion.

Amendment and Modification

        Any provision of the merger agreement may be amended by an instrument in writing signed on behalf of each of the parties. No amendment shall be made after the effective time. Before the receipt of Joy Global stockholder approval, no amendment shall require the approval of the stockholders of Komatsu or Joy Global. After the receipt of Joy Global stockholder approval, and before the effective time, no amendment that by law requires further approval by Joy Global's stockholders is permitted to be made without the further approval of such stockholders.

        At any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant to the merger agreement, (c) waive compliance with any covenants and agreements contained herein, subject to stockholder approval if after the receipt of company stockholder approval, or (d) waive the satisfaction of any of the conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to the merger agreement to assert any of its rights under the merger agreement or otherwise shall not constitute a waiver of such rights.

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Jurisdiction; Specific Enforcement

        The parties acknowledged and agreed that irreparable damage would occur in the event that any of the provisions of the merger agreement were not performed in accordance with their specific terms or were otherwise breached and that monetary damages, even if available, would not be an adequate remedy therefor. It was accordingly agreed that, at any time prior to the valid termination of the merger agreement under the terms and subject to the limitations therein, the parties shall be entitled to an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the performance of terms and provisions of the merger agreement, including the right of a party to cause each other party to consummate the merger and the other transactions contemplated by the merger agreement, in certain agreed courts (and each party to the merger agreement waived any requirement for the securing or posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at law or in equity. The parties further agreed not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy for any such breach. If any party brings any claim to enforce specifically the performance of the terms and provisions of the merger agreement when expressly available to such party pursuant to the terms of the merger agreement, then, notwithstanding anything to the contrary therein, the end date shall automatically be extended by the period of time between the commencement of such claim and the date on which such claim is fully and finally resolved. All claims arising from, under or in connection with the merger agreement shall be raised to and exclusively determined by the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware), to whose jurisdiction and venue the parties irrevocably and unconditionally consent and submit. Each party to the merger agreement irrevocably and unconditionally waived any objection to the laying of venue of claim arising out of the merger agreement in such court and further irrevocably and unconditionally waived and agreed not to plead or claim in any such court that any such claim brought in any such court has been brought in an inconvenient forum. Each party further agreed that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in the merger agreement shall be effective service of process for any claim brought against such party in any such court.

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